Water shortages constrain Iran's economic outlook

Subject

Iran water crisis.

Significance

Increasing demand and ineffective management, exacerbated by climate change, are imposing unsustainable strains on the country's freshwater resources. Water shortages have stoked local conflicts within Iran, and clashes with Afghan forces. Mounting water stresses risk undermining economic development, food security and, potentially, political order.

Impacts

• Water scarcity will increase competition for water between agriculture, power generation, urban and industrial demand.
• Food security will be highly vulnerable to diminishing water availability, increasing import bills and fiscal burdens.
• Inter-provincial and international tensions over shared waters will rise.
• Mass population displacements from desertified regions could occur.
• The environmental sector will provide increasing opportunities for economic and diplomatic engagement with Iran as sanctions are lifted.