On World Water Day, March 22, 2021, the eighth annual UN World Water Development Report 2021 titled Valuing Water was launched. The report was published by UNESCO on behalf of UN-Water, coordinated by UNESCO World Water Assessment Programme (WWAP). The report assesses the current status of, and challenges to, the valuation of water across different sectors and perspectives. It identifies ways in which valuation can be promoted as a tool to help achieve sustainability.
Water is our most precious resource, a ‘blue gold’, to which more than two billion people do not have direct access, as the Director General of UNESCO has pointed out. It is not only essential for survival, but it also plays sanitary, social, and cultural roles. The report provides insight on the main trends concerning the state, use, and management of fresh water and sanitation based on the findings of UN-Water members and partners.
As per the report, the way water is used and by whom determines its worth or value. Unjust and irrational use of water is the main reason, or a symptom, of the political neglect of water and its mismanagement.
In OECD countries, the rate of increase in the use of fresh water has gradually diminished, but after reaching a high per capita water use. The rate of water use continues to grow in most of the emerging economies and the countries of middle and lower incomes, mainly due to a combination of factors—population growth, development, and changing patterns of consumption. Water needs, especially for agriculture, is expected to grow beyond what the existent water resources can supply. However, there is much scope for improvement in water use efficiency, in eliminating food waste, and changing consumption patterns towards diets that demand less water.
Water stress is affecting several regions and people. It is not just physical scarcity of water that affects people, i.e., they have difficulty in accessing water physically, but also economic scarcity in which case, water may be physically available, but the necessary infrastructure to access that water is lacking. Climate change and overdrawing groundwater are exacerbating the shortage of water. Depletion of water is attributed mainly to irrigation.
Nearly all major rivers of Africa, Asia, and Latin America suffer from pollution, leading to a deterioration in water quality.
Better measurement, monitoring and understanding of the values of water, and their incorporation into improved decision-making frameworks, says the report, enable the equitable comparison of multiple values of water held by multiple stakeholder groups, and are essential for achieving sustainable water resources management.
The report takes five inter-related perspectives to establish the value of water. These are—(i) valuing water sources, in situ water resources and ecosystems; (ii) valuing water infrastructure for water storage; (iii) valuing water services, mainly drinking water, sanitation etc.; (iv) valuing water as an input to production and socio-economic activity such as food and agriculture, energy and industry; and (v) socio-cultural values of water, including recreational, cultural, and spiritual features.
Key Findings
Valuing in terms of environment Interlinking water and environment can address water-related challenges. Significant values can be attributed to ecosystem services that relate to supporting resilience, or reducing risks. However, environmental values are neglected and, as a result, many disaster risks are exacerbated by the loss of relevant ecosystem services that play a role in preventing disasters in the first place.
Nature-based solutions are available to address the water crisis and problems. Supply may be augmented by means of recharging groundwater, sustaining surface water flows, improving soil moisture retention, or managing regional precipitation. Alternatives to large dams may be found in rainwater harvesting in combination with green infrastructure such as groundwater or soil water storage.
Valuation of hydraulic infrastructure Hydraulic infrastructure serves to store or move water. It is an important factor for socio-economic development and cannot be ignored. However, there have been flaws in the valuation of hydraulic infrastructure, particularly for large dams. Large dams are built to gain political benefits and often subject to corruption. Most approaches at valuation focus mainly on financial costs and financial returns, omitting to take into account indirect costs, especially social and environmental costs, which are considered to be externalities. Their concern is the target beneficiaries, but there are other stakeholders who may not get enough benefit less or may be even negatively impacted.
Water storage and availability of fresh water has declined, mainly due to the overextraction of groundwater and temperature-induced loss of surface water. Per capita reservoir capacity is decreasing. In the circumstances, the value of the environment in storing water gains importance as there is lower evaporative losses. Groundwater dams can slow groundwater flows, reduce evaporative losses, and create additional storage in the aquifers behind them. Land management can work towards increasing aquifer recharge.
Many parameters are involved in valuation of water infrastructure—site, type of project, hydrological, environmental and social conditions. What matters in valuation of water infrastructure is good governance.
Valuation of water, sanitation, and hygiene services Access to water, sanitation, and hygiene (WASH) services improves educational opportunities and productivity of workforce; besides, it contributes to a life of dignity and equality. An indirect benefit is a healthier environment, with waste water being properly managed. As waste water collection and treatment improves, health outcomes also improve, and the effects of environmental pollution are reduced. Waste water reuse brings its own benefits. Using water within households, workplaces, and healthcare facilities is often overlooked or not assigned a value comparable with other uses. The returns on hygiene are higher as they help improve health outcomes without the need for extra expenses for new infrastructure. It is a matter of concern that globally, over three billion people and two out of five healthcare facilities lack adequate access to hand hygiene facilities.
WASH services being considered essential, they are mostly under the government and subsidised. But the poor are not necessarily benefited by these subsidies as they often lack water connections and sewerage networks. Value is thus lost to the provider who does not get full revenue from those who can afford to pay even as the poor cannot access WASH services.
The affordability of WASH services has to be looked at from the perspective of disadvantaged groups, considering their income, their location, and the challenges they face.
Valuation of water for food and agriculture The food system is largely dependent on water. Agriculture uses the major share, 69 per cent, of global freshwater resources. In many regions of the world, water for food production is used inefficiently and this results in environmental degradation, including depletion of aquifers, reduction of river flows, degradation of wildlife habitats, and water pollution. The value assigned to water in food production is generally low compared to other uses.
Shifts towards sustainable diets (defined as healthy, having a low environmental impact, affordable, and culturally acceptable, calling for less meat and more plants-based food in one’s diet) could also reduce the use of water for food production.
Valuing water for food production should take into consideration the direct economically beneficial use of water as well as the economic, sociocultural, or environmental benefits associated with water. These benefits include achieving food security and improving nutrition, accommodating changes in consumption patterns, and creating employment, especially for smallholder farmers, thus contributing to poverty alleviation and revitalisation of rural economies. Supporting mitigation of climate change and adaptation, and providing multiple-use water services are other benefits.
Management strategies that could increase the multiple values of water for food production include improving water management in rainfed areas, moving over to sustainable intensification, turning to nature-based and non-conventional sources to get water for irrigation, improving efficiency in water use, reducing demand for food, and improving the understanding of water use for food production.
In order to improve efficiency in water use in agriculture and make users aware of the value of water, different pricing instruments (e.g., volumetric pricing, non-volumetric pricing, tradeable permits) could be used.
Energy industry and business sectors In the energy, industry, and business (EIB) sector, water is essential but is required in large amounts and even expected to be cheap. But in having to treat waste water, water is seen as a liability. Higher costs, lower earnings, and financial losses related to water risks are significant. These sectors have to adequately incorporate the value of water into their business models. Corporate interests in water management should align with those of water management agencies pursuing Integrated Water Resources Management (IWRM) planning approaches. In the circular economy, water will be valued to the extent that each litre is reused again and again, so that water is seen as almost part of the infrastructure rather than as a consumable resource.
Cultural values of water Perception of the values of water and how it is derived and used are directly influenced by culture. The appeal of water could lie in spiritual reasons, or in scenic beauty, its importance for wildlife or recreation, or combinations of these. It would be difficult to compare these values with values derived through other formal means, such as economics. As a result, they are often excluded from value assessments. Culture, further, changes and evolves over time rapidly. The values of water to human well-being thus, go beyond a life-sustaining role to include such aspects as mental health, spiritual well-being, emotional balance, and happiness.
Regional Outlook
The report considers some areas of the world from the perspective of water resources.
Africa: The fresh water resources of Africa are estimated to be about 9 per cent of the world’s total. These resources are unevenly distributed with the six most water-rich countries of central and western Africa accounting for 54 per cent of the continent’s total resources and the 27 most water-proof countries holding only 7 per cent. Valuing water in Sub-Saharan Africa especially, proves to be a challenging task.
Pan-European region: Valuing water is a challenging task within any single jurisdiction, more so across borders. There is no single unified approach to quantitatively valuing water. Within transboundary contexts, quantitatively valuing water is rather challenging as the data required is lacking. The countries that share a water resource often put different emphases on values, needs, and priorities related to sectors that are related to water. However, as this region has significant transboundary agreements on water cooperation, several broad-based approaches exist for identifying the intersectoral benefits. When strengthened, these benefits can help increase the value of transboundary water management by reducing the economic and other costs of lack of action or insufficient cooperation in shared basins.
Latin America and the Caribbean: Latin America and the Caribbean have abundant water. But this water is unequally distributed. Water stress has led to many conflicts in the region. Poor regulation, lack of investment are the main hurdles in securing effective allocation processes. There are some countries in the region that have attempted to value and regulate the use of water. But, on the whole, regulation and monitoring as well as well thought out incentives are required in the region to ensure a better appreciation of the role and value of water as well as to prevent its overexploitation and pollution.
Asia and the Pacific: The per capita availability of water in this region is lowest in the world. There is a severe water competition among different sectors in the region on account of population growth, urbanisation, and increased industrialisation. The water withdrawals are unsustainable, as some countries in this region source a large proportion of their freshwater supply – exceeding half of the total water availability – from groundwater. Water stress due to the demands from irrigation is seen in the North China Plain and northwest India, major areas of food production in the region. Water scarcity is likely to worsen due to impacts of climate change. There is an imminent need to utilise wastewater in the region as the waste water remains an underutilised resource.
There have some positive water-valuing initiatives in Australia, China, Japan, and Malaysia.
The Arab region: Over 85 per cent of people in the Arab region live under conditions of water scarcity. Water is considered a matter of security in bilateral and multilateral discussions among states. This is closely concerned with the fact that most of the freshwater resources available in Arab states cross one or more international boundaries. Over-extraction of groundwater, especially of non-renewable groundwater, is also a major concern. However, this region has also expanded its dependency on non-conventional sources of water (through desalination and treatment of waste water) to meet its growing water needs.
There is a pressing need for considerable investment in infrastructure, appropriate technologies, and the use of non-conventional water resources to improve productivity, sustainability, and access for all.
Understanding and addressing different cultural settings can help to better understand cultural values of water, reconcile antagonistic values, and build resilience with regard to current and future challenges, such as climate change. In modern nations, water remains a major factor for peace and conflict. It is necessary to allow full and effective gender-sensitive participation of all stakeholders in decision-making, allowing everyone to express their own values in their own way. Social learning, individual and collective psychology, and emotions have an important role in internalising values. Community initiatives, water museums, and local interpretation centres can help formal education in this effort. Youth, too, should be engaged in valuing water holistically.
Water governance Global momentum is evolving towards an understanding that a diverse set of values drives the economic and financial considerations in water-related decision-making. There is now a recognition of multiple values of water as well as calls for more robust measurement and valuation methods to help resolve trade-offs. Adopting multi-value approaches to water valuation methods implies acceptance of the important role of values in the management of water resources. There would also be a call for the active participation of a more diverse set of actors incorporating a more diverse set of values into water governance. Water governance may be improved through adoption of inclusive multi-value and multi-stakeholder approaches that could balance environmental, social, cultural, economic and other priorities, and systematically integrate the interdependencies and trade-offs between goals and decisions.
Financing and funding water services Designing an appropriate water tariff (i.e., price) structure for investments in water supply, sanitation or irrigation service is a challenge. This is because a number of policy goals, some of them competing, have to be taken into account.
Large subsidies for WASH services can be counterproductive if they are untargeted, and will result in reducing the benefits of water services. The valuations of WASH investments will, consequently, will also be reduced. To maximise the value of water in investment decisions, there must be careful valuation of the costs and benefits provided by a project.
The water tariff must be carefully designed to address affordability for the poor along with ensuring accessibility to the largest number of individuals, besides having a reliable and expanded network. Large subsidies for WASH service provision are justifiable from an economic, as well as a social and moral standpoint.
For proper valuation, all benefits need to be considered— economic, social, or environmental.
Importance of knowledge and research in valuation Data and information relating to water, such as its location, quantity, and quality, are important if we are to understand and value the resource. The data and information must also include facts relating to human and environmental needs to help informed decision-making. Local and indigenous knowledge is also important if an inclusive change is to be brought about in valuing water.
Conclusion
It is quite difficult to determine the true value for water which is a non-substitutable resource. Thus, the importance of this vital resource does not get appropriate political attention or financial investment in many parts of the world. This results in inequalities in access to water resources and water-related services as well as inefficient and unsustainable use and degradation of water supplies themselves. It also affects the fulfilment of nearly all the sustainable development goals (SDGs) and basic human rights.
Approaches to valuing water vary widely across and even within the different dimensions and perspectives of the users. It is a challenge to consolidate these different approaches, but an effort has to be made in this direction.
There has to be political will to consider all value sets for water, and to then take decisions, and this requires the transformation of political processes and a redistribution of power and voice; public awareness and pressure for change have to be developed. All over the world, water is under-priced and undervalued. Governments, businesses, and citizens are not interested in water being properly valued. This is all the more because citizens see water as a human right, and therefore a free or public good. But it is necessary for everyone to realise that water has value, and undervaluing it poses risks for the inhabitants of Earth.
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