The cost of noncooperation in international river basins

In recent years there has been a renewed interest for water supply enhancement strategies in order to deal with the exploding demand for water in some regions, particularly in Asia and Africa. Within such strategies, reservoirs, especially multipurpose ones, are expected to play a key role in enhancing water security. This renewed impetus for the traditional supply-side approach to water management may indeed contribute to socioeconomic development and poverty reduction if the planning process considers the lessons learned from the past, which led to the recommendations by the World Commission on Dams and other relevant policy initiatives. More specifically, the issues dealing with benefit sharing within an efficient and equitable utilization of water resources are key elements toward the successful development of those river basins. Hence, there is a need for improved coordination and cooperation among water users, sectors, and riparian countries. However, few studies have explicitly tried to quantify, in monetary terms, the economic costs of noncooperation, which we believe to be important information for water managers and policy makers, especially at a time when major developments are planned. In this paper we propose a methodology to assess the economic costs of noncooperation when managing large-scale water resources systems involving multiple reservoirs, and where the dominant uses are hydropower generation and irrigated agriculture. An analysis of the Zambezi River basin, one of the largest river basins in Africa that is likely to see major developments in the coming decades, is carried out. This valuation exercise reveals that the yearly average cost of noncooperation would reach 350 million US$/ a, which is 10% of the annual benefits derived from the system.