Valuation of the Teesta River water by Hydro Economic Model

Abstract

Hydro-Economic Models (HEMs) are powerful tools to analyse water scarcity and water management problems. The Teesta River which flows from India to Bangladesh has long been a source of dispute between India and Bangladesh. A win–win solution for the problem is important for the 1.2 billion people of the two neighboring countries. A Hydro-Economic Model (HEM) on the Teesta may provide sufficient information for the solution of the dispute. Most HEMs that treat transboundary water issues consider a narrow scope of water values including agriculture, hydropower, municipal, and tourism. However, water has many additional values. This study adds to the HEM literature by considering the values of fisheries, navigation, environment or sediment transport. A Teesta Hydro-Economic Model (THEM) was developed to represent a large range of economic values of water use during the dry season. Results show that the total water use value for a dry season is USD 41.5 million for India and USD 77 million for Bangladesh. The study shows that the benefit per unit volume of water for hydropower is the lowest among all types of water use. After performing an economic analysis, this study found a potential for trade-off between hydropower use in India and environmental use in Bangladesh. This study gives an idea about how to maximise the benefits from the river and how to mitigate the water sharing dispute.