FORUM: Bilateral Monopoly: A Market for Intercountry River Water Allocation

Lekakis, Joseph N.

doi:10.1007/s002679900079

Cited by 13 publications

(6 citation statements)

References 17 publications

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“…The aim of the SQR project (Sustainability and Environmental Quality in Transboundary Riverbasins) (Delft University of Technology and Institute for Environmental Studies 1996) is to develop a decision framework by linking different models. Other examples on how combined economic-ecological models can help to solve transboundary river problems, in particular on the sharing of water resources, are described in Giannis and Lekakis (1996Lekakis ( , 1997 and Lekakis (1998). For the evaluation of policy measures, performance indicators can be used to reflect the level of achievement of each management objective.…”

mentioning

confidence: 99%

Indicators for Transboundary River Management

Lorenz¹,

Gilbert

Cofino

2001

Environmental Management

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/ The aim of this paper is to analyze the potential of indicators for integrated river basin management and to develop a set of indicators for the management of transboundary river basins. An indicator, comprising a variable or some aggregation of variables, describes a system or process such that it has significance beyond the face value of its components. Integrated river basin management takes into account policies and measures for the multifunctional use of rivers on a catchment scale and associated institutional changes. Indicators are useful instruments for this process for two reasons. Firstly, they meet the information need of policyand decision-makers. Secondly, indicators can be used to structure the definition and description of information needs and collection of information between the different international, institutional, and sectoral management levels. The development of indicators involves a number of steps: definition of aim, construction of conceptual model, selection of variables, comparison with selection criteria, database assessment, and indicator selection. In this paper these steps are discussed and specified for integrated river basin management. This results in a set of indicators describing the pressure to the river, the state of the river ecosystem, the impact to goods and services provided by the river, and the societal response. The proposed set of indicators measured at a river basin scale provides integrated information on the use and supply of goods and services, underlying cause-effect relationships and possible trade-offs and their spatial distribution (e.g., upstream versus downstream). Furthermore, we propose a division of tasks and responsibilities for river basin management with regard to the development of indicators, data collection, and their application in decision-making.Throughout history, human use of goods and service provided by rivers has changed them dramatically. These changes have impacted the river ecosystem, which is expressed by a reduction of species diversity and abundance (Wolff 1978, Admiraal and others 1993, Tittizer and Krebs 1996 and the supply of goods and services, such as drinking water production (RIWA 1997, Ietswaart andVan Dijk 1996), fisheries (Lelek 1989, IKSR 1993, and recreation. The cause-effect relationships underlying these changes are spatially and temporally displaced due to the unidirectional flow from the catchment to the river mouth (Burns 1991, Petts 1994. Policy-makers and water management bodies face the challenge of managing the complex spatial and temporal cause-effect relationships in watersheds and coping with conflicting interests in order to attain a more equitable and sustainable situation than is presently the case. This needs for an all-encompassing approach, and hence concepts such as integrated or comprehensive river basin management have been developed (Downs and Gregory 1991, De Jong and others 1994). River basin management needs practical instruments to implement such concepts in practice and to develop...

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confidence: 99%

Indicators for Transboundary River Management

Lorenz¹,

Gilbert

Cofino

2001

Environmental Management

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“…To obtain a larger stock, investments generally need to be higher. This becomes clear in the long run (s F >s OL immediately follows from (15) and (20)), even though we have not proved it at each point in time.…”

Section: Comparison Between the Open-loop And The Feedback Nash Equilmentioning

confidence: 69%

“…We first investigate the Nash equilibrium that occurs in the market (see Nash 1951). We consider a bilateral monopoly with a single water seller and a single water buyer, like in Lekakis (1998). The transfer price will be determined in a demand-supply setting in the market (see for example Ballestero (2004)).…”

Section: Introductionmentioning

confidence: 99%

Dynamic management of water transfer between two interconnected river basins

Cabo

Erdlenbruch

Tidball

2014

Resource and Energy Economics

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This paper analyzes the dynamic interaction between two regions with interconnected river basins. Precipitation is higher in one river-basin while water productivity is higher in the other. Water transfer increases productivity in the recipient basin, but may cause environmental damage in the donor basin. The recipient faces a trade-off between paying the price of the water transfer, or investing in alternative water supplies to achieve a higher usable water capacity. We analyze the design of this transfer using a dynamic modeling approach, which relies on non-cooperative game theory, and compare solutions with different information structure (Nash open-loop, Nash feedback, Stackelberg) with the social optimum. We first assume that the equilibrium between supply and demand determines the optimal transfer price and amount. We show that, contrary to the static case, in a realistic dynamic setting in which the recipient uses a feedback information structure the social optimum will not emerge as the equilibrium solution. We then study different leadership situations in the water market and observe that the transfer amount decreases towards a long-run value lower than the transfer under perfect competition, which in turn lays below the social optimum. In consequence, the water in the donor's river-basin river converges to a better quality in the presence of market power. Finally, we numerically compare our results to the Tagus-Segura water transfer described in Ballestero (2004). Welfare gains are compared for the different scenarios. We show that in all dynamic settings, the longrun transfer amount is lower than in Ballestero's static model. Further, we show that the long-run price settles at a lower level than in Ballestero's model, but is still higher than the average cost-based price determined by the Spanish government.

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“…Hence, making fair and reasonable allocation rules is key to avoiding such conflict [14][15][16][17][18][19][20][21][22][23]. In addition, a few scholars proposed to construct an international water trading market to solve water conflict in transboundary rivers [24][25][26][27][28][29]. However, current studies mostly focus on the physical water to find solutions to water quantity conflict yet ignore the virtual water transfer (VWT) triggered by commodity trade among countries within the same drainage basin.…”

Section: Introduction 1literature Reviewmentioning

confidence: 99%

Analysis on Management Policies on Water Quantity Conflict in Transboundary Rivers Embedded with Virtual Water—Using Ili River as the Case

et al. 2022

Sustainability

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Current studies neglect how virtual water transfer (VWT) between countries within a drainage basin affects water stress and then yields an invisible effect on the water quantity conflict in transboundary rivers, which would further make management policies on water quantity conflict less fair and reasonable. Therefore, this study first constructs the Inequality Index of VWT and water stress index (WSI) to assess water stress. Next, different types are set according to the Inequality Index and WSI to analyze management policies, with Ili River as the case. Results show: (1) Within the study period, from 1996, the Inequality Index of VWT between China and Kazakhstan stayed at 0.368 (0.368 < 0.5), indicating a relatively high inequality of VWT between the two countries—China at a disadvantage, while Kazakhstan having the upper hand. (2) According to the remotely sensed data, WSI in the riparian zones of the Ili River rose from 0.288 to 0421 in China, and 0214 to 0.402 in Kazakhstan, showing intermediate scarcity. (3) China and Kazakhstan both fall into Type 2, and Kazakhstan has the advantageous position. Therefore, while allocating the water resources of the Ili River, Kazakhstan should lower its expectation and proactively ask to exchange benefits in other aspects to reverse the outward transfer of its physical water. In addition, the two countries should find suitable ways to go about water rights trading to reduce the possibility of potential water quantity conflict.

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FORUM: Bilateral Monopoly: A Market for Intercountry River Water Allocation

Cited by 13 publications

References 17 publications

Indicators for Transboundary River Management

Indicators for Transboundary River Management

Dynamic management of water transfer between two interconnected river basins

Analysis on Management Policies on Water Quantity Conflict in Transboundary Rivers Embedded with Virtual Water—Using Ili River as the Case

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