Table of Contents

  • Good water management is fundamental to human and economic development, and to the maintenance of ecosystems. Water policies around the world are in urgent need of reform. Despite improvements in some sectors and countries, progress on meeting national, regional and international goals for managing and securing access to water for all has been uneven. Rallying policy makers around a positive water reform agenda needs to be a high priority and calls for strong political commitment and leadership.

  • The need to reform water policies is as urgent as ever. Yet governments around the world face significant challenges in managing their water resources effectively. The problems are multiple and complex: billions of people are still without access to safe water and adequate sanitation; competition for water is increasing among the different uses and users; and major investment is required to maintain and improve water infrastructure in OECD and non-OECD countries. Population growth, urbanisation, and changing lifestyles as a result of economic growth are key drivers of these challenges, while increasing spatial and temporal water variability resulting from climate change will exacerbate these pressures. Despite progress on many fronts, including on reaching the Millennium Development Goals on water and sanitation, in 2008 an estimated 141 million city dwellers and 743 million rural dwellers remained without access to an improved water source, and an estimated 2.6 billion people without access to sanitation.

  • Access to clean water is fundamental to human well-being. Managing water to meet that need is a major – and growing – challenge in many parts of the world. Many people are suffering from an inadequate quantity and quality of water, as well as stress from floods and droughts and this has implications for health, the environment, and economic development. Without major policy changes and considerable improvements in water management processes and techniques, by 2050 the situation is likely to deteriorate, and will be compounded by increasing competition for water and increasing uncertainty about water availability. The policy solutions are often readily apparent. The key challenge lies in implementing reforms to existing water policies. This chapter highlights the reform challenges confronting governments drawing on the key trends and projections from the OECD Environmental Outlook to 2050.

  • Financing has been a recurring theme in international debate on water and has been a key feature of reform efforts in many countries. Increasing access to water supply and sanitation, ensuring the environmental sustainability of water ecosystems, reducing the impacts of floods and drought, and ensuring water is used to maximise welfare across an economy all require financial support. Yet, despite some progress, securing sustainable finance for this wide range of services is an ongoing struggle for most countries, particularly in the current global economic crisis. This chapter examines the policy challenges surrounding the financing of water supply and sanitation and presents a policy toolkit that can underpin policy dialogues to stimulate much needed reform. The chapter also addresses the growing problem of financing the broader water resources management functions of government.

  • Managing and securing access to water for all requires not only a question of financing, but equally a matter of good governance. While many of the solutions to meeting the water challenge (such as water pricing, water markets, financial planning) do exist and are relatively well-known, the rate of take-up of these solutions by governments in OECD and non-OECD countries has been uneven. Some countries have undertaken very innovative and sophisticated reforms while others seem to be hamstring by significant obstacles to reform. A major challenge lays in the implementation of 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. This chapter highlights the key governance challenges confronting water policy reform, focusing on the issues arising from the multi-level governance structure that generally characterises water resources management.

  • The water sector is not always master of its own fate. Policies in other areas such as agriculture and energy can have a significant impact on the economic, social and environmental sustainability of the water sector. The nexus between water, energy, food and the environment has been attracting increasing attention in recent years, and presents significant challenges for water policy reform efforts. The importance of water in energy production and use (such as for hydropower, thermal power stations, biofuels) is matched by the importance of energy in water (through pumping and transfer of water, desalination). Similarly, water and agriculture are inextricably linked, not least because agriculture accounts for around 70% of water sue globally. Increasing the coherence of policies across these areas is essential if governments wish to meet the range of policy goals while not undermining the sustainability of the water resource base. This chapter examines the coherence issues raised by the linkages between water, energy and agriculture and presents a number of steps that governments need to take to address the water coherence challenge.