Transboundary river basin management presents significant geopolitical challenges due to conflicts over resource exploitation and concerns about water, energy, and food security. Individual countries often prioritize self-interest, leading to a "prisoner's dilemma" characterized by inefficient resource utilization. Transboundary cooperation is a solution, but effective implementation requires appropriate compensation and incentive mechanisms. The Lancang-Mekong River Basin (LMB), supporting 65 million people across six countries, exemplifies these challenges. Upstream countries focus on hydropower, while downstream countries rely heavily on agriculture. Water scarcity, exacerbated by population growth and droughts, necessitates broader cooperation. Current emergency negotiations are unsustainable due to uncompensated losses for upstream countries and the potential for free-riding. This research proposes a DWEC framework to address these limitations by integrating water and electricity cooperation, offering a novel and sustainable approach to transboundary river basin management.

Existing research highlights the complexities of the water-food-energy nexus in transboundary basins. Studies emphasize the need for compensation measures and incentive strategies to overcome the barriers to cooperation. Previous work has separately addressed water and electricity cooperation, but this study is the first to integrate both sectors, leveraging their interdependencies to create a more sustainable and mutually beneficial system. The literature also reveals the challenges of long-distance electricity transmission and the difficulties in achieving stakeholder cooperation in transboundary electricity trade, highlighting the need for innovative solutions like the DWEC framework.

The study develops a novel integrated model consisting of water and electricity modules. The water module integrates the SWAT model, hydropower generation model, agriculture model, water allocation model, and cost-benefit analysis. The hydropower benefit is calculated based on factors including electricity price, efficiency coefficient, flow through turbines, net water head, reservoir inflow, and storage constraints. Agricultural benefits are estimated using the FAO's water production function and farmland water balance considering various crops and their water requirements. The electricity module considers cost minimization and willingness maximization as objectives, reflecting stakeholders' preferences for electricity trade volume. The willingness function is modeled using a triangular utility function, incorporating stakeholders' roles (loss or gain) in water cooperation and electricity trade (exporter or importer). The integrated model links water and electricity cooperation strategies, optimizing water allocation and electricity trade to maximize overall benefits and equity. Two types of water cooperation (emergent water supplementation (EWS) and basin-wide cooperation (BWC)) are evaluated under different electricity trade scenarios (cost minimization (CMin) and willingness maximization (WMax)). The model considers different hydrological conditions to assess the robustness of the DWEC strategy.

The results show that incorporating electricity trading into water cooperation significantly increases economic benefits. In the EWS scenario, electricity trade compensates China for water losses, achieving a win-win situation. In the EWS_WMax scenario, maximizing willingness through increased electricity trade yields even greater economic benefits for all countries, compared to the water-only scenarios. The BWC scenario, even without electricity trade, generates substantial economic benefits due to optimized water allocation. However, DWEC further enhances these benefits by fully compensating water-exporting countries through electricity trade. In BWC_WMax, the total net benefit is significantly higher than in the BWC scenario. The DWEC strategy also improves regional water use equality, especially during water shortage periods. The Gini index for water use is significantly lower in DWEC scenarios compared to water-only cooperation, particularly in dry periods. Analysis of different hydrological frequencies shows the DWEC is robust, with electricity trade volume less affected by hydrological uncertainty than water cooperation. The majority of electricity trade is driven by demand, not solely compensation for water losses.

The findings demonstrate that the DWEC framework successfully addresses the limitations of existing water-only cooperation strategies. By integrating electricity trading, the framework creates a more equitable and economically viable mechanism for transboundary river basin management. The 'no loss' principle ensures all parties benefit, overcoming the reluctance to cooperate and fostering a win-win situation. The significant improvement in both economic benefits and regional water use equality highlights the synergy between water and electricity cooperation. This success demonstrates the potential for applying this framework to other river basins facing similar challenges. The increased willingness to cooperate under DWEC, evidenced by expanded trade routes and volumes, suggests a more sustainable path toward transboundary cooperation than emergency, case-by-case negotiations.

The DWEC framework offers a promising and practical approach to transboundary river basin cooperation. It leverages the complementarities of water and electricity sectors, creating a mutually beneficial system that promotes participation and sustainability. Future research should focus on further refining the model, incorporating more detailed economic and environmental factors, and exploring the application of DWEC in other transboundary river basins. Addressing the challenges of energy market uncertainties, transaction costs, data sharing, legal frameworks, and potential environmental trade-offs are also important considerations for future work.

The model relies on certain simplifying assumptions, including fixed electricity trade routes and a specific willingness function. The accuracy of the results depends on the quality and availability of data on various economic and hydrological parameters. The model does not fully account for all potential environmental impacts, particularly those related to changed hydropower reservoir operation and sediment flow. Further research is needed to thoroughly assess these aspects and refine the model accordingly.