by Aude Farnault and Xavier Leflaive, Water Team, OECD Environment Directorate
Although extreme heat, droughts, and floods have been recurrent in recent years, weather patterns this summer have reached unprecedented limits: the continuation of catastrophic drought in Western States in the United States and in East Africa, record low levels of water in Europe, and catastrophic floods in Pakistan. This week, the 2022 Stockholm World Water Week took place in this very critical context, with a particularly timely theme: “Seeing the Unseen: The Value of Water”.
The ‘unseen’ refers to groundwater, which provides not only almost half of the world’s drinking water, but also about 40% of the water used for irrigation and about a third of the supply needed for industry (UN, 2022). Yet this precious water source lacks explicit consideration from the water community, and it is poorly assessed and regulated. Beyond the discussions in Stockholm, the ‘unseen’ can also refer to ‘green water’, such as vapour and humidity in the air, soil moisture, which is much less visible than rivers and lakes. Green water is an important condition for livelihoods and determines crop yields, yet the ‘green water planetary boundary’ was recently reported as already being surpassed by the Nature Reviews Earth & Environment.
Valuing water is key to solving water challenges
The widespread undervaluing of water is one of the fundamental causes of its mismanagement and of the lack of investment in water-related services, infrastructures and practices. The Valuing Water Initiative, initiated by the government of the Netherlands, has clearly established that water values are multifaceted with sociocultural, economic, and religious associations. Still, traditional economic assessments tend to restrict the value of water to the price or cost of water recorded only in economic transactions. There is no clear relationship between the price and the value of water. Water is priced as consumers are charged for using it, but the price often reflects the intention to recover some of the costs of service provision and not the full value of water.
It is striking that valuing and financing water have only become prominent relatively recently in the international water agenda, whereas they were almost absent of international conferences a few years ago. These topics resonate strongly with the work underway at the OECD Environment Directorate, including the Roundtable on Financing Water, the Economic Aspects of Implementing the EU Water Framework and Floods Directives, the support to the Valuing Water Initiative and to the Global Commission on the Economics of Water and several national policy dialogues.
What were some of the key takeaways from this year’s Stockholm World Water Week?
The upcoming UN Water Conference in March 2023, the first in almost 50 years, will be an important step to shift the dial on these fundamental issues and move beyond traditional economic thinking. This is the ambition of the Global Commission on the Economics of Water and a main objective of the two Roundtables on Financing Water planned for 2023. In March, the Roundtable will hold a meeting in Geneva ahead of the UN Water Conference, in coordination with UN Water, and a regional meeting on Africa later in the year, to analyse regional specificities and catalyse action. Our Water Team at the OECD Environment Directorate is looking forward to this once-in-a-life time opportunity.