Abstract
This study presents an integrated modeling framework that combines CO2 emissions and economic valuation to advance sustainable water management, focusing on the Segura River Basin in southeastern Spain. Characterized by arid conditions and severe water stress, the basin serves as an exemplary case for evaluating the trade-offs between environmental sustainability and economic productivity. The framework integrates CO2 emissions models with economic analyses to quantify the carbon footprint and economic returns across five key water demand sectors: agriculture, industry, urban, recreational and environmental. Results demonstrate substantial variations in both CO2 emissions and economic returns across and within these sectors, underscoring source-specific differences. Agriculture stands out as a key sector that balances carbon sequestration with productivity, whereas urban and industrial sectors exhibit energy-intensive water demands that significantly increase emissions. Additionally, there is notable heterogeneity in economic performance and CO2 emissions within each sector. By linking CO2 emissions with economic outcomes, the framework enables users to assess the relationship between economic value and CO2 emissions across water demand units, supporting informed decision-making on the most sustainable allocation strategies. A critical finding is the negative economic impact of using desalinated water in agriculture, where high costs substantially reduce profit margins. These insights inform policies aimed at enhancing resource efficiency, promoting low-carbon water sources and aligning water management strategies with both environmental and economic goals. This approach guides sustainable water allocation in water-scarce regions.