Work Package 3 – Basin-scale development scenarios

This work package focuses on the development of basin scale development scenarios driven by both a multi-stakeholder participatory process and hydro-economic modeling, informed by new data inputs obtained from WP1, WP2 and WP4. Given Nepal’s geography and the limited extent to which water resources have been put to productive economic use, there is a clear need to more thoroughly evaluate the potential socioenvironmental impacts of various proposed water infrastructure projects. A well-informed analysis of the economic benefits from hydro-power and irrigation projects must consider how changes in water resource availability may affect economic sectors such as agriculture and industry and how those impacts translate to changes in household welfare either indirectly through changing employment opportunities or directly through changes in water and electricity availability for household use.

Moreover, the timing and quantity of the water use required in different sectors may imply trade-offs between them or negative impacts on the environment and existing ecosystem services. Previous work has delivered important insights about some of these trade-offs, but has been constrained by a lack of sufficient data on water productivity, and on the value and nature of ecosystem services, including their dependence on existing hydrology (Wu et al.; 2013; Jeuland et al., 2013). Both of these deficiencies should be significantly reduced by the work proposed in WP1 and WP2.

There are a variety of strategic hydrological issues for Nepal to consider as it makes plans to develop its ambitions for greater water resources development. These encompass changes in institutions (e.g. rules governing transboundary water sharing), demographics and population, as well as the effects of climate or other environmental change (e.g., land use change).

Specifically, we will use hydro-economic models to assess the economic implications of operational changes required:

  • To meet more or less flexible downstream institutional or political economy requirements (e.g., comparison of the economics of agreements on fixed water allocations at the border with India vs. more flexible benefit-sharing or payment for ecosystem services (PES) arrangements);
  • To maintain vital ecosystem services (e.g., environmental flows, existing agricultural needs) under scenarios of increasing infrastructure development;
  • To most efficiently cope with the range of changes in potential flow due to climate change, and their distributional implications;

Building on previous models (Wu et al., 2013), these analyses will primarily focus on the tradeoffs in the Karnali Basin, but will also use previously collected data (Wu et al., 2013) and leverage ongoing modelling efforts in the Ganges to make comparisons with the Mahakali basin.Points of infeasibility or thresholds beyond which water supply is insufficient to achieve various combinations of objectives will be identified.

Once the sensitivities in the system are better characterized, and more efficient and sustainable management strategies are identified, this activity will work to clarify and specify the types and features of organizations and agreements required to implement them effectively.

Given the number of proposed infrastructure projects in the basin and depending on the availability of climate change projections, the hydro-economic model could be used to gain insights on a number of scenarios, including:

  • The likely social benefits (magnitude and distribution) and characterization of water demand corresponding to the development of different infrastructure projects;
  • The extent to which climate change (specific projections or sensitivity around changes in flows) may affect those benefits, and;
  • The interaction of these factors with policy requirements to ensure environmental flows at a given place and time.

This research would attempt to address the differential impacts of likely changes to the basin’s hydro-economy on the welfare of several groups including small farmers and women, who are disproportionately represented in the agricultural labor force. This will provide an important link across scales with WP4. Furthermore, given some amount of data on groundwater availability and the interaction of surface and groundwater supplies in the Terai, a groundwater pumping sub-model could be developed and connected with the surface water hydro-economic modelling framework. This would allow for the analysis of several related issues including how increased electricity from hydropower may lead to more groundwater pumping, the extent to which increased groundwater pumping may improve the livelihoods of small farmers, and the feasibility and desirability of policies aimed at promoting groundwater use.

A final key element of this work package will be implementation of a participatory process with key stakeholders to explore the development pathway options and resulting trade-offs. The process will build on similar work by IWMI on the Volta River Basin and broadly include i) developing qualitative scenarios through facilitated dialog of stakeholders representing countries and sectors ii) prepare quantitative scenarios from the above qualitative scenario narratives, expressing them in quantifiable variables iii) modelling scenarios to produce multi-model ensembles and to estimate model uncertainties. The modelling teams will harmonize datasets to use in the modelling and coordinate closely with the qualitative scenario team; iv) develop “A Karnali/ Mahakali Trade-off Arena” based on the above – an iterative process with scenario development to refine both the models and scenarios, distilling possible technological management and political solution options and run them by the stakeholder group.

Such a multi-stakeholder, participatory and transparent approach will provide an evidence base and solid tool for the policy makers to decide the future course of sustainable development related actions. 


  • Establish a ‘development panel’ of stakeholders that will help identify development priorities, options and proposed plans
  • Identify local capacity and potential local knowledge hubs for scenario-based planning
  • Identify development priorities and social values
  • Create a framework structure for options database
  • Work with ‘development panel’ to collect existing and proposed development plans (as detailed as possible)
  • Estimate parameters for options. What are the potentials for the options identified? What are the demands and technologies? What are the costs? What are the estimated benefits?
  • Assemble trend data – demographic (population and migration), technological change rates (efficiencies/potentials), economic growth rates, climate change to build projections of future water availability, water demands (time, place, quality), etc.
  • Scenario development – develop three to four scenarios based on various assumptions of economic, demographic, climate, technological and behavioral change, along with the possibility of an additional visionary scenario with back-casting. 


  • ‘Development panel’ and list of potential knowledge hubs established by December, 2016.
  • Development objectives and priorities which are linked with social values in the region are listed by December, 2016.
  • Database structure and working paper by March, 2017
  • Database of development plans and trend database (including constraints/limits to those trends), and report by March, 2017

Assumptions and risks

  • Development plans have already been considered, and knowledgeable stakeholders are available and interested in the process.
  • Development plans in the basin are shared.
  • Participation from development panel.
  • Trend information available and accessible for the region (as available global data can be used as default where necessary).

Project outcomes

  • Local capacity in the form of development planning stakeholders and knowledge hubs will be established, and development objectives and priorities will be understood.
  • Hydro-economic model, which can be used to support dialog about and understanding of options, and provide decision support, is developed.

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