Transboundary water treaty design for poverty reduction and climate adaptation

Abstract

When transboundary basins are developed in poor regions where freshwater resources are fully committed, it becomes important to design economically sustainable action plans to address existing poverty, especially in responding to mounting evidence of climate change and population growth. Increasing competition over shared water resources as well as climate water stress has attracted research efforts internationally addressing the benefits and costs of establishing water-sharing treaties. Despite this ongoing interest, few peer-reviewed works have investigated water development and use patterns that could produce economic gains for all parties from establishing transboundary water sharing agreements. This work develops an approach to address the gap by formulating and applying a basin-scale hydro-economic optimization model of West Africa’s Volta River Basin. The work analyzes the effects of a prospective multilateral water allocation and hydropower trade agreement on the size, sign, and distribution of basin-wide economic benefits. The model includes two new large storage reservoirs, five water use purposes, and two climate water supply scenarios with and without a water sharing treaty. From that, it assesses the net economic benefit-maximizing patterns of water use with and without the treaty. Results show a Pareto Improving outcome is achievable for all riparian countries from new storage capacity in the basin for which at least one country is better and none is worse off. This improvement is achievable with a multilateral water sharing treaty implemented with power trading among the six basin countries. Results indicate that all basin countries have the potential to secure significant economic gains from additional hydropower production with the treaty. Under its implementation, upstream countries would reduce agricultural water use in exchange for higher valued hydropower benefits under the climate-stressed low flow scenario. Despite potential benefits that are shareable from negotiation, practical implementation of such a treaty will require considerable diplomatic skill, patience and effort.