Assessing Water (Ir)Rationality in Nagorno-Karabakh

Abstract

The deterioration and scarcity of water resources have increasingly been at the heart of debates on regional security, with disputes over management and ownership of waterways leading both upstream and downstream countries to the brink of conflict. Such danger has emphasized the need for transboundary cooperation to ensure water security and regional governance. The present chapter focuses on a region where military security, economic viability, and national sentiment have overshadowed transboundary water management issues: Nagorno-Karabakh. As home to the headwaters of rivers, dams, and hydropower plants alike, the lands in and around Nagorno-Karabakh have played a vital role in providing water to an area that has been particularly afflicted by water scarcity. In the last three decades, this case has assumed significant importance in the literature on water conflicts because of the status of Nagorno-Karabakh as an upstream non-internationally recognized state whose control has been disputed by Armenia and Azerbaijan since the collapse of the Soviet Union. On 9 November 2020, the leaders of Azerbaijan and Armenia signed a Russia-brokered agreement to end the military operations in Karabakh after 44 days of war. As evidenced by the reciprocal accusations of eco-terrorism and environmental sabotage, mutual distrust and deep politicization prevent the two sides from achieving successful transboundary management, which fosters instability in the region. The present chapter will assess and compare the main theories on water governance, exploring possible diplomatic outcomes between Armenia and Azerbaijan in convergence with the other regional states—Georgia, Russia, Turkey, and Iran—to foster successful cooperation over shared water resources.

1 Introduction

Since the collapse of the Soviet Union to September 2023¹ the landlocked mountainous territory of Nagorno-Karabakh has been the object of an unresolved dispute between Azerbaijan, of which it is internationally recognized as a part, and its ethnic Armenian majority population, backed by neighboring Armenia.² As home to the headwaters of rivers, dams, and hydropower plants alike, the lands in and around Nagorno-Karabakh play a vital role in providing water to an area that has been particularly afflicted by water scarcity. Throughout the years, the disputed status of this area has worsened the water security of Azerbaijan, whose territory constitutes the downstream area of this region.

The deterioration and scarcity of water resources have been increasingly at the heart of debates on regional security, with disputes over management and ownership of waterways leading upstream and downstream countries to the brink of conflict. To quote Cooley (1984), “water is likely to cause wars, cement peace, and make and break empires and alliances in the region”. The danger of running into this eventuality emphasizes the need for transboundary cooperation to ensure water resilience and prevent further conflicts.

In this chapter, we will examine the existing literature on environmental security and governance, with an empirical analysis of the impact of water scarcity on regional conflicts. We intend to test two hypotheses: (1) water scarcity is unlikely to be the main cause of wars, but it can combine with factors such as ethnic, political, and social tensions to transform already existing hostilities into open military conflicts; and (2) politicization of environmental issues represents a further obstacle that increases mutual mistrust between contending parties and thus implies the need for a third actor to achieve durable and successful governance.

On 27 September 2020, the decades-long conflict between Armenia, which provides military and economic backing to the de facto Armenian breakaway republic of Artsakh,³ and Azerbaijan erupted into an open military brawl lasting 44 days, representing a turning point in the dispute. On 9 November 2020, the two countries’ leaders signed a Russia-brokered agreement to end belligerent operations, returning part of the region and the surrounding areas to the control of Baku. While the Azerbaijani side achieved significant territorial gains and access to abundant freshwater resources, the territories under Armenian control have been plagued by water and electricity shortages. Despite the end of the Nagorno-Karabakh conflict in September 2023, the lack of any new border demarcation between Armenia and Azerbaijan and exchanges of fire along the Armenian-Azerbaijani state border are just a few of the contentious issues that still eclipse water security problems. Nevertheless, the lack of lasting solutions to environmental issues poses the threat of new escalation between Azerbaijan and Armenia.

Our work consists mainly of three parts. The first section examines the existing literature on water scarcity and provides an overview of the hydropolitical structure of the Kura-Aras basin. In doing this, we highlight the region's potential regarding water resources and hydroelectric energy, analyze the water scarcity situation in Azerbaijan in the wake of the 2020 war, and describe the impacts of the November 9th ceasefire agreement on water-related issues. The second section deals with regional environmental governance and water rationality theory. Consequently, we identify the types of governance and the possible actors involved in the South Caucasus region, evaluating whether the governance structures available are feasible according to the framework of water rationality theory. The third section applies the considerations overviewed in the second part before and right after the 2020 war to investigate the already existing and ongoing initiatives attempting to tackle water issues in the region, specifically those involving the three major regional powers—Russia, Turkey, and Iran—and the OSCE. Finally, we provide some conclusions on the uniqueness of the case of Nagorno-Karabakh in the literature on water conflict and governance and on the possible insights that the latter can provide to the analysis of transboundary water management issues in the broader OSCE region.

2 Real or Constructed “Wars Over Water”

This section seeks, using the geographical and political context of the South Caucasus and Azerbaijan, to understand the rationale behind the water wars and, more specifically, to what extent water issues trigger the outbreak of military conflicts. Water is essential to all aspects of life. It is necessary for human health, hygiene, waste disposal, food, and ecology, and it powers society's most important industries, including agriculture, energy, and transportation. In Azerbaijan, the country at the center of our research, annual freshwater consumption by economic sectors increased by 7% between 2000 and 2017 (SEIS, 2016). Due to the massive use of irrigation, agriculture has the highest water demand. In the same period, water use in this sector increased by 76.5% (SEIS, 2016). The country’s energy mix is still heavily concentrated on its rich fossil fuels reserves, with oil and gas accounting for more than 98% of total supply and hydropower accounting for only 6% of gross electricity generation in 2019 (IEA, 2021).

According to Bencala and Dabelko (2008), factors such as population growth, increased agricultural production, increased consumption, and climate change are expected to result in an unprecedented scarcity of water resources. Mehta (2003), emphasizing the multifaceted nature of environmental scarcity, claims that it (1) is often caused by poor management; (2) varies across time and space, depending on factors such as climate, season, and temperature; and (3) is impacted by the fact that natural resources are “unequal resources” when it comes to their access and control. Being a “scarce” resource, it is understandable why policymakers, practitioners, experts, and scholars inevitably end up treating access to freshwater as a security issue (Gupta & Pahl-Wostl, 2013). Azerbaijan was experiencing a water crisis in the run-up to the 2020 Nagorno-Karabakh conflict. A report from CEOBS (2021) indicates that during the summer, water levels in the Kura River fell by two and a half meters, allowing seawater from the Caspian Sea to flow inland and upstream; and (2) the Mingachevir reservoir, the largest in the Caucasus region, saw its level drop by 16 m. This significantly impacted rural Azeris’ drinking and agricultural water supplies. Azerbaijani President Ilham Aliyev has acknowledged the country’s water issues, pointing to the role of drinking water and irrigation projects as the most important issues on the government agenda in the coming years (President of Azerbaijan, 2020). On the eve of the conflict in July 2020, Azerbaijani President Ilham Aliyev approved the Action Plan for 2020–2022 to ensure the efficient use of water resources, which lists the construction of 10 new reservoirs across the country as well as water pipelines and irrigation canals (Lmahamad, 2020).

In addressing the issue of environmental scarcity, Homer-Dixon (2001) claims that it can be of three types: supply-induced, demand-driven, and structural. The first results from the deterioration and the exhaustion of an environmental resource, such as cropland erosion. The second is caused by regional population growth or increased per capita consumption of a resource, both rising demand. The third stems from the unequal social distribution of a resource that concentrates it in the hands of a small number of people while the rest of the population suffers from severe scarcity. These forms of environmental scarcity often interact in two patterns (Homer-Dixon, 2001). The first pattern of interaction, “resource capture”, occurs when powerful groups respond to a drop in the quality and quantity of a renewable resource, such as water, by changing the distribution of the resource in a way that harms weaker groups. The second, “ecological marginalization”, occurs if high population density, combined with a lack of knowledge and capital to protect local resources, causes severe environmental damage and chronic poverty.

In the case of Azerbaijan, it is arguable that the country has faced the problem of water scarcity from all the levels indicated. Since its independence in 1991, Azerbaijan has faced several water issues, such as water pollution, exhaustion of water resources in arid areas, salinization of irrigated lands, and a decrease in the level of the Caspian Sea. The nation’s ecosystem varies from dry in the central and eastern regions to subtropical and humid in the southeast. Aside from the Caucasus mountains and the Lankaran lowland, most of the territory in the arid east and central areas records insufficient rainfall (Yu, 2022).

Azerbaijan’s climate makes its agriculture heavily dependent on irrigation. In the country’s most arid regions—such as the Aran and Absheron macroregions—the water level of the Kura and Aras Rivers has dramatically decreased in recent years. Lowlands like the Southern shore of the Absheron Peninsula and Southeast of Gobustan receive the minimum average annual precipitation—around 150–200 mm per year. At the same time, maximum and minimum temperatures across the country are expected to rise faster than the global average (Asian Development Bank, 2021) (Map 5.1).

Map 5.1

Koppen-Geiger climate classification map for Azerbaijan. Source Beck et al. (2018)

This suggests that Azerbaijan's water scarcity is certainly supply-induced. Yet, water scarcity in Azerbaijan also exhibits characteristics of demand-induced scarcity since the country's population has reached 10 million people—more than half of the South Caucasus population—around half of whom live in rural areas and rely on agriculture (Yu, 2022). As a result of human activities, it is calculated that 40% of the water in the case of the Kura and 27% of the water in the case of the Aras is not discharged to the Caspian Sea (Zeeb, 2010). Finally, the water scarcity of Azerbaijan is also structurally induced, due to the conflict around Nagorno-Karabakh. This region comprises unavailable water resources, which could reduce water scarcity in the most arid regions of the country. Eight rivers cross this region: the Tatar, Khachen, and Karkar, which flow into the Kura River, while the Vorotan, Voghchi, Hakari, Ishkhan, and Chkhpor are five tributaries of the Aras.

The lands in and around Nagorno-Karabakh are vital in providing water to its agricultural lowlands, which have been particularly affected by water scarcity. The region still preserves four significant dams and 36 hydropower plants built during the Soviet era, which together can generate about 2.56 billion cubic meters of water annually (Ministry of Energy of Azerbaijan, 2022). The largest single hydropower plant is Sarsang, built in 1976 on the Tartar River and located in the Terter region, which produces more than half the territory’s hydropower capacity at 50 megawatts of energy (Mejlumyan & Natiqqizi, 2021). ​In 1990, the power produced by the plant per annum amounted to 81.9 million kW/hour (Ministry of Energy of Azerbaijan, 2022). ​It is worth mentioning that the Sarsang water reservoir provides irrigation water for about 125,000 hectares across six districts—Tartar, Agdam, Barda, Goranboy, Yevlakh, and Agjabadi​. Access to water resources cradled in the Karabakh mountains will inevitably change the energy strategy of Baku, shifting it towards a more intense use of hydroelectricity for local needs and thus reallocating natural gas resources available for export (Karimli, 2022).

Having defined the concept of water scarcity, framed its characteristics, and explained how it could be a security issue for a country, we need to understand the relationship between water scarcity and the outbreak of violent conflict and whether water issues alone can bring nations to the brink of military confrontation. As argued by Bencala and Dabelko (2008), the challenge for experts and practitioners is to distinguish between the several dynamics that can lead to conflict over water and find opportunities for cooperation. According to the existing literature, in areas where water is scarce in terms of quality and quantity, competition for limited supplies may involve individuals, groups (Gleick, 1993, Merierding, 2013), and even nations (Gleick, 1993; Klare, 2002). Klare (2002) argues that the possibility of conflict between states will increase as states face escalating demands for resources, resource shortages, and proliferating ownership contests. Some scholars (Abdel-Samad & Khoury, 2006) claim that environmental degradation can be both a reason for and a consequence of violent actions.

But are water or environmental issues enough to push states to war? Gleditsch (2001) states that, besides ecological degradation or resource scarcity, political, economic, and cultural factors could result in social fragmentation and cleavages, causing conflict. In the longstanding Nagorno-Karabakh conflict, military security, economic viability, and ethno-nationalist tensions have overshadowed water security issues for years. Alam (2002), although focusing on the Indian subcontinent, provides an exciting observation potentially relevant to the latest events in the South Caucasus. If a water shortage occurs during a wider conflict and enemy states depend on the same shared resources, each country will work to guarantee its access to the required water. O'Lear and Gray (2006), who also used Azerbaijan as a case study, insist that there needs to be more clarity in the causal linkages between environmental degradation and conflicts. Thus, we can argue that although the Nagorno-Karabakh conflict has deep historical and political roots, ecological issues revealed renewed tensions concerning Azerbaijan’s water scarcity issues. This topic has seldom been researched, although Baku has seen this water-rich region of its territory as a way out of the country’s constant lack of water resources. Up to 40% of the Republic of Azerbaijan’s mineral water resources are located in areas under Armenian control before the 2020 war (Ahmadi et al., 2023). Thus, the Nagorno-Karabakh conflict case seems to prove Homer-Dixon and Blitt’s (1998) claims on the fact that: (1) the perception of relative scarcity alone is not sufficient to generate conflict; but (2) if there is enough mobilization around a shared identity, such as religion, class, or ethnicity in the face of a rigid political structure then violent conflict related to resource scarcity among groups within a state may emerge.

Moreover, another aspect of water scarcity outlined by this conflict is that, as argued by Mehta (2003), environmental scarcity is both “real” and “constructed”. This means that, even if water and water supply systems are increasingly likely to become both objectives of military action and instruments of war (Gleick, 1993), environmental scarcity will be increasingly instrumentalized by policymakers and become the center of a series of political and discursive processes due to the increased strain that climate change will place on freshwater resources from industry, agriculture, and expanding urban populations (Armitage et al., 2015). This will likely happen through those mechanisms Alam (2002) describes as “bellicose statements”. A 2021 report from CEOBS (2021) indicates that the extent to which the environment featured in the 2020 conflict between Armenia and Azerbaijan was unusual, with both parties co-opting and weaponizing the term ecocide and accusing each other of eco-terrorism and environmental sabotage. From the Armenian side, 51 NGOs, based mainly in Armenia, signed an “Ecocide Alert”. In the alert, they blamed the Azerbaijan army for using white phosphorus, representing an existential ecological threat. They called for action from global environmental actors to prevent this “ecocide”, highlighting the region's significant biodiversity and number of endangered species (CEOBS, 2021).

On the other hand, the Azerbaijani side blamed their Armenian counterparts for provoking fires and destroying ecosystems and settlements. Azerbaijan’s Deputy Foreign Minister Elnur Mammadov said that Baku intended to bring evidence to the International Court of Justice of Armenia’s environmental terrorism and illegal exploitation of natural resources. This included the pollution of industrial wastes from the Armenian side of the Okhchu River, 1 of 11 Azerbaijani rivers in Nagorno-Karabakh, providing approximately 30% of the country’s total drinking water reserves (Mehdiyev, 2021). Moreover, in Resolution 2085, the Parliamentary Assembly of the Council of Europe (PACE) criticized the Armenian authorities, stating that deliberate limitation to access of water resources flowing from the Nagorno-Karabakh region to the citizens of Azerbaijan living in the Lower Karabakh “must be regarded as environmental aggression and seen as a hostile act by one state towards another aimed at creating environmental disaster areas and making normal life impossible for the population concerned” (PACE, 2016).

3 Establishing Water Governance in the South Caucasus: Irrationality Prevails

As claimed by Ahmadi et al. (2023), water played a dual role in the Nagorno-Karabakh region: (1) it ensured the water and energy security of the de facto republic and, to a lesser extent, Armenia; and (2) it was and still is critical for the development of Azerbaijan's neighboring regions and for the country’s security. Homer-Dixon (1998) argues that, since river waters flow from one area to another, one country's access may be hampered by the actions of another. In the case of Nagorno-Karabakh hydropolitics, a term used by Waterbury (1979) to discuss the policies influenced by water resources, this implies that both the Armenian and Azerbaijani sides have used water diversion as both “real” and “constructed” weapons to exert pressure on each other. If, prior to the 2020 war, the ethnic Armenians living in the region could rely on energy self-sufficiency, export electricity to Armenia, and, as claimed by the Azerbaijani side (Ahmadi et al., 2023), create artificial floods and droughts through the Sarsang Reservoir to provoke environmental damage in the plains of the Karabakh region under Azerbaijani control, in its aftermath, the de facto republic has suffered from water and electricity shortages. After the ceasefire agreement, only one-sixth of the Nagorno-Karabakh hydroelectric plants remained in the Armenian-Russian-controlled area, reducing the energy production capacity from the pre-war 191 megawatts to 79 MW (Mejlumyan & Natiqqizi, 2021). At the same time, Azerbaijan increased its hydropower production capacity, taking control of several hydroelectric power plants and planning to create new ones in the territories it retook in the war. The Kalbajar and Lachin districts, under Armenian control until the 2020 conflict, contain the Arpa and Vorotan Rivers. Around 5,000 cubic meters of thermal water per day in the Kalbajar, Lachin, and Shusha districts are now at Azerbaijan’s disposal (Karimli, 2022). Baku also controlled the Jabrayil district and the state border with Iran, thus accessing the Khodaafarin reservoir. Therefore, the 2020 war completely changed the regional balance of power in terms of water resources.

Stabilizing conflict entails assisting governance through actors viewed as legitimate by the local population. Governance is widely understood to be the institutions (laws, constitutions, laws, policies, formal and informal rules), structures (entities, organizations, informal networks of actors and organizations), and processes (articulation of institutional mandates, negotiation of values, conflict resolution, law-making, and policy formation) that decide who makes decisions, how and for whom decisions are made, whether actions are taken, by whom, and for what purposes (Graham et al., 2003)?

What makes us think that in such a contested situation, the parties involved can work to reach a regime that governs environmental issues? Alam (2002) suggests that to secure their long-term water supply, states build and maintain relationships with their co-riparian countries conducive to long-term access to shared water. Nevertheless, if direct bilateral negotiations prove unsuccessful, the intervention of an impartial mediator can assist in communication between the parties (Alam, 2002). This theory is known as the “water rationality theory”.

The institutional, structural, and procedural components of governance take place at various scales, from local to global, interact with each other, and influence the general capability, performance, and consequences of environmental governance (Bennet & Satterfield, 2018). Pahl-Wostl et al. (2018) sum up the different levels at which water scholars and policymakers advocate governance: (1) local, (2) national, (3) basin-level, and (4) global. When dealing with water resources in Nagorno-Karabakh, the first significant challenge is to understand who the actors were at each level of governance and, looking at water rationality theory, whether they could have collaborated.

Local environmental governance (LEG) has its cornerstones in subsidiarity and decentralization (Pahl-Wostl et al., 2018). It stipulates that, together with the formal inclusion in decision-making processes, there is a distinct definition of the realms of authority (local access issues, vector-borne diseases, and regional demand) that local actors are expected to operate within (Lemos & Agrawal, 2006). The main driver for establishing LEG is connected with the fact that local people are more competent and committed to dealing with their problems than those from higher levels of government (Gupta & Pahl-Wostl, 2013).

In August 2022, both Azerbaijani (Turan News Agency, 2022) and Armenian (Hetq, 2022) media outlets reported that representatives from both sides had met and visited the Sarsang Reservoir, situated in the north of the then Armenian-controlled territories in Nagorno-Karabakh, to solve their water distribution problems. The government of the de facto republic declared that the two sides, assisted by Russian peacekeepers, had been in contact regarding water management issues since the end of the 2020 conflict. The media outlets also reported that the Azerbaijani representatives first monitored the reservoir and received information on the schedule of its water inflow and discharge. Second, the two parties discussed the restoration of water supply to irrigated lands in lowland Azerbaijan and the possibility of making such meetings regular.

However, although this event represented a faint sign of hope, establishing this type of governance was threatened by the unresolved conflict and Azerbaijan's intention not to negotiate with Karabakh Armenians. In 2013, the authorities of the de facto of Artsakh had proposed working out a way for both sides to use the Sarsang Reservoir. Arthur Aghabegyan, the Deputy Prime Minister of the de facto, suggested that the two sides could engage in joint management of the Tartar River and of the Sarsang Dam, since the reservoir has more capacity than is currently used (Leylekian, 2015). Although the initiative received the support of the OSCE Minsk Group and, in particular, of the US co-chairman James Warlick, Azerbaijan rejected the offer, saying that it would not negotiate with the separatists. Baku, by virtue of the principle of territorial integrity,⁴ claimed the entirety of the region and, in fact, the ceasefire agreement of November 2020 did not in any way mention the status of the region. Azerbaijani President Ilham Aliyev repeatedly affirmed that ethnic Armenians living in Nagorno-Karabakh will enjoy no special status or autonomy once the area comes fully under the control of Baku. While Veliyev et al. (2019) claim that Azerbaijanis and Karabakh Armenians may see an opportunity for cooperation in the Sarsang Reservoir by focusing on the environment as a common goal, Leylekian (2015) argues that the political context and the disposition of the conflicting parties make it difficult to incite them toward such rationality.

Therefore, as demonstrated by the August meetings between the Azerbaijani and de facto authorities, the only attempts to establish a form of local governance were possible thanks to the presence of what Alam would define as a third actor who mediates between the parties involved in the conflict: the Russian peacekeepers. In September 2021, the Kremlin’s servicemen provided more than 200 tons of drinking water to the residents of the de facto republic using two water carriers, each with a volume of about five cubic meters (Ministry of Defense of the Russian Federation, 2021). Furthermore, they tended to crops, fixed water pipes, and facilitated meetings to discuss access to water and electricity with Azerbaijani officials (Vartanyan, 2021).

Additionally, the Kremlin's militarily depleting takeover of Ukraine has provided Azerbaijan with the functional space⁵ and legal cover to test Russian presence within the region. Thus, it is clear that the peacekeepers’ mission did not offer a lasting solution to establish and strengthen water governance. For this reason, establishing LEG in Nagorno-Karabakh could not be an option according to our theoretical framework.

National environmental governance (NEG) implies that water is a national resource that should be managed to benefit the economy and society (Pahl-Wostl et al., 2018). This means that, for the sake of domestic interests, it is up to the state to manage national and transboundary resources (Gupta & Pahl-Wostl, 2013). Applying this definition to our research, it would appear that Azerbaijan and Armenia, the two countries that fought over Nagorno-Karabakh for three decades, should agree on the management of water resources. Since the Arpa and Vorotan Rivers feed Lake Sevan, the main source of freshwater in Armenia, Yerevan is also deeply concerned about water governance in the Nagorno-Karabakh region.

The instrumentalization of water scarcity operated by both parties, environmental relations between Armenia and Azerbaijan would be determined by the absolute lack of mutual trust. It is no coincidence that the only document signed between the two sides dates back to 1974, when tensions were contained under the common borders of the Soviet Union. On this occasion, the Soviet Socialist Republics of Armenia and Azerbaijan inked an agreement on the joint utilization of the waters of the Vorotan River, allocating 50% of the waters to each party.

As paraphrased by Weinthal (2002), governance dynamics have to be looked at in terms of upstream/downstream dynamics. This means that, if upstream countries are politically powerful and concerned about water security issues, they are more likely to develop joint rules that benefit downstream countries as well. However, in our case, the most upstream of the two countries, Armenia, was defeated in the war, has limited economic resources, and has been experiencing a very serious political crisis since the last war with Azerbaijan. Thus, the new geopolitical framework in which Yerevan has lost control over upstream territories has strongly reduced the country's legitimacy as an interlocutor in regional and international affairs vis-a-vis its neighbor Azerbaijan. In the aftermath of the 2020 conflict, with unresolved issues of border demarcation,⁶ exchange of prisoners of war, and the implementation of the so-called Zangezur corridor fuelling tensions between the two sides, water issues are treated as part of the conflict and might be discussed only after the signing of an eventual peace agreement or memorandum of understanding.

Basin-level environmental governance (BEG) is where water issues and conflicts are best dealt with (Pahl-Wostl et al., 2018). The Kura River and its primary tributary, the Aras, originate in the mountains of eastern Turkey, join in Azerbaijan, and drain a basin that is 117,000 square miles in size and includes portions of Georgian, Armenian, Iranian and Azerbaijani territory. Since the collapse of the Soviet Union, the Kura-Aras Basin has become an international river basin joining five states: the new countries of the South Caucasus (Armenia, Azerbaijan, and Georgia), Iran, and Turkey.

Regarding the Southern Caucasus countries, this watershed represents both a common vital resource and a security challenge. For example, in Georgia, this water basin is necessary for agriculture; in Armenia, it is needed for both agriculture and industry (Campana & Vener, 2009); and in Azerbaijan, the Kura and Aras Rivers provide about half of the drinking water and 60% of the irrigation water necessary for agriculture (Zeeb, 2010). Moreover, being located most downstream among the three states in the region, Azerbaijan depends on its upstream neighbors for its primary freshwater resources. Although the majority of the Kura-Aras river basin is located on its territory (31.5%), the three primary water sources crossing the country—the Kura, Aras, and Samur Rivers—originate in neighboring countries and are heavily impacted by pollution and overuse from upstream industries and municipalities in those counties, as well as within Azerbaijan (Yu, 2022). The dependency ratio is also high: according to a blog post by the World Bank (2004), about 73% of Azerbaijani water resources come from bordering flows and 70% of its territory is located on international basins.

Water users in all three countries face water quality and quantity problems. The difference in water use among these three countries also relates to vulnerability. If, on the one hand, Georgia has an oversupply of water and Armenia has some shortages based on scarce management, the main challenge is faced by Azerbaijan, which has to deal with the heavy need for water flow (Campana & Vener, 2009). Furthermore, the Kura-Aras watershed in the South Caucasus has drawn attention due to its severe industrial and agricultural pollution, radioactive contamination, and lack of availability of fresh water for drinking.

The concept of basin governance revolves around the notions of efficiency within a hydrological systems approach (Pahl-Wostl et al., 2018). Ahmadi et al. (2023) argue that there is a significant correlation between the Nagorno-Karabakh conflict and water management issues in the Kura-Aras basin. Although the basin's water scarcity problems have emphasized the common need for transboundary cooperation, the riparian states have yet to sign any joint treaty regarding water allocation, water quality, or ecosystem maintenance. The lack of adequate collaboration caused by the Nagorno-Karabakh conflict has created a significant barrier to developing a viable and efficient multilateral water management system in the region (Veliyev et al., 2019). There is no global regime to govern such conflicts in river basins, as each is managed separately by the riparian states (Haas, 2016). In the Southern Caucasus, such bilateral agreements were inked mostly during Soviet times, with the three newly born states inheriting these accords in compliance with the International Convention on State Succession. The Soviet Union inked two conventions in 1927 with Turkey on the “regulation of the use of transboundary waters” and the “utilization of transboundary streams” and two others in 1957 with Iran on the “establishment of the regime on the Soviet-Iran border” and the “procedure of settlement of boundary disputes and incidents”. The parties agreed on preserving the boundary waters, the exchange of information regularly regarding the quantity and volume of water in the transboundary rivers, joint management of transboundary waters and energy resources, joint draft projects, and the protection of water quality (Zeeb, 2010).

After the collapse of the Soviet Union in 1997, the Ministry of Environment of Georgia and the State Committee of Ecology and Nature Management of Azerbaijan signed a memorandum of understanding on cooperation in the development and implementation of pilot projects for monitoring and assessment of the status of the Kura-Aras basin. In the same year, Georgia signed two other agreements with its neighbors on cooperation in environmental protection. In 2016, Iranian and Azerbaijani authorities agreed to cooperate on constructing power plants on the Aras River at the Khudafarin and Giz Galasi Dams. After the 2020 war, works on this hydroelectric power plant's infrastructure started in 2022, aiming to generate a total capacity of about 280 megawatts (Sarabi, 2022).

However, looking at Basin Environmental Governance (BEG) under the lens of water rationality theory and applying this to our research, it becomes evident that the presence of more than one “water irrational” actor—Armenia, Azerbaijan, and/or Turkey—can hamper the establishment of BEG for water management. Despite their lack of bilateral diplomatic relations, Armenia and Turkey have continued to honor old treaties signed before the collapse of the Soviet Union and continue to share the Arpacay/Akhourian River equitably. Nonetheless, because the treaties only address the quantity to be shared by the co-riparians, further cooperation between the two parties has been necessary to address water quality and protection issues. The lack of sufficient water-rational actors in the BEG implies the necessity of a third actor who can act as a mediator between the contending countries (Alam, 2002).

Global environmental governance (GEG) aims to develop a shared understanding of international water drivers and their impacts to establish standard norms for water management and raise the efficiency of policy measures (Pahl-Wostl, 2013). The 1972 Stockholm Declaration on the Human Environment and the 1992 Rio Declaration on Environment and Development are widely regarded as the foundations of international environmental law. The basic principles outlined in these declarations link environmental and human rights. However, these international ecological laws have flaws, particularly in implementation as international organizations lack enforcement authority. This is especially the case if the actors involved in the governance attempts are not “water” or “environment” rational.

4 Few Initiatives, Poor Chances of Success

As discussed thus far, the relationship between governance and conflict dynamics in the South Caucasus region demonstrates that several irrational actors are involved in the water governance process. Water rationality theory presumes that rational riparian countries will build relationships to maintain long-term access to shared water resources. This is different in the South Caucasus region. At the local level, there was the issue of the upstream region of Nagorno-Karabakh, which serves the downstream territory of Azerbaijan with sources of water—the lack of recognition from Baku of Nagorno-Karabakh as a counterpart limited any attempts at LEG. A significant issue at the national level is the poor relationship of Armenia with Azerbaijan and Turkey, where the lack of diplomatic relations prevents any developments toward NEG.

Therefore, BEG, which should bring the governance system to a broader level, allowing for the involvement of other actors as mediators between “irrational” actors, has a privileged position in our analysis. Nevertheless, if we consider the irrationality of the actors involved and the predominant role that Russia has played in the regional security dynamics—which was strengthened further after it deployed peacekeepers in the Nagorno-Karabakh region—BEG as a strategy of water governance is not without hindrances. This portion of the chapter analyzes attempts aimed at strengthening the Kura-Aras BEG, both considering the format of cooperation among the actors—the South Caucasus countries of Georgia, Armenia, and Azerbaijan, together with regional actors Turkey, Russia, and Iran—and with an external platform of regional cooperation—the OSCE, for instance.

On December 2020, after the outcome of the Nagorno-Karabakh war, Turkish President Recep Tayyip Erdoğan proposed the creation of a 3 + 3 country-regional cooperation platform as a win-win initiative for the three South Caucasus states—Georgia, Armenia, and Azerbaijan—and their three neighbors—Russia, Turkey, and Iran. In particular, Erdoğan claimed, “Not only Azerbaijan, but all countries of the region, including Armenia, as well as the whole world, will benefit if peace and tranquillity are achieved in the Caucasus” (Jamnews, 2021). As stated by Russia’s Foreign Minister Lavrov, Russia supports the realization of such a platform based on the points highlighted in the Nagorno-Karabakh ceasefire declaration:

The joint statement contained the principles that define joint steps to advance the settlement, including work on unblocking all transport communications, unblocking all economic ties in this region, from which not only Armenia and Azerbaijan but also Georgia will benefit (Daily Sabah, 2021).

In January 2021, then-Iranian Foreign Minister Javad Zarif’s diplomatic tour in Azerbaijan, Armenia, Georgia, Turkey, and Russia was inspired by Erdoğan’s initiative. In Baku, Zarif expressed his pleasure at Azerbaijani territorial restoration, while in Yerevan, he pinpointed that the territorial integrity of Armenia represents a red line for Tehran (Kucera, 2021). Despite taking a passive position during the last conflict, Iran’s main challenge in this new regional scenario is to reconfigure its relationship with Baku and Yerevan by building up mutual trust and stabilizing the geopolitical situation on its northern border.

The first session of the 3 + 3 group was held in Moscow on 10 December 2021, with the participation of all the regional countries except for Georgia. Tbilisi refused to take part in the meeting due to the presence of Russia, which does not recognize its territorial integrity. As declared by Georgian Deputy Foreign Minister Alexander Khvtisiashvili in this regard, “Georgia will not be able to engage in the peace platform, where the country occupying Georgian territories is participating as well” (Demirtaş, 2021).

Strengthening the regional security system in the South Caucasus remains the major pillar of this new platform of security for Tehran, Ankara, and Moscow. However, when it comes to interstate issues, particularly those related to water management, this approach has provided the necessary tools to improve cooperation in the Kura-Aras River Basin. In this framework, water issues are considered as an element of security among states rather than an element on which to build mutual cooperation. Thus, in such a region where water irrationality is related to political dynamics among local actors, making it difficult to find a suitable solution, supranational policies may represent a way to create the basis for a neutral water cooperation platform.

One of the most relevant frameworks in this sense in the South Caucasus is the EU Water Initiative (EUWI) and its operational tool, the EU Water Framework Directive (WFD), which supports EU countries and beyond in the adoption of water reform policies. Although the EUWI has managed to provide for adopting general principles of Integrated Water Resources Management (IWRM), the enforcement of such management frameworks still needs to be improved in this region. An ineffective legal and environmental framework and a need for more transparency and public awareness represent the main obstacles to establishing a sustainable water cooperation system (Veliyev et al., 2019).

In May 2003, at the fifth Environment for Europe Ministerial Conference in Kyiv, the Organization for Security and Co-operation in Europe (OSCE), the United Nations Environment Programme (UNEP), and the United Nations Development Programme (UNDP) launched an important initiative, the Environment, and Security (ENVSEC) initiative, to formulate a comprehensive response “to the challenges posed by the close links between environmental degradation, natural resource scarcity and conflict” (OSCE, 2012).

In the South Caucasus, this initiative launched several projects to strengthen bilateral and multilateral cooperation at the water basin level, taking as its principal legal framework the UNECE Water Convention. Between 2002 and 2008, the ENVSEC Initiative implemented the South Caucasus River Monitoring project, a jointly-led North Atlantic Treaty Organisation (NATO) and OSCE project aimed at establishing a regional transboundary river monitoring system for water resources among Armenia, Azerbaijan, and Georgia in the Kura-Aras River Basin. This first project laid the basis for developing a multimodal approach to regional cooperation in this basin. In 2006, as part of the same initiative, the UNDP carried out the identification of transboundary aquifer systems in the South Caucasus and an assessment of water resources and issues related to their use. Moreover, the UNDP addressed the importance of establishing an NGO forum in the Kura-Aras River Basin as part of this initiative. This forum would be aimed at increasing public participation and the capacity of local communities to face water degradation and adopt sustainable measures to improve the coordinated use of the transboundary basin resources.

In the context of the Kura-Aras River Basin, where the water irrationality of the actors involved does not allow for water quality and quantity issues that regional water users have to face to be properly addressed. The OSCE, through the ENVSEC initiative, fills this gap by depoliticizing water management among the riparian countries through the implementation of transboundary policies that put at the center the water users, laying the foundations for basin-level environmental governance in the South Caucasus which involves local communities and conducts basin analysis.

The role of such international organizations in implementing common norms for water management and efficiency-oriented policy in a specific area is part of global environmental governance, as theorized by Pahl-Wostl (2013). However, such as the supranational approach is often lacking in the proper enforcement authority in a regional framework. The OSCE, due to its intergovernmental structure in which the South Caucasus countries are directly involved, is endowed with a certain degree of authority as a mediator in solving water issues between states. In this sense, a successful example of the facilitator role of the OSCE lies in the ENVSEC initiative, which, between 2010 and 2011, accomplished the development of a bilateral agreement between Georgia and Azerbaijan on the water management of the Kura River. Supported by the UNECE, this is the first bilateral agreement in the South Caucasus region to establish a cooperation framework between two countries for the protection and sustainable use of a water resource.

5 Conclusion

The 44-day war in Nagorno-Karabakh in 2020 highlighted some critical features for understanding water conflicts and governance dynamics in the broader OSCE region. In the Introduction, we formulated two particular hypotheses, and we argue that this specific case study has confirmed them. The first hypothesis is that water scarcity is unlikely to be the leading cause of ongoing wars. Still, it can combine with factors such as ethnic, political, and social tensions to transform already existing hostilities into open military conflicts. We then outlined how the existing literature has yet to draw any general rule on whether or how the phenomenon of water scarcity can be considered a direct cause of the outbreak of war. The longstanding conflict in Nagorno-Karabakh has overshadowed water issues for a considerable amount of time, and water was not mentioned in the November 2020 ceasefire agreement, continuing to be a topic of secondary importance compared to other issues, such as border demarcation, exchange of prisoners of war, and the implementation of the so-called Zangezur corridor. It is also true, however, that Azerbaijan was experiencing a water crisis in the run-up to the 2020 conflict, and the de facto republic of Nagorno-Karabakh possessed the region’s water resources. These resources represented an essential source of electricity and an instrument of political leverage in the conflict, as the rivers of this territory contribute to the livelihood of many Azerbaijani regions. Therefore, water scarcity has played a role in the conflict and, if not managed rationally, will lead to further tensions between Azerbaijan and Armenia.

Our second hypothesis is that the politicization of environmental issues represents a further obstacle that increases mutual mistrust between contending parties. This implies the need for the intervention of a third actor to achieve durable and successful governance. In the second part of the chapter, we introduced the water rationality framework, which claims that: (1) to secure their long-term water supply, states build and maintain relationships with their co-riparian countries conducive to long-term access to shared water and (2) if direct bilateral negotiations prove unsuccessful, the intervention of an impartial mediator can assist in communication between the parties. The politicization of environmental issues seen in 2020 was a new feature in the conflict, with Armenia and Azerbaijan co-opting and weaponizing the term “ecocide” and accusing each other of eco-terrorism and environmental sabotage. By analyzing the different models of governance (from local to global) and different actors that could be involved in the aftermath of the war under the lens of the theoretical framework of water rationality, we can argue that the South Caucasus is a “water irrational region”, with security issues and unresolved conflicts, where water scarcity to the role of mere security and political issue.

To give further ground to such a statement, we investigated two initiatives proposed to address the region's issues. The first is the 3 + 3 platform offered by Turkey in the aftermath of the 2020 conflict, which considers water among the other security issues in the region. The 3 + 3 format platform, which tries to bring together the three South Caucasus states and their neighbors Russia, Turkey, and Iran, proposes a new model of regional security that only sometimes addresses the environmental issues that the regional actors have to handle. If, on the one hand, the creation of a regional security system may provide stability in the area, the political dimension preserves the status quo of hierarchical power and conflict stabilization rather than promoting environmental cooperation among the countries.

The second initiative is the ENVSEC, launched by the OSCE, the UNDP, the UN Environment, and the United Nations Economic Commission for Europe (UNECE) in 2003, which aims to bring about the depoliticization of water issues and establish a common framework for the Kura-Aras Basin countries (Armenia, Azerbaijan, Georgia, Iran, and Turkey). This would allow member states to adopt rational measures, from the local to the basin dimension, and to resolve common issues. What hinders a greater impact of this initiative is: (1) the lack of enforcement ability of these organizations; (2) the nature of the South Caucasus region as a contest where potential mediators—Russia, Turkey, and Iran—pursue a politicized agenda; and (3) the unbiased role of the international organizations entitled to support the implementation of the water governance system in a region dominated by water irrational actors. Water irrationality in the South Caucasus also explains why, for example, the case of the Sarsang water dam between Azerbaijan and Artsakh de facto authorities has not followed the same path of the management of the Enguri dam between Georgia and the secessionist rules of Abkhazia.

The influence of international organizations like the OSCE, which has already promoted ad hoc policies through the ENVSEC initiative, remains the only path to establishing a dialogue platform for depoliticizing water issues in this region. Addressing the worsening climate situation is one objective of the ENVSEC initiative. The OSCE should encourage the implementation of measures that depoliticize water issues and build a sustainable long-term alternative form of water governance in the region.