The transition to the Green Economy in the Mediterranean region: water demand management strategies and market efficiency

This study explores the role that water demand management (WDM) in agriculture can play in the transition to the Green Economy in the arid and semi-arid Mediter- ranean region. In particular, it will investigate the potential for WDM strategies to contribute to the development of green economies, through the adoption of demand-regulating market mechanisms and improvements in water use efficien- cy. The study argues that, first, for the aim of achieving optimal solutions, it is paramount to ensure the alignment between individual and collective interests by means of the enhanced capacity of markets to convey signals of the relative scarcity of different resources. The extent to which water price/cost reflects relative water scarcity has a great potential to influence actual performances in agriculture and to discourage unsustainable water use. Second, the study suggests that, while there is large scope for improving overall water use efficiency in both irrigated and rain- fed agriculture, the greatest potential lies in upgrading rain-fed crop production, which supports the largest share of food production globally. Finally, it is argued that institutional capacity-building can be regarded as a fundamental prerequisite of the whole transition to the Green Economy; but that socio-political imperatives and circumstances determine which options are available to local decision makers.