Is Sustainable Watershed Management Feasible under Climate Change? An Economic Appraisal of the Nile River

Historically, the Nile, a well-known transboundary river, has been a major contributor to Egyptian economic growth in many ways but has suffered from sediment accumulation. Since anthropocentric activities on the Nile delta heavily rely on nutrient-rich sediment from the Ethiopian highland, sediment control schemes in the Aswan High Dam not only prolong the life of the dam but also increase the economic value of the watershed. The purpose of our study is to use an economic optimization approach to evaluate the feasibility of sustainable management of the Nile concerning climate change. The model considers significant anthropocentric effects on the reservoir as well as the impacts of climate change on the entire watershed. Moreover, the social planner’s model is developed to unravel somewhat numerous externalities. The results indicate that among the various technically feasible sediment removal schemes, the hydro-suction sediment removal system (HSRS) is the only desirable solution under severe climate change. In order to control the negative externalities in the watershed, the in-stream flow control should be applied. By implementing appropriate management schemes simultaneously, the life of the AHD can be extended, and the total economic benefits of the entire watershed can be maximized to approximately $272 billion USD.