Unreliable and unequal public water supply already affects around one billion urban residents around the world. In many cities, informal water markets have emerged to fill public supply gaps by delivering water via tanker trucks, depleting scarce rural groundwater sources. A quintessential example of this can be found in the highly water-scarce country of Jordan. In Jordan, intermittent public water supply and rapid urban growth have led to a surge of uncontrolled groundwater abstractions by pervasive illegal tanker water markets.

Here, we use a rigorous coupled human-natural systems model to assess a range of policy options for mitigating the groundwater impacts of informal water markets in Jordan with regards to their effectiveness and impacts on household water access. The model represents spatially distributed feedbacks between Jordan’s water sector and groundwater resources in country-wide scenario simulations until 2050. We find that investments in supply augmentation have limited impact on tanker water demand, unless they are combined with a more equitable and efficient distribution of public water supply. Jordan’s current policy of closing illegal tanker wells is found to impede the access of water-stressed households to tanker deliveries. Approaches for the legalization of tanker water markets provide more efficient policy options. Policy design is shown to be decisive for safeguarding household water access. Our findings show that understanding the role of informal water markets in urban water supply can be critical for reconciling sustainable groundwater management and household water security.