4. Improving water quality

4.1. Allocation of resources to manage water pollution

The Recommendation suggests Adherents “allocate adequate human, technical, scientific and financial resources to assess water and effluent quantity and quality. Water quality monitoring should be developed and publicly reported”.

The EU Water Framework Directive requires that countries monitor in each river basin district the status of surface water, groundwater and protected areas. Article 8 specifically requires that monitoring programmes for water status are set up to monitor the ecological and chemical status of surface waters and the chemical status of groundwater. This enables to assess water conditions, for example in Lithuania, where a majority of surface water bodies are in good chemical and ecological status and all groundwater bodies are in good chemical and quantitative status, all main sources of pollution are identified, and their pollution loads quantified (OECD, 2017[1]).

There are a range of parameters that need to be monitored because of their impact on the environment and risk to human health. In Korea, the Integrated Groundwater Information Service supports the mapping of groundwater level and quality data across Korea. Countries are also monitoring aquatic invertebrates, plants and fish. For instance, the National Aquatic Ecological Monitoring Programme monitors ecosystems at 3 880 spots nationwide including main streams of the four major Korean rivers as well as tributaries, small rivers, etc.

A combination of approaches are used in some Adherents to monitor water quality of different nature at different scale. For instance Ireland includes national modelling tools and maps, national programmes that are defined at local level to respond to its requirements under the Water Framework Directive and Agriculture Catchment Programmes to monitor nutrient run-offs. The United Kingdom applies chemical and ecological monitoring methods, remote sensing models, water quality models, catchment specific methods, sediment finger printing approaches and even citizen based reporting (WaterBlitz).1

Contaminants of emerging concern (CECs) are considered so because they have only recently appeared in water, or are of recent concern due to concentration levels higher than expected, or their risk to human and environmental health may not be fully understood.2 While there is good progress among Adherents in establishing watch-lists and voluntary monitoring programmes for certain pharmaceuticals in surface water, the majority of active pharmaceuticals ingredients, metabolites and transformation products remain unmonitored. Countries are thus increasingly making efforts to identify pollutants of emerging concerns, such is the case of Switzerland (Box 4.1).

Remote sensing and imaging technologies such as satellites and drones are becoming key elements to managing water resources at service area, watershed and regional scales. These technologies provide data for mapping water resources, measuring water levels and quality, and utility asset management. Data from such technologies can better prepare water resource managers and utilities for incidences of heavy storm water flow (e.g., altering operations to prevent sewage overflow), indicate when conservation practices should be activated during periods of drought (e.g., reducing water use, use of emergency wells), ensure all treated water is delivered to customers, and provide water quality data (e.g., turbidity, algal blooms) (OECD, FAO, IIASA, 2020[3]).

Water quality monitoring results are best shared with the public through report cards (e.g. Great Barrier Reef Report Card in Australia) or as part of wider reporting process on the state of the environment (OECD, 2019[4]). Many jurisdictions also developed dedicated digital content for making data available to a very wide audience. For instance, the Seoul Metropolitan government (Korea) works on water quality through an online monitoring system for water quality (OECD, 2015[5]). Italy uses an Information System for the Protection of Water (SINTAI), an open source dataset available on line inventorying pollution releases from diffuse sources at the national level, using data from regional sources (OECD, 2013[6]).

The Water Recommendation further suggests to use resources to “identify sources of pollution (diffuse and point sources), and for the most relevant pollutants, assess the concentrations, total amounts and timing of discharges”.

Pollution from point sources is largely under control among many Adherents (OECD, 2017[7]). In Australia, for instance, the main types of point-source pollution, which are discharges from municipal treatment plants and industrial facilities, do no longer significantly affect the water environment (OECD, 2019[4]). In Korea, point source pollution control improved drastically thanks to the expansion in wastewater treatment services, including with tertiary wastewater treatment (OECD, 2018[8]). The EU Urban Wastewater Directive, focussing on pollution at source, helps protects the water environment from adverse effects of discharges of urban waste water and from certain industrial discharges.

Adherents still face challenges when it comes to monitoring diffuse pollution and its impacts on human and ecosystem health, which largely remain under-reported and under-regulated (OECD, 2017[7]). These are particularly prevalent in the agriculture sector. Figure 4.1 shows the main pollutants from agriculture sector as reported by Adherents responding to the OECD Survey on water and agriculture policy changes 2019. 3 Almost all these Adherents identify nitrates and phosphorus from mineral fertilisers as well as animal waste as the most problematic source of agriculture pollution of water. Pesticides from agriculture also remain an important pollutant in many responding countries (Figure 4.1). Under the Clean Water Act, each state in the United States is tasked with developing Total Maximum Daily Load (TMDL) allocations specifying allowable loads of nutrients and sediment into impaired waters. Although TMDLs for agriculture serve as overall targets for appropriate loads, pollution from agricultural sources is not directly regulated at a national level and therefore enforcement is achieved through indirect means such as more stringent regulation of point sources.

Figure 4.1. Key pollutants of concern coming from the agricultural sector

Number of countries listing a particular type of pollutant

Source: (Gruère, Shigemitsu and Crawford, 2020[9]).

The use of information and communication technologies, by helping to fill some of the water-related information gaps, can usefully inform water-related policies and practices. Countries are using sensor technology for real-time monitoring, satellite imagery and data processing and modelling capabilities to support their water quality monitoring and controlling efforts. New Zealand uses the national farm-scale nutrient budgeting and loss estimation model to manage its diffuse pollution outputs (Box 4.2). Denmark also uses sophisticated tools to estimate the flows of nutrient pollution and implement spatially differentiated regulations (Gruère and Le Boëdec, 2019[10]).

The Recommendation further recommends to use resources to “set policy objectives and targets to achieve and maintain assigned water quality standards in water bodies, in order to protect designated uses and water-related ecosystems, taking into account water quality requirements for all water uses”. It also calls for improving “standards for water quality target setting, building on the latest scientific knowledge and the most cost-effective technologies”.

Water policy objectives are defined to protect designated uses and water-related ecosystems. The EU Water Framework Directive defines five levels for the ecological status of surface water bodies: “high”, “good”, “moderate”, “poor” and “bad” according to a combination of biological quality elements (aquatic flora, benthic invertebrate fauna and fish fauna) and physico-chemical quality elements (such as oxygenation conditions, nutrient conditions, salinity, as well as specific pollutants). Other parameters such as microbiological or morphological can be taken into account.

There are different levels of water quality desired for identified uses such as drinking, recreation, farming, fish production, propagation of other aquatic life, and agricultural and industrial processes. These uses might need undisturbed water quality (e.g. ecosystem functioning), defined water quality standards (e.g. drinking water) or might not need water quality standards (e.g. extraction of minerals). The EU Directives include explicit quality standards for surface waters (e.g. Directive for abstraction of drinking water, 75/440/EEC) while other Directives, although generally aiming at improvement of surface water and groundwater, do not contain explicit water quality standards (e.g. the Urban Wastewater Directive 91/271/EEC or the Nitrate Directive 91/676/EEC).

Countries are using different methods to set standards. For instance in New Zealand the Collaborative Governance Model supports the definition of water quality limits (Box 4.3). Chile has adopted standards for sewerage discharges, as well as water quality standards for ecosystem protection for four river basins and two lake catchments which provide water to major cities. In Korea, the total pollution load management (TPLM) system, introduced in 2004, helped improve water quality management policy and reduce point source pollution. The TPLM are calculated using scientific water quality modelling at the watershed, local and individual property levels. It allocates pollution load reductions necessary to reduce the sources of pollution (OECD, 2017[7]).

Finally, the Recommendation suggests Adherents to use resources to “Assess the investments necessary to achieve the desired level of water quality and to protect and restore water-related ecosystems, taking account of cost-effectiveness related to human and ecosystem health benefits”.

Investment in water supply and sanitation services typically generates a number of economic, environmental and social benefits. Benefits from the provision of basic water supply and sanitation services have been reaped in the late 19th or early 20th century in most Adherent countries, with now a marginal rate of return of water and sanitation interventions that diminishes with the increasing sophistication of measures. In contrast, relatively high cost investments required in wastewater treatment have benefits, through the removal of different polluting substances (generating benefits for municipal water supply as much as for fishing), which are more difficult to assess in monetary terms. In the United States, the 1972 Clean Water Act built an important legal basis for expanding wastewater treatment facilities. The 1991 EU Urban Waste Water Treatment Directive (UWWTD) addressed to the growing problem of untreated sewage disposed into the aquatic environment (OECD, 2011[12]).

In a recent collaboration with the European Commission, the OECD projected that all EU member states will need to increase the current level of investments in wastewater collection and treatment by 20% or more, to reach (or preserve) compliance with the UWWTD. Some countries will need to more than double current level of spending. (OECD, 2020).

One reason why investments in water quality lag behind in most Adherent countries is that the benefits they generate are often insufficiently documented. Investing in water supply and sanitation for improved water quality can bring a wide range of benefits to the economy. For instance, the health benefits of quality improvements of recreational waters in south-west Scotland (United Kingdom) have been calculated at GBP 1.3 billion per year. In most countries, access to beaches or lakes can be limited in cases of non-compliance with certain bathing norms. In Normandy (France), it has been estimated that closing 40% of the coastal beaches would lead to a sudden drop of 14% of all visits, corresponding to a loss of EUR 350 million per year and the potential loss of 2 000 local jobs. Similarly, it has been shown that people living in the surroundings of water bodies benefit from increased property values when wastewater treatment measures ensure a certain quality of water bodies (OECD, 2011[12]) (OECD, 2018[13]).

Some countries have assessed economy-wide benefits of water quality improvements. For instance, the United States Environmental Protection Agency estimates the net benefits of water pollution legislation in the last 30 years at about USD 11 billion annually, or about USD 109 per household. In the United Kingdom, several studies estimating benefits and costs of measures to implement the EU Water Framework Directive have been showing a net benefit in England and Wales of USD 10 million. In the Netherlands, similar cost-benefit analyses showed that monetised benefits were significantly less than estimated costs, but an important range of benefits could not be monetised. Assessments would greatly benefit from a more thorough and systematic valuation of direct and indirect benefits of treated wastewater (OECD, 2011[12]).

Switzerland was the first country to roll out a national strategy to assess investments that reduce pharmaceutical residues in water, essentially by upgrading treatment levels in wastewater treatment plants. The Waters Protection Act was revised in 2014 and it mandates the upgrade of 100 wastewater treatment plants to remove selected residues. The total investment cost to upgrade the 100 wastewater treatment plants was estimated to be around USD 1 billion, plus an additional USD 115 million per year for operation and maintenance costs. The majority of the capital costs (75%) have been covered by the national budget. The remaining investment, operation and maintenance costs are covered by municipalities as well as a new (2016) federal sewage tax of EUR 9/person/year (OECD, 2019[2]). The Netherlands pioneer a life-cycle approach, which combines initiatives from a range of stakeholders all along the value chain, from drug development to manufacturing and use and waste management (see Box 4.5).

4.2. Risk mitigation

The Recommendation highlights the need to “identify, assess and endeavour to mitigate risks associated with investments that negatively affect the natural integrity of rivers, lakes, aquifers and wetlands, their hydro morphological conditions, the natural water retention capacity of the basins or ecosystem functioning”.

Strengthening valuations of water pollution in Environmental Impact Assessments (EIAs), which are required for infrastructure development projects in most Adherent countries, can help to identify, assess and mitigate any risks arising from these investments and identify trade-offs and co-benefits. EIAs are usually reviewed by locally relevant committee of public officials, experts and residents’ representatives, such as in Korea. The European Union has published guidance with practical steps to be followed in a EIAs (OECD, 2018[8]).

4.3. Reduction of water pollution

The Recommendation encourages Adherents to “take measures to reduce, to the extent necessary, the pollution of all waters and in particular the pollution of surface waters resulting in eutrophication, with particular reference to the problem arising from the transfer of nutrient-loaded waters across frontiers or to the sea. These measures should ensure compliance with the water quality objectives and targets mentioned above”.

In Europe, nutrient pollution, leading to eutrophication, is a widespread problem which occurs in about 30% of water bodies in 17 member states. Denmark uses cost-effectiveness analysis to manage risk of eutrophication (OECD, 2018[14]). In Canada, federal programmes implemented at provincial level such as the Environmental Farm Plans and the Environmental Stewardship Incentive aim to reduce eutrophication and algal blooms, for instance by requiring buffer strips around surface water bodies and groundwater sources (OECD, 2017[7]).

Regulating surface water quality in transboundary basins requires, at a minimum, that the riparian states agree on joint criteria for the assessment of surface water quality. Joint criteria help to assure that countries make compatible assessments and draw conclusions about water quality. Building on such criteria, the United States and Canada have established joint surface quality targets to be achieved on both sides of the border as well as have coordinated their water management measures. This can be a good example for Adherents (Box 4.4).

4.4. Cost-effectiveness

The Recommendation encourages Adherents to “foster the most cost-effective measures for improving water quality, whilst keeping polluters and users accountable as much as possible through:

• A targeted action on pollutants of particular significance at the appropriate scale (catchment, basin, or aquifer), on the basis of such characteristics as toxicity, persistence, bio-accumulation, and risk to human and environmental health.

• The application of pollution control measures as close to the source as possible taking into consideration alternative cost-effective options in case of disproportionate costs.

• Integrated pollution control so that water pollution control measures do not lead to uncontrolled pollution transfers to other water resources or to soil or air systems.”

In light of the Polluter Pays and the Beneficiary Pays Principles, countries are holding polluters accountable for the water pollution they may cause. Countries are using pollution charges, taxes on inputs (such as fertilisers and pesticides) and sewer user charges to send appropriate signal and to generate revenues to address pollution (see chapters 7 and 8 for more information on the state of play). The application of the Polluter Pays Principle is less costly and more commonly applied for the control of point source pollution than diffuse sources (OECD, 2017[15]). It can be applied at different stages of the pollution chain (Box 4.5).

The European Union is one rare jurisdiction that applies the Polluter Pays principle in the agriculture sector. The Nitrates Directive (1991) aims to protect water quality by preventing nitrates from agricultural sources reaching ground and surface waters. This Directive requires member states to identify Nitrate Vulnerable Zones (NVZs),4 to develop codes of good practices for all farmers and implement action programmes for NVZs. These actions include the mandatory application of the codes and of other measures to limit the quantity of nitrogen applied with animal manures. Later embedded into the requirements under the Water Framework Directive, the Nitrates Directive took a long time to be implemented by member states, with results starting to be visible for surface water, but less obvious for groundwater. Some member states were found in violation of their obligation under this directive (Gruère, Ashley and Cadilhon, 2018[16]).

Some tools and mechanisms are helping Adherents overcome challenges related to the identification and targeting of polluters. For instance, the EU, United States, Australia and New Zealand manage pollution with computer modelling in catchments (Box 4.5) (OECD, 2018[8]). Korea uses collective accountability at the catchment level, as total pollution load is monitored at that scale, and farmers active in the catchment are collectively accountable (OECD, 2017[17]). Many Adherents are using proxies such as taxes on inputs (e.g. fertilisers, pesticides, cleaning products) or land use (e.g. paved urban surfaces, livestock numbers, intensive land use) ( chapter 8). However these taxes are not always effective due to the low response they induce, except at very high levels (Sud, 2020[18]). In Norway, the pesticides tax, revised in 1999 to better reflect environmental and health risks, successfully encouraged the use of less toxic pesticide. While it resulted only in a slight decline in overall quantity of pesticide sold, the pesticide tax induced a shift towards using pesticides with lower environmental and health risks (Ibid.).

While it can be difficult to estimate reliably pollution costs, Adherents are using new data sources for monitoring and justifying action (see Box 4.5 above). They are also using market-based mechanisms to reveal pollution costs. The point-diffuse source water quality trading to reduce nutrient pollution of Chesapeake Bay in the United States and the Lake Taupō market to cap nitrogen emissions at the catchment scale in New Zealand, the world’s first diffuse source pollution-related market in the world, are illustrative (OECD, 2017[7]).

The Recommendation also invites Adherents to “consider the most cost-effective measures to tackle water quality issues, whilst applying the Polluter Pays Principle as much as possible where it is mentioned in the legal and regulatory framework, and promoting it where absent”.

In line with the Polluter Pays principle under the EU Water Framework Directive, the association of German Water Suppliers presented a proposal for setting up an extended producer responsibility (EPR) scheme to require certain pharmaceutical manufacturing companies to contribute to the recovering costs of advanced wastewater treatment plant upgrades. While the tool comes with some practical issues (OECD, 2020[19]) it is an interesting development, well-aligned with the requirements of the Recommendation.

4.5. Cost-effectiveness and Polluter Pays Principle

The Recommendation encourages Adherents to “combine regulatory, voluntary and economic instruments to provide continuing incentives for polluters to reduce and control pollution of water resources”.

Most Adherents have a range of policy instruments to promote water quality and tackle pollution. This chapter provides an inventory of the most common ones and illustrates some combinations.

Adherents use regulatory instruments to limit the discharge of pollutants into water bodies. New Zealand has regulated point-source pollution effectively through discharge permits for limiting industrial and urban wastewater discharge in its 1991 Resource Management Act (OECD, 2017[11]). New Zealand also requires regional governments to manage point and diffuse discharges within set environmental limits, which are already showing their impact with some water bodies making significant recoveries, such as the Rotorua Lakes. Tighter regulations on industrial wastewater have resulted in a significant reduction in heavy metals in Japan (OECD, 2017[7]). In cases where standards are not sufficient, or as a precaution, some countries can proceed to ban an activity, as illustrated by the worldwide ban of DDT, or the annual two-month fishing ban in the Pearl River system in China to restore fish numbers and improve water quality (OECD, 2012[20]). Finally, Costa Rica set effluent limit values for polluting parameters such as biochemical oxygen demand (BOD), chemical oxygen demand (COD), phosphorus, nitrates, acidity (pH), fats and oils and suspended solids in its 2007 Law on the Discharge and Reuse of Wastewater. Additional limits are set for a group of hazardous substances (OECD, 2012[21]).

Voluntary agreements or commitments to take actions to improve the water environment are commonly used across Adherent countries. They are unilateral commitments taken by firms or cities. There are also negotiated agreements such the United Kingdom’s Pesticides Voluntary Initiative which promotes responsible pesticide use (OECD, 2012[20]). New Zealand’s “Sustainable Dairying: Water Accord” is a success story to manage water pollution related to dairy farming. Adherents are also using payments for eco-system services to improve water-related environment such as the Tasmanian Forest Conservation Fund programme in Australia or Vittel’s (Nestle Water) scheme in France (OECD, 2012[20]).

Economic instruments are used by many Adherents to incentivise pollution reduction and fund water quality-related upgrades. Most Adherents are taxing environmentally harmful products, and apply pollution charges on emissions. For example, a number of countries are using effluent discharge taxes (Figure 4.2) (further details are provided in chapter 8). They also provide incentives such as subsidies to upgrade infrastructure. Several Adherents have also established tradable permits to reduce pollution and negative externalities, such as in the United States and in New Zealand (OECD, 2017[7]). France provides financial incentives (EUR 10 million) for stimulating new innovative projects to manage contaminants of emerging concerns and empowering local stakeholders. The selected projects target domestic, industrial, diffuse and multiple sources of pollution and include solutions for better diagnostics, cost-efficient reduction of CECs and changes in practices of various types of stakeholders (OECD, 2019[2]).

Figure 4.2. Countries with effluent discharge tax

Note: Responses to the question: “Does your country have an effluent discharge tax?”.

Source: 2019 survey on the implementation of the OECD Council Recommendation on Water; 27 responses received, including 26 Adherents.

Policies to promote the collection and treatment of (domestic and industrial) wastewater typically combine regulation (standards on required levels of treatment before a wastewater can be returned to the environment), information (on water quality and the performance of utilities and service provided) and market mechanisms (a charge on pollution load, that makes pollution costly and possibly generates revenues to invest in abatement). Such a combination is exemplified in the UWWTD, part of the European Commission’s acquis on water.

In the case of agriculture, twenty two Adherents use a combination of regulatory, economic and (voluntary) information instruments. Regulatory instruments are the most common, followed by economic and information instruments. For instance, Canada has a Federal Act on water quality and provinces apply their own water quality regulations. Via the Canadian Agricultural Partnership, the federal government supports cost-share programmes to increase the adoption of farm best management practices to reduce pollution. Agriculture and Agri-Food Canada has also launched a new initiative that will facilitate communication and knowledge transfer between researchers and producers about sustainable farming practice. Denmark combines carrot and sticks by implementing a targeted regulation aiming to reduce nutrient pollution at the source, beyond Nitrates Directive requirements, payments via the rural development program to incentivise producers to do better than regulatory minimum, and collaboration with farmers’ organisation to facilitate collective measures.5

4.6. Compliance

The Council also recommends to “set up mechanisms to monitor and enforce compliance with regulatory provisions. Enforcement should be targeted, making use of all available data sources. It should build on clear, transparent and proportionate enforcement rules, procedures, penalties, incentives and tools to achieve regulatory objectives cost-effectively”.

Although Adherents are setting water quality objectives and policies, there is evidence of implementation gaps due to insufficient compliance. Facility-specific permits translate environmental policies into enforceable conditions. In the United Kingdom although the permitting framework only covers around 2% of registered businesses, all businesses are covered by general legal requirements, for example, to fulfil their “duty of care” with respect to water pollution prevention (OECD, 2009[22]). Countries monitor compliance with regulatory effluent limits and impose fines in case of breach of requirements.

Compliance is promoted through assistance and information-based tools about firms’ environmental behaviour and performance. These tools are also used to trigger market reactions and community pressure against violators. For instance, the United States Toxics Release Inventory (TRI) provides information to the public on releases of toxic chemicals from manufacturing facilities. The European Pollutant Release and Transfer Register (E-PRTR) is a disclosure tool that provides data on amounts of pollutant releases to air, water and land as well as off-site transfers of waste and of pollutants in waste water, from over more than 30 000 industrial facilities. Some information on releases from diffuse sources is also available and will be gradually enhanced (OECD, 2009[22]) (E-PRTR website).

Compliance is monitored through inspections, various monitoring tools and with self monitoring processes. In EU countries with fully integrated permitting systems such as in France and Finland, all the inspections are multimedia (e.g. covering air, water, wastewater, hazardous and solid waste). In the United Kingdom and the Netherlands, where the permitting regimes remain differentiated, both integrated and water-specific inspections are used. Finland relies more and more on self-monitoring and reporting of wastewater discharges (OECD, 2009[22]).

In cases of non-compliance with water quality regulations, countries often apply fines and more stringent control to enforce regulations, according to the 2019 OECD Implementation Survey (Figure 4.3). Faced with continued non-compliance of nutrient pollution regulations, several Adherents have adopted innovative approaches. The Scottish Environment Protection Agency in the United Kingdom decided to re-shift its activities from notification of non-compliance to developing solutions directly with farmers to achieve compliance, achieving some visible progress. Ireland’s regulators have used behavioural sciences to improve their messaging with farmers, using more personalised communication and engaging into farm advice where needed (Gruère and Le Boëdec, 2019[10]).

Figure 4.3. Types of penalties used in case of non-compliance with water quality regulation

Note: Responses to the question: “What kind of penalties are used in case of non-compliance with water quality regulations?.” Multiple responses were possible.

Source: 2019 survey on the implementation of the OECD Council Recommendation on Water; 27 responses received, including 26 Adherents.

Finally, a competent authority can also force an offender to carry out the clean-up and then administratively recover the costs incurred from the responsible party such as in the United States where this can be done only through a federal court. The Environment Agency of England and Wales (United Kingdom) can invoice the polluter directly for cleaning up a toxic spill in water. The responsibility for enforcing remediation or undertaking it and recover the costs from the operator is the subject of the 2004 EU Environmental Liability Directive (OECD, 2009[22]).

4.7. Sustainable use of water-related ecosystems

The Council encourages Adherents “to take measures to protect, restore and promote sustainable use of water-related ecosystems, halt and reverse degradation, and halt biodiversity loss”.

Indeed, improving water quality is valuable for environmental uses such as the provision of fish habitat and ecosystem health (OECD, 2017[7]). Scaling up nature-based solutions has been a way for many Adherents to improve water-related ecosystems (see chapter 5 for more details).

4.8. Coherence between water and sectoral policies

The Council also encourages Adherents “to take the following measures to address sector-specific issues”.

Adherents are encouraged “to foster coherence between water and sectoral policies, e.g. industry, energy, nature, drinking water, health care and agriculture. For the latter, identify and reduce to the greatest extent possible any harmful incentives and practices that have adverse environmental or water-harmful effects (e.g. subsidies for fertiliser and pesticides that are harmful to water).”

The strong interlinkages between water and other policies (such as agriculture, forestry, industry, mining, energy, environment, drinking water, solid waste, health, fisheries, urban development, spatial planning and land use, tourism and recreation) require robust mainstreaming of water into the policies and plans of sectors that affect water availability and use. Policy coherence can help overcome possible tensions among different sectors responsible for taking and financing action.

More coherent policy approaches are slowly beginning to take shape as seen in the case of the agricultural sector. OECD countries have gradually shifted away from output and input support and most distorting agricultural support, which may encourage the use of water or impact nutrient pollution (Gruère and Le Boëdec, 2019[10]; DeBoe, 2020[23]; Henderson and Lankoski, 2019[24]) to decoupled payments and to a limited extent payments that take into account environmental concerns and help to reduce water pollution from agriculture. Still, much more efforts are needed with 50% of support in OECD countries potentially environmentally impactful (OECD, 2019[25]). Support can take the form of nitrogen fertiliser subsidies to stimulate agricultural production. Nitrogen, which moves among environmental media and takes on multiple forms, creates multiple risks to the environment (e.g. to air quality, to water quality through eutrophication, and climate change). Policy coherence between nitrogen pollution management policy and other environmental and sectoral needs thus to be sought. For example, depending on the types of fertiliser and soil, nitrogen fertiliser subsidies can increase greenhouse gas emissions of crops. China, for instance, has taken steps to phase out fertiliser subsidies (OECD, 2018[14]).

More generally, despite progress since 2009, agriculture and water policies remain insufficiently aligned (Figure 4.4). Results from the OECD Survey on water and agriculture policy changes were used to derive relative alignment indices for each country and section of the Recommendation (Gruère, Shigemitsu and Crawford, 2020[9]).6 The average alignment score of Adherents policies with the OECD’s water quality recommendations is 0.54, or close to half of its potential maximum value. The maximum alignment score in 2019 is much below that of other recommendations, indicating that more efforts are needed by all Adherents.

Figure 4.4. Alignment of agriculture and water policies with section 4 recommendations on water quality

Changes from 2009 to 2019, Scores range from 0 to 1. Higher scores indicate a higher alignment

Note: Colombia and Iceland did not provide responses.

Source: (Gruère, Shigemitsu and Crawford, 2020[9])

The Recommendation encourages Adherents “to adopt the appropriate financial, managerial and technical measures to ensure that wastewater treatment systems: are built and operated in a cost-efficient manner; take into consideration the topography and future population trends; contribute to water quality objectives; and allow for resource recovery, energy and water efficiency and reuse to conserve water.”

Substantial investments in wastewater treatment plants and progress in controlling point sources of pollution have contributed to significant improvements in water quality in recent decades (OECD, 2017[7]). In more than one third of OECD countries over 80% of the population are connected to a sewage treatment plant with at least secondary treatment (OECD, 2020[26]).

Recent work by Eureau (the union of private water utilities in Europe) indicates that very little is known on the state of the asset and the rate of renewal of existing wastewater collection and treatment systems (OECD, 2020[19]). On-going discussions in Europe on the comparative strengths and limitations of Individual and other appropriate sanitation Systems (IAS) illustrate complexities related to the design of appropriate infrastructures that reflect local conditions (geography and topography, density of settlements, sensitivity of receiving environments, etc.) (OECD, 2020[19]).

The Recommendation encourages Adherents “to pay particular attention to achieving sustainable management and conservation of fishing resources and other aquatic life in freshwater and related coastal areas at the local, national and international levels, and ensure co-ordination of all relevant authorities, to the extent possible”.

A number of coastal countries target much of their efforts to reduce pollution that contributes to eutrophic zones in coastal areas. For instance, Lithuania’s Water Development Program for 2017-2023 sets the goal of reducing eutrophication-promoting nutrients entering the Curonian Lagoon and the Baltic Sea, by reducing inflows of nitrogen and phosphorus compounds (with specific quantitative targets). In Canada, the Federal Government has also committed CAD 44.84 million over five years (2017-2022) to Canada’s Great Lakes Protection Initiative, CAD 26 million of which is allocated to prevent toxic and nuisance algae in Lake Erie. This includes development of watershed plans to identify priority areas for phosphorus management and implementation of phosphorus reduction measures outlined in the 2018 Canada-Ontario Lake Erie Action Plan.7

In Norway, support is provided for assisting practices that benefit wetlands and ecosystems in farmed landscapes, and for establishing ponds and constructed wetlands. In the United States, the US Department of Agriculture’s Wildlife Habitat Incentives Program provides financial and technical assistance for improvement of fish and wildlife habitat. In addition, recent US Farm Bills have included swampbuster provisions to discourage the conversion of wetlands or highly erodible lands to crop production through the loss of eligibility for federal program benefits.8