Sharing benefits in transboundary rivers: An experimental case study of the Central Asian water-energy-agriculture nexus

October 12th, 2015

Dr. Shokhrukh-Mirzo Jalilov, Water & Development Research Group, Aalto University, Finland

The principle of benefit sharing has been proposed as a strategy to facilitate the cooperation on transboundary river basins to address a wide range of water uses such as agriculture and energy production1,2,3. The main idea behind of the concept of benefit sharing is not to share physical quantities of water, but rather to share the benefits arising from water development and use2.

Benefit sharing thus builds on the assumption that the beneficiaries – in transboundary river basins the riparian countries – are more interested in the economic value and benefits that water and its development creates, rather than dividing up a fixed quantity of water itself. In ideal benefit sharing situations, the riparian countries view the benefits of water development and use as a positive-sum game associated with benefits optimization, rather than a zero-sum game associated with simple water sharing4. Such benefits are often economic, but can also include for example social, political or environmental benefits, and various mixes between these5.

This article presents an experimental case study looking at the possibility for benefit sharing in the Amu Darya River Basin (ADRB). The focus of the study is on the economic benefits that the riparian countries could receive from the planned Rogun Dam and its operation on the Vakhsh River, tributary to Amu Darya (see Figure 1). The Rogun Hydropower Plant (RHP) is a controversial project, and there have been active debates about its benefits, revolving around Tajikistan’s aim to enhance its energy security and Uzbekistan’s concerns about the negative impacts on its agriculture.

The modelling framework

An integrated river basin model was developed to estimate the benefits resulting from the various possible operation schemes of the Rogun Dam. Such operation schemes investigated three individual (country-specific) and two cooperative schemes, and focused on two of the most important water uses i.e. hydropower generation and agricultural production in the Amu Darya River Basin.

One baseline and five alternative model scenarios were considered as options to examine the economic performance of the riparian countries: 1) Baseline without the Rogun Dam; 2) Upstream Energy Priority (Tajikistan); 3) Uzbekistan Priority; 4) Turkmenistan Priority; 5) Downstream Agriculture Priority (Uzbekistan and Turkmenistan); and 6) No Priority (“optimal”) (see Figure 2).

Afghanistan was not included in these operation schemes as it is not a major water user in the basin, yet its water use was included in the actual model results. The baseline was included in the model by constraining the irrigation in the basin to closely reproduce historical agricultural land under production in each riparian country without the Rogun Dam. This created the baseline within which the five scenarios (with Rogun Dam) can be compared with.

Opportunities for benefit sharing

To initiate discussion on benefit sharing, we first look at the how preferable different operation schemes are for different countries based on the total economic benefits. As can be seen from Table 1, Tajikistan has in a way the most optimal situation, as all operation schemes are clearly more beneficial for it in terms of total economic benefits. The situation is different for Uzbekistan, Turkmenistan and Afghanistan which all have some operation schemes that are at least slightly detrimental when compared to the current situation i.e. the baseline.

Yet, a closer look at Tajikistan’s situation reveals that due to less optimal timing of energy production, it would not favor any other schemes except “Upstream Energy Priority” unless its energy demand is compensated in some other way. As a result, the key message from Table 1 is that there is no single operation scheme that would simultaneously satisfy the needs of all riparian countries, indicating the need for some kind of benefit sharing and related compensation mechanisms.

When looking at the different operation schemes and their potential for benefit sharing, we can first exclude “Uzbekistan Priority” and “Turkmenistan Priority” as both these scenarios result in clearly detrimental impact (red color) to some other country. Consequently, the three scenarios that have the biggest potential for benefit sharing and monetary compensation are: “Upstream Energy Priority”, “Downstream Agricultural Priority” and “No Priority.”

Discussion

The benefit sharing process consists of three main phases: motivation, design, and implementation6. Unfortunately, in the case of the Amu Darya Basin neither motivation nor any of the other stages from riparian countries have been realised. Each country strongly pursues its own unilateral interest which doesn’t help to bring peace and collaboration between historically and geographically close neighbors. In such a complicated situation we set out the reasons for the motivation stage of the benefit sharing process or so called “pre-motivation.”

The possible “pre-motivation” for benefit sharing could be offered by “Upstream Energy Priority”, “Downstream Agricultural Priority” and “No Priority” scenarios. The former scenario assumes energy production by the Rogun Hydropower Plant is based on the published energy needs of Tajikistan. This scenario satisfies 70% of the energy needs of Tajikistan for each month of a year and at the same time guarantees maximal electricity production by the RHP.

However, the size of the increase varies widely from 212% for Turkmenistan to 11% for Uzbekistan. Even considering an 11% increase in agricultural benefits in Uzbekistan it is hard to believe that this country would agree to the Rogun Dam construction. Taking into account the key role of Uzbekistan in the Amu Darya Basin and in the region, it would be reasonable to think Tajikistan will need to share the benefits and offer some compensation to reach consensus with its downstream neighbor country. The main difference of this scenario from the others is that energy is produced throughout the year and the energy benefits gained by Tajikistan let the country compensate agricultural losses of the downstream countries Uzbekistan and Turkmenistan due to RHP operation mode.

Another feasible set of options are presented by the “Downstream Agricultural Priority” and “No Priority” scenarios, which could be viewed as a restoration of a benefit sharing scheme used in the former Soviet period. Both schemes are based on the principle that water was provided for the downstream countries in vegetation time, so upstream countries have to store water in their reservoirs in winter and release it in summer. In exchange, downstream countries were obliged to provide upstream countries with energy resources (natural gas, oil, coal) in the winter period.

Although both scenarios are structurally the same they may differ in the compensation mechanisms adopted (who and how much should compensate) as the benefits of the downstream countries differ in both scenarios. In order to assess how much monetary compensation would be needed to convince upstream Tajikistan to agree for the “Downstream Agricultural Priority” or “No Priority” scenarios, each country must agree for such a scheme and detailed calculations should be made. It could turn out that this scheme would not be acceptable in terms of a cost-benefit analysis.

Conclusions

The water, food and energy security nexus is becoming a top issue in the global development agenda. Addressing conflict among these closely interrelated domains is considered increasingly important for equity and sustainability in transboundary river basins. The issue is complex and requires careful consideration by reviewing existing best practices, identifying new approaches, and implementing state-of-the-art principles and processes. This research argues that despite the unique basin-scale and sector challenges of agriculture, water and energy security in the Central Asian Amu Darya basin, the concept of benefit sharing could be utilized to find effective, contextualized solutions for the nexus issue.

The concepts illustrated in this article could be used as a basis for analyzing benefits sharing and cooperation in the context of transboundary cooperation. Using this approach, each country can see the benefits – and their limits – associated with cooperating in a regional, basin-wide agreement across water-energy-agriculture nexus.

References :

Sadoff, W. C.; Grey, D. Cooperation on International Rivers. A Continuum for Securing and Sharing Benefits. Water International 2005, 30(4), 420-427. Sadoff, C.W.; Grey, D. Beyond the river: the benefits of cooperation on international rivers. Water Policy 2002, 4(5), 389-403. Phillips, D.J.H.; Daoudy, M.; Öjendal, J.; Turton, A.R.; McCaffrey, S. Trans-boundary Water Cooperation as a Tool for Conflict Prevention and for Broader Benefit-Sharing. 2006. Stockholm, Sweden: Ministry of Foreign Affairs. Qaddumi, H. Practical approaches to transboundary water benefit sharing. Working Paper 292. 2008. Results of ODI research presented in preliminary form for discussion and critical comment. Lee, S. Benefit sharing in the Mekong River basin. Water International 2014, 40(1), 139-152. Sadoff, C.; Greiber, T.; Smith, M.; Bergkamp, G. Share – Managing water across boundaries. 2008. Gland, Switzerland.

Shokhrukh-Mirzo Jalilov is a Postdoctoral Fellow at the Water & Development Research Group, Aalto University, Finland, where he is conducting research on the diverse connections between water, energy and food security in large Asian river basins, with a specific focus on Central Asia (Amu Darya) and Southeast Asia (Mekong). Originally from Tashkent, Uzbekistan, he earned MS degree from North Dakota State University (USA) and PhD degree from New Mexico State University (USA). Shokhrukh is extensively working on policy analysis and designing hydro-economic models to optimally allocate water resources in transboundary river basin. A number of integrated basin models have been developed for Amu Darya and Tigris-Euphrates river basins to inform ongoing policy debates about perspectives of water resources management. In addition, he consulted on a number of projects for such international and bilateral donor organizations as United Nations Development Program (UNDP), Stockholm International Water Institute (SIWI), International Water Management Institute (IWMI), and Japan International Cooperation Agency (JICA). He is a recipient of the U.S. Department of State’s Edmund Muskie Fellowship and Open Society Foundations’ Global Supplementary Grant. This article is based on an original piece of research published in journal Water “Sharing Benefits in Transboundary Rivers: An Experimental Case Study of Central Asian Water-Energy-Agriculture Nexus.” The study was done under the Academy of Finland funded NexusAsia project (269901).

The views expressed in this article belong to the individual authors and do not represent the views of the Global Water Forum, the UNESCO Chair in Water Economics and Transboundary Water Governance, UNESCO, the Australian National University, or any of the institutions to which the authors are associated. Please see the Global Water Forum terms and conditions here.