Cooperative game theory and its application to natural, environmental, and water resource issues : 2. application to natural and environmental resources

This paper provides a review of various applications of cooperative game theory (CGT) to issues of natural and environmental resources. With an increase in the level of competition over environmental and natural resources, the incidents of disputes have been at the center of allocation agreements. The paper reviews the cases of common pool resources such as fisheries and forests, and cases of environmental pollution such as acid rain, flow, and stock pollution. In addition to providing examples of cooperative solutions to allocation problems, the conclusion from this review suggests that cooperation over scarce environmental and natural resources is possible under a variety of physical conditions and institutional arrangements. CGT applications to international fishery disputes are especially useful in that they have been making headway in policy-related agreements among states and regions of the world. Forest applications are more local in nature, but of great relevance in solving disputes among communities and various levels of governments.Environmental Economics&Policies,Fisheries&Aquaculture,Common Property Resource Development,Economic Theory&Research,Ecosystems and Natural Habitats

Applications of negotiation theory to water issues

The authors review the applications of noncooperative bargaining theory to waterrelated issues-which fall in the category of formal models of negotiation. They aim to identify the conditions under which agreements are likely to emerge and their characteristics, to support policymakers in devising the"rules of the game"that could help obtain a desired result. Despite the fact that allocation of natural resources, especially trans-boundary allocation, has all the characteristics of a negotiation problem, there are not many applications of formal negotiation theory to the issue. Therefore, the authors first discuss the noncooperative bargaining models applied to water allocation problems found in the literature. Key findings include the important role noncooperative negotiations can play in cases where binding agreements cannot be signed; the value added of politically and socially acceptable compromises; and the need for a negotiated model that considers incomplete information over the negotiated resource.Water Supply and Sanitation Governance and Institutions,Town Water Supply and Sanitation,Water and Industry,Environmental Economics&Policies,Water Conservation

The Case for International Emission Trade in the Absence of Cooperative Climate Policy

We evaluate the efficacy of international trade in carbon emission permits when countries are guided strictly by their national self-interest. To do so, we construct a calibrated general equilibrium model that jointly describes the world economy and the strategic incentives that guide the design of national abatement policies. Countries' decisions about their participation in a trading system and about their initial permit endowment are made noncooperatively; so a priori it is not clear that permit trade will induce participation in international abatement agreements or that participation will result in significant environmental gains. Despite this, we find that emission trade agreements can be effective; that smaller groupings pairing developing and developed-world partners often perform better than agreements with larger rosters; and that general equilibrium responses play an important role in shaping these outcomes.Global warming, coalitions, general equilibrium, tradable permits

Improved water and land management in the Ethiopian highlands: its impact on downstream stakeholders dependent on the Blue Nile; Intermediate Results Dissemination Workshop February 5-6, 2009, Addis Ababa, Ethiopia

River basin management, Watershed management, Farming systems, Water balance, Reservoirs, Water supply, Irrigation requirements, Irrigation programs, Simulation models, Sedimentation, Rainfall-Runoff relationships, Erosion, Soil water, Water balance, Soil conservation, Institutions, Organizations, Policy, Water governance, International waters, Institutional and Behavioral Economics, Land Economics/Use, Resource /Energy Economics and Policy,

Applications of Negotiation Theory to Water Issues

The purpose of the paper is to review the applications of non-cooperative bargaining theory to water related issues – which fall in the category of formal models of negotiation. The ultimate aim is that to, on the one hand, identify the conditions under which agreements are likely to emerge, and their characteristics; and, on the other hand, to support policy makers in devising the “rules of the game” that could help obtain a desired result. Despite the fact that allocation of natural resources, especially of trans-boundary nature, has all the characteristics of a negotiation problem, there are not many applications of formal negotiation theory to the issue. Therefore, this paper first discusses the non-cooperative bargaining models applied to water allocation problems found in the literature. Particular attention will be given to those directly modelling the process of negotiation, although some attempts at finding strategies to maintain the efficient allocation solution will also be illustrated. In addition, this paper will focus on Negotiation Support Systems (NSS), developed to support the process of negotiation. This field of research is still relatively new, however, and NSS have not yet found much use in real life negotiation. The paper will conclude by highlighting the key remaining gaps in the literature.Negotiation theory, Water, Agreeements, Stochasticity, Stakeholders

Applications of negotiation theory to water issues

The purpose of the paper is to review the applications of non-cooperative bargaining theory to water related issues – which fall in the category of formal models of negotiation. The ultimate aim is that of, on the one hand, identify the conditions under which agreements are likely to emerge, and their characteristics; and, on the other hand, to support policy makers in devising the “rules of the game” that could help obtain a desired result. Despite the fact that allocation of natural resources, especially of trans-boundary nature, has all the characteristics of a negotiation problem, there are not many applications of formal negotiation theory to the issue. Therefore, this paper first discusses the noncooperative bargaining models applied to water allocation problems found in the literature. Particular attention will be given to those directly modelling the process of negotiation, although some attempts at finding strategies to maintain the efficient allocation solution will also be illustrated. In addition, this paper will focus on Negotiation Support Systems (NSS), developed to support the process of negotiation. This field of research is still relatively new, however, and NSS have not yet found much use in real life negotiation. The paper will conclude by highlighting the key remaining gaps in the literature.Negotiation theory, Bragaining, Coalitions, Fairness, Agreements

Prospects of Cooperation in the Eastern Nile Basin : The case of Experimental Game Application

Tensions over the use of Nile waters have recently increased and no comprehensive agreement till date acceptable to all Eastern Nile Basin riparian countries exists. After years of escalating tensions between upstream and downstream countries of the Nile basin, mainly because of Ethiopia's construction of Grand Ethiopian Renaissance Dam (GERD), a sense of mistrust hangs over the dam's ultimate use. Preventing transboundary water conflicts cannot be realized without forming adequate cooperation in managing shared waters which through robust and equitable structures and institutions. Since conflict resolution is a political process to make decisions after a lengthy procedure of negotiations, cooperation at transboundary level needs much time, patience and persistence to have ampler chances to succeed if the drivers and interests of the riparian states are identified, quantified and shared with the help of diplomatic mechanisms. The nature of cooperative decision-making at the transboundary water scale is regarded as a complex system composed which cannot be forgone without diplomacy among parties to facilitate understanding of actors' interests by creating a transparent and confident environment. This study developed a series of laboratory game experiment as an approach to examine the impact of a set of incentivized compensation options to promote cooperation through trust building, reduction of decision makers' uncertainties and simplification of complexities. To test whether individuals have the ability to signal the economic gains expansion as a motive for cooperation, this study reports a laboratory game experiment in the form of non-binding, 3-player, trust games. Payoff schemes are calculated and provided using real-world data for the case of the Eastern Nile Basin under four different allocation scenarios. The analysis of exploring cooperation probability under each scenario aims to identify the likelihood of the "win for all" decisions, which could not be reached with the unilateral behavior of states, but through a stable integrative and collaborative framework. The results of the experimental games indicate that cooperation is indeed hard to establish in a strategic environment with a sense of uncertainty for the future, but it is still attainable. Since cooperation is mostly conditional, as long as a set of preconditions are available and certain ranges of incentives are ensured, cooperation continues. The result of the study demonstrates that basin-wide security requires regional cooperation while cooperative decision-making takes place in a transparent environment with a variety of compensation options, institutional reforms, and incentive-compatible considerations. In the end, key conclusions prove that sustained and open communication and information sharing can lead to collective actions. In order to establish joint decision-making for cooperation over the shared waters, recognition of all sorts of benefits cooperation brings in a short and long run, and fair distribution of those benefits among the riparian countries play a crucial role.Die durch die Verwendung von Nil-Gewässern ausgelösten Spannung erhöhen sich seit geraumer Zeit und nach wie vor wurde noch keine umfassende Vereinbarung getroffen, welche akzeptable Lösungsansätze für alle Staaten am östlichen Nilufer darstellt. Nach Jahren der immer wieder eskalierenden Spannungen zwischen Downstream- und Upstream-Länder im Nilbecken, insbesondere im Hinblick auf Äthiopiens Bau des Grand Äthiopien Renaissance Dam (GERD), schwebt ein Gefühl von Misstrauen über dem Damm und Nutzung. Da die Konfliktlösung einen politischen Prozess darstellt, mit Entscheidungen die nach langwierigen Verhandlungsverfahren getroffen werden, braucht die Zusammenarbeit auf grenzüberschreitender Ebene, viel Zeit, Geduld und Beharrlichkeit, sofern Entscheidungsgrundlagen und Interessen der Uferstaaten mittels diplomatischer Mechanismen bekannt und quantifiziert wurden, um letztlich eine höhere Chance auf Erfolg zu realisieren/erhalten/haben/in Aussicht zu haben. Das Wesen der kooperativen Entscheidungsfindung in einem grenzüberschreitenden Wassersystem wird als ein komplexes Netzwerksystem betrachtet, welches nicht auf Diplomatie unter/zwischen den Parteien verzichten kann, um folglich das Verständnis von Interessen, durch Schaffung eines transparenten und zuversichtlichen Umfeldes, zu erleichtern. Diese Studie trägt dazu bei, eine Reihe von Laborspiel- Experimenten zu entwickeln, welche eine Reihe von Anreizkompensationsoptionen untersuchen, die die Kooperation durch Vertrauensbildung, also der Minderung der Zweifel Entscheidungsträger und die Vereinfachung der Komplexität fördern. Um zu testen, ob Einzelpersonen fähig sind, ihre Bereitschaft zur Zusammenarbeit zu signalisieren, wodurch sie ihre ökonomischen Gewinne erhöhen könnten, zeigt die Studie eine Reihe von experimentellen Laboratorien in Form von unverbindlichen, 3-Spieler, Vertrauensspielen. Die Analyse der Kooperationswahrscheinlichkeitserforschung jedes Szenarios zielt darauf ab, die Wahrscheinlichkeit der "win for all" -Situation zu identifizieren, die zwar nicht mit dem einseitigen Verhalten der Staaten erreichbar ist, jedoch durch einen stabilen, integrativen und kooperativen Rahmen bewerkstelligt werden kann. Die Ergebnisse des experimentellen Spiels zeigten, dass obwohl Zusammenarbeit in strategischen Umfeldern mit ungewisser Zukunft schwierig zu implementieren ist, dennoch, sofern Vorbedingungen zur Verfügung stehen, machbar ist. Da die Kooperation meist unter Vorbehalt ist, schreitet die Zusammenarbeit nur voran, solange eine Reihe von Voraussetzungen gegeben ist und bestimmte Anreizbereiche sichergestellt sind. Das Ergebnis der Studie zeigt, dass ein Becken weite Effizienz, eine regionale Kooperation erfordert und eine kooperative Entscheidungsfindung in einem transparenten Umfeld unter einer Vielzahl von Ausgleichsoptionen, institutionellen Veränderungen und anreizkompatiblen Überlegungen, möglich ist. Die Schlussfolgerungen sind letztlich, dass eine nachhaltige und offene Kommunikation zur Zusammenarbeit führen und eine kooperative Entscheidungsfindung schaffen kann. Das Verständnis für den wirtschaftlichen Nutzen durch die Zusammenarbeit, die Kooperationsbereitschaft und die Vertrauenswürdigkeit der Entscheidungsträger stellen die zentralen Problemfelder dar

Science diplomacy and trans-boundary water management. The Orontes River case

The Mediterranean Basin in general, and more specifically its southeastern part, is encountering rapid changes leading to huge water stress and the tiniest percentage of available drinking water per inhabitant in the world. Changes leading to water scarcity include growing population, with rates annually exceeding 2.8%, and excessive water demand for irrigation. Climate change exacerbates water droughts and risks. Overall national sovereignty, political, social and economic factors seem to be equally important to the scarcity of water resources, which may influence conflicts and violent clashes (\u201cwater riots\u201d).This is the reason why water and hydro-diplomacy occupy a central space on the diplomatic agenda of the governments in the region, including Lebanon, Syria, Jordan, Palestine, Israel, Egypt and Turkey. To guarantee the equitable use of water resources for the population of the countries involved, a major task of hydro-diplomacy is to overcome a number of challenges and critical thresholds by exploring all possible options for consensus building and by using reliable scientific evidence.Hydro-diplomacy, as applied in the case of the Orontes, builds partly on traditional bilateral approaches, taking account of power relations, partly on observing International Law and partly on pursuing new methods and tendencies based on the analyses of the actual water needs at national and local level, considering in particular the most vulnerable communities and enhancing prospects for social and economic development.The present publication is based, on one hand, on the results of the ICT project funded by the Italian Development Cooperation (Ministry of Foreign Affairs and International Cooperation) through the University of Insubria, and on the other hand, on the data and accumulated experience of hydro-diplomacy efforts. It thus brings together two approaches: first a crisp analysis of the evolution in addressing the water challenges applying technological tools on basin management, and secondly, a pragmatic one, based on a case study dealing with water resources in the Middle East

Simulating a Sequential Coalition Formation Process for the Climate Change Problem: First Come, but Second Served?

We analyze stability of self-enforcing climate agreements based on a data set generated by the CLIMNEG world simulation model (CWSM), version 1.2. We consider two new aspects which appear important in actual treaty-making. First, we consider a sequential coalition formation process where players can make proposals which are either accepted or countered by other proposals. Second, we analyze whether a moderator, like an international organization, even without enforcement power, can improve upon globally suboptimal outcomes through coordinating actions by making recommendations that must be Pareto-improving to all parties. We discuss the conceptual difficulties of implementing our algorithm.International Climate Agreements, Sequential Coalition Formation, Coordination through Moderator, Integrated Assessment Model, Algorithm for Computations