New research published in the journal Science and led by Oxford University is highlighting the accelerating pressure on measuring, monitoring and managing water locally and globally.

The researchers are proposing a new framework to value water for sustainable development to guide better policy and practice.

The scale of the investment for universal and safely-managed drinking water and sanitation is vast, with estimates around $114B USD per year, for capital costs alone.

However, the researchers say there is an increasing need to re-think the value of water for two key reasons – not least because of its key role in sustainable development. Water’s value is evident in all of the 17 UN Sustainable Development Goals, notably poverty alleviation and ending hunger, where the connection is long recognised. It also extends to sustainable cities and peace and justice, where the complex impacts of water are only now being fully appreciated. 

Growing global concerns over water security

The research is also highlighting growing global concerns over water security. The negative impacts of water shortages, flooding and pollution have placed water related risks among the top 5 global threats by the World Economic Forum for several years running.

 In 2015, Oxford-led research on water security quantified expected losses from water shortages, inadequate water supply and sanitation and flooding at approximately $500B USD annually.

Last month the World Bank demonstrated the consequences of water scarcity and shocks: the cost of a drought in cities is four times greater than a flood, and a single drought in rural Africa can ignite a chain of deprivation and poverty across generations.

There is an urgent and global opportunity to re-think the value of water, with the UN/World Bank High Level Panel on Water launching a new initiative on Valuing Water earlier this year, the researchers say. With a growing consensus that valuing water goes beyond monetary value or price, valuing water needs to be seen as a governance challenge in order to better direct future policies and investment.

Published in Science, the study was conducted by an international team led by Oxford University and charts a new framework to value water for the Sustainable Development Goals. However, putting a monetary value on water and capturing the cultural benefits of water are only one step towards achieving this objective. 

The researchers suggest that valuing and managing water requires parallel and coordinated action across four priorities: measurement, valuation, trade-offs and capable institutions for allocating and financing water.

Lead author Dustin Garrick, University of Oxford, Smith School of Enterprise and the Environment, explained:

‘Our paper responds to a global call to action: the cascading negative impacts of scarcity, shocks and inadequate water services underscore the need to value water better. There may not be any silver bullets, but there are clear steps to take. We argue that valuing water is fundamentally about navigating trade-offs. The objective of our research is to show why we need to rethink the value of water, and how to go about it, by leveraging technology, science and incentives to punch through stubborn governance barriers. Valuing water requires that we value institutions.’

Co-author Richard Damania, Global Lead Economist, World Bank Water Practice said:

‘We show that water underpins development, and that we must manage it sustainably. Multiple policies will be needed for multiple goals. Current water management policies are outdated and unsuited to addressing the water related challenges of the 21st century. 

“Without policies to allocate finite supplies of water more efficiently, control the burgeoning demand for water and reduce wastage, water stress will intensify where water is already scarce and spread to regions of the world - with impacts on economic growth and the development of water-stressed nations.’  

New approaches to water valuation, finance and allocation

Earlier this month Oxford University hosted a one-day forum to advance new approaches to water valuation, finance and allocation. Key research presented at the conference included: (i) the challenges of valuing water, (ii) new tools for navigating the challenges, (iii) financial solutions to the global water infrastructure gap and (iv) using water markets to respond to scarcity and shocks.

Expert speakers at the event included:

• Dr Richard Damania, Global Lead Economist, Water Global Practice, World Bank;
• Prof Michael Hanemann, Professor of Environmental and Resource Economics, University of California - Berkeley;
• Prof Cameron Hepburn, Professor of Environmental Economics, the Institute for New Economic Thinking at the Oxford Martin School and Smith School of Enterprise and the Environment (SSEE), University of Oxford;
• Dr Guy Hutton, Senior Advisor WASH, UNICEF;
• Ambika Jindal, Vice President, Sustainable Finance, ING;
• Dr Xavier Leflaive, Water Team Lead, OECD;
• Stuart Orr, Freshwater Practice Lead, WWF-International;
• Henk Ovink, Special Envoy International Water Affairs, Government of the Netherlands;
• Jennifer Sara, Director, Water Global Practice, World Bank.

Watch the first in a series of keynote presentations from expert speakers at the conference on the Waterbriefing Watch channel – click here to listen to Prof. Michael Hanemann from the University of California – Berkeley outline the major challenges of valuing water.