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Economic and hydrological impacts of the Grand Ethiopian Renaissance Dam on the Eastern Nile River Basin

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  • Nigatu, Getachew
  • Dinar, Ariel

Abstract

We propose an ‘allocate-and-trade’ institution to manage the eastern Nile River Basin for Ethiopia, Sudan and Egypt as the basin faces a new reality of the Grand Ethiopian Renaissance Dam (GERD). We find that a social planner could increase the region's economic welfare by assigning water rights to the riparian states. An alternative intrabasin water rights arrangement and trade could achieve more than 95 per cent of the welfare created by the social planner. GERD will change both the economic benefits and hydrological positions of the riparian countries. Economic benefits from alternative water use would be sufficient to make riparian countries better off compared with the status quo. Furthermore, riparian countries could raise more than US$680 m annually for protecting and conserving the natural resources of the region.

Suggested Citation

  • Nigatu, Getachew & Dinar, Ariel, 2016. "Economic and hydrological impacts of the Grand Ethiopian Renaissance Dam on the Eastern Nile River Basin," Environment and Development Economics, Cambridge University Press, vol. 21(4), pages 532-555, August.
    • Handle: RePEc:cup:endeec:v:21:y:2016:i:04:p:532-555_00
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    Cited by:

    1. Siddig, Khalid & Basheer, Mohammed & Luckmann, Jonas & Grethe, Harald, 2019. "Long-term economy-wide impacts of the Grand Ethiopian Renaissance Dam on Sudan," Conference papers 333118, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Jacob Rightnar & Ariel Dinar, 2020. "The Welfare Implications of Bankruptcy Allocation of the Colorado River Water: The Case of the Salton Sea Region," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 34(8), pages 2353-2370, June.
    3. Walaa El-Nashar & Ahmed Elyamany, 2023. "Win–win Strategies for Transboundary Water Management During the GERD Operating Stage," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 37(2), pages 915-936, January.

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