Pakistan is currently facing physical and economic water scarcity issues that are further complicated by the rapid increase in its population and by climate change. Many studies have focused on the physical water scarcity using hydrological modeling and the measurement of the impact of climate change on water resources in the Upper Indus Basin (UIB). However, few studies have concentrated on the importance of the economic water scarcity, that is, the water management issue under the looming impacts of climate change and the population explosion of Pakistan. The purpose of this study is to develop a management strategy which helps to achieve water security and sustainability in the Upper Indus Basin (UIB) with the help of different socio-economic and climate change scenarios using WEAP (Water Evaluation and Planning) modeling. The streamflow data of five sub-basins (Gilgit, Hunza, Shigar, Shyok, and Astore) and the entire Upper Indus Basin (UIB) were calibrated (2006–2010) and validated (2011–2014) in the WEAP model. The coefficient of determination and Nash Sutcliffe values for the calibration period ranged from 0.81–0.96. The coefficient of determination and the Nash Sutcliffe values for the validation period ranged from 0.85–0.94. After the development of the WEAP model, the analysis of the unmet water demand and percent coverage of the water demand for the period of 2006–2050 was computed. Different scenarios were generated for external driving factors (population growth, urbanization, and living standards) and the impact of climate change to evaluate their effect on the current water supply system. The results indicated that the future unmet water demand is likely to reach 134 million cubic meters (mcm) by the year 2050 and that the external driving factors are putting more pressure on the supply service. This study further explores the importance of proposed dams (likely to be built until 2025) by WAPDA (Water and Power Development Authority). These dams will decrease the unmet water demand by 60% in the catchment. The water demands under four scenarios (the reference, moderate future-1, moderate future-2, and management scenarios) were compared. The management scenario analysis revealed that 80% of the water demand coverage could be achieved by the year 2023, which could help in developing sustainable water governance for the catchment.
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