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Benefit (Cost) Sharing

Benefit (Cost) Sharing. In the context of the Okavango. Why talk about benefit sharing?. Why talk about benefit sharing?. as long the uses are non-rival there is no problem! The need for allocation and management occurs when the uses become rival and trade-offs emerge

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Benefit (Cost) Sharing

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  1. Benefit (Cost) Sharing In the context of the Okavango

  2. Why talk about benefit sharing? Why talk about benefit sharing? • as long the uses are non-rival there is no problem! • The need for allocation and management occurs when the uses become rival and trade-offs emerge • then we have two options • reallocating the water or the benefits of the water use, • investing in ways to conserve, store or reuse water • fundamentally the concept of benefit sharing becomes a good idea when the strategically selected and placed investments planned at a basin level is more profitable than when done at a country level. This allows the basin to exploit the comparative advantages of the individual countries. • Who and what use can generate the most benefit per unit of water? (more benefit per drop)

  3. The Okavango Case • water use in Angola and Namibia is minimal! Then most of the water ends in Botswana where it is “used” for tourism. • this is not going to remain so, there are development needs in the basin and all three will increase use for basic needs and for development • expect demand for diversions (i.e. agriculture or inter basin transfers), storage (resulting changes in flow regimes) or even landuse change that can affect the quality and quantity of the flow regime • There will be gains and losses. The TDA shows the gains will be upstream and the losses will be downstream.

  4. The OKACOM TDA methodology an analysis that linked water resource uses to river flows and ecological impacts, and then translated those impacts into economic terms. De facto current and potential future allocations of the water resource were explored through three water use alternatives. The current economic value of the use of the water resource was estimated in each country based on conservative and optimistic projections of the potential value of the different activities. the analysis of changes to the flow regime (IFA) under each projection was used to assess how existing water uses and new water supply, hydropower and irrigation uses would lead to increases or decreases in economic value derived from the river.

  5. What was found! • within the scope of the analysis (irrigation. HEP and WatSan) difficult to increase the net benefits generated by the river. • Benefits to share or compensation based on a resource allocation agreement?

  6. Alternative? • Is there a more sensible alternatives to water resources development? • What is the basin comparative advantage? Which uses can generate the most benefit per unit of water? (more benefit per drop) • invest in a low water withdrawal future? • one that involves maintaining the health and functioning of the Ecosystem, while investing in WatSAN, low cost run-of-river hydropower schemes, and only the most economically promising irrigation schemes? • liberate large amounts of investment capital for use in other productive activities in the basin?

  7. Conclusions? • current state of the river creates a comparative advantage for the region in the tourism and wildlife sector. • In the short term, the relative comparative advantage lies in the tourism sector in Botswana and Namibia (this can change) • a comprehensive settlement that both acknowledges equitable access by countries to the water resource and provides for using water in a productive manner and sharing of the resulting benefits would allow countries to gain the most • then you can have benefit sharing

  8. BUT!!

  9. Issues! • but how much to share and who? • Does Botswana pay because they were historically “using” the water? • Does Angola, which is still to generate value from the river, share their benefit downstream? Is that fair? • Problem 1: if you show large benefits then you can use more of the water! • Problem 2: if you show large benefits then you have to share those benefits!

  10. A Solution? • Set aside water for basic human needs including WatSan, some irrigation, power and ecosystem services • Use the rest of the water to develop joint Muti-Sectoral Investments where the countries share the benefits and the costs of the most productive investments selected at a basin level within an agreed basin development framework

  11. Watch this space for exciting new developments!

  12. The Okavango Strategic Action Program Starring: the people of the Okavango Produced and directed by: OKACOM Watch this space for exciting new developments!

  13. Thank you!

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