Calculating the Benefits of Transboundary River Basin Cooperation: Syr Darya Basin

Abstract

This paper presents an analysis of a newly developed draft agreement on the allocation of water and energy resources of the Syr Darya basin considering transboundary cooperation and benefits sharing. The method uses a river basin model and game theoretic concepts to assess the potential benefits to the four riparian countries, under various arrangements of cooperation, ranging from independent action to full cooperation as envisioned in the draft agreement. The analysis shows increased benefits to all countries in the basin if they follow the four-country cooperative arrangements outlined in the draft agreement. Different methods for allocating the benefits of cooperation are considered. The Shapely allocation provides each country with increased economic benefits and is stable in relation to each country’s likelihood of treaty compliance. Other methods to allocate of the gains are considered, such as proportional shares, equal shares, the Nucleolus, and Nash-Harsayni, which all result in allocations that are more likely to be violated and are less stable than the Shapley allocation. The analysis indicates the upstream country of Kyrgyzstan can be encouraged to participate in and comply with the agreement through additional compensatory payments; however, if their conditions are not right, they may be prone to noncompliance and disruption of the treaty. The concepts illustrated in this paper can be used as the basis for analyzing benefits sharing and cooperation in other transboundary basins.