The northern border of Baja California hosts prominent agriculture and fast-growing cities under an extreme-arid climate. This paper provides an economic-engineering analysis of water supply alternatives to cope with agricultural, environmental and urban water needs projected to year 2025. Analysed alternatives include idealised water markets, wastewater reuse, seawater desalination and infrastructural expansions. Network flow optimisation using CALVIN (CALifornia Value Integrated Network) was employed. A database of the water system was built to include hydrology; agricultural, environmental and urban demands infrastructure, and economic information on operating costs and economic value of water. For the coastal cities, results show that wastewater reuse along with other already projected infrastructure expansions is overall the most economically promising alternative. Water markets offer leverage and flexibility for future urban needs. However, some locations cannot take advantage of domestic water markets with current aqueduct capacities. Worthwhile investments in infrastructure include an expanded aqueduct connecting coast and inland water supply systems. Furthermore, at current urban water prices and operating costs, seawater desalination is uneconomical for Baja California. Computer models are useful to better understand water-related issues in a region and provide a technical basis for developing and comparing long-term water management solutions.

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