Env /Ep Oc/Eap(2015)
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Unclassified ENV/EPOC/EAP(2015)11 Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development 23-Sep-2015 ___________________________________________________________________________________________ _____________ English - Or. English ENVIRONMENT DIRECTORATE ENVIRONMENT POLICY COMMITTEE Unclassified ENV/EPOC/EAP(201 TASK FORCE FOR THE IMPLEMENTATION OF THE ENVIRONMENTAL ACTION PROGRAMME FOR CENTRAL AND EASTERN EUROPE, CAUCASUS AND CENTRAL ASIA 5)11 THE POTENTIAL BENEFITS OF TRANS-BOUNDARY COOPERATION IN GEORGIA AND AZERBAIJAN-KURA RIVER BASIN Final Report 7-8 October 2015, Tashkent, Uzbekistan Agenda Item 6 This report’s objective was to provide further insight on the potential benefits of trans-boundary cooperation between Georgia and Azerbaijan in the Kura river basin. Economic analysis can help identify potential benefits of improved cooperation on water resources management, and allocate them fairly, to drive further improvement of the river management. The outcomes of this study allowed for the identification of priorities for future work on trans-boundary cooperation between Georgia and Azerbaijan. Earlier versions of the study were discussed at the regional workshop on 11 November 2014 in Georgia and at the National Policy Dialogue on water on 27 February 2015 in Azerbaijan. Both meetings generally endorsed the findings of this study. Following discussion by the EAP Task Force the report will be published by the OECD. ACTION REQUIRED: For information. Please contact Ms. Tatiana Efimova in Green Growth and Globa Relatoons division for any additional information at [email protected] English JT03382158 Complete document available on OLIS in its original format - This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of Or. English international frontiers and boundaries and to the name of any territory, city or area. ENV/EPOC/EAP(2015)11 TABLE OF CONTENTS INTRODUCTION ........................................................................................................................................... 5 BUILDING AN ANALYTICAL FRAMEWORK FOR BENEFIT INVENTORY ....................................... 7 Existing analytical frameworks .................................................................................................................... 7 The proposed framework ........................................................................................................................... 10 FROM THEORY TO PRACTICE: POTENTIAL BENEFITS OF COOPERATIVE WATER MANAGEMENT IN GEORGIA AND AZERBAIJAN ............................................................................... 15 Trans-boundary water management issues in Georgia and Azerbaijan ..................................................... 15 Inventory of potential benefits of cooperative management in trans-boundary water bodies ................... 19 Selection of the case studies for the benefit assessment ............................................................................ 23 BUILDING SCENARIOS AND ASSESSING BENEFITS FOR THE MAJOR TRANS-BOUNDARY WATER BODIES: PROPOSED METHODOLOGY ................................................................................... 24 The overall framework ............................................................................................................................... 24 How to build cooperation scenarios? An example ..................................................................................... 24 The net benefits of the different cooperation scenarios ............................................................................. 25 JANDARI LAKE .......................................................................................................................................... 27 Water quantity issues: an overview ........................................................................................................... 27 Building scenarios ...................................................................................................................................... 28 The costs of trans-boundary cooperation on water quantity issues: first estimates ................................... 30 Estimating the gross benefits of trans-boundary cooperation on water quantity issues ............................. 31 Economic benefits for water supply companies ........................................................................................ 32 Comparison of costs and benefits estimates, and considerations over these first results ........................... 34 FLOODING ISSUES ALONG THE KURA RIVER ................................................................................... 36 Scenarios for trans-boundary cooperation ................................................................................................. 36 The gross benefits of trans-boundary flood management .......................................................................... 36 Georgia: flood hazard distribution and the costs of flooding events ......................................................... 37 Number of flood events in Azerbaijan ....................................................................................................... 40 The avoided costs of flooding following the implementation of a joint early-warning system ................. 41 The costs of trans-boundary flood management ........................................................................................ 41 Comparison of costs and benefits estimates, and considerations over these first results ........................... 42 THE ROLE OF ECONOMIC THINKING IN TRANS-BOUNDARY WATER MANAGEMENT: HOW CAN ECONOMIC INFORMATION SUPPORT THE DECISION-MAKING PROCESS? ....................... 43 What do the case studies tell us? ................................................................................................................ 43 The role of economic thinking in the trans-boundary decision-making process ....................................... 44 In conclusion… .......................................................................................................................................... 45 CURRENT AND FUTURE PROSPECTS FOR TRANS-BOUNDARY COOPERATION ON WATER MANAGEMENT BETWEEN GEORGIA AND AZERBAIJAN ................................................................ 46 2 ENV/EPOC/EAP(2015)11 CONCLUDING REMARKS ........................................................................................................................ 48 Conclusions ................................................................................................................................................ 48 The way forward ........................................................................................................................................ 49 Tables Table 1. TEEB Classification of ecosystem goods and services ........................................................... 7 Table 2. Classification of trans-boundary benefits of coordinated water management according to Sadoff and Grey (2002) ............................................................................................................................... 8 Table 3. The benefits of trans-boundary water management ................................................................. 9 Table 4. Proposed framework for benefit inventory ............................................................................ 13 Table 5. Kura River ............................................................................................................................. 16 Table 6. Iori/ Gabirri River .................................................................................................................. 17 Table 7. Alazani/ Ganyh River ............................................................................................................ 17 Table 8. Ktsia-Khrami river ................................................................................................................. 18 Table 9. Lake Jandari ........................................................................................................................... 18 Table 10. Alazani-Agrichay aquifer ...................................................................................................... 19 Table 11. Benefits for Kura River ......................................................................................................... 20 Table 12. Benefits for Iori/Gabirri River ............................................................................................... 20 Table 13. Benefits for Alazani/ Ganyh River ........................................................................................ 21 Table 14. Benefits for Ktsia-Khrami River ........................................................................................... 22 Table 15. Benefits for Lake Jandari ....................................................................................................... 22 Table 16. Benefits for Alazani-Agrichay Aquifer ................................................................................. 22 Table 17. Water abstraction balance ...................................................................................................... 24 Table 18. Water abstraction by countries .............................................................................................