Transboundary Water Allocation under Water Scarcity Based on an Asymmetric Power Index Approach with Bankruptcy Theory

Abstract

Cooperative and self-enforceable water allocation is a key instrument to manage geopolitical conflict induced by water scarcity, which necessitates the cooperative willingness of the agents and considers their heterogeneity in geography, climate, hydrology, environment and social economy. Based on a multi-indicator system that contains asymmetric information on water volume contribution, current water consumption, water economic efficiency and efforts for eco-environmental protection, this study proposed a water allocation framework by combining the asymmetric power index approach with bankruptcy theory for solving the transboundary water allocation problem under scarcity. The proposed method was applied to the Yellow River Basin in northern China, which is mainly shared by nine provincial districts and frequently suffers from severe water shortages, and its results were compared with six alternative methods. The results highlight the necessity of quantifying agents’ willingness to cooperate under the condition of asymmetric negotiation power when making decisions on transboundary water allocations. The proposed method allows for transboundary water allocations through simultaneous consideration of the agent’s willingness to cooperate and asymmetric negotiation power, as well as disagreement allocation points, which ensure the stability, fairness and self-enforceability of allocation results. Therefore, it can offer practical and valuable decision-making insights for transboundary water management under water scarcity.