Social Conflicts

Our language reflects […] ancient roots: 'rivalry' comes from the Latin rivalis, or 'one using the same river as another.' Riparians – countries or provinces bordering the same river – are often rivals for the water they share (Wolf et al. 2005, p. 80).

Social conflicts are often closely related to the distribution of benefits and costs (Bernauer et al. 2012). In the real world, most MWEPs that generate benefits only to some groups in society and losses to others are subject to a potential conflict. These benefits and losses are very often associated with power relations. Ohlsson (2000) argues that the source of MWEPs conflict is not water scarcity itself but the required institutional change following large scale engineering to govern the scarce resource. The Human Development Report (UNDP 2006, p. 2) also states that the “scarcity at the heart of the global water crisis is rooted in power, poverty and inequality, not in physical availability”.

Here, one important step to avoid or reduce conflicts is to explicitly address distributive impacts in decision support schemes. Who are the individuals or societal groups affected by the MWEPs? Are indigenous people or vulnerable groups particularly affected? What are alternatives? How can people be compensated? Thus it is decisive to include distributive aspects into (economic) analysis of major water infrastructure projects. Such distributive effects can be assessed quantitatively and qualitatively to build up a knowledge base for potential solutions (TEEB 2012, p. 31). In case distributional effects are not sufficiently taken into account potential conflicts may incur substantial economic (welfare) losses.

Involuntary or uncompensated re-settlements and losses of heritage sites may provide an example. Creation of large reservoirs for hydropower often requires that farmers and settlements are to be relocated. This entails not just the loss of nutrient rich high-yield marsh soils for farming, but often historically important settlement areas, cultural heritage sites, and aesthetic and recreational services. Some of these values may never be recovered – such as the loss of cultural heritage. Other values may be recovered such as the value of agricultural production. It is basically an ethical and often a political question of whether these values can be offset, compensated for or outweighed by benefits.

Another example may be provided by trans-boundary water conflicts caused by different goals and needs in different countries along the same river. Water is rival in its use – meaning that water used for a specific purpose is often not available for other uses. These trade-offs occur over space and time when hydropower is required upstream in winter, but downstream agricultural irrigation is required in summer like in the Syrdarya basin (see Chap. 7).

Economically speaking these “social costs” (impacts on ecosystem services, vulnerable groups or indigenous people that are not covered in market relations) have to be accounted for – otherwise an infrastructure investment decision like a dam might constitute a decision that turns out to be inefficient in terms of welfare. Whether this is practically feasible is not just a question of a proper assessment but also political will, power, and (democratic) institutions.

Potential and Limits of Economic Analysis

An informed decision on whether to build or not to build e.g. a large dam is not just a question of “yes” or “no” but also about different options to realise a certain goal, let it be flood control, food security, or electricity generation. Such a decision involves inevitable trade-offs. A well-designed analysis of different options and their associated costs and benefits can show which alternative actually yields the largest positive net benefit.

Figure 5.3 exemplifies hypothetical use scenarios for fresh water bodies. Optimising a single service or benefit dimension such as hydropower or ecosystem services does not necessarily yield an overall optimum. Finding balanced solutions that take into account multiple value dimensions may create the largest net benefits.

A comprehensive analysis that compares the advantages (benefits) and disadvantages (costs) of different scenarios for the use of water and wetland resources among multiple value dimensions can identify the best choice option. One policy goal could be secure water access and availability for a certain region. Another policy goal might be renewable energy production by hydropower. A third policy goal might be

Fig. 5.3 Hypothetical scenarios of trade-offs between services and social impacts (Adapted from Millennium Ecosystem Assessment 2005b, p. 219)

sustaining a healthy environment. The decisive point here is that all impacts should be considered – and not only a single one. We see this as a major fault in past decisions on dam building where in many cases the focus was merely on energy production.

The actual management options to realise a single or multiple of these goals can look quite different and can incur different costs and benefits. It could be naturebased or technical, decentralised or centralised, smallor large-scale. After an identification of potential approaches, different options could be compared by cost-benefit-analysis (Hansjürgens 2004), multi-criteria-analysis (Hansjürgens 2011), or other methods (TEEB 2010, 2012).

If properly designed an economic analysis can thus be an important source for decision-making and can ideally ensure that all relevant costs and benefits are taken into account.

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