oecd work on water 2015-16

WATEROECD WORK ON

WaterOECD WORK ON

“Water policies around the world are in urgent need of reform. OECD work identifies the priority areas where governments need to focus their reform efforts.”

Angel Gurría, OECD Secretary-General

2015 - 16

ContentsOverview of OECD work on water

Looking ahead 6

OECD Environmental Outlook to 2050 6

Water and climate change 8

Managing water for growth 10

Water security 10

Water and innovation for green growth 12

Water resources allocation 13

Financing water resources and water services 14

The High-Level Panel on financing for a water secure world 14

Financing water supply and sanitation services 15

Financing water resources management 15

Private sector participation for water supply and sanitation services 16

Aid flows for water 17

Water governance 19

The OECD Principles of water governance 21

The OECD Water Governance Initiative 22

Stakeholder engagement 23

The governance of water regulators 23

Water and agriculture 25

Cross-cutting issues 27

Water and Cities 27

Policy coherence: the water food and energy nexus 29

Managing water disasters 30

Making water reform happen 32

Water indicators and data 37

Key water publications 40

www.oecd.org/water

4

www.oecd.org/water

4 . OECD WORK ON WATER

Overview of OECD work on water

The global community increasingly understands how water defines growth and contributes to sustainable development. It also experiences how water risks can affect people’s health and well-being, the environment and economies.

The OECD is working to help developed and developing countries meet the water challenge. With a multi-disciplinary team drawn from across the organisation, the OECD contributes analyses to improve the information base, identify good practice, and provide a forum for exchanging country experiences. OECD work focuses on water economics and governance:

• How water defines growth and sustainable development. How to finance water-related infrastructure and services. How to protect against water-related risks. How to allocate water between competing uses. How to manage water and adapt to climate change.

• How to enhance effective, efficient and inclusive water governance. How to manage water across jurisdictions and scales. How to engage with stakeholders. How to regulate water services. How to strengthen capacity, especially at the subnational level. How to foster integrity and transparency.

THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

The Organisation for Economic

Co-operation and Development (OECD)

is a multi-disciplinary inter governmental

organisation, tracing its roots back to the

post-World War II Marshall Plan. Today, it

comprises 34 member countries that are

committed to democratic government and

the market economy and the European

Commission, with the major emerging

economies increasingly engaged directly in

the work.

The OECD provides a unique forum and the

analytical capacity to assist governments to

compare and exchange policy experiences,

and to identify and promote good

practices through policy decisions and

recommendations.

OECD WORK ON WATER . 5

In addition to analytical work, the OECD works with selected regions and countries to facilitate the reform of water policies. This confirms our aspiration to make reform happen. The OECD has recently enhanced its convening power and capacity to structure discussion among stakeholders on water issues, by setting up the Water Governance Initiative and the Network of Economic Regulators.

This brochure provides an overview of OECD’s work on water.

Key link: www.oecd.org/water

www.oecd.org/water

joint modelling by the OECD and the PBL Netherlands Environmental Assessment Agency. These model-based projections shed light on what demographic and economic trends might mean for water if governments do not introduce new policies to manage freshwater resources with much greater care.

The Outlook has helped improve our understanding of the environmental challenges, the trade-offs that need to be made, and set out achievable solutions.

In particular, the Outlook helped realise the issues related to competition to access water.


1Looking ahead

OECD work on water aims at developing policy recommendations to design and implement water policies that are fit for current and future challenges. Because of the long lead time of water cycles and water infrastructures, anticipation is essential. Long-term projections are captured in the OECD Environmental Outlook to 2050. More specific work focuses on adaptation to climate change.

OECD Environmental Outlook to 2050

In 2012, the OECD Environmental Outlook to 2050 provided a snapshot of the global state of water under business-as-usual conditions. It also highlighted the policies that could change that picture for the better. The work was based on

Overall water demand is projected to increase by some 55% between 2010 and 2050, due to growing demand from manufacturing, energy generation and domestic use. There will be increasing competition for water amongst uses and users, putting ecosystems at risk. Groundwater depletion may become the greatest threat to agriculture and urban water supplies in several regions in the coming decades.

Nutrient pollution from point sources (urban wastewater) and diffuse sources (mainly agriculture) is projected to worsen in most regions, intensifying eutrophication and damaging aquatic biodiversity. Despite progress in increasing access to improved water sources and sanitation, significant challenges remain. Policy options to address these water challenges highlighted in the Outlook include: investing in green infra structures, creating incentives for water efficiency, improving water quality and ensuring policy coherence.


Overall water demand is projected to increase by some

0

1 000

2 000

3 000

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6 000

2000

OECD BRIICS RoW World

2050 2000 2050 2000 2050 2000 2050

Km

3

irrigation domestic livestock manufacturing electricity

Global water demand: Baseline, 2000 and 2050

Note: This graph only measures blue water demand and does not consider rainfed agriculture.

Source: Environmental Outlook Baseline; output from IMAGE.

55% by 2050.


Climate change is reshaping the future for freshwater. More torrential rains, floods and droughts can be expected in many areas. Changing precipitation patterns are shifting rainy seasons and affecting the timing and quantity of melt water from snow pack and glaciers. Impacts on water quality can be expected and freshwater ecosystems are especially vulnerable. Climate change also adds considerable uncertainty to the management of water resources.

Water and climate change adaptation Reducing the adverse consequences and costs of climate change, and tapping into any opportunities, will require adjusting to new circumstances – that is, adaptation. Adaptation is not about maintaining the status quo at all costs – it is about better managing water risks – the risks of shortage (including drought), excess (including flood), inadequate quality, and disruption to freshwater systems.

The OECD report Water and Climate Change: Policies to Navigate Uncharted Waters (OECD 2013) sets out a risk-based approach to improve water security in a changing climate. It provides policy guidance to prioritise action, and improve the efficiency, timeliness and equity of adaption decisions.

The OECD recently surveyed experience on water and adaptation across all 34 member countries and the European Commission to take stock of progress and collect examples of good practice. Individual country profiles are available at: www.oecd.org/env/resources/waterandclimatechange.htm


http://www.oecd.org/env/resources/waterandclimatechange.htm

http://www.oecd.org/env/resources/waterandclimatechange.htm

The survey reveals nearly all countries project increasing water risks due to climate change. Extreme events (e.g. floods and/or droughts) are cited as a primary concern by 32 countries, while water shortage is a key issue for 23 countries. Water quality is a key concern for 15 countries, and impacts on water supply and sanitation were flagged by 16 countries. For 13 countries, impacts on freshwater ecosystems were highlighted. The survey reveals that OECD countries are making progress on “knowing” the risk, by building the scientific evidence base and disseminating information on projected impacts and possible responses.

However, much more could be done to scale up efforts to better “target” water risks by reviewing levels of acceptable risk and to “manage” these risks by considering the full range of strategies and policy options. Only a handful of countries have begun to tackle the issue of financing adaptation for water.

The OECD report also highlights the benefits of adaptive governance, and flexible water policy and financing approaches. In particular, there is potential to scale-up the use of well-designed economic instruments – water trading, efficient water pricing, and flood insurance schemes, in addition to cost-effective ecosystem-based adaptation and green infrastructure approaches. These instruments can provide flexibility and minimise the cost of adjusting to changing climate conditions.

Further work on water, climate change and agriculture features in the section on agriculture.

Did you know?

Water is the principal medium through which climate change impacts on natural and human systems will be felt.


The Task Force demonstrated in their report Securing Water, Sustaining Growth that water resources can play a defining role in economic development. Water-related risks act as a drag on global economic growth, and the scale of the challenge that can be monetised is estimated to be in the order of US$500 billion annually (excluding environmental risks). Harnessing water to drive sustainable growth requires investments in infrastructure, information and institutions.

The occurrence of recent floods and droughts around the world highlight the threats that water (or the lack thereof) can cause to society. The OECD argues that water security is about risk management, and identifies four water-related risks: risk of shortage, of excess water, of inadequate water quality, and of disruption of freshwater systems such as rivers and lakes. Inadequate water supply and sanitation is subsumed under these risks.

The OECD report Water Security for Better Lives explains why governments must promote a risk-based approach to water security. It proposes steps to implement such an approach.

More recently, the Task Force on Water Security and Sustainable Growth, a joint initiative by the OECD and the Global Water Partnership, was set up to draw attention to the relevance of water for sustainable economic development and human well-being within the context of the Post-2015 Development Agenda.

Water security

2Managing water for growth


The Task Force argues that the most beneficial investments in water security are sequenced along strategic pathways. Securing Water, Sustaining Growth documents some of the pathways taken by cities, aquifers, and basins to water security. This work helps establish water, and water security in particular, on the global development agenda and provides the justification for investment.

On the occasion of the 7th World Water Forum in Korea, a High-Level Panel launched the report and an accompanying Policy Statement endorsed by distinguished leaders in water from around the world. In particular, leaders call for enhanced action and investment in water along three lines: invest in water security; invest in risk management; and invest in knowledge, people and partnerships. These messages can inform the water policy agenda, but are also relevant to the development community and for infrastructure planning. A rethink of how investment projects are assessed and valued is required, to account for their contribution to sustainable pathways. The OECD continues to provide guidance on financing and investment in water security.

Key link: Securing Water, Sustaining Growth and the Policy Statement are

available at: www.oecd.org/water


Water and innovation for green growth

Green growth means fostering economic growth and development, while ensuring that natural assets continue to provide the resources and environmental services on which human well-being relies.

We need green growth because risks to development are rising as growth continues to erode natural capital – our water, soil, minerals, living organisms, the atmosphere, and all formations of the Earth’s biosphere. If left unchecked, this results in increased water scarcity, worsening resource bottlenecks, greater pollution, climate change, and unrecoverable biodiversity loss.

Effective water management is a crucial ingredient for green growth. To do this, governments must catalyse water-related investment and innovation that underpin sustained growth and give rise to new economic opportunities.

OECD work on the issue lays out the opportunities to manage and invest in water as a means for green growth. It identifies the key policy options that governments can use to assist this transition towards greener growth. While local circumstances matter, policies to manage water for green growth generally share a number of key features:

l An explicit green growth strategy at national or regional level that guides decisions on water allocation and related issues.

l Water allocation regimes that reliably translate the strategy into water flows; that adjust to shifting conditions; and that drive innovation and investment.

l The capacity to design and finance infrastructures that adjust to the strategy and to shifting conditions. Green infrastructures deserve particular attention.

l Investment in water supply and sanitation services, in particular in urban slums where lack of access generates huge health costs and lost opportunities for social and economic development.

l Institutions and policies that are conducive to the development and diffusion of water-related innovation. International assistance can help developing countries develop, adopt and adapt innovations to their needs and capacities.

l A robust set of data, coupled with tools such as modelling, scenario development, planning, and real options, to enhance effective decision-making.


Water resources allocation

Allocation regimes determine who is able to use water resources, how, when and where. As competition to access water resources intensifies, water resources allocation is an important instrument to manage water for sustainable growth.

Well-designed water allocation regimes allocate water to where it creates the most value for society - economically, socially and environmentally. They can also adjust to changing conditions and preferences at least cost for society.

Well-designed water allocation regimes reflect the different capacities of water users to take and adapt to risks of scarcity. They provide incentives for investment and innovation in water use efficiency. For instance, water entitlements in the Murray Darling Basin, Australia, have triggered innovative responses from irrigators, freeing water for valuable uses.

However, many allocation regimes are strongly conditioned by historical preferences and usage patterns. They show a high degree of path dependency, which manifests in laws and policies, and in the design and operational rules of existing water infrastructures. As a result, water use is often locked-in to uses that are no longer as valuable today as they once were. For example, adequate flows to support ecosystem functioning are not secured in many basins, and many countries still apply very low, or no charges at all, for water abstraction, even though the value of water has increased as competition for the resource has intensified).

A health check for improving water resources allocation

Check 1. Are there accountability mechanisms in place for the management of water allocation that are effective at a catchment or basin scale?

Check 2. Is there a clear legal status in place for all water resources (surface and ground water and alternative sources of supply)?

Check 3. Is the availability of water resources (surface water, groundwater and alternative sources of supply) identified and possible scarcity well-understood?

Check 4. Is there an abstraction limit (“cap”) that reflects in situ requirements and sustainable use?

Check 5. Is there an effective approach to enable efficient and fair management of the risk of shortage that ensures water for essential uses?

Check 6. Are adequate arrangements in place for dealing with exceptional circumstances (such as drought or severe pollution events)?

Check 7. Is there a process for dealing with new entrants and for increasing or varying existing entitlements?

Check 8. Are there effective mechanisms for monitoring and enforcement, with clear and legally robust sanctions?

Check 9. Are water infrastructures in place to store, treat and deliver water in order to allow for the allocation regime to function effectively?

Check 10. Is there policy coherence across sectors that affect water resources allocation?

Check 11. Is there a clear legal definition of water entitlements?

Check 12. Are appropriate abstraction charges in place for all users that reflect the impact of the abstraction on resource availability for other users and the environment?

Check 13. Are obligations related to return flows and discharges properly specified and enforced?

Check 14. Does the system allow water users to reallocate water among themselves to improve the allocative efficiency of the regime?

Source: OECD (2015), Water Resources Allocation: Sharing Risks and Opportunities


Key link: Water Resources Allocation: Sharing Risks and Opportunities

available at: www.oecd.org/water

3

1.5 billion people are projected by 2050 to remain without access to basic sanitation, mostly in developing countries.

High-level Panel on financing for a water secure world

In 2014-15, the OECD and the World Water Council initiated the High-Level Panel on Financing for a Water Secure World, to revive the political momentum on water finance. The High-Level Panel has released a report Water: fit to finance? that takes stock of new and emerging trends in water management and infrastructure finance. The report, launched at the 7th World Water Forum, Korea, presents a series of options to make water fit to finance.

OECD work on financing continues to affirm water finance on the global development agenda. Some of the key processes include the input into the development of SDGs, the G20 work on infrastructure and the international discussions on climate change, of which COP21 is a key milestone.

Did you know?

The total economic value generated by wetlands in one particular natural park in Normandy, France ranges between EUR 2 400 and 4 400 per hectare. This suggests that policies which were considered too costly (such as land acquisition to protect catchments) actually make economic sense.

The OECD has been working on financing for water resources management for decades. The work, initially focused on water supply and sanitation, has expanded to cover a range of aspects of water resources management, water services and water infrastructures.

The OECD is creating bridges between the water, finance and other communities. This work is spearheaded by Angel Gurría, OECD Secretary-General, who was a member of the Camdessus Panel on Financing Water for All and who then chaired the Gurría Task Force on the same issue.


Financing water resources and water services

http://www.worldwatercouncil.org/fileadmin/world_water_council/documents/mailing/mail_wwf7_documents/WWC_OECD_Water-fit-to-finance_Report.pdf

Financing water supply and sanitation services

OECD work has addressed how financing for essential water and sanitation services can be mobilised. Closing the financing gap for water and sanitation infrastructure will require countries to mobilise financing from a variety of sources as well as reducing costs through efficiency gains.

The OECD report Meeting the Challenge of Financing Water and Sanitation provides a set of tools and approaches for financing water supply and sanitation, including: financial planning tools for national and local governments, as well as for water utilities; benchmarking and performance tools; and a checklist for public action on private sector participation. These tools have been successfully tested and used in a number of OECD and developing countries (see pages 32-34).

Financing water resources management

The OECD also reviews the experience of countries in financing water resources management, with a focus on the role of economic instruments in improving incentives for water users and financing water management services. Good water resources management can improve the sustainability of watershed services and enhance the value they add to the community. However, markets do not generally recognise these benefits, and the beneficiaries of water-related services do not usually pay the cost of their provision. As a result, government intervention is required to provide the institutional and financial mechanisms to address this market failure.

Drawing on the experience of countries, the OECD released a Framework for Financing Water Resources Management in 2012.

The framework identifies four principles for water resources management financing and a series of implementation challenges, which have to be addressed in a pragmatic way. The report discusses the potential benefit of economic instruments, to curb water demand and the need for additional infrastructures, to allocate water where it creates most value for the community; or to generate revenues for water policies and water services.


Key link: Framework for Financing Water Resources Management

www.oecd.org/environment/aframeworkforfinancingwaterresourcesmanagement.htm

www.oecd.org/environment/aframeworkforfinancingwaterresourcesmanagement.htm

The OECD Checklist for Public Action has been used to carry out assessments of private sector participation in the water sector in Egypt, Lebanon, Mexico, Russia and Tunisia.

Private sector participation for water supply and sanitation services

Providing an adequate framework for private sector participation in the financing, development and management of water and sanitation infrastructure is a key challenge. The OECD, working with non-OECD countries and stakeholders, developed a Checklist for Public Action, building on the OECD Principles for Private Sector Participation in Infrastructure. The Checklist helps

Key link: http://www.oecd.org/investment/investment-policy/water.htm

governments to properly assess and manage the implications of private sector participation in the water sector. Experience drawn from applying the Checklist in a range of countries has pointed to the need for countries to assess their frameworks for private sector participation. There is also a strong demand to share tools and access good practice. Focussing on framework conditions has proven to be of particular relevance. The Checklist has demonstrated its usefulness in helping countries identify key areas for reform.

The Checklist highlights a set of principles across five key policy areas:

l Deciding on the nature and modalities of private sector participation.

l Providing a sound institutional and regulatory environment for infrastructure investment.

l Ensuring public and institutional support for the project and choice of financing.

l Making the co-operation between the public and private sectors work in the public interest.

l Encouraging responsible business conduct.


http://www.oecd.org/investment/investment-policy/water.htm

http://www.oecd.org/investment/investment-policy/water.htm

Donors allocated on average 6% of their aid programmes to the water sector in developing countries in 2010-11. This share has been regularly increasing over the last 30 years. The share allocated to education reaches 11% and 14% for health.

Aid flows for water

The OECD collects and regularly updates statistics on aid for water supply and sanitation. The data collection is based on a standard methodology and agreed definitions which ensures that data can be used to analyse trends and compare the efforts of donors.

Data cover flows from members of the OECD Development Assistance Committee (DAC), non-DAC providers of development assistance, and multilateral agencies including the World Bank, regional development banks, UN agencies and other agencies such as the Arab institutions or Global Environment Facility. The coverage improves from year to year.

In addition to aid flows, non-concessional developmental flows for water extended by bilateral development finance

institutions and multilateral agencies are collected through the Creditor Reporting System (CRS). Data collection has also started from private charitable foundations.

OECD analysis provides insight on how and where aid for water is spent. Regular statistical briefs cover the following aspects:

l Monitoring trends

l Commitments versus disbursements

l Geographical allocation of resources

l Nature of projects financed

l Water and climate change

l Water and gender equality

Did you know?


Trends in aid to water and sanitationCommitments, annual figures and 5-year moving averages, constant 2009 prices, USD millions

Source: http://webnet.oecd.org/dcdgraphs/water/

Key link: All information related to aid flows for water, including statistical briefs, standard statistics and user-friendly access to the online database is available at: www.oecd.org/dac/stats/water.

Recent improvements in statistics on aid flows for water

l Sanitation versus water supply: A new feature in the data, starting with

2010 flows, is the possibility to identify aid for sanitation separately from water supply. This amendment to the sector classification was realised at the request of water experts, including UN Water and the EUWI.

l New classification for aid modalities: Also starting with 2010 flows, donors have started to report on aid modalities (budget support, pooled contributions, projects, technical assistance) which will facilitate studying donors’ preferred aid modalities in the water sector.


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1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

USD million

Aid to Water & Sanitation, 5-y moving average, USD million (left axis)

Aid to Water & Sanitation as a share of total sector allocable aid, % (right axis)

http://webnet.oecd.org/dcdgraphs/water

www.oecd.org/dac

4Water governance

Managing water for all is not only a question of resource availability and money, but also a matter of good governance. Water is a fragmented sector: it is managed at different levels of government and involves a wide range of stakeholders at basin, municipal, regional, national and international levels. In the absence of effective public governance to manage interdependencies between actors and policy areas, policymakers inevitably face obstacles to effectively design and implement water reforms.

Key governance challenges include institutional and territorial fragmentation and poorly managed multi-level governance. Limited capacity at the local level, unclear allocation of roles and responsibilities and questionable resource allocation are also problematic. This is often reflected in patchy financial management and the lack of long-term strategic planning, together with weak economic regulation and poorly drafted legislation.

Insufficient means for measuring performance have contributed to low accountability and transparency. These obstacles are often rooted in misaligned objectives and poor management of interactions between stakeholders.


OECD Multi-level Governance Framework: “Mind the Gap, Brigde the Gap”

MULTI-LEVEL GOVERNANCE

GAPS

Policy gap

Accountability gap

Funding gap

Capacity gapInformation gap

Administrative gap

Objective gap BRIDG

E THE G

APS

DIA

GN

OSE

TH

E G

APS

In addition, good governance and financial sustainability are inextricably linked. Ensuring that the water sector has a sound regulatory and institutional basis can help to increase the attractiveness of the sector for private sources of funding, as well as improve the financial sustainability of public water utilities.

Often the technical and institutional solutions to the water crisis exist and are well-known. The real challenge lies in implementing these solutions, tailoring them to local contexts, overcoming obstacles to reform, and bringing together the main actors from different sectors to join forces and share the risks and tasks. OECD work on water governance has produced analytical frameworks to diagnose governance across member and non-member countries, and scale up good practices to overcome them.

BETTER INTEGRITY AND TRANSPARENCY

INTEGRATED WATER RESOURCES M

ANAGEMENT


Did you know?

The number of ministries and public agencies with core prerogatives in water policy ranges from 2 to 15, depending on OECD countries.

The OECD Principles on Water Governance set standards for more effective, efficient and inclusive design and implementation of water policies, and encourage governments to put them into action. They were welcomed by Ministers at the OECD Ministerial Council Meeting on 4 June 2015.

The 12 Water Governance Principles will contribute to a broader OECD perspective on water management over the coming years. The Principles intend to contribute to tangible and outcome-oriented public policies, based on three mutually reinforcing and complementary dimensions of water governance:

l Effectiveness relates to the contribution of governance to defining clear, sustainable water policy goals and targets at all levels of government, to implementing those policy goals and meeting expected targets.

l Efficiency relates to the contribution of governance to maximising the benefits of sustainable water management and welfare at the least cost to society.

l Trust and Engagement relate to the contribution of governance to building public confidence and ensuring inclusiveness of stakeholders through democratic legitimacy and fairness for society at large.

INTEGRATED WATER RESOURCES M

ANAGEMENT

OECD Principles on Water Governance The OECD Principles on Water Governance were developed using a multi-stakeholder approach and were endorsed by a large number of public, private and non-profit organisations at the 7th World Water Forum in April 2015 in Korea through the Daegu Multi-stakeholder Declaration. 65 major stakeholder groups and individuals, actively engaged in the OECD Water Governance Initiative, committed to mainstream the Principles into their practices and to work further with the OECD to support their implementation.

OECD Principles on Water Governance


TRUST & ENGAGEMENT

Clear roles &

responsibilities

Capacity

Policy coherence

Appropriate scales within

basin systems

Regulatory Frameworks

Data & information

Financing

Innovative governance

Trade-offs across users,

rural and urban areas, and

generations

Integrity & Transparency

Monitoring& Evaluation

Stakeholder engagement

WATER GOVERNANCE

http://www.oecd.org/gov/regional-policy/OECD-Principles-on-Water-Governance-brochure.pdf

http://www.oecd.org/governance/regional-policy/world-water-forum-7.htm

The OECD Water Governance Initiative is an international multi-stakeholder network of 115 public, private and non-for-profit stakeholders gathering twice a year in a Policy Forum to share on-going reforms, projects, lessons and good practices in support of better governance in the water sector. It has the following objectives:

l Advise governments in taking the needed steps for effective water reforms through policy dialogue across decision-makers at different levels.

l Provide a technical platform to discuss analytical work on water governance through peer-to-peer exchanges and knowledge sharing.

l Provide a consultation mechanism to raise the profile of governance issues in the Global Water Agenda (World Water Forum, Post-2015 Agenda).

l Support the implementation of the governance targets designed for the 6th World Water Forum (Marseille, 2012) and the Implementation Roadmap of the 7th World Water Forum (Korea, 2015).

The OECD Water Governance Initiative

l Assist with the monitoring of the implementation of OECD Principles on Water Governance through the preparation of OECD Indicators on Water Governance.

Key link: OECD Water Governance Initiative:www.oecd.org/gov/water


Around 100 Network Members

Steering Committee[OECD, Suez Environnement, ASTEE,

INBO/OIEau, UNESCO, WIN, SIWI, Transparency International]

Beneficiaries: larger water communities

Global Water Agenda

OECD Indicators on water governance

OECD Principles on water governance

Regional partners [LAC, Europe, Asia-Pacific,

MENA, Africa]

WG n°1Stakeholder engagement

WG n°2Governance & performance

of water services

WG n°4Integrity &

Transparency

WG n°3 Basin

governance

OECD Water Governance Initiative

www.oecd.org/gov/water

The Checklist on stakeholder engagement in water governance highlights a set of

six principles to help policymakers get stakeholder engagement right:

l Map all those who have a stake in the outcome of any water project, their

responsibility, motivations and interactions.

l Define the line of decision making, and how stakeholder engagement will

contribute.

l Aim for result-oriented stakeholder engagement, with the proper financial and

human resources, and information.

l Carry out regular assessments of stakeholder engagement.

l Embed engagement processes in clear legal and policy frameworks, making

them a required part of organisational structures and principles.

l Customise engagement to specific issues and keep the process as flexible as

possible.


OECD’s Guidance on stakeholder engagement for inclusive water governanceDecisions makers will be forced to make tough choices

about how to manage water for inclusive growth and environmental stability. Better engaging stakeholders both within and outside the water sector can help ensure these choices are the right ones, and are implemented effectively.

The OECD report “Stakeholder Engagement for Inclusive Water Governance” assesses the current trends, drivers, obstacles, mechanisms, impacts, costs and benefits of stakeholder engagement in the water sector. It highlights the increasing importance of stakeholder engagement in the water sector as a principle of good governance and the need for better understanding of the pressing and emerging issues related to stakeholder engagement. These include: the shift of power across stakeholders; the arrival of new entrants that ought to be considered; the external and internal drivers that have triggered engagement processes; innovative tools that have emerged to manage the interface between multiple players, and types of costs and benefits incurred by engagement at policy and project levels.

The report concludes with pragmatic policy guidance to decision makers and practitioners in the form of key principles and a Checklist for Public Action with indicators, international references and self-assessment questions, which together can help policy makers to set up the appropriate framework conditions needed to yield the short and long-term benefits of stakeholder engagement.

The governance of water regulators

The establishment of water regulators is both recent and a consistent trend among OECD and non-OECD countries. A water regulator is generally established to protect the public interest as part of broader reforms to make service providers more accountable, to establish an independent price-setting process and to bring regulatory expertise into the public sector.

Stakeholder engagement


The establishment of a dedicated regulatory body for water services is seen as responding to the need of a complex sector – prone to market failures and where regulatory responsibilities are fragmented – by promoting transparency, policy coherence and co-ordination, continuity, predictability and credibility of decision-making (in particular concerning tariff setting) and accountability to users.

The work builds on the OECD Best Practice Principles for the Good Governance of Regulators to understand what it means to be a well-performing water regulator. It is based on a detailed survey of their institutional setting; their mandates, roles and core regulatory functions; their internal organisation;

Source: OECD (2015), The Governance of Water Regulators.

Core regulatory functions carried out by water regulators

Note: * Multi-sector regulators. Source: OECD (2015), The Governance of Water Regulators.

their accountability mechanisms; and their use of tools and mechanisms to ensure regulatory quality.

Water regulators generally play a role in four main areas: i) economic regulation; ii) data collection and performance monitoring related to water services; iii) enforcement of regulations and standards; and iv) customer engagement and protection. Water regulators generally display legitimacy, clarity of roles and responsibilities, and accountability grounded in legislative instruments. They also show a strong culture of consultation. Other areas, in particular evaluation of regulatory impacts, could be further strengthened.

The 34 regulators participating in the OECD work on the governance of

water regulators33

32

27

27

25

25

24

22

22

20

20

18

17

16

15

14

11

9

4

1

2

7

7

9

9

10

12

12

14

14

16

17

18

19

20

23

25

30

Tariff regulation

Monitoring of service delivery performance

Information and data gathering

Analysing utilities’ investment/business plans

Customer engagement

Consumer protection and dispute resolution

Incentives for efficient investment

Defining technical & service standards

Incentives for efficient use of water resources

Uniform systems of accounts

Promoting demand management

Promoting innovative technologies

Licensing of water operators

Carrying management audits on utilities

Defining public service obligations

Supervision of contracts with private actors

Supervising utilities’ financing activities

Quality standards for drinking water

Quality standards for wastewater treatment

Yes No

5

9

14

6

0

2

4

6

8

10

12

14

16

1911-1937 1989-1999 2000-2009 >2010

US/Hawaii* US/Maine* US/Ohio*

US/Pennsylvania*US/West Virginia*

AlbaniaAustralia/ACT* Australia/NSW*

ChileColombia

PeruPortugal* UK/E&W

US/Tennessee*

Australia/Victoria*Australia/WA*

Armenia*Brazil/RS*Bulgaria*Indonesia

KosovoLatvia*

MalaysiaMozambique

Romania*UK/N. Ireland*UK/Scotland *

Uruguay*

Belgium/FlandersEstonia*

Hungary*Ireland*

Italy*Ukraine*

http://www.oecd.org/gov/regulatory-policy/governance-regulators.htm

http://www.oecd.org/gov/regulatory-policy/governance-regulators.htm

Source: OECD (2015), The Governance of Water Regulators.

5Water and agriculture

There is a large, complex and dynamic set of linkages between agriculture and water. Irrigated agriculture makes a substantial contribution to the growth in agricultural production across many countries. Yet, agriculture can have significant impacts (both positive and negative) on water ecosystems, and both agriculture and water are becoming increasingly vulnerable to climate change.

In most OECD countries, agriculture is the major consumer of water and a significant source of diffuse water pollution. While agriculture often suffers the most from droughts and floods, in the case of floods, it can also help reduce their impact on the rest of the economy.

OECD’s examination of these linkages focuses on economic and policy analysis, supported by economic and environmental data. Overall, OECD work is seeking to provide policy advice to governments that could help to move agriculture onto a sustainable path in the overall management of water systems.

Agriculture faces the enormous challenge of producing globally almost 50% more food by 2030 and doubling production by 2050. This will likely need to be achieved with less water, mainly because of growing pressures


from urbanisation, industrialisation and climate change. In this context, it will be important in the future for farmers to receive the right signals to increase water use efficiency and improve agricultural water management, while preserving aquatic ecosystems.

In the OECD report Sustainable Management of Water Resources in Agriculture, the OECD analyses the challenges of moving towards more efficient management of water resources in agriculture, and responding to growing food demands and the impacts of climate change.

The impact of OECD agriculture on water quality (mainly from nutrients, soil sediments and pesticides) over the past decade has been either stable or deteriorating, with only a few cases where significant improvements are reported. Agricultural water pollution has cost OECD taxpayers billions of dollars annually and calls for policy improvements.

The OECD report Water Quality and Agriculture: Meeting the Policy Challenge identifies several recommendations to encourage the sustainable management of water quality in agriculture. In particular, the report calls for better

climate change and best adaptation practices, and providing technical assistance.

l At the watershed level, design flexible and robust water sharing rules and economic instruments, such as water pricing and water trading, in order to foster adaptation of water systems.

l Design risk-sharing arrangements and insurance systems to reduce the burden of increasing risk and uncertainty of weather events, such as floods and droughts, and thus contribute to the resilience of agriculture to climate change.

l Provide the enabling environment to promote private water storage and competitive storage markets. Commodity markets can play an important role in smoothing the impact of extreme weather events on price volatility over time.

Forthcoming work explores more specifically some aspects of this strategy, first by investigating the potential role and management of groundwater use for irrigation, and second by analysing policies and strategies to cope with droughts and floods.

enforcement of existing standards, removal of perverse support mechanisms that degrade water quality, and recommends a holistic approach, using a mix of policy instruments to tackle the complex issues associated with agricultural water pollution.

Agriculture is expected to be the most economically affected sector by climate change, most notably due to an increase in rainfall variability. Long-term changes in precipitation, changes in crop water requirements, and the increasing frequency of extreme weather events are expected to affect crops and livestock production systems in many regions. As countries develop climate adaptation policies in agriculture, water management will play a key role in increasing agriculture’s resilience to climate change.

The OECD report Climate Change, Water and Agriculture: Towards resilient systems analyses the policy implications of linking climate change with water management objectives in agriculture. It proposes a four-level policy strategy to support agriculture adaptation:

l At the farm level, create an enabling environment for on-farm adaptation by collecting and disseminating relevant and site-specific information about projected impacts of


Key links:

www.oecd.org/tad/sustainable-agriculture/wateruseinagriculture.htm

www.oecd.org/tad/env/indicators

http://www.oecd.org/tad/sustainable-agriculture/wateruseinagriculture.htm

http://www.oecd.org/tad/sustainable-agriculture/wateruseinagriculture.htm

http://www.oecd.org/tad/env/indicators

6Cross-cutting issues

Cities are major contributors to national economies and play a key role as nodes in global markets. But cities can only develop sustainably when they provide reliable water supply and sanitation services to city dwellers, and manage risks of too much, too little or too polluted water.

In OECD countries, cities have achieved high levels of protection against droughts, floods, or water pollution, and a vast majority of city dwellers enjoy reliable water services. This remarkable performance derives from distinctive combinations of infrastructures, business models and institutional arrangements. However, whether and how such combinations are fit for future challenges is unclear.

The economic, social and environmental costs of water security are increasing, driven by urban growth, competition among water users, urban and agricultural pollution, and climate change. Existing infrastructures are also ageing and need to adapt to new contexts. In addition, city dwellers have rising expectations as regards to the quality of water services and water security.

Water and cities


The OECD has embarked in policy analysis across the house, to highlight best practices for urban water management. The outcome builds on several case studies from OECD countries, two surveys on urban water governance and on the governance of regulators for water supply and sanitation services, and extensive country consultations.

The report Water and Cities: Ensuring sustainable futures (OECD 2015) establishes that cities that effectively manage water for future challenges combine:

l Innovation. Technical innovation is burgeoning in cities, but is not fully exploited. Cities would benefit from having a wide latitude to explore technologies that fit local contexts, often in combination with non-technical innovation.

l Financing. The financial conundrum in OECD countries is changing rapidly, with rising investment needs to renew ageing infrastructures, declining water demand in city centres, and fierce competition to access public finance. Tariff structures and business models need adjusting accordingly.

l Rural-urban linkages. The urban-rural interface can contribute a great deal to OECD cities’ water security, now and in the future, at least cost to society. National governments should provide incentives and institutional mechanisms to foster the use of co-operative arrangements benefiting cities, surrounding communities, and ecosystems.

l Governance. Three issues deserve particular attention: stakeholder engagement; dedicated regulatory agencies; and metropolitan governance. The OECD explores good international practice, drawing on dedicated networks of stakeholders and practitioners.

OECD cities will not be in a position to respond to all the future water challenges on their own. A number of initiatives by other tiers of governments, clustered around three categories – regulation (on land use, reclaimed water and public procurement), resource provision (e.g. information and education) and incentives (e.g. financial) – will also contribute to urban water management. Governments can use urban policies and infrastructure financing to promote water-sensitive urban design, especially in high-risk regions. The interplay between national and local initiatives on water management will shape the cities of the future, including their capacity to thrive and contribute to bettering the lives of their residents.

The forthcoming report Water Governance in cities will dig deeper into water governance challenges in cities and suggest policy responses, by focusing on coordination across people, places and policies. It will draw from the result of a survey carried out across 40 + cities from OECD and non OECD countries.



Policy coherence: water, energy, agriculture and the environment

Water policies intersect with a wide array of sectors, especially energy and agriculture, and are implemented at various geographical scales, from local to international. Thus, policy coherence is essential. However, tensions may arise from real or perceived trade-offs between various policy objectives - for instance, between food security and water productivity. Inefficiencies may result from subsidies that have negative impacts on water, as in the case of energy subsidies for groundwater abstraction by farmers.

Resolving these tensions requires a global perspective. For instance, free trade in agricultural commodities and the reform of farm support policies in OECD countries can alleviate some of the tensions between food security and water productivity at domestic level. Policy co-ordination is also required. The linkages between the policy areas have to be considered early on in the policy making process. For example, when countries set biofuel production targets, there is a need to factor in potential consequences for future water withdrawals.

OECD work on policy coherence examines the policy challenges at the intersection between water, energy and agriculture. Further insight was provided during the OECD Global Forum on Environment held in Paris, November 2014.

The Forum focused on projections and scenario analysis for the Water-Energy-Food Nexus, on financing and investment, and on governing the nexus to make reform happen.

Did you know?

According to market insights from Global Water Intelligence, 50% of the world’s major industrial companies and 25% of major cities will consider water reuse in the period 2005-15.


Managing water disasters

Hurricane Sandy caused an unprecedented US $75 billion in damages to the New York metropolitan area. In a global economy, the impacts of water-related disasters can disrupt global supply chains, causing propagation effects across borders. The 2011 floods in Bangkok caused a global shortage of hard disk drives, as 40% of production is located around the Thai capital. Droughts are a major contributor to the volatility of food prices, which have been linked to recent episodes of social unrest and political instability. Natural disasters can harm the economies of even the wealthiest of countries. For example, the OECD estimates that a major flood of Paris could decrease the national GDP by 3%. In this context, all levels of government should implement appropriate risk management policies for water-related disasters.

The OECD High-Level Risk Forum provides a venue for risk managers from governments and the private sectors to exchange solutions to reduce water-related disaster risks. This resulted in the adoption of the OECD Recommendation on the Governance of Critical Risks by the OECD Ministerial Council in May 2014. The Recommendation makes the case for a whole of society effort, to better assess, prevent, respond to, and recover from, the effects of extreme events.

The Recommendation provides a framework against which risk management policies can be evaluated and compared.

OECD Recommendation on the Governance of Critical Risks

The OECD Recommendation on the Governance of Critical Risks calls OECD governments to:

l Identify and assess risks, taking interlinkages and knock-on effects into account. This helps set priorities and inform allocation of resources.

l Invest more in risk prevention and mitigation such as in protective infrastructure, but also non-structural policies such as land use planning.

l Develop flexible capacities for preparedness, response and recovery, which help manage unanticipated and novel types of crises.

l Establish transparent and accountable risk management systems that learn continuously and systematically from experience and research.

Key link: http://www.oecd.org/governance/risk/

http://www.oecd.org/governance/risk/

Adequate preparation for water-related disasters requires governments to invest in risk analysis, structural protections, policies in support of prevention, and emergency response capabilities. It also entails social policies and financial mechanisms to mitigate the welfare impact of losses, and ensure a quick recovery and reconstruction that reduces future vulnerability.

The critical policy challenge is how to best prioritize investments suited to different risks. Managing water-related risks requires improved policy coherence across climate change adaptation, water management and disaster risk reduction. If coordinated effectively, these efforts can set an incentive structure that delivers more resilient societies. Governance is therefore one of the fundamental challenges to getting management of water related risks right. Indeed, the Sendai Framework on Disaster Risk Reduction, adopted by governments at the 3rd World Conference on Disaster Risk Reduction in March 2015, integrates risk governance as one of its main priorities.

The OECD, through its Reviews of risk management policies, assists governments in developing tailored policy responses to these challenges. As an example, the OECD Review on the resilience to Major Floods from the Seine in Ile-de-France (OECD 2014) led to the establishment of a new governance structure for institutions in charge of prevention policies and emergency preparedness to work better together towards reaching an established target of resilience for the metropolitan area.


The OECD is also a founding member of the United Nations High Level Experts and Leaders Panel on Water and Disasters (UN-HELP), which ensures that the water disasters stay high on the water policy agenda.

Did you know?

According to OECD estimates, a major flooding of the Seine River, similar to the flood disaster of 1910, could affect up to 5 million residents in the greater Paris area and cause up to EUR 30 billion worth of damage. Economic growth, jobs and public finances could also be significantly affected: several points of GDP and hundreds thousands of jobs could be lost in the most extreme case.

Map of the floodplain for a 100-year flood in Paris


7Making water reform happen

OECD analyses confirm that water management needs to change in most OECD and non-member countries: fiercer competition to access the resource puts more pressure on allocation regimes; more uncertainty about future availability of water challenges the way water services and infrastructures are designed and operate; new technologies and innovative management practices generate opportunities to deliver better services at least cost for the community. Water governance needs to adapt to better reach out to communities which behaviour affects water demand and availability (farmers, city dwellers, energy suppliers) and to engage stakeholders in complex policy decisions.

The OECD is committed to supporting governments in their efforts to reform policies that influence the availability and use of water. OECD’s analytical work provides the insight and evidence-base to build the case for reform, drawing on international best practice. In addition, the OECD co-operates with a variety of countries on concrete reform projects. This is done in the context of national policy dialogues on water, a process, that facilitates the design and implementation of policy reforms. In turn, the pragmatic, hands-on experience gained through these processes informs OECD’s analytical work.

National policy dialogues

The OECD has worked directly with a number of countries to support National Policy Dialogues, helping to make water reform happen. National Policy Dialogues are a structured process for stakeholder engagement supported by robust and tailored analytical work and lessons learnt from international experience. For such policy dialogues to be effective, expertise is needed to make complex

with the UNECE. The EUWI EECCA is funded by the European Union with co-financing from Austria, Finland, Germany, Norway, and Switzerland.

The EUWI EECCA combines a regional co-operation dimension, where countries in the region share experience on water-related challenges and successful reforms; and country specific multi-year National Policy Dialogues (NPDs), where the OECD and UNECE facilitate reforms in the field of integrated water resource management and/or water supply and sanitation. The OECD focuses on the economic aspects of water resources management (policy coherence, managing water for growth and making the best use of economic instruments for water management), and on the financial sustainability of water supply and sanitation services (strategic and mid-term financial planning and financial support mechanisms to the sector). The UNECE focuses on the co-operation related to the trans-boundary waters.

Key link: http://www.oecd.org/environment/outreach/


* The EECCA countries are: Armenia, Azerbaijan,

Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova,

the Russian Federation, Tajikistan, Turkmenistan,

Ukraine and Uzbekistan.

technical and non-technical choices, and to undertake comprehensive options assessments (e.g. economic and environmental impact assessments). The OECD has accumulated experience with National Policy Dialogues in a range of countries focussing on various elements of water policy reform, including financing and pricing, governance, allocation, water security and private sector participation (using the checklist for public action, p.16).

National Policy Dialogues in Eastern Europe, the Caucasus and Central Asia (EECCA)*

The OECD assists the EECCA countries in adopting a more integrated approach to water management, applying robust economic and financial analyses and improving multi-stakeholder participation. It also helps in identifying and removing some of the key obstacles to effective and efficient water management, while reflecting countries’ level of socio-economic development.

This work is part of the EECCA component of the European Union Water Initiative (EUWI), for which the OECD is a strategic partner, together

Tools for strategic financial planning that have facilitated reforms in EECCA include:

l Strategic financial planning for water supply and sanitation at national or regional level.

l Financial planning tool for water utilities.

l Multi-year investment planning tool for municipalities.

l Guidelines for the development of performance based contracts for water utilities.

l Toolkit for benchmarking water utility performance.

http://www.oecd.org/environment/outreach

Supporting the implementation of Mexico’s 2030 Water Agenda

Mexico’s 2030 Water Agenda, designed by the National Water Commission of Mexico (CONAGUA), advocates for a new paradigm for more efficient management of water resources and services.

The OECD worked with Mexico to provide evidence-based assessment, analytical guidance, and customised policy recommendations in support of its water policy reforms. The process was based on OECD tools, methodologies and frameworks, and involved high-level peer reviewers and experts from Australia, Brazil, Italy, and the United Kingdom.

The process was useful to engage stakeholders, particularly as the Head of State and senior officers at the Mexican Water Commission changed during the course of the project.

The report Making Water Reform Happen in Mexico (OECD 2013) was handed over to the President of Mexico right after his election to serve as a reference for major policy reforms. It is also being used by donors to target their co-operation.

Did you know?

The Mexican government is expected to invest 51 billion pesos annually over the coming twenty years to meet the water reform challenge.


Key link: http://www.oecd.org/gov/regional-policy/makingwaterreformhappeninmexico.htm

http://www.oecd.org/gov/regional

makingwaterreformhappeninmexico.htm

National Water Policy Dialogue in the Netherlands

Two-thirds of the Dutch territory, more than half of the population and two-thirds of the economic activity, are at risk of flood. As a result, water management has long been a national security issue for The Netherlands. Due to this unique situation, and centuries of concerted effort and dedicated ingenuity to “keep feet dry”, the Dutch have become a global leader in water management.

However, in the face of broader administrative reforms, fiscal tightening and increasing water challenges due to climate change, a number of key questions have emerged: how fit is the current system to meet future challenges? Are the current water governance and institutional arrangements effective and resilient? Is the Dutch society willing and able to pay the rising costs of water management? Can the Dutch “polder” approach effectively address issues related to the quality of the rivers and lakes, and cope with increasing risks of both floods and scarcity in the country?

To shed light on these questions, the OECD-Netherlands Policy Dialogue on Water Governance was set up. The final report Water Governance in the Netherlands: Fit for the Future? (OECD 2013) flags issues which could shape an agenda for future water policies in the Netherlands.


National Water Policy Dialogue in Brazil

Water is abundant in Brazil, but unevenly distributed across regions and users. Brazil faces at the same time severe droughts and an overabundance of water. For example, the 2015 drought in the São Paulo region occurred at the same time the Amazon region suffered severe flooding. Future economic, demographic, and climate trends make these issues more critical, as they affect rainfall variability, availability and demand, and increase the number of people and assets at risk.

Current tensions and future trends show that business as usual cannot continue. They suggest that, although important reforms have been carried out in the past 15 years and remarkable progress has been achieved, prevailing ways of managing water in some basins may fail to contribute to national priorities. Opportunities are lost to create more value and welfare with available water resources. These trends also generate unnecessary burden on public finance, distracting private initiative and building future liabilities.

The OECD carried out a policy dialogue with the National Water Agency of Brazil and 100+ stakeholders at all levels, zooming on how to better articulate state and federal water resources management, and to strengthen water allocation regimes. The process drew on OECD expertise in these areas, on international best practice, and on the experience of senior policy makers from Canada, South Africa, Portugal, Australia and the European Commission.

8Water indicators and dataThe availability of high-quality water information is crucial for responsive and cost-effective water policies. The OECD provides leadership in the development of indicators to measure performance, produces harmonised data, and helps countries improve their environmental information systems. Over the past decade, many countries have been upgrading their water monitoring systems and their data collection efforts, supported with new information technologies and web-based communication. A review of the information

Water stress, OECD countries2013 or latest year available; water abstractions as % of total renewable resource

* The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

Central to OECD work are core environmental indicators to measure environmental progress. Two water-related indicators are: intensity of use of water resources (water stress) and wastewater treatment connection rates.

0

10

20

30

40

50

60 %Water stress: <10%: Low 10%-40%: Moderate and medium-high >40%: High

Source: OECD Environmental data.


With the rapid development of water policy reform in many countries, this lack of information has been brought into sharp focus, and has meant that the implementation of water policy initiatives often builds on scant data and information. To address this issue, the OECD held a workshop in Zaragoza, Spain (2010) on improving the information base to better guide water resource management. OECD data on the intensity of use of freshwater resources (both surface and groundwater) is expressed as gross abstractions per capita, as a percentage of total available

demands arising from OECD work, shows that important gaps still remain. The quality of water data currently available at national and international level is insufficient to effectively support integrated water management and water policies.

Gaps in information on the economic and institutional aspects, for example, constrain the analysis of water policies and their effectiveness. Information on water resources and hydrological systems, though available in many countries, remains incomplete and often lacks coherence, thus constraining the calculation of water stress indicators.

Sewage treatment connection rates 2013 or latest available year % of national population connected to a wastewater treatment plant


0

20

40

60

80

100

Connected to a sewerage network without treatment Connected to a wastewater treatment plant with primary treatment onlyConnected to a wastewater treatment plant with secondary and/or tertiary treatment Connected to a wastewater treatment plant (treatment level not known)

Partial data%


Sewage treatment connection rates 2013 or latest available year % of national population connected to a wastewater treatment plant


renewable freshwater resources (including inflows from neighbouring countries (see below)) and as a percentage of internal resources. It has to be noted that when measured at national level, these indicators may hide significant variations at territorial level.

OECD data on Wastewater treatment connection rates show the percentage of the national population connected to public waste water treatment plants. The extent of secondary (biological) and/or tertiary (chemical) treatment provides an indication of efforts to reduce pollution loads.

Future OECD work will build on, and improve, existing indicators, and possibly complement them with indicators on pollution loads to water bodies and the intensity of use of freshwater resources at subnational level. The OECD is also developing water-related indicators to better monitor progress towards green growth. They deal with resource productivity (water productivity), the stock of renewable resources (freshwater resources), environmental quality of life (access to sewage treatment and drinking water), and economic opportunities and policy responses (water pricing and cost recovery).

The OECD also measures a number of water-related agri-environmental indicators, including water resources withdrawals, irrigation, water application rates, and water quality (nitrates, phosphorous, eutrophication and pesticides).

Did you know?

There are only three ways to cover the costs incurred to supply safe water and proper sanitation services.

Commonly referred to as the “3Ts”, these are tariffs (revenues from pricing water-related services), taxes (via budgetary transfers and subsidies) and transfers from development assistance (paid by foreign tax payers). The steady stream of revenue from these sources would open the way for repayable finance in the form of loans, bonds and equity.



Key water publications

OECD (2015), Water and Cities: Ensuring Sustainable Futures. This report provides guidance on how governments and cities can cooperate to ensure the financial sustainability of urban water systems, improve governance and regulatory frameworks to better implement water policies at different territorial scales, reduce barriers to the use of innovative techniques and approaches, and better link urban and rural water policies.

http://dx.doi.org/10.1787/ 9789264230149-en

OECD (2015), Water Resources Allocation:

Sharing Risks and Opportunities. Competition for water is intensifying and water is already over-allocated in many countries. This report reviews the current allocation policies in OECD and key partner countries and provides policy guidance on

how to improve the performance of allocation regimes. The report provides a “Health Check for Water Resources Allocation” to help countries assess whether their institutional arrangements have the core elements of well-designed regimes.

http://dx.doi.org/10.1787/ 9789264229631-en

OECD (2015), The Governance of Water Regulators. The establishment of bodies responsible for regulating the provision of drinking water and wastewater services is both recent and a consistent trend among OECD and non-OECD countries. This report describes the governance arrangements, operational modalities and use of regulatory tools across a sample of 34 water regulators, based on the OECD Best Practice Principles for Regulatory Policy: The Governance of Regulators.

http://dx.doi.org/10.1787/ 9789264231092-en

The Governance of Water Regulators

http://dx.doi.org/10.1787/9789264230149-en

http://dx.doi.org/10.1787/9789264230149-en

http://dx.doi.org/10.1787/9789264229631-en

http://dx.doi.org/10.1787/9789264229631-en

%20http://dx.doi.org/10.1787/9789264231092-en

http://dx.doi.org/10.1787/9789264231092-en

http://dx.doi.org/10.1787/9789264231092-en

resources play in economic development.

A Policy Statement to promote policies

and initiatives that contribute to water

security was released at the 2015 World

Water Forum, South Korea. The Dialogue

will continue to bring new priority and

urgency to water security and sustainable

growth on the global agenda.

OECD/World Water Council (2015), Water: Fit to Finance

The High-Level Panel on Financing

Infrastructure for a Water Secure World

is a joint initiative of the OECD and

the World Water Council to provide

guidance to policy makers, the

private sector, civil society and the

international water community about

how to finance water infrastructure

and build the institutions necessary

for maximising the social return

from such investments. The work of

the panel covers all types of water

infrastructures, including water supply

and sanitation, reservoirs, irrigation,

green infrastructure, and protection

against floods and droughts.

GWP/OECD (2015), Securing Water, Sustaining Growth

The Global Dialogue on Water Security

for Sustainable Growth is a joint

initiative of the OECD and the Global

Water Partnership to promote and

accelerate a transition to water security,

by connecting policy makers and

practitioners through research and

policy guidance. A milestone report

Securing Water, Sustaining Growth provides

evidence of the defining role water

SECURING WATER,SUSTAINING GROWTH

Report of the GWP/OECD Task Forceon Water Security and Sustainable Growth

APRIL 2015

REPORT OF THE HIGH LEVEL PANEL ON FINANCING INFRASTRUCTURE FOR A WATER-SECURE WORLD

WATER: FIT TO FINANCE?CATALYZING NATIONAL GROWTH THROUGH

INVESTMENT IN WATER SECURITY

OECD (2015), Stakeholder Engagement for Inclusive Water Governance This report assesses the current trends, drivers, obstacles, mechanisms, impacts, costs and benefits of stakeholder engagement in the water sector. It provides pragmatic policy guidance to decision makers and practitioners in the form of key principles and a Checklist for Public Action with indicators, international references and self-assessment questions.

http://dx.doi.org/10.1787/ 9789264231122-en


http://dx.doi.org/10.1787/9789264231122-en

http://dx.doi.org/10.1787/9789264231122-en


OECD (2014), Water Governance in Jordan This report assesses the main

governance and financing challenges to private sector participation (PSP) in the water supply and sanitation sector of Jordan, and provides ways forward to address them, based on international experience and OECD compendium of principles and good practices.

http://dx.doi.org/10.1787/ 9789264213753-en

OCDE (2014), La gouvernance des services de l’eau en Tunisie

Ce rapport analyse les principaux défis de gouvernance à la participation du secteur privé (PSP) au secteur des services de l’eau et de l’assainissement en Tunisie et suggère des recommandations de politiques publiques pour les surmonter, basées sur le corpus analytique et de bonnes pratiques de l’OCDE.

http://dx.doi.org/10.1787/ 9789264213807-fr

OECD (2014), Climate Change, Water and Agriculture: Towards resilient systems

This report reviews the main linkages between climate change, water and agriculture as a means to identifying and discussing adaptation strategies for better use and conservation of water resources. It aims to provide guidance to decision makers on choosing an appropriate mix of policies and market approaches.

http://dx.doi.org/10.1787/ 9789264209138-en

OECD (2014), Seine Basin, Île-de-France, 2014: Resilience to Major Floods This study examines flood risk prevention of the Seine in the Ile-de-France region. It highlights the impacts a major flood, like the one in 1910, could have on the well-being of citizens, city management and the economy.

http://dx.doi.org/10.1787/ 9789264208728-en

Consult this publication on line at http://dx.doi.org/10.1787/9789264208728-en.

This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases.Visit www.oecd-ilibrary.org for more information.

OECD Reviews of Risk Management Policies

Seine Basin, Île-de-France: Resilience to Major Floods

OECD Reviews of Risk Management Policies

Seine Basin, Île-de-France: Resilience to Major FloodsContentsExecutive summary

Assessment and recommendations

Chapter 1. Impacts of a major Seine flood in the Île-de-France region

Chapter 2. Governance to prevent a Seine flood in Île-de-France

Chapter 3. Enhancing resilience in Île-de-France by preventing the risk of flooding

Chapter 4. Funding increased resilience against flooding of the Seine in Île-de-France

Annex A. List of stakeholders interviewed

Annex B. Questionnaires sent to stakeholders

Annex C. A Dynamic General Equilibrium model to analyse the effects of Seine flooding

Annex D. Technical annex

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Seine B

asin, Île-de-France: Resilience to M

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D R

eviews of R

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ent Policies

9HSTCQE*caihbb+

http://dx.doi.org/10.1787/9789264213753-en

http://dx.doi.org/10.1787/9789264213753-en

http://dx.doi.org/10.1787/9789264213807-fr

http://dx.doi.org/10.1787/9789264213807-fr

http://dx.doi.org/10.1787/9789264209138-en

http://dx.doi.org/10.1787/9789264209138-en

http://dx.doi.org/10.1787/9789264208728-en

http://dx.doi.org/10.1787/9789264208728-en


OECD (2013), Water Security for Better Lives

The report explains why governments must take a risk-based approach to water management and proposes steps to help implement this approach. The OECD proposes that water security is about managing water risks, including risks of water shortage, excess, pollution, and risks of undermining the resilience of freshwater systems (rivers, lakes, aquifers). Two observations follow. First, water security comes at a cost. Second, protecting against one set of risks can enhance other risks. The risk-based approach has been used to review initiatives taken by OECD countries to adapt water management to climate change, or to inform policy debates on water management in selected countries.

http://dx.doi.org/10.1787/ 9789264202405-en

OECD (2013), Water and Climate Change Adaptation: Policies to Navigate Unchartered WatersThis report sets out the challenge for freshwater in a changing climate and provides policy guidance on how to navigate this new “waterscape”. It highlights the range of expected changes in the water cycle and the challenges of making practical, on-site adaptation decisions for water. It offers policymakers a risk-based approach to better “know”, “target” and “manage” water risks and proposes policy guidelines to prioritise action. The report also draws out good practice from a survey of policies on water and adaptation across all 34 member countries and the European Commission. Finally, the report highlights the benefits of well-designed economic instruments, ecosystem-based approaches and ‘real options’ approaches to financing.

http://dx.doi.org/10.1787/ 9789264200449-en

http://dx.doi.org/10.1787/9789264202405-en

http://dx.doi.org/10.1787/9789264202405-en

http://dx.doi.org/10.1787/9789264200449-en

http://dx.doi.org/10.1787/9789264200449-en


OECD (2013), OECD Compendium of Agri-environmental Indicators

This second edition compiles indicators that monitor the contribution of agriculture to the environment. It is part of OECD work on agriculture and the environment, with the key objective to use agri-environmental indicators as a tool to assist policy makers. The report has three main sections: a description of the policy and market drivers affecting the environmental performance of agriculture; an assessment of agri-environmental performance in specific domains; a review of recent use of the OECD agri-environmental indicators for policy monitoring and evaluation. The chapter on water covers water resources withdrawals, irrigated area, and irrigation water application rates; and water quality (nitrates, phosphorus and pesticides).

http://dx.doi.org/10.1787/ 9789264186217-en

OECD (2013), Making Water Reform Happen in MexicoThe report provides evidence-based assessment and policy recommendations in support of Mexico’s water reform. It analyses implementation bottlenecks and identifies good practices in four key areas considered as essential drivers for change in the water sector of Mexico: multi-level and river basin governance; economic efficiency and financial sustainability; and regulatory functions for water supply and sanitation.

http://dx.doi.org/10.1787/ 9789264187894-en

OECD (2013), Water Governance in the Netherlands: Fit for the Future?

This report assesses the extent to which Dutch water governance is fit for future challenges and sets out an agenda for the reform of water policies in the Netherlands.

http://dx.doi.org/10.1787/ 9789264102637-en

http://dx.doi.org/10.1787/9789264186217-en

http://dx.doi.org/10.1787/9789264186217-en

http://dx.doi.org/10.1787/9789264187894-en

http://dx.doi.org/10.1787/9789264187894-en

http://dx.doi.org/10.1787/9789264102637-en

http://dx.doi.org/10.1787/9789264102637-en


OECD (2012), Environmental Outlook to 2050The OECD Environmental Outlook to 2050 asks “What will the next four decades bring?” Based on joint modelling by the OECD and the Netherlands Environmental Assessment Agency (PBL), it looks forward to the year 2050 to find out what demographic and economic trends might mean for the environment if the world does not adopt more ambitious green policies. It also looks at what policies could change that picture for the better. This Outlook focuses on four areas: climate change, biodiversity, freshwater and health impacts of pollution. These four key environmental challenges were identified by the previous Environmental Outlook to 2030 (OECD, 2008) as “Red Light” issues requiring urgent attention.

http://dx.doi.org/10.1787/ 9789264122246-en

OECD (2012), A Framework for Financing Water Resources Management

A lack of finance for water resources management is a primary concern for most OECD countries. This is exacerbated in the current fiscal environment of tight budgets and strong fiscal consolidation, as public funding provides the lion’s share of financial resources for water management. This report provides governments with a framework to assess and strengthen the financial dimension of water resources management. It proposes a set of four principles to frame financing strategies for water management, with a specific focus on the potential role of economic instruments. It highlights implementation issues, which have to be addressed in a pragmatic way. Case studies illustrate selected instruments and how they can be used to finance water resources management.

http://dx.doi.org/10.1787/ 9789264179820-en

http://dx.doi.org/10.1787/9789264122246-en

http://dx.doi.org/10.1787/9789264122246-en

http://dx.doi.org/10.1787/9789264179820-en

http://dx.doi.org/10.1787/9789264179820-en

OECD (2012), Meeting the Water Reform ChallengeBuilding on the water challenges identified by the OECD Environment Outlook to 2050: The Consequences of Inaction, this report examines three fundamental areas that need to be addressed whatever reform agendas are pursued by governments: financing of the water sector; the governance and institutional arrangements that are in place; and coherence between water policies and policies in place in other sectors of the economy. The report provides governments with practical advice and policy tools to pursue urgent reform in their water sectors.

http://dx.doi.org/10.1787/ 9789264170001-en

OECD (2012), Business Models for Rural Sanitation in Moldova

This report describes possible approaches to introducing sustainable business models for sanitation services in Moldova, with focus on small towns and rural settlements.


OECD (2012), Water Quality and Agriculture: Meeting the Policy ChallengeImproving water quality is consistently ranked as a top environmental concern in OECD public opinion surveys. The key challenge for policy makers in addressing water quality issues in agriculture is to reduce water pollution while encouraging higher water quality for recreational and other uses. This book examines linking policies, farm management and water quality. It looks at recent trends and prospects for water pollution from agriculture and the implications of climate change. It assesses the costs and benefits of agriculture’s impact on water systems, and presents case studies of policy experiences from several OECD countries and the European Union in general. Finally the report provides a set of recommendations for countries for meeting the challenge of improving agricultural water quality.

http://dx.doi.org/10.1787/ 9789264168060-en

http://dx.doi.org/10.1787/9789264170001-en

http://dx.doi.org/10.1787/9789264170001-en

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http://dx.doi.org/10.1787/9789264168060-en%20

This document and any maps included herein are without prejudice to the status of, or sovereignty over, any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries.

Photo credits

Front and back cover: Water: © Dmytro Tolokonov / fotolia.com

Inside cover: Falling water: © ingimage.com

Page 2: Water drop: © ingimage.com

Page 3: Hands cupping water: © silver-john / shutterstock.com

Page 4: Boy drinking from water pipe: © africa924 / shutterstock.com

Page 5: Irrigation sprinkler wheel line: © Diane Garcia / shutterstock.com. Water flowing from Dam (lake): © ded pixto / shutterstock.com. Running tap: © ingimage.com

Page 6: Women carrying water: © RCH / fotolia.com

Page 8: Swimming pool: © ingimage.com

Page 9: Water treatment plant: © Antiksu / fotolia.com

Page 10: Waste water treatment: © John Kasawa / shutterstock.com

Page 11: Irrigation system agriculture: © REDAV / shutterstock.com. Polluted water: © PinkShot / fotolia.com

Page 12: Paddyfield workers: © Siegfried Schnapf / fotolia.com

Pages 12-13: Songdo International Business District, South Korea: © songdo.com

Pages 14-15: Severe drought: © Galyna Andrushko / fotolia.comDe-salination plant: © Irabel 8 /dreamstime.com

Page 16: Glacier in Tierra del Fuego: © Soizick de Tilly, OECDFlooding in Bangkok: © Thor Jurgen Udvang / dreamstime.com

Page 17: Hydroelectric dam: © Stanislav Tiplyashin / dreamstime.com

Page 18: Water aerating device: © Jirapong Boonpoongha / dreamstime.com

Page 19: River in spate: © Dmitry Naumov / shutterstock.com

Pages 20-21: Lake reflections: © ingimage.com

Page 20: Mexican open sewer: © Juan Manuel Robledo / dreamstime.com

Page 21: Flooding in The Netherlands: © Wessel Cirkel / dreamstime.com

Page 22: Aquaduct: © Ron Chapple / dreamstime.com

Page 22: Sewage treatment plant: © Antikainen / dreamstime.com

Page 23: Aerial view of water treatment: © Mariusz Szczgiel / fotolia.com

Page 24: Mountain stream: © ingimage.com

Inside back cover: Woman pumping water: © Andrew Biraj / Reuters


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http://www.oecd.org/environment/resources/[email protected]

© OECD August 2015

OECD freely authorises the use of this

material for non-commercial purposes.

All requests for commercial uses of this

material or for translation rights should

be submitted to [email protected].

“We have the ability to provide clean water for every man, woman and child on the Earth. What has been lacking is the collective will to accomplish this. What are we waiting for? This is the commitment we need to make to the world, now.”

Jean-Michel Cousteau

http://www.oecd.org/env/resources/water.htm

mailto:[email protected]

mailto:[email protected]

oecd work on water 2015-16

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