Trans-boundary water resources are often a cause of conflict among riparian entities. Increasing demand for water resources and deterioration of existing water sources underscore the need to resolve conflicts over the allocation of consumption and pollution rights among conflicting uses and users. Because economic growth of the entities that share a water resource depends on sustainability of the resource, water has great potential as a basis for cooperation among political entities. However, enforcement of cooperation particularly in international settings is limited. Thus, parties sharing a water resource will form and remain in a cooperating coalition only when economic incentives for each can be identified. This book offers an economic approach to resolution of conflicts by identifying economic mechanisms that encourage sustainable cooperation. The book includes discussions on international, interstate, and intrastate disputes regarding both water quantity and water quality issues. It presents mechanisms for facilitating cooperation among users from agricultural, industrial, domestic, and environmental sectors. It considers the experience and potential in many regions around the world including Australia (the Muray-Darling Basin), Latin America (Chile), the Middle East (Israel and the Palestinian Authority), the U.S. (California, Florida's Everglades, Hawaii, and the Chesapeake Bay), and Africa (South Africa, Lesotho). Part I of the book discusses international experience in forming water coalitions and offers an illustrative model of water quality coalitions. It emphasizes the dependence of sustainability of international agreements on the practical ability to create incentivesthrough economic mechanisms and political linkages that overcome the problem of limited enforcement due to sovereignty claims. Part II of the book discusses management of intrastate U.S. water resources involving competing local jurisdictions or user groups and the U.S. and Australian attempts to facilitate state management of interstate water resources through federal cooperation. Part III of the book explores the expanding scope of trans-boundary water resource issues that contribute to complexity of conflict beyond traditional interests such as allocation and navigation rights. In particular, it analyzes the economic implications of nutrient, land, and airshed management in an environment where the interaction of trans-boundary water resources with the ecological system is considered. Trans-boundary water usage and infrastructure are discussed in the context of privatization and political uncertainty. Part IV of the book examines economic solutions to trans-boundary water allocation including water markets, tradable water permits, contractual arrangements, and coordinated management. The interaction between ground and surface water and the interaction between desalinated, recycled, and fresh water is analyzed in the context of optimal water allocation. The book concludes with a critical discussion of the role and potential of the economics profession in contributing to conflict resolution and management of trans-boundary water resources. The strengths and weaknesses of economic analysis are discussed with special consideration of the modern tools of bargaining theory and game theory that go beyond economic efficiency in considering political realities.

Trans-boundary water resources are often a cause of conflict among riparian entities. Increasing demand for water resources and deterioration of existing water sources underscore the need to resolve conflicts over the allocation of consumption and pollution rights among conflicting uses and users. Because economic growth of the entities that share a water resource depends on sustainability of the resource, water has great potential as a basis for cooperation among political entities. However, enforcement of cooperation particularly in international settings is limited. Thus, parties sharing a water resource will form and remain in a cooperating coalition only when economic incentives for each can be identified. This book offers an economic approach to resolution of conflicts by identifying economic mechanisms that encourage sustainable cooperation. The book includes discussions on international, interstate, and intrastate disputes regarding both water quantity and water quality issues. It presents mechanisms for facilitating cooperation among users from agricultural, industrial, domestic, and environmental sectors.It considers the experience and potential in many regions around the world including Australia (the Muray-Darling Basin), Latin America (Chile), the Middle East (Israel and the Palestinian Authority), the U.S. (California, Florida's Everglades, Hawaii, and the Chesapeake Bay), and Africa (South Africa, Lesotho). Part I of the book discusses international experience in forming water coalitions and offers an illustrative model of water quality coalitions. It emphasizes the dependence of sustainability of international agreements on the practical ability to create incentives through economic mechanisms and political linkages that overcome the problem of limited enforcement due to sovereignty claims. Part II of the book discusses management of intrastate U.S. water resources involving competing local jurisdictions or user groups and the U.S. and Australian attempts to facilitate state management of interstate water resources through federal cooperation. Part III of the book explores the expanding scope of trans-boundary water resource issues that contribute to complexity of conflict beyond traditional interests such as allocation and navigation rights.In particular, it analyzes the economic implications of nutrient, land, and airshed management in an environment where the interaction of trans-boundary water resources with the ecological system is considered. Trans-boundary water usage and infrastructure are discussed in the context of privatization and political uncertainty. Part IV of the book examines economic solutions to trans-boundary water allocation including water markets, tradable water permits, contractual arrangements, and coordinated management. The interaction between ground and surface water and the interaction between desalinated, recycled, and fresh water is analyzed in the context of optimal water allocation. The book concludes with a critical discussion of the role and potential of the economics profession in contributing to conflict resolution and management of trans-boundary water resources. The strengths and weaknesses of economic analysis are discussed with special consideration of the modern tools of bargaining theory and game theory that go beyond economic efficiency in considering political realities.