Ambec, Stefan, Ariel Dinar and Daenne McKinney. 2013. “Water sharing agreements sustainable to reduced flows.” Journal of Environmental Economics and Management 66:3: 639-655.
Download reference Doi:10.1016/j.jeem.2013.06.003
By signing a water sharing agreement (WSA), countries agree to release an amount of river water in exchange for a negotiated compensation. We examine the vulnerability of such agreements to reduced water flows. Among all WSAs that are acceptable to riparian countries, we find out the one which is self-enforced under the most severe drought scenarios. The so-called upstream incremental WSA assigns to each country its marginal contribution to its followers in the river. Its mirror image, the downstream incremental WSA, is not sustainable to reduced flow at the source. Self-enforcement problems can be solved by setting water releases and compensations contingent to water flow. We apply our analysis to the Aral Sea Basin. We compute the upstream incremental compensations for the Bishkek agreement and asses its vulnerability with historical flows.