Integrating CO₂ Emissions and Economic Value Modeling for Sustainable Water Management: Insights from the Segura River Basin

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.

1. Introduction

Water scarcity is an escalating global challenge, intensified by climate change, population growth and rising demands from diverse sectors, including agriculture, urban development, industry, recreation and environmental conservation. River basins, as pivotal units of water resource management, encounter unique pressures due to their roles in sustaining ecosystems, supporting livelihoods and driving economic productivity. The Segura River Basin in southeastern Spain embodies these challenges. Characterized by an arid to semi-arid climate, the basin experiences low annual rainfall and frequent droughts, rendering it one of Europe’s most water-stressed regions [1].

Efficient and sustainable allocation of water resources in such basins necessitates a comprehensive understanding of the interplay among water usage, environmental impacts and economic value. Water-related activities, especially those involving energy-intensive sources like desalination, groundwater extraction and inter-basin transfers, significantly contribute to CO₂ emissions. These emissions exacerbate climate change and impose additional sustainability challenges on water resource management [2]. Concurrently, the economic productivity of water varies substantially across sectors, requiring careful evaluation to ensure that resources are allocated to maximize societal benefits while minimizing environmental harm [3].

Previous models have primarily addressed CO₂ emissions or economic valuation independently, often focusing on isolated sectors or specific water sources [4]. Such fragmented approaches have limited policymakers’ capacity to fully understand the trade-offs inherent in water resource management, especially regarding the environmental–economic nexus [5]. This study significantly advances beyond these earlier frameworks by integrating CO₂ emission models with comprehensive economic valuation models into a single, unified framework. Unlike previous efforts, our holistic model explicitly captures the entire lifecycle of water use—from production and treatment to distribution and application—across all critical sectors: agriculture, industry, urban, recreational, and environmental.

This integration enables a detailed quantification of the carbon footprint and economic returns of water allocation strategies, highlighting sector-specific and source-specific variations in both emissions and economic performance. By connecting CO₂ emissions directly to economic outcomes, our model facilitates the identification of optimal water demand units, thus guiding policymakers towards more sustainable decisions that effectively balance high economic productivity with low environmental impact.

The Segura River Basin serves as a case study to demonstrate the application of this framework. Known for its intensive agricultural production, urban hubs, industrial activities and recreational demands, the basin features a complex water allocation system that relies on a mix of surface water, groundwater, reclaimed water, desalinated water and inter-basin transfers [6]. Each of these sources has distinct environmental and economic implications, making the Segura Basin an ideal setting for evaluating the inherent trade-offs in water resource management.

The objectives of this study are threefold:

Quantify CO₂ Emissions: Assess the carbon footprint associated with different water sources and usage patterns, providing a detailed understanding of the environmental impacts of water allocation decisions.

Evaluate Economic Value: Analyze the economic returns of water use across key demand sectors, identifying opportunities to enhance productivity while ensuring sustainability.

Optimize Resource Allocation: Provide actionable insights into the trade-offs between environmental and economic objectives, guiding policymakers toward more sustainable water management strategies.

By achieving these objectives, this research contributes to the broader discourse on sustainable water management in water-scarce regions [7]. The findings aim to inform decision-making processes supporting the development of policies that balance ecological preservation with socio-economic development. Moreover, the holistic modeling approach presents a replicable framework adaptable to other river basins facing similar challenges, thereby reinforcing its relevance in the context of global water resource management.

2. Literature Review

2.1. CO₂ Emissions Linked to Water Demand: Sectoral Impacts and Sources

The impact of CO₂ emissions on river basins and the subsequent effects on water allocation is a multifaceted issue that intersects various aspects of environmental science and resource management. Numerous studies have investigated CO₂ emissions from river basins, highlighting the significance of small rivers as major sources of CO₂ emissions [8]. Urban rivers, in particular, have been identified as hotspots for riverine greenhouse gas emissions due to increased anthropogenic activities [9]. These findings underscore that riverine systems play a pivotal role in the global carbon cycle and the need for comprehensive basin-scale studies to understand and mitigate CO₂ emissions effectively.

Panique-Casso et al. (2023) [10] emphasize that factors such as population density and river slope significantly influence CO₂ emission models. They suggest that human activities and geomorphological characteristics are critical determinants of emission rates. However, according to their review, riverine global greenhouse gas models remain oversimplified, consequently restraining the development of effective predictions for riverine global greenhouse gas emission feedbacks.

In the context of water allocation, existing models aim to optimize water use by considering CO₂ emissions and associated costs [11]. Nevertheless, many of these models are sector-specific and fail to address the interconnected impacts across different water uses. For instance, Tang et al. (2022) [12] investigated how water allocation processes affect soil greenhouse gas emissions in agricultural settings. Their study indicates that water management practices can either exacerbate or mitigate CO₂ emissions, depending on the strategies employed.

Agricultural activities within river basins significantly influence CO₂ emissions through irrigation practices and land-use changes. To address these challenges, Feng et al. (2024) [13] developed a multi-objective optimization model for sustainable agricultural development in the Tarim River Basin. Their model focuses on enhancing water use efficiency and reducing CO₂ emissions, demonstrating that sustainable practices can simultaneously achieve environmental and economic objectives. This approach underscores the potential for integrated models to tackle complex resource management challenges. Despite these advances, there remains a lack of integrated models that address both water allocation efficiency and emission reductions across multiple sectors, highlighting the need for holistic approaches to resource management.

Urban water demand management is crucial for reducing energy consumption and associated CO₂ emissions. Escriva-Bou et al. (2018) [14] analyzed the significant energy use throughout the urban water cycle caused by water consumption. They found that both direct emissions from energy use and indirect emissions from infrastructure contribute substantially to the overall carbon footprint. Ma et al. (2022) [15] further assessed carbon emissions from urban water supply in China, stressing the importance of measuring both total carbon emissions and carbon emission intensity. Their research suggests that policy measures targeting energy efficiency in water supply systems can lead to significant emission reductions.

Industrial water utilization also has considerable socioeconomic implications and a notable carbon footprint. Rothausen and Conway (2011) [16] introduced the concept of “energy for water”, highlighting the energy-intensive nature of water supply and treatment processes in industrial sectors. Lu (2019) [17] analyzed data from 14 industries and identified substantial potential for emissions reduction through more efficient water use practices. This study underscores the importance of industry-level data in assessing opportunities to enhance water use efficiency and mitigate CO₂ emissions.

In regions like the Segura River Basin, golf courses are significant water users, primarily for irrigation, contributing to greenhouse gas emissions throughout the water supply chain. Bartlett and James (2011) [18] developed a model of greenhouse gas emissions from golf course management, including emissions from water consumption for irrigation. Bekken and Soldat (2022) [19] expanded on this by estimating energy consumption and greenhouse gas emissions from golf turf maintenance across 14 golf courses in the Northern USA. They found that emissions varied significantly, averaging 1109 kg CO₂ per course, influenced by factors such as climate, soil type, and management practices.

Wetlands are important ecosystems in the global carbon cycle, acting as both sinks and sources of greenhouse gases. Zou et al. (2022) [20] projected that wetland degradation could emit 408 gigatons of CO₂-equivalent by 2100. However, they also found that rewetting degraded wetlands could fully offset these emissions through CO₂ uptake. This dual role for wetlands underscores the importance of conservation and restoration efforts to mitigate climate change.

The source of water significantly influences the CO₂ emissions associated with water use. In water-scarce regions, reliance on high energy-intensity water sources—such as interbasin transfers, desalination, or groundwater extraction—increases the carbon footprint [21]. Martin-Gorriz et al. (2021) [22] demonstrated the sensitivity of different scenarios involving water transfers among basins, revealing that energy consumption and associated emissions can vary widely depending on the chosen water source. This highlights the need to consider the origin of water in water resource planning.

Climate change, driven by CO₂ emissions, has profound implications for river basin management. Quevauviller (2012) [23] emphasizes that the integration of research advances in modeling and monitoring is crucial to effective river basin management planning. Assessments by Huntjens et al. (2010) [24] on the impacts of climate change on floods and droughts in European river basins, such as the Segura River Basin, stress the need for a balance between bottom-up and top-down governance. These studies suggest that basin-scale CO₂ emission modeling is essential to address the uncertainties posed by climate change.

Despite extensive research on CO₂ emissions and water management, there is a notable gap in holistic models that integrate various water uses, sources, and their associated emissions at the basin scale. To address this gap and support informed decision-making by policymakers, this paper introduces a comprehensive modeling framework to quantify CO₂ emissions associated with water use and its sources within a river basin. The proposed framework is applied to the Segura River Basin, a semi-arid region characterized by complex water allocation challenges [25] and heightened vulnerability to climate change impacts [6,26]. By incorporating multiple sectors and water sources, this model aims to provide a valuable tool for optimizing water allocation while minimizing CO₂ emissions.

2.2. Economic Value Associated with Water Demand

Economic value modeling is pivotal for the efficient and sustainable allocation of water resources in river basins, where competing demands among agricultural, industrial, ecological, recreational and urban sectors necessitate strategic decision-making. These models integrate economic principles with hydrological and environmental considerations to quantify the trade-offs associated with various allocation scenarios. By providing a monetary valuation of water use across sectors, they enable policymakers to prioritize allocations that maximize social welfare, economic productivity and environmental health. Furthermore, economic modeling informs the design of water pricing strategies, market mechanisms and incentive-based policies, ensuring that water resources are allocated to their highest-value uses while safeguarding the needs of vulnerable communities and ecosystems [27,28].

Research shows that using economic models to value water use helps build resilience to water scarcity by improving how resources are distributed under uncertain conditions and a changing climate. For example, integrating economic optimization frameworks within river basin management has been shown to increase agricultural output while minimizing environmental degradation [29]. Additionally, these models support conflict resolution by providing transparent and fair allocation mechanisms, as demonstrated in transboundary river basins where disputes over shared water resources are common [30].

Agriculture, as the largest consumer of freshwater globally, plays a crucial role in water allocation decisions. Economic valuation ensures that resources are used efficiently to achieve maximum productivity. By identifying crops and irrigation practices that yield the highest returns per unit of water, economic models guide policymakers in balancing food security and sustainability. This approach promotes the adoption of water-efficient technologies and high-value crops, increasing resilience to water scarcity and climate variability [31,32,33].

Industrial water demand is also significant, contributing substantially to economic growth and job creation. Valuing industrial water use ensures that water is allocated efficiently to sectors generating the highest economic returns. By incorporating industrial demand into allocation frameworks, policymakers can design pricing strategies and incentives that encourage water efficiency and waste reduction, aligning with sustainable resource management goals [34,35].

Urban water demand has been extensively studied due to its critical role in supporting economic growth, public health and quality of life. Urban water use is influenced by population growth, economic activity, climate variability and infrastructure efficiency [36,37]. Integrated water management approaches that incorporate pricing mechanisms, conservation policies and technology adoption are essential to address increasing urban demand while ensuring equitable access [38]. The economic valuation of urban water demand helps optimize resource allocation and mitigate conflicts among competing sectors [31].

Tourism, particularly golf courses and recreational facilities, represents a notable water demand in the Segura River Basin. By quantifying the monetary value generated through tourism, employment and local economic benefits, policymakers can assess whether water allocated to these activities aligns with broader socio-economic and environmental objectives. Integrating these valuations into water management strategies ensures that high-value uses are prioritized without compromising sustainability [39,40].

Wetlands in the Segura River Basin provide critical ecosystem services, including water purification, flood control, carbon sequestration and biodiversity conservation. Assigning monetary value to these services aids policymakers in balancing wetland conservation with competing land and water uses, especially amid pressures from urbanization and agricultural expansion [41,42]. The economic value of wetlands supports the design of payment-for-ecosystem-services schemes and sustainable water allocation frameworks at the basin level [43,44].

In conclusion, economic modeling is indispensable for optimizing water resource distribution in the Segura Basin. By presenting a comprehensive model of economic valuation for different water demands, this paper aims to identify the most economically beneficial water uses and provide critical insights for policymakers regarding economic returns across various sectors. The analysis also evaluates the economic viability of using desalinated water for agriculture, considering its high costs and the potential benefits it offers in alleviating water scarcity. This holistic approach supports sustainable decision-making in water management, ensuring that allocations contribute to the basin’s overall socio-economic and environmental objectives.

3. Materials and Methods

3.1. Study Area: Segura River Basin

The Segura River Basin, located in southeastern Spain, spans approximately 18,870 square kilometers across the provinces of Murcia, Alicante, Almería, Granada and Albacete. Characterized by an arid to semi-arid Mediterranean climate, the basin faces chronic water scarcity due to high temperatures, low annual rainfall averaging below 400 mm and significant seasonal variability. These conditions result in frequent droughts and limited natural recharge of water sources, making the Segura Basin one of Europe’s most water-stressed regions [45].

Despite these challenges, the basin holds substantial socio-economic importance. It is one of Spain’s most intensive agricultural zones, renowned for producing high-value crops such as fruits, vegetables and olives, much of which are exported internationally. Agriculture is a primary driver of local employment and the regional economy, significantly contributing to Spain’s agricultural exports [46]. Additionally, the region hosts major urban centers, industrial activities and tourism, particularly along the Mediterranean coast, where recreational water demands are prevalent.

The acute water scarcity necessitates a complex management system integrating diverse water sources and distribution networks. Water management in the basin is governed by national and regional frameworks, including the Spanish National Hydrological Plan and European Union water directives. These governance structures aim to balance water resource allocation among sectors while prioritizing sustainable practices to prevent ecological degradation, such as saline intrusion into aquifers and loss of biodiversity in wetlands [25]. Strategic water planning is thus essential for sustaining economic productivity without compromising environmental integrity in an increasingly climate-impacted region [47].

3.1.1. Water Sources

The Segura River Basin employs a combination of water sources to meet its varied demands, each with distinct availability and reliability:

• Surface water: Sourced primarily from the Segura River and its tributaries, surface water is vital for agricultural, urban and environmental uses. However, its availability is highly variable, affecting reliability, especially during dry years. Reservoirs throughout the basin help mitigate these fluctuations by storing water during wetter periods [48].
• Groundwater: Groundwater serves as a crucial resource, offering a more consistent supply compared to surface water. Over-extraction, however, has led to issues such as saline intrusion and aquifer depletion, intensifying the focus on sustainably managing groundwater extraction rates.
• Transferred water: The Tagus–Segura interbasin transfer (TST) channels water from the Tagus river basin to support agricultural and urban demands. While essential for balancing local shortages, the TST is subject to regulatory and environmental constraints in the donor basin, leading to potential variability in transferred volumes [49].
• Reclaimed water: Increasingly important as an alternative source, reclaimed water from wastewater treatment plants is primarily used for irrigation in agriculture and golf courses. It alleviates pressure on conventional sources and supports non-potable uses, with treatment standards ensuring safety and reliability for irrigation purposes.
• Desalinated water: Desalinated water provides a consistent supply independent of climatic conditions. However, desalination is energy-intensive, resulting in higher CO₂ emissions compared to other sources. Despite this, desalinated water remains a key backup supply during extreme droughts, enhancing the basin’s resilience [2].

3.1.2. Water Demand Sectors and Units

The basin’s water management framework is structured around five primary sectors of water demand: agricultural, industrial, urban, recreational and environmental. Each sector is organized into defined demand units, facilitating targeted resource allocation and sustainable planning. Figure 1 illustrates the spatial distribution of the main water demand units in the basin according to the type of activity.

• Agricultural Demand Units: Accounting for the largest water use, the agricultural sector is organized into 73 agricultural demand units (ADUs). Each ADU represents a designated irrigated area with common characteristics, such as irrigation methods, geographic location and shared water sources. These units are critical for optimizing water distribution for high-value crop irrigation.
• Industrial Demand Units: Industrial water demand is divided into seven industrial demand units, reflecting the spatial distribution of industrial activities, including agro-food industries and wineries.
• Urban Demand Units: Urban water use encompasses 14 urban demand units (UDUs). These units serve major population centers such as Murcia and Cartagena.
• Recreational Demand Units: The recreational sector, primarily golf courses, represents a notable water demand due to the region’s tourism prominence. Projected growth in this sector underscores the importance of efficient reclaimed water use and adaptive management to meet future demands sustainably amid increasing climate pressures.
• Environmental Demand Units: Environmental demand units aim to preserve key ecosystems, particularly wetlands within the basin. Specific water allocations are designated to maintain ecological balance and biodiversity, especially during droughts, ensuring a continuous water supply to vulnerable habitats.

3.2. CO₂ Emissions Modeling for Water Demand Sectors in the Segura River Basin

To estimate CO₂ emissions associated with various water use activities in the Segura River Basin, we employ studies based on Life Cycle Assessment (LCA) methodologies. LCA provides a comprehensive framework for evaluating environmental impacts by accounting for emissions generated throughout the entire life cycle of the activity. Given the basin’s specific context, we prioritize localized studies to ensure relevant emission factors.

3.2.1. Agricultural Water Use

For CO₂ emissions from agricultural activities, we utilize data from the Hydrological Plan of the Segura River Basin [50]. Representative crops for each ADU are selected to accurately reflect crop diversity and cultivation practices. The selected crops include winter cereals, rice, spring cereals, tubers, greenhouse horticulture, open-field horticulture, citrus fruits, fleshy-fruit trees, almond trees, wine vineyards, table grape vineyards and olive groves.

Emissions are estimated using crop-specific LCA studies, excluding the irrigation component, to integrate it later with each ADU’s specific water sources. We also account for CO₂ uptake due to plant growth. By balancing emissions with atmospheric CO₂ capture, we derive the net CO₂ impact for each crop, as presented in

Table 1. Agricultural CO₂ emissions and sequestration by crop in the Segura River Basin.

Crop	Emissions Without Irrigation	Carbon Sequestration
	(t CO2/ha·Year)	(t CO2/ha·Year)
Winter cereals [51]	1.754	−12.857
Rice [52]	4.856	−2.292
Spring cereals [53]	1.370	−35.500
Tubers [54]	4.200	−15.950
Greenhouse horticulture [55]	10.743	−28.369
Open-field horticulture [22]	12.369	−15.910
Citrus fruits [22]	8.243	−25.560
Fleshy-fruit trees [22]	6.862	−24.080
Almond trees [56]	12.030	−22.240
Wine vineyards [57]	1.800	−7.700
Table grape vineyards [55]	3.000	−20.700
Olive groves [58]	4.011	−16.700

.

3.2.2. Industrial Water Use

For industrial water demand, we utilize official Spanish CO₂ emission data by industry type given by the National Statistics Institute (NSI) [59]. Emissions are matched with reported water consumption to calculate a CO₂ emission ratio per cubic meter of water consumed. Industries analyzed include food, textile, wood, chemical, rubber, metallurgy, computer products, transport equipment and miscellaneous manufacturing.

Using industry distribution data from the Hydrological Plan of the Segura River Basin [50] (

Table 2. Industry distribution by sector for each IDU.

Industry Sector	IDU 1	IDU 2	IDU 3	IDU 4	IDU 5	IDU 6
Food	66.13%	62.08%	42.02%	37.76%	20.80%	29.03%
Textile	4.99%	2.11%	1.26%	2.30%	19.60%	0.68%
Wood	1.72%	5.55%	2.95%	4.98%	9.76%	1.99%
Chemical	5.29%	0.00%	10.64%	16.13%	9.83%	17.65%
Rubber	10.59%	18.84%	5.42%	7.04%	12.21%	5.55%
Metallurgy	4.81%	4.41%	7.73%	12.81%	11.10%	13.15%
Computer Products	1.40%	2.16%	4.22%	8.17%	6.19%	3.44%
Transport Equipment	2.22%	0.00%	0.00%	2.62%	1.04%	19.90%
Miscellaneous Manufacturing	2.85%	4.85%	25.76%	8.19%	9.47%	8.61%

), we calculate characteristic CO₂ emission values for each IDU, as presented in

Table 3. CO₂ emissions per cubic meter for each IDU.

IDU	IDU 1	IDU 2	IDU 3	IDU 4	IDU 5	IDU 6	IDU 7
CO2 Emissions	692.07	1211.85	372.82	478.39	799.35	386.52	16.89
(kg CO2/m3)

. An exception is IDU 7, which, due to its military nature, uses data, also from the NSI, of military CO₂ emissions and water consumption.

3.2.3. Urban Water Use

CO₂ emissions associated with urban water use are based on the carbon footprint report by the Municipal Water and Sanitation Company of Murcia [60]. Excluding emissions related to water sourcing, we determine an emission ratio of 0.01743 kg CO₂/m³ for urban water consumption.

3.2.4. Recreational Water Use

For recreational demand units, mainly composed of golf courses, CO₂ emissions are estimated using LCA data and water consumption figures from a representative golf course [61]. The calculated emission ratio is 0.6927 kg CO₂/m³, as shown in

Table 4. CO₂ emissions, sequestration, water consumption and emission ratio for a representative golf course.

	Emissions Without Irrigation	CO2 Sequestration	Water Consumption	Emission Ratio
	(t CO2/Year)	(t CO2/Year)	(m3/Year)	(kg CO2/m3)
Values	184.3	−28.14	225,440	0.6927

.

3.2.5. Environmental Water Use

For environmental demand units supplying water to wetlands, we reference a CO₂ capture rate of 1 t CO₂/ha·year [62]. Using wetland area and water demand data from the Hydrological Plan [50], we calculate a CO₂ capture ratio of 0.3952 kg CO₂/m³.

3.2.6. Water Source Emission Factors

To determine the carbon footprint associated with each water source, we use specific energy requirements from a basin-specific LCA study, combined with Spain’s emission factor for electricity (0.354 kg CO₂/kWh) [22]. The specific energy values and resulting CO₂ emissions per cubic meter for each water source are listed in

Table 5. Specific energy requirements and CO₂ emissions by water source type in the Segura River Basin.

Water Source Type	Specific Energy	CO2 Emissions
	(kWh/m3)	(kg CO2/m3)
Surface water	0.06	0.021
Groundwater	0.90	0.319
Reclaimed water	0.78	0.276
Transferred water	1.21	0.429
Desalinated water	4.32	1.530

.

The CO₂ emissions per cubic meter are calculated by multiplying the specific energy consumption by the emission factor for electricity generation in Spain.

3.3. Economic Value Modeling

This section presents the economic modeling approach used to assess the profitability and economic impact of water use in the Segura River Basin. The analysis evaluates agricultural, industrial, urban, recreational and environmental water demands. All economic values are adjusted for inflation in Spain.

3.3.1. Agricultural Water Use

The economic model for agricultural water use is based on profitability studies conducted for each ADU within the basin [50]. These studies analyze the net margin of agricultural production relative to the volume of water supplied, allowing for a direct assessment of how water availability influences agricultural profitability.

Each ADU’s economic output is represented by a curve depicting the relationship between net profit and water volume. This curve reflects the unique characteristics of each ADU’s crop types, irrigation practices and productivity, providing a customized economic profile for each unit.

Figure 2 illustrates example profitability curves for four representative ADUs, highlighting the variability in water-dependent agricultural profitability across the basin. These curves demonstrate how different ADUs respond economically to changes in water availability, emphasizing the importance of tailored water management strategies.

The economic relationship is often non-linear, reflecting diminishing returns at higher water volumes due to factors such as soil saturation. By capturing these dynamics, the model provides insights into optimal water allocations that maximize economic returns for the agricultural sector.

3.3.2. Industrial Water Use

The economic model for industrial water use is based on the distribution of economic activities across each IDU, utilizing sectoral distribution data from the Hydrological Plan of the Segura River Basin [50] (see Table 2) and water consumption per economic output.

Table 6. Water consumption per industrial sector in the Segura River Basin.

Industrial Sector	Water Consumption
	(m3/EUR 1000 GVA)
Food	13.3
Textile	22.8
Wood	14.5
Chemical	19.2
Rubber	2.9
Metallurgy	16.5
Computer products	1.1
Transport equipment	2.1
Miscellaneous manufacturing	4.0

provides specific values indicating the cubic meters of water required per EUR 1000 of Gross Value Added (GVA) for various industrial sectors.

By combining the sectoral distribution data with the water consumption per GVA, we calculate the economic output associated with industrial water consumption in each IDU. This allows us to generate curves illustrating the relationship between accumulated economic value and the volume of water supplied for each IDU. These curves reflect how changes in water availability impact industrial productivity within each demand unit, considering both the sectoral composition and water requirements unique to each IDU.

Figure 3 presents example economic curves for IDU 1 and IDU 4. These curves highlight the differing economic sensitivities to water supply among industrial sectors within the basin.

These curves will enable us to assess the marginal economic value of water in industrial applications, which is crucial for prioritizing water allocation during scarcity.

3.3.3. Urban Water Use

The economic model for urban water demand employs hydroeconomic analyses similar to those applied in other river basins, such as the Ebro Basin [63]. This model integrates the social and economic benefits of water allocation.

The benefit derived from water supplied to each UDU is calculated using the following formula:

$$\mathrm{Benefit}\left(Q\right)=P·{\displaystyle \frac{e}{e-1}}·Q+0.5·{\displaystyle \frac{e·D}{P}}·Q^2$$

(1)

where

• $e=-0.15$ is the price elasticity of demand,
• D is the total water demand of the UDU (m³/year),
• Q is the volume of water supplied to the UDU (m³/year),
• $P=3.16\mathrm{EUR}/{\mathrm{m}}^3$ is the average cost of water in the Segura Basin.

This formula is derived from the integration of the inverse demand function, capturing the consumer surplus associated with water consumption. It accounts for the non-linear relationship among water price, demand and economic benefit, providing a more accurate estimation of urban water value.

3.3.4. Recreational Water Use

The economic model for recreational water demand is based on a study analyzing the economic productivity of golf courses in the Levante region [64]. This study provides an estimate of the economic margin generated by water used for golf course irrigation, considering its broader impact on the tourism industry. From this analysis, a margin of EUR 9.3 per cubic meter of irrigated water is applied to assess the economic benefit of recreational water use. This value reflects both the direct revenue from golf activities and the associated economic contributions to regional tourism, such as accommodation, dining and other leisure services.

3.3.5. Environmental Water Use

The economic valuation of environmental water demand is based on a study that assessed the economic benefits of ecosystem services in a comparable reserve [65]. The study estimated the value of selective ecosystem services at USD 781 per hectare per year, using a combination of market-based and value transfer methods. This valuation reflects the contribution of provisioning services and highlights the economic importance of wetland ecosystems for local welfare. To quantify the economic benefit per unit of water supplied to wetlands, we calculate the value per cubic meter based on the total area of wetlands and their water requirements.

This approach allows us to integrate environmental water demands into the overall economic modeling framework, ensuring that ecosystem services are appropriately valued in water allocation decisions. Recognizing the economic contribution of wetlands supports policies that allocate sufficient water to maintain these critical ecosystems.

4. Results

This section presents the findings of the study, focusing on the application of the economic and CO₂ emission models to the different water demand units within the Segura River Basin. Key insights into water source distribution, CO₂ emissions, economic impacts and sustainability metrics are discussed.

4.1. Water Origin Distribution and Carbon Footprint Across Demands

The distribution of water sources among the various demand units in the Segura River Basin reflects distinct sectoral requirements and resource dependencies.

Table 7. Total regional water use by sector and water source (hm³/year).

Sectors	Surface Water	Groundwater	Transferred Water	Reclaimed Water	Desalinated Water	Total	Deficit
Agricultural	422	446	222	136	126	1352	193
Urban	66	9	100	0	63	238	0
Industrial	0	7	0	0	2	9	0
Recreational	0	4	0	5	2	11	0
Environmental	16	22	0	1	0	39	0
Total	504	488	322	142	193	1649	193

summarizes the total volume of water used in the Segura River Basin, disaggregated by sector and water source. This provides a clear overview of the scale and structure of regional water consumption.

Figure 4 illustrates the allocation of different water sources across the demand unit types, highlighting the varying reliance on each source according to sector characteristics and needs.

Groundwater is the most utilized water source in EDUs and IDUs, while surface water is heavily relied upon by EDUs, ADUs and UDUs. Reclaimed water plays a prominent role in RDUs, demonstrating the successful integration of recycled water into recreational uses, thereby reducing pressure on conventional water sources. Desalinated and transferred water are critical for UDUs where other sources may be insufficient; these energy-intensive sources ensure water availability for urban populations.

Figure 5 displays the CO₂ emissions per hm³ of water supplied across the five water demand unit types. The results reveal notable differences in carbon intensity across sectors, closely linked to the water source allocations discussed previously.

UDUs and IDUs exhibit the highest CO₂ emissions, around 600 tons CO₂ per hm³. These elevated values reflect the significant reliance on energy-intensive water sources such as desalinated and transferred water. RDUs also show relatively high emissions.

ADUs have moderate emissions, averaging approximately 350 tons CO₂ per hm³. EDUs demonstrate the lowest emissions, under 200 tons CO₂ per hm³, owing to their reliance on surface water and groundwater.

4.2. CO₂ Emissions and Economic Outcomes in the Water Demand Units

This section presents the results from the simulations of the CO₂ emissions and economic value models for each water demand sector.

Figure 6 illustrates the net CO₂ emissions and economic value for each ADU in the Segura River Basin. The primary y-axis represents net CO₂ emissions (tons CO₂/year), shown as red bars, while the secondary y-axis depicts the annual economic value (EUR per year), represented by the blue line.

Most ADUs exhibit net CO₂ absorption due to the carbon sequestration associated with crop growth, with variations depending on crop type, cultivated area and agricultural practices. However, one ADU demonstrates net CO₂ emissions, primarily attributed to the prevalence of rice cultivation. Unlike other crops, rice generates significant methane emissions, offsetting the sequestration benefits.

The economic value associated with agricultural production varies considerably across ADUs, as indicated by the blue line. ADUs with high economic output are often linked to high-value crops, such as citrus fruits and horticultural products, which typically require more intensive water use.

Notable intra-sector variability exists within agriculture. High-value crops like citrus and greenhouse vegetables tend to offer greater economic returns per unit of water, while others, such as rice, show lower profitability and higher emissions. These differences highlight the need for targeted water policies that account for crop-level trade-offs between economic and environmental performance.

Figure 7 presents the CO₂ emissions and economic value for (a) Industrial Demand Units (left) and (b) Recreational Demand Units (right), both of which are net CO₂ emitters. As in the previous case, the bars correspond to the primary Y-axis and represent the CO₂ emissions of each demand unit, while the blue line represents the economic value associated with the secondary Y-axis.

IDU07 stands out as the most economically significant unit, generating over EUR 1.1 billion per year while maintaining a notably low CO₂ emissions profile. This outcome is primarily attributed to the military nature of IDU07. Similarly, IDU04 achieves a high economic value, approximately EUR 1 billion per year, while also maintaining low CO₂ emissions.

In contrast, IDU03 and IDU05 exhibit the highest CO₂ emissions, nearing 1.6 million tons CO₂ per year. Despite their significant environmental impact, their economic contributions are moderate, reaching approximately EUR 900 million and EUR 600 million per year, respectively. These units are associated with energy-intensive industries.

These results demonstrate the diversity in economic and environmental profiles among IDUs in the Segura River Basin. IDU07 and IDU04 exemplify the potential to achieve substantial economic output with minimal environmental impact, emphasizing the importance of optimizing water and energy management in industrial operations. In contrast, the high emissions from IDU03 and IDU05 highlight the need for targeted strategies to reduce their carbon footprint while maintaining economic productivity.

In the case of recreational demand units, RDU07 is the most economically significant RDU, generating over EUR 60 million per year. However, this unit also exhibits the highest CO₂ emissions, exceeding 5500 tons CO₂ per year, reflecting the energy-intensive processes associated with reclaimed and desalinated water use. Other RDUs, such as RDU01 and RDU04, show moderate economic contributions and CO₂ emissions, linked to smaller-scale recreational activities. The remaining RDUs have minimal economic value and low emissions, indicating a less prominent role in the overall recreational water demand of the basin.

Figure 8 presents the CO₂ emissions and economic value for (a) urban demand units (left) and (b) environmental demand units (right).

The results highlight that both CO₂ emissions and economic value are predominantly concentrated in four UDUs, which encompass the major population centers within the basin. In contrast, the remaining UDUs exhibit minimal significance in both aspects. All EDUs demonstrate net CO₂ absorption, with EDU03 being particularly notable due to its extensive wetland areas contributing to carbon sequestration. From an economic perspective, EDUs 8 and 9 stand out as the most significant contributors, reflecting the value of ecosystem services provided by these units.

4.3. Environmental and Economic Efficiency Metrics

This section presents metrics that address the sustainability and economic aspects of the basin, with a particular focus on ADUs and IDUs, since priority in water allocation is inherently given to UDUs and EDUs. These metrics are designed to provide policymakers with enhanced insights to inform decisions regarding future water allocations, especially under drought conditions. In the first analysis, the economic value generated per ton of CO₂ emitted or sequestered by IDUs and ADUs is evaluated. Subsequently, the net margin of ADUs is examined, taking into account the cost of water based on its source. This analysis is particularly interesting for policymakers because climate change is driving an increased reliance on desalinated water, which has significant economic implications.

Figure 9 illustrates the environmental and economic efficiency metrics for (a) IDUs and (b) ADUs. In Figure 9a, the ratio of economic value (in euros) to CO₂ emissions (in tons) is shown for each IDU. A higher ratio reflects greater economic output per unit of CO₂ emitted, indicating more efficient resource utilization. Figure 9b presents the economic value generated per ton of CO₂ absorbed for each ADU. Higher values in this case indicate a lower level of sustainability, as they reflect reduced CO₂ absorption relative to economic output.

Among the IDUs, IDU06 and IDU07 distinguish themselves by generating a high economic value per ton of CO₂ emitted, demonstrating superior efficiency compared to other units. This indicates that these units achieve substantial economic output with relatively lower emissions.

In contrast, most ADUs cluster around a value of 500 EUR/ton of CO₂ absorbed. However, a few outliers exhibit substantially higher values, indicating lower sustainability compared to the majority. These outliers represent ADUs with high economic returns but reduced carbon sequestration capacity.

Figure 10 presents three curves depicting the economic analysis for the set of ADUs. The x-axis represents the cumulative volume of water supplied to the ADUs (in hm³), while the y-axis denotes the value in euros. The blue curve represents the total accumulated gross margin excluding water costs. The red curve shows the accumulated water cost as progressively more expensive sources are utilized. The green curve represents the net margin, calculated as the difference between the accumulated gross margin and the accumulated water cost.

As shown in Figure 10, the net margin progressively flattens, particularly as groundwater usage begins due to its higher extraction costs. Moreover, the inclusion of desalinated water results in a sharp decline in net economic margins due to its high unit cost. Importantly, the climate cost is also significant: desalinated water disproportionately increases the carbon footprint of agricultural and urban sectors. This dual economic and environmental burden raises critical considerations for long-term policy planning—particularly as climate change increases pressure on conventional water sources.

Under scenarios of increasing drought frequency, desalination may become a necessary fallback. However, its deployment must be carefully evaluated in the context of carbon mitigation goals. Policymakers should consider incentivizing low-carbon energy for desalination and prioritize its use for high-value applications or critical supply shortages, rather than as a baseline water source.

In this context, it is important to note that projected climate scenarios for the Segura River Basin indicate a likely reduction in annual precipitation and increased temperature extremes, which will exacerbate water scarcity and shift the reliance toward more energy-intensive sources such as desalinated and transferred water [6,26]. These trends imply a growing carbon footprint associated with water supply, particularly under high-emission climate pathways. Incorporating such projections into future modeling efforts is essential for ensuring that water allocation strategies remain both economically and environmentally sustainable under changing climatic conditions.

These findings underscore the importance of optimizing water source allocation to balance economic returns with environmental sustainability. Prioritizing less energy-intensive water sources and improving water use efficiency in agriculture can enhance economic margins while reducing the carbon footprint.

5. Conclusions

This study demonstrates that a holistic approach to water resource management—one that integrates environmental impact assessments with economic valuations—is essential for achieving sustainability in water-scarce regions. By providing detailed insights into the CO₂ emissions and economic outcomes associated with different water sources and demand sectors, the modeling framework offers a valuable tool for policymakers. The Segura River Basin case study highlights the complex trade-offs and opportunities inherent in water allocation decisions. Emphasizing efficiency, sustainability and strategic resource utilization can guide the development of policies that balance the needs of society with environmental stewardship, contributing to resilient and sustainable water management practices.

However, it is important to note that the applicability of the proposed model depends on the availability and accuracy of local hydrological, economic, and emissions data. Regional differences in water infrastructure, electricity generation sources and crop productivity can significantly affect outcomes. Despite these limitations, the framework is designed to be adaptable: with region-specific input data, it can be extended to other basins facing similar challenges. Future work could explore integrating stochastic modeling or climate projection scenarios to enhance robustness under uncertainty, as well as conducting a comprehensive sensitivity analysis to evaluate how variations in key parameters may influence the outcomes.