A Framework for Financing Water Resources Management

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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.

The report provides a framework for policy discussions around financing water resources management that are taking place at local, basin, national, or transboundary levels. The report goes beyond the traditional focus on financing water supply and sanitation to examine the full range of water management tasks that governments have to fulfill; when appropriate, a distinction is made on distinctive water issues.

The report identifies four principles (Polluter Pays, Beneficiary Pays, Equity, Policy Coherence), which have to be combined. In addition, it identifies five empirical issues, which have to be addressed on a case-by-case basis. Finally, it sketches a staged approach that governments might wish to consider, to assess the financial status of their water policies and to design robust financial strategies for water management. Case studies provide illustrations of selected instruments and how they can be used to finance water resources management.    




Water resources management is a key function of governments around the world. Governments need to ensure that available water resources are used in ways to meet economic and social objectives, and this task is becoming increasingly complex as the intersection of water policies with other policy areas (such as energy and agriculture) increases. In many countries, however, water resources management is hampered by a lack of financing and capacity that restricts countries’ abilities to effectively harness water resources for economic growth and prosperity. Water resources management covers a wide range of functions, from the “hard” end of construction, operation and maintenance of water infrastructure to the “soft” end of the design, implementation, monitoring and enforcement of water policy. All this requires resources, without which governments will be increasingly frustrated in the effective management of their water resources


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