Ambec, Stefan and Dinar, Ariel (2010) Hot Stuff: Would Climate Change Alter Transboundary Water Sharing Treaties? TSE Working Paper, n. 10-216

Preview

Text Download (460kB) | Preview

Abstract

By signing an international river sharing agreement (RSA), countries voluntary commit
to release water in exchange for a compensation. We examine the robustness of such
commitments to reduced water flows. We focus on RSAs that satisfy core lower bounds
and fairness upper bounds. We characterize the constrained upstream incremental RSA as
the core and fair RSA that is sustainable during the most severe droughts. It assigns to
each country its marginal contribution to its followers, up to its maximal benefit from water
extraction. It lexicographically maximizes the welfare of the most upstream countries in
the set of core and fair RSAs. Its mirror image, the downstream incremental RSA, is not
sustainable to drought at the river source.