URS LUTERBACHER

04/20/23

Water Asymmetries, Climate Change and Conflict

Preamble

Water, even in the form of fresh water is globally relatively abundant and constant in mass

There are however huge regional disparities in terms of its availability

The water situation can be serious in arid and semi arid regions of the globe and lead to competition in different sectors

More than 70% is used for irrigation, over 90% is semi arid and arid areas

The current boom in agricultural prices could aggravate this situation

Freshwater Withdrawal by Sector (2000)

Sou

rce:

Peo

ple

and

Eco

syst

ems.

Was

hing

ton

DC

, US

A 2

000

Mountain Regions are Usually Abundant Sources of Water

However asymmetries are often present in terms of access to the resource due either to geography or to strong social inequalities

Climate change and low latitude or close to the equator glacier melt could aggravate these problems

Thus mountain regions are also often sources of conflicts internal and international

Example of an Internal Conflict:Nepal

Since the mid 1990’s a Maoist guerrilla has initiated a civil war

The Nepalese monarchy in charge of governing has during the same time witnessed a period of instability

It became increasingly authoritarian until recently when it had to agree to relinquish power under pressure from both a democratic opposition and the Maoist guerrilla and was actually terminated as an institution

Illustration of the Conflict

Fatalities (Source ISS)

0

1000

2000

3000

4000

5000

6000

1996

          19

97

           1

998

           1

999

           2

000

           2

001

           2

002

           2

003

           2

004

           2

005

IISS INSEC

Government forces have progressively increased to about to 130 000 whereas Maoists can count on 200 000 sympathizers

This situation gets clearer when one takes into account

84% of the population is rural and lives from agriculture

Access to water has been going down dramatically for significant segments of the population

Water Availability over Time in Nepal(Source FAO)

Water resources: total internal per capita (m3/inhab/yr)

0

5000

10000

15000

20000

25000

1958-1962 1963-1967 1968-1972 1973-1977 1978-1982 1983-1987 1988-1992 1993-1997 1998-2002 2003-2007

Water Conflicts Have Also International Dimensions

In the Middle East

In Central Asia

In Africa

In East Asia and North America

Illustration with 2 Cases

Example: The Nile River

Asymmetric access to river water: Euphrates river basin and Central

Asia

Asymmetric access to water resources is characteristic of mountain regions where water originates: 2 regions

Middle East

Central Asia: Dispute upstream countries, downstream countries over Soviet inherited water allocations: Here reversed situation, downstream countries are more powerful

Climate Change Predictions Middle East

Theory: Water Allocation is part of the "Common" or free Access Problem studied by

Dasgupta and Heal

Open access generally leads to inefficiencies and overuse of resources

The problem can be compounded by asymmetries between different users or producers

Commons Problems can usually be solved with a taxation system leading to a tax equilibrium or a property rights system: standard solutions

Market for externalities solution

Instruments of solution

Taxation

Theory: Symmetry and Asymmetries

Standard solutions often don’t work

They can add to the problem if for instance property rights have initially been distributed in a way that leads to inefficiencies

They will then often lead to conflict and credibility problems

However preexisting property arrangements might make this

difficult

Credibility Issues: Perfect and imperfect Information

Paradoxically in a sequential bargaining process the lack of knowledge of the opponent’s real intentions can lead to prudence and keep the other side prudent as well (risk averse)

It can thus lead to the emergence of equilibria which can lead to cooperative outcomes

It is best if such outcomes are backed by international institutional settings

Central Asia

Central Asia has Good Water Resources from Mountains and

Glaciers

Example: Kyrgyzstan Petrov Glacier, Ak-Shyrak Range

Alt: 3800 m

Water Use leads here to major inefficiencies

Water is wasted for cotton production in areas otherwise not suited for this culture

It is provided for free most often so no incentive to preserve it

32,000 km of Canals, poorly maintained and full of leaks

Karakoum canal: 1,340 km open air in the Turkmenistan Desert

These lead to transboundary conflicts on allocations

Countries are constrained by a water quota system dating back to the Soviet Era The Almaty Agreement (1992) Some extensions and revisions in different years

especially in (1998: exact amount of energy to be exported)

Under the system Kyrgyzstan gets only 10% of the waters of the Syr Daria basin

This prohibits the use of major developments in power generation

Any attempts to retain more water has lead to retaliations by down-stream countries

Interruption of fossil fuel deliveries

Conflict is the most inefficient form of environmental management: Can we do

better?

Project: an attempt at proposing solutions

Such solutions have to enhance efficiency

All regions have to profit

Potential of Kyrgyzstan

Kyrgyzstan generates an annual total flow of about 51 km3

This flow could increase by 10 % under projected climate change through precipitations and glacier melt

Hydropower could extend to 150 billion kwh if potential fully used

Basic Economic Trends:Value Added:Value added is the net output of a

sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. Value Added in Industry: (Source: World Bank)

Value Added in Industry in Billions (Constant 1995 USD)

02468

1012141618

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Kazakhstan Kyrgyz Republic Uzbekistan

Value Added in Agriculture

Value Added in Agriculture in billions (Constant 1995 USD)

0

1

2

3

4

5

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Kazakhstan Kyrgyz Republic Uzbekistan

Solution to Conflict

Is it possible to improve the welfare of the whole region: Kyrgyzstan +Kazakhstan +Uzbekistan?

Yes, by letting Kyrgyzstan use its full hydroelectric potential and export it cheaply to the region

Kyrgyzstan with 150 billion kwh potential can produce more than enough for the region: In 2000, entire production of Kyrgyzstan +Kazakhstan +Uzbekistan= 106 billions

Tadjikistan has almost the same potential, so 300 billion kwh would be available !

Kyrgyz production can use high altitude areas with low population densities:

Population (People per Sq Km)

0 - 2

3 - 10

11 - 20

21 - 50

51 - 100

101 - 200

201 - 500

501 - 1000

>1000

Kyrgyzstan can make use of high altitude dams

They can advantageously replace fossil fuel facilities

They can adapt instantaneously to demand and intervene in times where spot prices are high

But are they advantageous for the whole region?

Answer with the help of a numerical model

Electricity Spot Prices in Europe:German and Dutch Market: Spot

PricesJanuary 2001 – April 2002

Yes: Expanded production can improve total value added for the three countries! This solution presents however

the credibility problems mentioned

Central Asia: Total Value Added

0.0E+00

2.0E+09

4.0E+09

6.0E+09

8.0E+09

1.0E+10

1.2E+10

1.4E+10

1.6E+10

1.8E+10

1994 1996 1998 2000 2002 2004 2006

Co

nst

ant

1995

$

Calculated Value Added

Real Total Added Value

Total Value Added with Total Potential Kyrgyz Hydropower

Strategic Implications

What are the implications of this finding and which strategies concretely should the decision makers apply ?

Decision maker 1 should offer a contract to decision maker 2 guaranteeing a share of his gains to her

The credibility problem could be lifted on the one hand if Decision maker 1 does not act too aggressively thus keeping 2 risk averse and on the other if the contract is guaranteed by a third party like an international institution.