I’ve been thinking about benefit sharing for the past few days and what it looks like in the Columbia River Basin. In particular my thoughts have focused on two topics: the challenges of ensuring equitable sharing of costs and benefits across scale and sectors and what benefits should be considered in any future negotiations on the Columbia River Treaty (CRT). This post focuses on the first topic.
Benefit sharing in transboundary basins is an approach that focuses on allocating or sharing the outputs from water use, rather than the water itself.One of the concepts my advisor, Dr. Aaron Wolf, is known for his using the “basket of benefits” approach in water negotiations. The exercise (at its core) involves removing the political boundaries to look at the basin as a whole, identifying where it makes the most sense to utilize the river in different ways (e.g., site dams in valleys with high hydropower potential, farm in fertile valleys, etc.), then putting the boundaries back on the map to ensure there is equitable sharing of the benefits amongst the riparian nations (the counties in the basin). The CRT essentially did this back in the 1960s. Canada and the US understood that the storage capacity needed was in the Canadian portion of the basin and built dams there. To ensure equitable sharing of benefits between the two nations the US paid a lump sum for dam construction and 60 years of flood control as well as the annual Canadian Entitlement.
The US and Canada agreed upon a benefit sharing scheme they thought was equitable for the two countries. But in the implementation of the concept of benefit sharing, the CRT does not explicitly consider two other important factors: the sub-national scale and sector (which can be considered domestic issues for each country to sort out).
For example, initially CRT payments and Canadian Entitlement were to go to the federal government of Canada (national scale) but the costs were born on the Province of British Columbia (provincial scale) or more specifically, the Canadian portion of the basin within BC (local scale). To correct for this disparity in scale, the federal government of Canada and provincial government of BC signed an agreement (Canada-British Columbia Agreement (1963)) which transferred most of the CRT benefits, rights and obligations to BC and requires Canada to obtain BC’s agreement before amending or terminating the CRT. Then later, after negotiations with a local action committee, the Province of BC formed and allocated funds to the Columbia Basin Trust “to create social, economic and environmental well-being in the Canadian portion of the Columbia River Basin – the region most affected by the Columbia River Treaty.” (CBT’s website).
Today the issue of benefit sharing among sectors is a topic of conversation. The US hydropower industry (as evidenced by their public comments on the Working Draft and Draft US Regional Recommendation) is concerned about paying for flood risk management benefits and does not want to do so. This poses the question: what is equitable sharing of costs and benefits across sectors/industries? How does the theoretical concept translate to on-the-ground application in the Columbia River Basin (particularly when the private sector and public sector are involved)?
In theory it makes sense to try to have each sector (or those included in the CRT–hydropower and flood risk management) cover the costs that are equal to the portion or percentage of the benefits it receives; but actually making that happen is more complicated. Flood risk management does not produce revenue; rather it avoids costs and makes revenue in other sectors possible. It can be difficult to assign values for the costs and benefits of flood risk management.
The US Regional Recommendation offers that:
“Any payments for Columbia River flood risk management should be consistent with the national flood risk funding policy of federal funding with applicable local beneficiaries sharing those costs as appropriate.”
What do you think? Will that approach work in the transition to Called Upon in 2024? Would that approach work for other sectors/issues (e.g., ecosystem function) or is more creative thinking required?