Sharing Benefits of Transboundary Waters through Cooperation

David Grey

The World Bank

International Conference on Freshwater Bonn, 2001

River basin management& boundaries

• Basins within nations with strong central government

• Basins within federal nations with strong state governments (transboundary waters)

• Basins shared by nations (international transboundary waters)

Legal complexityPolitical complexity

International transboundary waters

• Extent: 260 “river” basins shared by 2+ nations

• Culture: river/society, pride, sovereignty

• Jurisdiction: no entity unless negotiated

• Politics: ‘anarchy’ of international relations

• Principles: UN Convention foundation

• Tensions: longstanding, always, growing with demand, ‘water wars’….

‘New Geography of Conflict’

“Possible flashpoint for resource conflict”

“Water systems & aquifers• Jordan• Nile• Tigris – Euphrates• Amu Darya• Indus• Mountain Aquifer (W.

Bank/Israel)”

Overview

• What are the benefits of cooperation?

• How can these benefits be shared?

• Some lessons and conclusions

Benefits of International Waters Cooperation

The Challenges The Opportunities

Level 1:

Benefits to the river

Limited water resour. management: degraded watersheds, wetlands, biodiversity, & water quality.

Improved water quality, riverflow characteristics, soil conservation, biodiversity; a pre-requisite

Benefits of International Waters Cooperation

Sub-optimal water resources development

Improved hydropower & agricultural production, flood-drought management, environmental conservation & water quality

The Challenges The Opportunities

Level 2:

Benefits from the river

Level 1:

Benefits to the river

Limited water resour. management: degraded watersheds, wetlands, biodiversity, & water quality.

Improved water quality, riverflow characteristics, soil conservation, biodiversity; a pre-requisite

Benefits of International Waters Cooperation

Sub-optimal water resources development

Improved hydropower & agricultural production, flood-drought management, environmental conservation & water quality

The Challenges The Opportunities

Level 2:

Benefits from the river

Level 1:

Benefits to the river

Limited water resour. management: degraded watersheds, wetlands, biodiversity, & water quality.

Improved water quality, riverflow characteristics, soil conservation, biodiversity; a pre-requisite

Level 3:

Costs because of the river

Tense (+/-) regional relations & political economy impacts

Policy shift to cooperation & development, from dispute; from food & energy self-sufficiency to security; reduced conflict risk & military expenditure (+/-)

Benefits of International Waters Cooperation

Sub-optimal water resources development

Improved hydropower & agricultural production, flood-drought management, environmental conservation & water quality

The Challenges The Opportunities

Level 2:

Benefits from the river

Level 1:

Benefits to the river

Limited water resour. management: degraded watersheds, wetlands, biodiversity, & water quality.

Improved water quality, riverflow characteristics, soil conservation, biodiversity; a pre-requisite

Level 3:

Costs because of the river

Tense (+/-) regional relations & political economy impacts

Policy shift to cooperation & development, from dispute; from food & energy self-sufficiency to security; reduced conflict risk & military expenditure (+/-)

Level 4:

Benefits beyond the river

Regional fragmentation

Integration of regional infrastructure, markets & trade

Sharing the benefits

The Challenge• Optimal river development may give unacceptable

distribution of benefits• A mechanism for redistribution & compensation• ‘Fairness’ – subjective & situation specific• Potential benefits to be shared

– Water quantity/quality; water supply; hydropower; agricultural production; fisheries; transport; eco-tourism; trade….

• Political decisions

Sharing the benefits

Principles• Some international consensus on principles

– 1997 UN Convention on the Law of the Non-navigable Uses of International Watercourses (SADC Protocol, etc)

• “Equitable and reasonable utilization” • “No significant harm”• No consensus on prioritization

– UN Convention ‘vital human needs’

• No consensus on specific criteria

Sharing the benefitsPotential Criteria

• Physical factors: geography, hydrology, contribution to flow • Socioeconomic factors: total population, dependent

population, economic & social needs • Water Uses: existing & potential, efficiency of use• Alternative sources: availability & costs• Externalities: upstream & downstream• Conservation: impacts & efforts to preserve• Formulae: Equal (or proportionate) shares of flows or benefits

Sharing the benefits

Past practices • Compensation for lost benefits• Equal apportionment of flow to each riparian • Prioritization of uses • Payments for water • Absolute sovereignty of tributaries • Equal allocation of benefits, and • Relinquishing of prior uses

(after: Wolf)

Sharing the benefitsSome possible mechanisms

• Water sharing– (Re)assigning rights

• Payments for water – Payment for use rights, bilateral sale or water markets

• Payments for benefits – Compensation for lost benefits, payments to allow new uses

• Purchase agreements – power, agriculture, etc.– Agreed price can effect a transfer of benefits

• Financing & ownership arrangements– Agreed terms can effect a transfer of benefits

• Bundling broader benefits– Trade, transport….

Lessons in Benefit Sharing

• Importance of political PROCESS• Perception of fairness essential to sustain cooperation

on transboundary waters• Sharing benefits &/or water• Benefit bundles: the broader the better• Innovative benefit sharing mechanisms• Unique solutions

Process: the key lesson• Imperative of trust

– Build capacity to “level playing field”– Wide civil society engagement: basin “community of interest”– Share experiences “in the bus”

• Riparian ownership: ownership builds commitment– Self-financed institutional arrangements essential

• Riparian commitment – “Shared Vision”: recognizing “win-win”– Share benefits, not only water

• Inclusiveness & subsidiarity– Build basin-wide framework– Achieve early results through sub-basin action

Conclusions• No blueprints: from simple to very complex

• Process as important as product to achieve cooperation

• Twice as long & costly as planned - & then some

• From river cooperation to economic integration

• An instrument to support PROCESS? – sustainability & security (‘public goods’)

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