WATER MANAGEMENT PERFORMANCE AND CHALLENGES IN OECD COUNTRIES

OCDE

FOREWORD

The OECD is an organisation with a special interest in the environmental effects of economic policies and the economic effects of environmental policies. In the area of water resource management, this interest is reflected in a focus on the cost-effectiveness of water management policies, the efficiency of water resource allocation and the impact on water resources of sectoral and other economic policies (e.g. concerning agriculture or spatial planning). In recent years, the OECD has evaluated the use of economic instruments for, inter alia, water management; it is currently also carrying out work on water pricing for domestic, industrial and agricultural uses.

The OECD environmental performance reviews have since 1992 documented the progress made by individual Member countries in terms of their national objectives and international commitments. This paper draws on the water management chapters of all 22 reviews carried out to date to identify common achievements and remaining challenges for OECD countries in terms of further reducing the pollution burden and protecting human health and aquatic ecosystems. Conclusions are drawn relating to: i) better integration of water and other policies for sustainable development; ii) new challenges for water-related public health; and iii) getting water prices right.

This report was first prepared at the request of the OECD Group on Environmental Performance (GEP) as background documentation to the meeting of the OECD Environment Policy Committee at ministerial level (Paris, 2-3 April 1998). It was agreed to submit it also to the International Conference on Water and Sustainable Development organised by the French Government in Paris on 19-21 March 1998 and to the Sixth Session of the UN Commission on Sustainable Development (UNCSD6, New York, 20 April-1 May 1998). This report has been written by Eduard Goldberg of the OECD Environment Directorate, under the supervision of Christian Avérous and with the technical assistance of Teresa Costa Pereira, Frédérique Zegel and Sylvie Dénaux. The report has benefited from comments by a number of experts and officials of OECD member countries. It is published under the authority of the Secretary-General of the OECD.

EXECUTIVE SUMMARY

There is wide diversity among OECD Member countries in terms of their water needs and available water resources. Water resources in seven Member countries are already subject to high or medium-high stress, and in a further eight countries water availability is becoming a constraint on development and significant investments are needed to marshal adequate supplies. Some other Member countries, even though relatively water-rich on a national scale, have extensive arid or semi-arid regions where the nature of development is necessarily shaped by the scarcity of water. A few countries have a low population density and abundant water resources and hence have no supply problems. In an international context, the integration of upstream and downstream interests of transboundary water bodies is receiving increasing attention as a potential source of discord.

Over the past few decades, OECD countries have made large efforts to clean up effluent discharges and to protect and restore water resources. Good progress has been made, even though the diversity among OECD Member countries, in terms of economic and social development, institutional structure and culture, accounts for large differences in the environmental results achieved to date.

The experience of the OECD programme of environmental performance reviews shows that all Member countries have achieved notable successes in at least some of the following areas:

establishment of a comprehensive institutional framework of water management laws, policies and programmes;

large reductions in point discharges from industry and urban areas;

clean-up of the worst polluted waters;

a good degree of integration of quantity and quality management; progress towards the whole-basin approach; wider implementation of integrated permitting;

improvement in the enforcement of regulations and permit conditions;

good capacity to effectively implement policies and measures; and

growing momentum in the reform of water pricing regimes.

Nevertheless, the considerable water management efforts of recent decades have not been enough to safeguard and restore receiving water quality and aquatic ecosystems. Much progress remains to be made on many issues, such as:

implementation of the laws, regulations and policies that have been adopted;

improved cost-effectiveness of water management policies and activities;

achievement of ambient water quality objectives and protection of aquatic ecosystems;

more consistent application of the polluter pays principle and lifting of constraints on trade in water;

control of diffuse discharges and depositions of nutrients, heavy metals and persistent organic pollutants;

better integration of water management and sectoral and land use policies;

renewed attention to human health aspects of water management;

contamination of groundwater aquifers by nitrates, pesticides and other persistent chemicals;

completion and upgrading of water treatment infrastructure;

greater public participation in the formulation of water management policies and programmes.

One of the main challenges for making the use of water resources sustainable is improving the integration of environmental factors in sectoral policies. Water quantity and quality problems caused by agriculture, in particular, raise questions about the sustainability of current practices in this sector. For example, in dry regions of several OECD countries, the scarcity of water has become a limiting factor on development. A change in production processes will often be required, which is mostly beyond the direct reach and responsibility of water managers. Stakeholders must therefore take responsibility for the environmental effects of their actions. Policy instruments should be aimed at encouraging environmentally responsible behaviour, for example through greater application of social and economic instruments, including the reform of production subsidies or taxes that have harmful environmental effects.

Another challenge concerns the supply of safe drinking water at reasonable cost. A few OECD countries have yet to connect their entire population to water supplies and in others the need to upgrade ageing networks and installations appears to be emerging at the same time as new demands for more, and higher, standards in drinking water purification. The need for removal of nitrates and pesticides from water supplies is becoming more frequent. Concern over the greater vulnerability of children or the elderly to infections by viruses and parasites is creating a demand for more advanced microbiological purification. Lead water supply pipes in older buildings and cities cause limits on lead to be exceeded in places. Considerable water infrastructure expenditure will be required at a time when central government subsidies are being reduced.

The need to get water prices right constitutes a third challenge to water managers. Both the concern about the sustainability of current water management practices and the rising cost of water are focusing attention on the need to: i) allocate water resources efficiently, and ii) run water services cost-effectively. Pricing systems must and can be structured so that every person has access to clean water for drinking, cooking and washing. They should also encourage water conservation. Flat rates, cross-subsidies among user groups and subsidies for operating costs should be abolished. Ultimately, all subsidies for infrastructure capital costs should also be abolished, although this will initially be difficult in countries where there are still acute public health concerns or where the local capacity to raise finance is limited. Water is no longer a minor expenditure item for many households, and signals that the public’s willingness to pay is being stretched are becoming more frequent. Authorities must therefore build, through public education, consultation campaigns and meaningful public participation practices, a broad stakeholder consensus on the justification for higher water prices.

OUTLINE

EXECUTIVE SUMMARY 7

1. BACKGROUND 9

2. PERFORMANCE CONCERNING AGENDA 21 WATER OBJECTIVES 13

2.1 Integrated water resource development and management 13

2.2 Water resource assessment 15

2.3 Protection of water resources, water quality and aquatic ecosystems 15

2.4 Drinking water supply and sanitation 19

2.5 Water and sustainable urban development 24

2.6 Water for sustainable food production and rural development 26

2.7 Impact of climate change on water resources 27

3. CONCLUSIONS 29

3.1 Better integration for sustainable use of water resources 31

3.2 New challenges for water-related public health 32

3.3 Getting the prices right 32

TECHNICAL NOTES 33

FIGURES AND TABLES

Figure 1 Water stress in OECD countries 10

Figure 2 Pollution abatement and control expenditure in OECD countries 11

Figure 3 Water quality of selected rivers 17

Figure 4 Sewerage and sewage treatment connection rates 20

Figure 5 Freshwater abstractions by major uses 25

 

Table 1 Investment and current expenditure on water pollution abatement and control 11

Table 2 Pollution and abstraction charges in OECD countries 22

Table 3 Service charges for water supply, sewerage and sewage treatment

in OECD countries 23

Table 4 Freshwater abstractions by major uses 25

Table 5 Performance of OECD countries concerning Agenda 21 water objectives 30

Cut-off date

This report is based on information and data available up to 16 February 1998.

The text will be available during the conference.