Speaker: Dr. Anand Jacob Abraham, IIT Kharagpur
Venue: IEOR Seminar Room
Date and time: 25 November 2024 (Monday), 10 – 11 a.m.
Title: Transboundary externalities and the river sharing problem
Abstract: The river sharing problem is decision problem which discusses allocation of river water among sovereign states. In this talk, some extensions of the river sharing problem that incorporate negative externalities are discussed. The negative externalities which shall be discussed are that of pollution, dam storage, and floods. In the context of bilateral water sharing under pollution externalities, we shall analyze water allocation under conflict and cooperation and derive a necessary condition on the transfer price for cooperative water transfers. Also, it can be seen that pollution limits the extent of water trade.
The ability to build and own dams on a transboundary river can also impose externalities. In such an environment, the introduction of water trade can result in adverse effects since the upstream state(s) can purposefully withhold water to increase the downstream agent’s willingness to pay and then sell the same water. This behaviour is termed as strategic storage. A necessary condition in terms of the bargaining power and the fixed cost of storage can be derived for strategic storage and it can be further demonstrated that strategic storage results in loss of social welfare.
Finally, we will examine the management of transboundary floods by tackling two key issues. The first issue focuses on fairly distributing flood costs among riparian states, while the second concerns ensuring the stability (self-enforcement) of this cost-sharing rule alongside water allocation in an uncertain flow environment. A threshold lower bound on discount factor is derived as a necessary condition for agreement stability.
Bio: Anand Jacob Abraham is currently working as an Assistant Professor at Department of Industrial and Systems Engineering, IIT Kharagpur. He previously worked as Assistant Professor in Operations and Supply Chain Area of IIM Jammu, and as an Ad-hoc Faculty of Industrial Engineering in the Department of Mechanical Engineering NIT Calicut. Anand completed his Ph.D. from the Department of Management Studies IISc Bengaluru, his MTech in Industrial Engineering and Management from NIT Calicut, and his BTech in Mechanical Engineering from University of Calicut. His areas of research interest are Management of Water Resources, Environmental Economics, Game theory, and Applied Operations Research. His teaching interests are Operations Research, Game theory, Simulation, Generalized Linear Models etc.