An economic assesment of the role of climate change and transboundary cooperation in hydropower production in the Niger Basin

HYDROPOWER: WHEN POLITICS CAN ACT AS A BUFFER AGAINST CLIMATIC RISK

In Esther's own words...

The starting point of my research in economics was to address the mechanisms and consequences of “water wars”, a popular and sensationalist concept that has largely been debunked by academics.
The economic literature has tackled water wars in two ways: first by focusing on inter-state cooperation and explaining the emergence of formalized institutions such as treaties (the Nile River Basin or the Jordan River stand among the famous case studies).
The second, more recent, approach looks at water from a global point of view, not only as a physical resource but as an input, embedded in a final product, ready to be consumed, traded and known as “virtual water”.
Both approaches have provided the literature with solid arguments for explaining the historical absence of water conflicts and have relied on interdisciplinarity. Indeed, while economic and human incentives to “fight” for the ownership of a shared water resource seem intuitive, it is the aggregate effect of economic power, geographical asymmetries, climatic variations, demography, historical and political relations, resource endowments and trade that will provide answers.
My first paper made an attempt to empirically investigate whether climate and economics triggered cooperative/conflictive interaction over water between upstream and downstream African countries. The reliability of African climatic and hydrologic data and the econometric methodology led to several interesting conclusions on the role of climatic asymmetries, however the data was clear: in the past 50 years, African countries had not waged war over water and this first study had not provided sufficient proof that climate was a sufficient criterion not to do so.
The difficulty of isolating the causes of water wars then led my research to take a step back from transboundary basins and look at virtual water trade. The concept suggests that water-scarce countries have preferred to import water-intensive commodities (mainly food and textile) rather than fight over shared water resources. However this argument is discredited mostly because water scarcity is not reflected in water prices and so will not be considered in production strategies. Therefore water-scarce countries like Kenya end up exploiting their water to export exotic flowers as the expected benefits outgrow the water constraint.
My research is now set out to empirically test and explain variations in volumes of virtual water trade based on economic, political, historical and economic factors. In line with the political and academic attempt to explain and prevent water conflict, I hope to strengthen the focus on two major pillars of water management: water pricing and productivity.

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