In recent centuries, water consumption rates have more than doubled and the population growth rate is rising constantly. As a result, water scarcity is now one of the main problems to be faced, mainly in semiarid regions. In light of such a dilemma, this study aims to develop a system dynamics model in order to evaluate the water system in the semiarid region of the state of Paraíba—located in the Brazilian Northeast—and it focus on the following two issues: (1) measures that could have been taken with respect to the recent water crisis (2012–2017); (2) simulating water availability up to 2025. It was observed that, despite the options of in-demand management tools being efficient solutions for water scarcity in the short term (e.g., the influence of scarcity-based tariffs in reducing water use), such tools would not suffice in a context of severe drought within a water-providing system that depends heavily on rainfall. However, certain policies involving water-supply management (e.g., wastewater reuse and inter-basin water transfer) are very effective in maintaining water supply and avoiding a water collapse in the region. Furthermore, employing the Monte Carlo approach in simulating the system dynamic proved that the water supply is sensitive to scarcity-based tariffs, wastewater reuse, and inter-basin water transfer. An important advancement in this study was the simulation of a methodology for pricing that encourages rational use of water-based on its scarcity, which in turn increases revenue and investment in other water-management strategies.
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