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 complexity Political 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 ChallengesThe 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 ChallengesThe 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 ChallengesThe 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 ChallengesThe 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 benefits Potential 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 benefits Some 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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