Abstract For countries sharing transboundary water resources, measuring changes in water availability and ensuing economic outcomes is challenging due to downstream impacts and interconnected agricultural markets. Using a coupled modeling approach that combines a detailed multi-sector model of international trade with a gridded hydrological model, this paper quantifies the impacts of climate change and anthropogenic activities on water scarcity and its economy-wide consequences for the riparian countries in the Tigris-Euprates (TE) river basin and evaluates scenarios of collaboration in basin water management as an adaptation strategy. By mid-century climate change will significantly increase water scarcity in the basin: up to 30% in Iran, 27% in Türkiye, 17% in Iraq, and 14% in Syria. Depending on the climate change scenario, average annual GDP losses from water scarcity and changes in crop yields range from 12 to 84 billion USD for these economies. However, collaboration among the TE river basin riparian countries in water allocation and use could mitigate the adverse economic effects and, relative to the status quo, generate direct GDP gain in the 42–58 billion USD range for these countries and indirect gains for other countries in the Middle East region. The results suggest that collaboration in water management in the TE river basin is an effective option to tackle emerging challenges such as the impact of climate change on water availability.
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