WATER GOVERNANCE IN DEVELOPING COUNTRIES - A POLICY & INTERDISCIPLINARY INTRODUCTION

WATER GOVERNANCE IN DEVELOPING COUNTRIES

A POLICY & INTERDISCIPLINARY

INTRODUCTION

(DRAFT ONLY)

KWAME MFODWO MONASH LAW SCHOOL

MELBOURNE & INTERNATIONAL

WATER CENTRE BRISBANE

2010

W A T E R R E S O U R C E S G O V E R N A N C E – A N O V E R V I E W _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

WATER RESOURCES

Chapter

1 GOVERNANCE -

AN OVERVIEW INTRODUCTION AND OVERVIEW OF CHAPTER

This monograph provides a policy fosused inter-disciplinary perspective on water governance. It is wide-ranging in its coverage as it aims to provoke thought and also provide understanding on how good governance as an aspect of water resource management can be achieved in an integrated way. Good governance is an essential prerequisite to the sustainable management of water resources and is fundamental to the widely accepted Millenium Development Goals of providing access to water services for all, with the poor, women and others marginalised in developing country contexts at the forefront of global concerns. For the purposes of the book water resources management is defined broadly and comprises the following inter-related aspects:

the formal/informal institutional frameworks governing ownership, access and use - social, economic, political, legal, regulatory, managerial, cultural, organizational aspects as these affect water

the intersection of these aspects with the development, maintenance and operation of the physical infrastructure of water.

Although the terminology and concepts of the natural sciences consistently inform the discussion, the focus is more on the social science, public policy, law and business management elements which come together to constitute water governance. At the end of this introductory Chapter , the reader will: Be able to describe the different and often conflicting uses of water in

developing and developed country contexts; Be able to describe the basic elements of IWRM with respect to these uses; Have a preliminary understanding of key concepts in ecological economics -

the theoretical framework underpinning the course; Be able to explain the key features of the concept of Social-Ecological systems

– a central part of the analytical approach to governance used in the course Be apply to apply the SES concept in a preliminary way to water and water

associated ecosystems

1 International Water Centre


GOVERNANCE AND WATER BASED SOCIAL-ECOLOGICAL SYSTEMS

Water resources managers are in charge of a system combining both tangible and intangible elements with both aspects of equal importance. This needs constantly to be borne in mind especially where either of the elements appear to be “primitive” or “traditional” or does not conform to what the analyst or water manager is used to. Tangible elements include the water resource itself, water storage structures and conveyance arrangements wastewater treatment etc. Intangible/”non-material” elements include the institutional framework (legal, regulatory and organizational roles) management instruments (regulatory and financial) etc.

Figure 1.1 The Water System1

The overall structure under management is essentially a Social-Ecological System (SES)2 comprising:

one or more water associated ecosystems (living resources as well as non-living resources, including water itself);

human uses of the resources associated with these ecosystems; institutional arrangements governing the use of these resources.; physical infrastructure related to the SES.

1 Adapted from Rutger van der Brugge, Transition dynamic & Transition Management …towards AWM , Newater Summer School Peyresq, 2006. Although specific to Holland it is easily applied elsewhere. 2 Ostrom et al. Going beyond Panaceas, Proceedings National Academy of Sciences September 25, 2007 vol. 104 no. 39 15176-15178, http://www.pnas.org/cgi/content/full/104/39/15176


http://www.pnas.org/cgi/content/full/104/39/15176


Figure 1.23 Pressures on Water Ecosystems

Marketplace

Government

NGOs/Social Institutions

Economic Pressures

Legal/ Political Pressures

Social Pressures


Human uses of Water and Water-Associated Ecosystems

Figure 1.3 The components of a Water Social-Ecological system

3 Adapted from Juda, L. and Hennessey, T. Governance profiles and the management of the uses of large marine ecosystems 32 Ocean Development and International Law 41-67, 45.


Figure 1.4 – Conceptual Model – Key Features of a Social-Ecological System4

Figures 1.1-1.4 provide different ways of conceptualising an SES, the overall effect of the representations providing a fine-grained picture of the fields of thought and action analysed in varying degrees by this Unit.

4 Ostrom et al. Going beyond Panaceas, Proceedings National Academy of Sciences September 25, 2007 vol. 104 no. 39 15176-15178, http://www.pnas.org/cgi/content/full/104/39/15176





SUSTAINABLE DEVELOPMENT AS A RESPONSE TO THE ECOLOGICAL CRISIS

Sustainable Development is the currently dominant conceptual framework for managing natural resources. It is a concept which requires the pursuit of three often contradictory goals at the same time:

ecological integrity, specifically referring to genetic, species and ecosystem diversity, resilience and balance;

economic efficiency, basically implying the replacement of the conventional concept of economic growth with that of an ecologically responsible economics which fully recognizes and accounts for the depletion of the natural and ecological resources consumed by human activity;

social equity, essentially meaning safeguarding of cultural values and social values including the protection of democracy and preserving of the rights of future generations.

Sustainable use and management (which is how sustainable development is implemented) covers a number of broad areas: (1) effective and flexible governance5 of resource use in a way which respects ecosystems and their limits; (2) resource allocation between competing uses including making justifiable choices between alternatives using appropriate instruments of policy analysis and valuation, including economic and non-economic instruments; (3) implementation of policies and their monitoring and evaluation; (4) carrying out all these activities within an appropriate framework of law.

Sustainable use and management of resources involves both public players (government agencies of various types, politicians, international organizations) and private stakeholders (for e.g. commercial actors, indigenous/local communities, environmental NGOs and the public generally). Before the advent of the concept of Sustainable Development, the primary focus of concern was more the supply of water than any other aspect. With the advent of and acceptance of the concept of Sustainable Development the situation has become much more complicated with water managers required now to pay attention to:

Water as degradable, renewable/quasi-renewable natural capital Water as a consumption commodity in urban contexts Water as a production factor in agriculture, especially irrigated agriculture Water as production factor in industry Water as conservation resource for the environment Water as environmental management input across all sectors Water as source of intangible value – culture, aesthetics, identity etc. Water as a key contributor to the stability, resilience and adaptation of the

global eco-system – a system we all agree is under a high degree of threat from human activity.

5 Governance is more than governing and what the government does – it involves the entire relationship between governments, the market , industry and civil society (indigenous groups, NGOs and other actors).


Box 1.2 – Sustainable Development

A sustainable development policy is one that seeks to maintain an acceptable rate of growth in per capita real incomes without depleting the natural capital asset stock or the national environmental

asset stock

(Turner, Sustainable Environmental Management: Principles and Practice 1988)

INTEGRATED WATER MANAGEMENT AND SUSTAINABLE DEVELOPMENT

To address the demands of water resource management in the era of Sustainable Development the relatively new discipline of integrated water resource management (IWRM) (an applied discipline as opposed to a theoretical discipline) has emerged in an attempt to create a feasible framework for implementing the requirements of Sustainable Development in the water sector. To achieve this objective, IWRM draws from a number of parent disciplines even as it fashions its own internal responses. The parent disciplines in question, all established disciplines are also affected by the complex imperatives of Sustainable Development. They include:

The natural sciences of the study of water (hydrology, climatology, geology and the subfields within these;

Human and physical geography; The engineering and other technical sciences supporting water extraction,

refinement; The neo-classical economics of water extraction and distribution; The neo-classical economics of environmental protection; The new sub-field of economics called ecological economics; The social sciences of natural resources management and environmental

management (anthropology, sociology, public policy, political science, law); Business management, including accounting and environmental

management as a sub-discipline of business management; Project design, evaluation and management as a practical intersection of all

the disciplines set out above.

KEY FEATURES OF THE NEW CONTEXT

References have been made above to a new context – a context in which governance/management of water has become more complex. The new policy context has the following features, all of which place new and stressful demands on water policy makers and managers:

global support for the proposition that ecological integrity and the protection of natural life-support systems are crucial high-order policy goals to be addressed by all countries according to their capability and their means;

a generalized expectation that social, environmental and ecological considerations will now be integrated into specific policies;



a generalized expectation that social, environmental and ecological considerations will be integrated into policy activity which cuts across sectors and multiple areas of public concern;

a generalized expectation that communities and stakeholders will be more closely involved in policy and management, ranging right through from general consultation to active participation in decision-making by way of co-management arrangements;

an increasing expectation that that both inter- and intra-generational equity will be integrated into policy-making;

an increasing expectation (driven by today’s information-rich and information-sensitive environment) that the public has a right to receive comprehensive information from governments and companies about any future threats or risks of environmental harm;

an increasing expectation that the complexities of culture will be taken into account in natural resources policy;

an increasing expectation (driven by today’s information-rich and information-sensitive environment) that governments and the private sector will invest in and undertake all possible research and monitoring with respect to natural resource and ecological/ environmental issues and more specifically projects and proposals that significantly affect the environment;

a willingness on the part of many sectors in society to consider new policy instruments and approaches to meet the challenges of sustainability, including an increased degree of willingness to consider changes to existing property rights regimes and explore new institutional arrangements;

an expectation that the precautionary principle will be respected such that scientific uncertainty will not be regarded as an excuse to delay regulatory or corrective action when impacts on human society can clearly be seen to be seriously harmful or irreversible;

a generalized distrust of the central actors with respect to the natural resources and environmental crisis - governments, large corporations and institutional science;

an active, alarmist and sensationalist mass media; and increasingly powerful well-equipped and globally networked NGOs, the

Internet providing a powerful tool for mass mobilisation and action.

7

Principle No. 4 - Water has an economic value in all its competing uses and should be recognised as an economic good Within this principle, it is vital to recognise first the basic right of all human beings to have access to clean water and sanitation at an affordable price. Past failure to recognise the economic value of water has led to wasteful and environmentally damaging uses of the resource. Managing water as an economic good is an important way of achieving efficient and equitable use and of encouraging conservation and protection of water resources.

International Water Centre

Box 1. 3 The Dublin Principles

Principle No. 1 - Fresh water is a finite and vulnerable resource, essential to sustain life, development and the environment Since water sustains life, effective management of water resources demands a holistic approach, linking social and economic development with protection of natural ecosystems. Effective management links land and water uses across the whole of a catchment area or groundwater aquifer. Principle No. 2 - Water development and management should be based on a participatory approach, involving users, planners and policy-makers at all levels The participatory approach involves raising awareness of the importance of water among policy-makers and the general public. It means that decisions are taken at the lowest appropriate level, with full public consultation and involvement of users in the planning and implementation of water projects. Principle No. 3 - Women play a central part in the provision, management and safeguarding of water This pivotal role of women as providers and users of water and guardians of the living environment has seldom been reflected in institutional arrangements for the development and management of water resources. Acceptance and implementation of this principle requires positive policies to address women's specific needs and to equip and empower women to participate at all levels in water resources programmes, including decision-making and implementation, in ways defined by them.



MAKING SENSE OF THE CONCEPT OF GOVERNANCE

Governance is a broad term covering the formal and informal arrangements, institutions and moral perspectives that structure:

how resources or an environment are utilised how problems and opportunities are evaluated and analysed what behaviour is deemed acceptable or forbidden what rules and sanctions are applied to affect the pattern of use6

Clearly, the term governance is broader than the related term government7. Governments and what governments do refers to the sources of formal authority backed by police powers to ensure that rules are obeyed. Government addresses ensuring that there is proper implementation of duly constituted policies. Governance is broader because in addition to covering what governments do, governance is:

the sum of the many ways individuals and institutions, public and private, manage their common affairs. It is a continuing process through which conflicting or diverse interests may be accommodated and co-operative action may be taken. It includes formal institutions and regimes empowered to enforce compliance, as well as informal arrangements that people and institutions either have agreed to or perceive to be in their interest (Commission on Global Governance (1995))

Put another way, governance is the

management of complex interdependencies among actors (whether individuals, corporations, interest groups or public agencies) who are engaged in interactive decision-making and therefore taking actions that affect each other’s welfare8

It is possible to have a society in which a large part of governance in that society is undertaken by transactions in the market place rather than by the actions of government. The United States provides a good example. By the same token it is possible to have a society in which governance occurs principally through people’s respect for religious norms rather than the formal rules set out by the recognized government. Saudi Arabia is a good example of this kind of society. Oran Young a leading US political scientist who writes about and works on natural resource issues also defines governance in a way which accurately emphasizes its inter-connected and essentially extra-governmental nature. He views governance as:

Activities and arrangements backed by shared goals that may or may not derive from legal and formally prescribed responsibilities and that do not necessarily rely on police powers to overcome defiance and attain compliance.

6 Juda, L. and Hennessey, T. Governance profiles and the management of the uses of large marine ecosystems 32 Ocean Development and International Law 41-67, 44. 7 Governments as organisations can be defined as complex material entities possessing offices, personnel, equipment, budgets and legal personality and with particular ideologies of ways of looking at the world. Juda, L. Considerations in developing a functional approach to the governance of large marine ecosystems 30 Ocean Development and International Law, (1999) 113, n. 13. . 8 Rosenau, J. M cited at Juda, L. and Hennessey, T. Governance profiles and the management of the uses of large marine ecosystems 32 Ocean Development and International Law 41-67, 64.


Governance in other words is a more encompassing phenomenon than government. It embraces government institutions, but it also subsumes informal, non-governmental mechanisms whereby those persons and organisations within purview move ahead, satisfy their needs and fulfil their wants9

GOOD WATER GOVERNANCE

Box 1. 1

Some Definitions of Water Governance

Definition 1

Water governance refers to the range of political, social, economic, and administrative systems

that are in place to develop and manage

water resources, and the delivery of water

services, at different levels of society(Rogers

and Hall, 2003. “Effective Water

Governance”. Global Water Partnership

Definition 2

The range of political, organizational and administrative processes through which communities articulate their interests, their input is absorbed, decisions are made and implemented, and decision makers are held accountable in the development and management of water resources and delivery of water services.

GWG is critical to the regulation of water use. Users typically share a river basin, an aquifer or a interconnected groundwater and surface-water systems. Good governance arrangements then becomeare vital to conflict resolution, defusion of upstream-downstream tensions and to the never-ending process of balancing the needs of different groups sharing water resources.10

As this Unit shows, water governance, in particular, good water governance has many component parts and operates at different levels. A key aspect of GWG is its concern with improving and institutionalizing popular participation in decisions about water resources and water systems.11 Improving water governance is also about power in decision-making, in particular the questions of:

where decisions are made (in the capital city or in the community itself);

how these decisions are made who makes these decisions who controls the information that guides

decision-making. Water governance is much more than law. It also refers to social mobilization and other actions designed to promote ownership, co-investment, capacity building, incentives for participation, and willingness to pay for services at the community level.12 Effective water governance builds institutional capacity from the local level upwards and empowers stakeholders with knowledge and the ability to make decisions about matters that directly affect their lives. It also promotes the equal participation of women and men in decision-

9 Cited in Juda, L. Considerations in developing a functional approach to the governance of large marine ecosystems 30 Ocean Development and International Law, (1999) 113, n. 13. . 10 UNDP Water Governance for Poverty Reduction Handbook (2004) 11 UNDP Water Governance for Poverty Reduction Handbook (2004) 12 UNDP Water Governance for Poverty Reduction Handbook (2004); Pahl-Wostl C (2002) Towards Sustainability in the Water Sector: The importance of human actors and processes Of social learning .Aquatic Sciences 64: 394-411.



making.13 Good water governance also determines the appropriate role for the government in service delivery (i.e., should government be a facilitator or be a service provider) and ensures that water and sanitation services provided by both public and private actors meet the needs of the people they serve and do not fall prey to corruption. Good water governance corrects market distortions, perverse incentives, and pricing that shuts out the poor.14 Governance models must fit the prevailing social, economic and cultural particularities of a country, but certain basic principles or attributes are essential. The approach taken to water governance should be transparent, inclusive, coherent and equitable. Similarly, the governance system should be accountable, efficient and responsive. Good governance requires the participation of government, civil society and the private sector as all are instrumental in different ways in the successful implementation of institutional reforms.15

WATER – THE TOTAL CYCLE

As shown by Figure ? below, there are a number of ecosystems which taken together shape the subset water and water associated ecosystems. In this unit, from the scientific-technical point of view we are focusing more on, the aquatic ecosystem, (surface-water) and the subterranean ecosystem (groundwater) and its interaction with terrestrial las well as coastal marine ecosystems.

Figure 1.4A The hydrological cycle – an ecosystem perspective16

13 UNDP Water Governance for Poverty Reduction Handbook (2004) 14UNDP Water Governance for Poverty Reduction Handbook (2004) 15 See in particular Module 5. 16 Millenium ecosystem assessment, Water and Wetlands, Synthesis Report, (2005) http://www.maweb.org/documents/document.358.aspx.pdf



SURFACE WATER

Figure 1.5 – Surface Water

Surface water is alll water naturally open to the atmosphere, and is to be found in rivers, lakes, reservoirs, ponds, streams, impoundments, seas, estuaries and wetlands.

GROUNDWATER Groundwater is water that flows or seeps downward into a storage structure called an aquifer. Groundwater saturates rock or petroleum oil or rock. It may seep to the surface through springs and also comes to the surface to form oases or swamps. Humans draw this water from wells or bores for agricultural, household and industrial use. It is replenished through surface seepage

but this may take many years depending on the depth of the aquifer. The rate of withdrawal commonly exceeds the rate of recharge, and in many areas the groundwater supply is declining. Groundwater is discussed in more detail by Chapter 4.

FOSSIL WATER17 This third category refers to water buried deep underground with recharge rates so slow that it is non-renewable in relation to its use on the human time-scale. On the larger scale of the natural water cycle it does in fact get renewed but extremely slowly. Chapter 4 discusses extraction of fossil water by Libya in more detail.

SURFACE WATER AND GROUNDWATER – CONNECTIONS AND DIFFERENCES Groundwater systems have a slow dynamism when compared to SW systems. Groundwater moves from areas of recharge to areas of discharge in slow motion over tens, hundreds and thousands of years. Flow rates are sometimes a few meters a day and can sometimes be as slow as 1 metre per year. Groundwater is generally cleaner and has more consistent quality and in terms of timing for agricultural use purposes is much more stable and easily available provided the aquifer has no significant problems.

17 See for instance, Jean Margat and Kamal Saad, Mining fossil water, UNESCO Courier (1985); The Fossil Water Report, http://www.fossilwater.ca/reports.htm



Figure 1. 6 – Conjunctive aspects of water Groundwater and surface water are often hydraulically connected in many catchments. A good example is shown by Figure ?. Integrated management of surface water and groundwater is critical in ensuring sustainability of the water resource. Water issues such as over-allocation, environmental flows and river salinity are all influenced by the connectivity between streams and aquifers. This means that groundwater-surface water interactions need to be assessed and incorporated into the management response to a range of water quantity and quality issues. Shared water comprises that component of water that either feeds into a stream or river from an aquifer (the ‘gaining’ stream), or conversely, discharges from a river or stream into an aquifer (the ‘losing’ stream). Connectivity can be complex, with a single river in some instances both gaining and losing water, depending on location. It may also be the case that any amount of groundwater pumping in a connected system will deplete stream flow, and that the rate of depletion will vary with the rate of pumping and distance from the river.

THE PHYSICAL INFRASTRUCTURE ASPECTS OF GOVERNANCE

Physical infrastructure in water is a mix of privately and publicly owned infrastructure, with the trend one of transfer of ownership to the private sector. Where ownership does not pass, then private sector approaches are mimicked, whilst control or public ownership is retained. Today Public physical infrastructure; community owned physical infrastructure; privately owned physical infrastructure – interface with governance comes up at design, construction, operation and maintenance – adaptation to match changing needs – multiple use aspects of dams and irrigation schemes for instance – thus with dams required now to be reshaped to incorporate multiple use as well as ecological water – same also with irrigation infrastructure – re-tooling of infrastructure required to accommodate community demands, needs participation – technical element may come under community control or surveillance in ways which are different from the past



THE USES OF WATER18

Figure 1. 7 Key Uses of Water19

. Some of the key uses of water are set out in Figure ? Uses that are missing are the waste assimilation function and the eco-regulatory and spiritual/cultural aspect. Some fairly precise terminology in the area of uses is also useful (see also Glossary ).

Withdrawal refers to water diverted from a surface soured or removed from a groundwater source for human use. 20

Consumption is that part of water withdrawal that is transpired through plants, evaporated, incorporated into products, counsmued by livestocks or humans or otherwise removed from the immediate water environment.21

Off-stream uses – these are uses which involve withdrawals and take place away from the hydrological cycle itself. Most offstream uses involve some degree of consumption and thus most off-stream uses are also consumptive uses.22

Offstream water-use sectors include public water supply for domestic and industrial purposes, the domestic use sector, industry, irrigation, livestock, mining, and thermoelectric power.23

In-stream uses of water generally involve little or physical loss and are thus generally classified as non-consumptive uses. In-stream uses do however change the nature of water, since in many cases, the use may require a

18See generally, Ronald C Griffin, Water Resource Economics – The Analysis of Scarcity, Policies and Projects (2006) Chapters 1-3; Robert A Young, Determining the Economic Value of Water (2006) Chapter 1. 19 Source: http://www.waterencyclopedia.com/Tw-Z/Uses-of-Water.html 20 Robert A Young, Determining the Economic Value of Water (2006), 3-4. 21 Robert A Young, Determining the Economic Value of Water (2006), 3-4. 22 Robert A Young, Determining the Economic Value of Water (2006), 3-4. 23 See generally, Ronald C Griffin, Water Resource Economics – The Analysis of Scarcity, Policies and Projects (2006) Chapters 1-3; Robert A Young, Determining the Economic Value of Water (2006) Chapter 1.




change in the time or place of water availability in ways quite different from that originally provided or established by the normal/natural hydrological cycle24

Good examples of in-stream use are transportation, hydro-electric power and recreational uses. In-stream uses may not divert water but definitely affect water quality and are also dependent on it. Recreational uses and transportation may also suffer from congestion.25

Commodity-uses of water refers to water withdrawn for use in the production of other commodities (agricultural, industrial, mining etc.)

Commodity uses carry a great deal of potential for conflict as one stakeholder’s use of a unit of water to some degree partially or completely precludes use of that same unit of water by another stakeholder. In the language of mainstream economics, commodity uses of water are rival in nature. As a general principle commodity uses of water are an instance of water presenting as a private good.26

INTERACTION BETWEEN SOME KEY WATER ATTRIBUTES & GOVERNANCE ISSUES27

Table 1. 1 Attribute Characteristics Impact on Governance Issues Mobility & lack of natural confinement

Flows downhill

Seeps through soil and rock

Naturally free and expands in space

Downstream-upstream user problems are pervasive Creates high degree of interdependency amongst users Measurement and observation problems are pervasive affecting

costing, economic/market policies and inhibits creation of individual/discrete property rights units

Lack of confinement and high mobility requires storage in large permanent structures or many small difficult to manage/standardize structures

Mobility requires investment in spatially extensive conveyance networks with implications for governance and sharing of responsibility

Individualization and creation of market oriented property rights difficult to effect and enforce

Cause of conflict & encourages cheating and theft Requires user groups to have a high degree of internal trust,

surveillance & internalization of group norms to prevent non-conformers/free-riders taking advantage of mobility and lack of confinement to “cheat” others

High transaction costs re: investment in and enforcement of institutional norms

Transience & changes of form

Evaporates & causes loss

Turns to ice and steam

Measurement problems, storage problems, losses in volume and value during transport affects markets/economics/property rights aspects of water

Cause of conflict & encourages cheating and theft Complex arrangements required to account for losses associated with

change of form Makes individualization and creation of market oriented property rights

difficult to effect and enforce Requires user groups to have a high degree of internal trust,

surveillance & internalization of group norms to prevent non-conformers/free-riders taking advantage of mobility and lack of confinement to “cheat” others

High transaction costs re: investment in and enforcement of institutional norms

Pronounced uncertainty and variability in

Supply and variability of raw/natural water

Decisively affects attempts to create markets

24 Robert A Young, Determining the Economic Value of Water (2006), 3-4 25 See generally, Ronald C Griffin, Water Resource Economics – The Analysis of Scarcity, Policies and Projects (2006) Chapters 1-3; Robert A Young, Determining the Economic Value of Water (2006) Chapter 1. 26 Robert A Young, Determining the Economic Value of Water (2006), 3-4 27 See generally, Ronald C Griffin, Water Resource Economics – The Analysis of Scarcity, Policies and Projects (2006) Chapters 1-3; Robert A Young, Determining the Economic Value of Water (2006) Chapter 1.



supply/renewability outside human control No perfect substitute available to smooth out variability

Interdependency among users

Up-stream uses constantly affect downstream uses often negatively

Decisively affects attempts to create markets – downstream users typically need to be significantly compensated for impact of upstream actions

A good example of the importance of some of these characteristics of water (and the accounting nightmare as well as cheating opportunity that water represents) is the fact that in 1995 for instance, data on the crop irrigation sector in the United States shows the following:28

X amount was shown as physically withdrawn for irrigation uses 80% of X was shown as having been delivered to irrigation users Amount consumed by irrigators was reported to be 60% of that delivered Net amount consumed is less than 50% of that originally withdrawn

CONFLICTS IN WATER USES – CONSUMPTIVE VS NON-CONSUMPTIVE VS INSTREAM VS OFFSTREAM

As set out above, water uses can be classified into consumptive and non-consumptive uses. These also overlap with instream vs offstream uses in an untidy manner. The conflicts between these inter-related but often contrasting forms of use are central to governance matters whether in terms of dispute settlement, project decisions, assessing costs and benefits, determining the highest values of water use or determining opportunity costs associated with particular decisions or allocation choices. Conflicts occur around issues of scale, geographical location and benefits or costs associated with location, allocation of rights of ownership, access and use, tenure and the impacts of the transformed water on other users.

Consumptive uses29 Conceptually consumption has two inter-related aspects as shown below:

diversion or withdrawal of water from river systems – related to but distinct from consumption

consumption of water diverted

Diversions and withdrawals involve the physical removal of water from its natural course. Water that is diverted from water courses meets several different fates. Some portion of diverted water is consumed by crops, people, or industrial processes, or it evaporates. The majority of all withdrawals of surface water are for agricultural purposes, principally for different types of irrigation Water that is consumptively used is lost to future beneficial uses. Water that is not 28 See Robert A Young, Determining the Economic Value of Water (2006) 41. 29 Ronald C Griffin, Water Resource Economics – The Analysis of Scarcity, Policies and Projects (2006)



consumptively used may flow back to rivers via overland channels (canals, ditches, or surface runoff) or seep into the ground, ultimately re-entering river systems through lateral flows of groundwater or through municipal outlets for storm water and wastewater treatment plants. The length of time before diverted water is available for other uses can vary from region to region and even within a relatively small section of a single watershed. The ratio of water diverted to water consumed also varies by use. For example, diversions for thermoelectric cooling affect the water supply differently than those for urban uses. Thermoelectric power plants typically divert water only for cooling purposes, and 97% of that water returns to the source, albeit at altered temperatures. Thus, the production of thermoelectric power diverts large quantities of water but consumes very little. In contrast, municipal and industrial uses withdraw smaller quantities of water than thermoelectric uses but consumes significantly more.

Conflicts – Offstream vs In-Stream Uses In-stream water uses, which are non-consumptive include the production of hydroelectric power, fish and wildlife habitat, recreation, and navigation. They are an important category because dedicating water to such uses may reduce the quantity of water available for diversion or consumption. Examples of in-stream water uses Hydroelectric power generally requires neither the consumption nor the withdrawal of water. Hydroelectric power is created when turbo generators are activated by falling water. Power plants are generally included in the base of large dams to harness the energy created when water is released from the associated reservoir. Although water need not be diverted or consumed to produce hydroelectric power, achieving the greatest possible financial value from power production for a given quantity of water requires adjusting releases to match daily and seasonal fluctuations in demand. In many cases, the timing of water releases for hydropower production conflicts with environmental and agricultural needs for water in complicated ways which require careful management based on extensive consultation, modelling and learning from experience. Conflicts between hydro water and agricultural water as well as environmental water, include:

The timing and rate of hydro flow release may not coincide with the requirements of agriculture and environmental water, especially water for fisheries

Higher discharge may satisfy the depth requirements for navigation, flow for irrigation or water supply, and usable area and carrying capacity for invertebrates and fish. However, excessively high flow of long duration may not be desirable because in some instances, they could transport water of undesirable quality.

Flow diversion upstream may eliminate the potential for other in-stream uses (including hydro generation) downstream.

Environmental and Recreational Uses The two uses are closely intertwined. However, direct measures of environmental water use are difficult or impossible to obtain. The amount of water needed to sustain a fish population, for example, is harder to quantify than the amount



needed to irrigate a field of cotton or the amount a family consumes. Fish may require a minimum amount of water for spawning and migration, or they may require water that is within a certain temperature range. Although those requirements vary by species and river basin, one rule of thumb holds that 30 percent of average annual flows is the minimum amount needed to protect fish populations. Recreational uses of water include activities that benefit from reservoirs (such as boating, waterskiing, swimming, and fishing) as well as those more suited to free-running rivers and streams (such as whitewater rafting and fishing). Many recreational activities depend on the health of fish and wildlife populations--fishing, bird-watching, and duck hunting are several examples. Thus, the need for water for purely environmental purposes, such as the preservation of a fish species, may be difficult to distinguish from the need for water for recreation. Although environmental and recreational uses of water are considered non-consumptive, they may conflict with other uses. In river systems modified by extensive water development, adjusting water regimes to benefit fish, wildlife, and recreation may require reducing the amount of water used for other purposes. For example, adjusting the timing or location of water releases from dams to improve conditions for fish or whitewater boating may reduce the value or quantity of hydroelectric power produced with that water. Similarly, the amount of in-stream flows required to protect fish habitat may restrict the diversion of water for irrigation.

Producer perspectives vs user perspectives Another perspective on uses, users and conflicting aspects is to ask whether the water use is a producer use or a consumer use. Producer uses are where the water is used to produce other products- its use is an input or an intermediate stage in a total process. Irrigation is a good example of a producer use. The water is embodied in rice, corn, sugar, wheazt and is often traded on global markets. Industrial production, hydropower, cooling for thermal energy plants and mining uses are further good examples of situations where water is mixed up with other inputs to produce a further product or commodity. This approach to using water is also associated with the notion of derived demand, an issue addressed a little later in our discussion of economic and market aspects of water governance. Producer uses compete with consumer uses, principally residential uses and the supply of water to support environmental or eco-regulatory functions.



Table 1. 2 Overview of conflicting/overlapping uses

Sector Quantity Quality Within agriculture

Conflict and competition arise over the distribution of water for irrigation between different parts of the agricultural sector and increase as water supplies become short.

Water quality is also an issue, because poor drainage increases the potential for a rise in salinity

Agriculture and other sectors

In principle and subject to geological conditions, water from agriculture is complementary to all other sectors, since seepage water can be used to recharge groundwater and thus supply other sectors.

However, in most cases, especially in drought years, agriculture competes fiercely against all other sectors for water, as certain quantities must be set aside to satisfy the needs of those sectors.

Conflicts over water quality arise between agriculture and the municipal/domestic, industrial and environmental sectors

Agrochemical run-off and minerals leached through water seepage and percolation contaminate water, making it unsuitable for use by other sectors

Municipal/domestic

Total amount of water needed for particular user small but impacts are large and cumulative

Municipal requirements must be met, in order to satisfy basic human needs including health needs.

Reductions in supply below what is required a potential source of conflict between different users at tap level.

Within the municipal/domestic sector, using more water than is required can lead to shortages and an increase in costs.

Municipal/domestic water requires water of the highest quality for drinking purposes and is thus in conflict with all uses which contaminate wate

However, not all domestic uses require the highest quality water

Conflict over quality is thus in theory not as great.

Industry High degree of conflict with agriculture in times of scarcity

Conflict with domestic in some contexts Internal conflicts over quantity within sector

in periods of scarcity

Pollutes water and therefore in conflict with other users

Internal conflict within sector over quality as some industrial sectors require the highest quality water – eg health and food sectors

Water for environmental purposes

In periods of water scarcity in conflict with agriculture/ industry and domestic

Previously not a high priority Increasingly a high priority for countries with

good water policy

Other sectors may be in conflict with environmental uses where they degrade water quality to such an extent that natural processes cannot clean such water effectively and recharge is polluted recharge

Transport Low degree of conflict with other sectors – high degree of conflict with hydropower

Hydropower Depending on geography, dam design and technology, schedules for dam retention and release as well as scarcity of water can be in conflict with other sectors

Can affect other sectors through siltation etc – dependent on geography, dam design and technology, schedules for dam retention and release as well as scarcity of water can be in conflict with other sectors

Recreational Depending on recreational type – can conflict with all other use types

Depending on recreational type – can conflict with all other use types


Figure 1.8 – Impacts of Human Activities on the Niger and Senegal Rivers (West Africa)30

CONFLICTS OVER GROUNDWATER USE

Issues to do with groundwater are discussed in more detail by Chapter 4. Here it is however useful to note the scope and diversity of conflicts between groundwater users. Governance issues in groundwater are quite different from those associated with surface water given:

the underground nature of the resource; its essential invisibility from a governance, control and prediction point of

view its slower rates of recharge the longer time-lags between degradation of the resource/resource base

and the visibility of such degradation of the resource/resource base to users and regulators

Governance is made particularly difficult by invisibility, issues of scale, large numbers of scattered users as well as the time lag problem. Chapter 2 addresses these matters in more detail.


30 Institut de l’énergie et de l’environnement pour la Francophonie (IEPF), La gestion intégrée des ressources en eau par bassin. Manuel de formation (2001), 98


Figure 1.8A Conflicts over groundwater

Conflicts in the use of groundwater

Within rural areas

Between rural and

urban areas

Joint well conflict among sharers of a well

Between well owners’ effect of competitive deepening

Water market conflict between seller and producer

Between surface and groundwater bodies

Urban water sale/ transportation

Effluent discharge/ conflict due to pollution

Send mining from river bed

IWRM - THE DOMINANT APPROACH TO 21ST CENTURY WATER RESOURCE MANAGEMENT

IWRM is currently viewed as the best way for the water resources manager to address his/her task. The Global Water Partnership (GWP) defines IWRM as ‘a process which promotes the coordinated development and management of water, land and related resources in order to maximise the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems.’ IWRM seeks to address (simultaneously!) two highly complicated and complex problem sets; sustainable development and cross sectoral planning.31 The concept of IWRM is based on the Dublin Principles, so called as they were adopted from the 1992 International Conference on Water and the Environment in Dublin. These principles formed the foundation for the freshwater resources component of the UN Agenda for protection of freshwater resources Agenda 21 Chapter 18.

IWRM aims to ensure that social, economic, environmental and technical dimensions are all taken into account when managing water resources. This involves ensuring an integrated approach to the management of the parts of the natural world that are important for the availability and quality of water. Key aspects that need theoretical and practical attention include:

Linking land and water management as land use and vegetation use both have an effect on water resources.


31GWP, 2000. Integrated Water Resources Management. Global Water Partnership Technical Advisory Committee. TAC Background Papers No 4.



Linking water quantity and water quality, to ensure usability of water for different purposes is maintained or enhanced.

Linking upstream and downstream interests, as upstream practices affect the quantity and quality of water for users downstream, including users in the coastal zone.

Linking "green water" and "blue water" as there tends to be a focus on water in rivers or aquifers ("blue water") at the expense of management of the water involved in plant growth such as rainfall, soil moisture and evapotranspiration ("green water").

Linking water and "waste water", with waste water constituting a good source of alternative water supplies.32

The other critical aspect of IWRM is the linking of the social dimension. This can be achieved through:

Coordinating water management and policy-making at all levels from global and national to local and community.

Involving all stakeholders in the decision-making process and providing avenues for conflict resolution and mechanisms for evaluating trade-offs.

Making mainstream planning and policy processes assess and account for any impacts on water resources. This acknowledges that decisions made in many sectors (such as food, transport, energy, immigration) need to be water sensitive.

Making available adequate information on the biophysical, economic, social and ecological characteristics of a catchment

Influencing water users to make choices based on the real value of water, and the need for long-term viability of the water resource.33

In practical terms, IWRM translates into the following broad principles:

IWRM should be applied at catchment level when broad-scale management is desired

It is critical to integrate water management and environmental management.

A systems approach should be followed. Full participation by all stakeholders, including workers and the community. Attention to the social dimensions. Capacity building. Availability of information and the capacity to use it to anticipate

developments. Full-cost pricing complemented by targeted subsidies. Central government support through the creation and maintenance of an

enabling environment. Adoption of the best existing technologies and practices. Reliable and sustained financing.

32 GWP, 2000. Integrated Water Resources Management. Global Water Partnership Technical Advisory Committee. TAC Background Papers No 4. 33 GWP, 2000. Integrated Water Resources Management. Global Water Partnership Technical Advisory Committee. TAC Background Papers No 4.



Equitable allocation of water resources. The recognition of water as an economic good. WRN should explicitly address the role of women in water management IWRM is highly context specific and dependent and has to be adapted to fit

the local context. 34 IWRM and critiques of IWRM are discussed in more detail by Chapter 3

Box 1.5 How To Do Bad Water Governance35

1. Surprise stakeholders. 2. Avoid consultation. 3. Exclude not just the public, but also political leaders, legislators, and rival agencies. 4. Get it wrong the first time. 5. Codify everything in statutes before you know what works. 6. Avoid experiments. 7. Prevent learning and adaptation. 8. Create losers. 9. Condition water rights on using less water and paying higher fees. 10. Make those receiving formal rights worse off than they were before. 11. Ignore local customs. 12. Insist that only national laws matter, and must be implemented with no adjustment for local

knowledge and conditions. 13. Make recognition of rights hard. Ensure that obtaining legal recognition of rights is complicated and

expensive, so those with more power and money can easily manipulate the system 14. Impose deadlines. Enact strict nationwide time limits for getting a permit, or else losing all rights. 15. Forget enforcement. Keep rights unreliable and insecure. Omit staff and budgets to monitor

compliance and apply sanctions. 16. Ensure that those with complaints have no way to appeal. 17. Maximize agency discretion. Keep criteria and procedures unclea 18. Enhance opportunities for agency officials to offer favors and earn extra income. 19. Cultivate confusion. Emphasize technical jargon and legalese to mystify non-experts. 20. Centralize power. Expect regional and local governments, as well as agencies responsible for health

and environment, to surrender to micromanagement by river basin organizations. 21. Ignore impacts. Allow transfer of water rights without public notice or agency review. Avoid regulating 22. natural monopolies, information asymmetries, or externalities for downstream users and the

environment. 23. Mandate markets. Assume that tradable water rights are always necessary, even when rights are

vague, governance weak, and gains from trade absent. 24. Promote paperwork. Emphasize targets for formal registration, and complex processes for

integratedwater resources planning, to keep water rights disconnected from practical problem-solving.

34 Newater document IWRM theory and concepts 2 at p. 35 Bryan Burns, cited in Dennis Von Custodio and Wouter Lincklaen Arriens (Asian Development Bank), Understanding Water Rights and Water Allocation A Background Paper, 1st NARBO Thematic Workshop on Water Rights and Water Allocation, Hanoi, Viet Nam 5-9 December 2005 http://adb.org/water/NARBO/2005/Thematic-Workshop/paper-Arriens-Custodio-water-rights.pdf



SPATIAL AND TEMPORAL SCALES

Another important issue in identification and management of water issues is their spatial and temporal scale. Some issues are more global than local or vice-versa whilst others span local, global and regional scales. Indeed after close investigation it may be found that the spatial or physical setting is more crucial to successful policy design/implementation than the issues of economy, society, culture or politics that dominate perceptions or previous policy on the issue. Spatial scale can be interpreted in a number of different ways although the following are key:

socially, politically and culturally constructed scales – neighbourhoods, cities, political regions within States, Nation-States, regional aggregations of State territories (eg. the EU)

natural system scales – watersheds, airsheds geologically based scales – plains, valleys, continents, the earth itself As Table ? and Figures ? cumulatively demonstrate, water operates within scales/temporal rythyms of a natural/geological scale whilst we attempt to manage it using socially constructed spatial arrangements. Failure to pay attention to this obvious fact has doomed many a policy initiative.

Caroline Sullivan has summed up the issues well:

Water is highly variable, both on a s patial and temporal scale. The sc ale at which various types of knowledge can be applie d to water m anagement also varies widely. At the socio-econom ic and politi cal levels, the scale relevant to policy making can range from the househo ld to the nation. Governance and in stitutional temporal and spatial preferences are no t a lways compatib le with those of individuals or communities or the m aintenance of ecosystem s. On the tem poral scale there also is lik ely to be a mis- match between the tim e preference rates of politicians, scientists and the pub lic at large, and in gene ral, these are often totally out of keeping with what is relevant at ecological and hydrological scales. On the temporal scale, water m anagement is im portant to … secu re adequate storage to ensure access to water when it is needed. Temporal variability of resources is more difficult to deal with th an spatial v ariability, subject as it is to higher levels of uncertainty. In term s of wa ter quality, it is important to recognize that there is major spatial and tem poral va riation in the scale of im pacts of both point and diffuse sources of pollution. These variab le impacts have im plications both at various ecological scales and also at the human scale.36

Hooper in Figure ? illustrates the various dimensions of scale further. Another dimension of the physical or spatial setting for many of these issues is the broad distinction “Built Environment vs Natural Environment” such that it can be said that this or that cluster of problems is to do with the built rather than the natural environment. But even this distinction, although helpful, can also often be misleading.

36Caroline Sullivan and Jeremy Meigher, “Integration of the bio-physical and social sciences using an indicator approach: Addressing water problems at different scales” Water Resources Management 21(2007 111-112


Figure 1.9 Scale issues Surface Water governance37

Time Figure 1.10 Scale issues in Groundwater governance38

Looking at time in more detail, key considerations include: Persistence – how persistent is the

issue? Reversibility – can the situation be

reversed and to what extent? Cumulative effects – is the issue

cumulative as opposed to a once-off situation?

Is the issue due to past, current or future decisions?

Is addressing the problem a genuine emergency or urgent but not an emergency – is there time for careful deliberation on the issue?

Time is a major factor in water policy and is a key dimension to sound IWRM.

37 Source: Bruce Hooper, Basin Governance Concept Note (2007) copy with Author. Full reference to be provided by B Hooper 38 Jarvis, T. 2006. Transboundary Groundwater: Geopolitical Consequences, Commons Sense, and the Law of the Hidden Sea. Oregon State University, Ph.D. Dissertation, 47.




Table ? An overview of mixed time and scale issues in IWRM39 Climate scales intra-seasonal, inter-seasonal and decadal (re. climate change) time frames River and aquifer flow scales

Surface water aspects include: high flow/drought “cycles” related to ENSO at multiple year scales

and the inter-seasonal variability associated with that; seasonality and concentration of stream flows within a year; intra-annual variability; forecastability of river flows from near real time, through a lead time of

days and up to a season ahead; flow scales for extremes such as floods;

For groundwater, temporal recharge patterns and water table fluctuations are of importance with some of this related to river flow scales

Aquatic habitat time scales

From a biological perspective aquatic habitat time scales caused or influenced by magnitudes, variabilities, frequencies and durations of river flows (low, high) with flows highly influenced by upstream land use management as well as by in-stream reservoir management

Agricultural time scales

Crops - intra- and inter-seasonal timeframes are important Forestry - inter-seasonal to decadal timeframes are of greater significance

Economic time scales

Longer term - international to national, to regional, local Shorter term - individual rural subsistence household time scales

Political time scales

Essentially stable time scales for government structures vs potentially unstable scales where government itsels is unstable Election based time scales for national to local governance structures

Project investment time scales

Often of the order of 10–20 years

Development level time scales

Wealthy countries tend to have longer term planning horizons vs shorter for poorer countries

39Adapted from Roland E. Schulze, Some foci of integrated water resources management in the “South” which are oft-forgotten by the “North”: A perspective from southern Africa, Water Resources Management (2007) 21:269–294 at 274



THEORETICAL FRAME

Given the highly complicated, muiti/trans-disciiplinary context set out above, it is clearly useful for the study of water governance to proceed within a coherent intellectual or theoretical framework. Accordingly, the discussion of water governance in the context of SD and IWRM in this course of study draws in a structured way from a range of disciplines and intellectual domains. However, the dominant perspectives structuring the discussion come from: ecological economics, geography, public policy, law and environmental management. This segment of Chapter 1 and Chapter 2 take these theoretical or conceptual considerations further.

Ecological economics – Extended Capital Theory Ecological economics (EE) provides the fundamental organising framework for our discussion. Basically EE takes the view that natural resources are capital assets. In effect natural resources are a form of wealth in their own right with the wealth embodied in the resources themselves. Like all other forms of capital assets -natural or otherwise – natural resources as a form of capital provide valuable services and require proper management and investment. From the EE perspective, nature as a form of capital provides an income stream over time and will continue to do so if it is maintained properly much like savings in a bank provide a flow of interest income. As shown in more detail in Chapter 2 this concept of nature as a form of capital is in sharp contrast to the mainstream approach in neo-classical economics (NCE) which more or less views nature as capable of being fully or almost replaced by man-made goods – a way of thinking viewed by ecological economists as techno-optimism and an over-reliance on the substitution principle in economics.

EE characterises the different types of capital associated with water and water-associated ecosystems as follows:

Natural capital – nature as a whole and the goods and services it provides to humanity.

Critical Natural Capital – that element of natural capital which is absolutely indispensable for the maintenance of ecosystems and by definition human society. Critical natural capital is not replaceable especially in the sense that there are no substitutes for it – the concept of critical natural capital is discussed in more detail by Chapter 2.

Human capital is the human population and the knowledge and skills that population acquires from formal and informal education associated with the occupational roles of natural resource extraction.

Social capital is the interactive network of humans that occurs within and between natural resource communities. Social capital is key to the flow of other forms of capital, as well as central to the dynamics of governance and resource utilization.

Cultural capital is the behaviors, values, knowledge, and culturally transmitted behavior and ideas of a population, applied to the transformation and utilization of natural resources.



Manufactured capital is long-lasting manufactured goods (in the water context, water supply and distribution infrastructure) that enhance the ability to produce other goods and services.

Goods and Services produced by Water and Water-Associated Eco-systems Water and water-associated ecosystems are a form of natural capital and thus provide society with a range of goods and services.

Water as a Community Resource There is firstly the fact that water is in some ways a community resource essential to all living creatures, its centrality to life, requiring that humans and the species they depend on be given a certain basic minimum to survive. From a community perspective, water has also historically had a cultural-referential aspect with much use made of water’s ability to provide beauty and meaning. There is however, the economistic, productionist and extractive dimension of water. It is this which is more important in practical terms.

Water as a Commodity for Producing Other Commodities From the point of view of being an economically useful commodity and as an input into the production process, water resources (groundwater/surface water as appropriate - renewable, quasi-renewable or non-renewable depending on circumstances ) are:

a traded, tradeable or market oriented commodity central to the production of other commodities (agriculture, industry, hydropower etc.);

a physical resource central to trade and economic circulation – water currents and water space as exploited by navigation;

its chemical attributes (e.g., providing a medium for dissolution of nutrients and salts for productive and extractive uses & the ability to dissolve organic substances thereby supporting environmental protection)

a physical resource central to economic production through water’s role as a moving sink – water is able to transport wastes away from their point of origin whilst and assimilating such waste;

a resource whose biological attributes support the production of other natural resources – eg providing habitat fish populations)

Figures ? -? provide further depth and interconnections in seeking to conceptualise water as a key part of society’s natural capital as well as its critical natural capital.


Figure 1.11 Extract from the Millenium Ecosystems Assessment Reports Series on ecosystem services provided by Wetlands

(NB in this unit – the term water associated ecosystems includes wetlands)40

40 Millenium ecosystem assessment, Water and Wetlands, Synthesis Report, (2005) http://www.maweb.org/documents/document.358.aspx.pdf



Figure 1.12 Water Governance and Policy from an Ecosystems and Natural Capital perspective41

Table 1. 3 Ecosystem Functions, Goods and Services – The Place of Water42

Functions Ecosystem Processes and Components

Goods and Services What role does the hydrological cycle and water generally play? Direct ? indirect? Essential? Critical? Peripheral?

Does good governance strengthen the ability of ecosystems to provide these goods and services?

Should markets, valuations, prices and other economic tools be applied?

Global Ecosystem level regulation Functions 1 Gas regulation

Role of ecosystems in biogeochemical cycles (e.g. CO2/ O2 balance, ozone etc.)

1.1 Protection from disease by the Ozone layer (preventing disease) 1.2 Maintenance of (good) air quality 1.3 Influence on climate

2 Climate regulation

Influence of land cover and biologically mediated processes on climate

Maintenance of a favorable climate (temp., precipitation, etc) for, for example, human habitation, health, cultivation

3 Disturbance prevention

Influence of ecosystem structure on dampening env. disturbances

3.1 Storm protection (e.g. by coral reefs) 3.2 Flood prevention (e.g. by wetlands and forests)

4 Water regulation

Role of land cover in regulating runoff & river discharge

4.1 Drainage and natural irrigation 4.2 Medium for transport

5 Water supply Filtering, retention and storage of

Provision of water for consumptive use (e.g.

41 Rudolf S. de Groot, Matthew A. Wilson, Roelof M.J. Boumans.A typology for the classification, description and valuation of ecosystem functions, goods and services. Ecological Economics 41 (2002) 393–408. 42 Adapted from Rudolf S. de Groot, Matthew A. Wilson, Roelof M.J. Boumans.A typology for the classification, description and valuation of ecosystem functions, goods and services. Ecological Economics 41 (2002) 393–408.


http://www.uvm.edu/giee/publications/deGroot_et_al.pdf






fresh water (e.g. in aquifers)

drinking, irrigation and industrial use)

6 Soil retention Role of vegetation root matrix and soil biota in soil retention

6.1 Maintenance of arable land 6.2 Prevention of damage from erosion/siltation

7 Soil formation

Weathering of rock, accumulation of organic matter

7.1 Maintenance of productivity on arable land 7.2 Maintenance of natural productive soils

8 Nutrient regulation ecosystems

Role of biota in storage and recyling of nutrients (eg.N,P&S)

Maintenance of healthy soils and productive ecosystems

9 Waste treatment

Role of vegetation & biota in removal or breakdown of nutrients & compounds

9.1 Pollution control/detoxification 9.2 Filtering of dust particles 9.3 Abatement of noise pollution

10 Pollination

Role of biota in movement of floral gametes

10.1 Pollination of wild plant species 10.2 Pollination of crops

11 Biological control

Population control through trophic-dynamic relations

11.1 Control of pests and diseases 11.2 Reduction of herbivory (crop damage)

Habitat Functions – Providing habitat (suitable living space) for wild plant and animal species 12 Refugium function

Suitable living space for wild plants and animals

Maintenance of biological & genetic diversity (and thus the basis for most other functions)

13 Nursery Function

Suitable reproduction habitat Maintenance of commercially harvested species

Production Functions – Provision of natural resources 14 Food

Conversion of solar energy into edible plants and animals

14.1 Hunting, gathering of fish, game, fruits, etc. 14.2 Small-scale subsistence farming & aquaculture

15 Raw materials

Conversion of solar energy into biomass for human construction and other uses

15.1 Building & Manufacturing (e.g. lumber, skins) 15.2 Fuel and energy (e.g. fuel wood, organic matter) 15.3 Fodder and fertilizer (e.g. krill, leaves, litter).

16 Genetic resources

Genetic material and evolution in wild plants and animals

16.1 Improve crop resistance to pathogens & pests, 16.2 Other applications (e.g. health care)

17 Medicinal resources

Variety in (bio)chemical substances in, and other medicinal uses of, natural biota

17.1 Drugs and pharmaceuticals 17.2 Chemical models & tools 17.3 Test- and assay organisms

18 Ornamental resources

Variety of biota in natural ecosystems with (potential) ornamental use

Resources for fashion, handicraft, jewelry, pets, worship, decoration & souvenirs (e.g. furs, feathers, ivory, orchids, butterflies, aquarium fish, shells, etc.)


Figure 1.13 Extract from the Millenium Ecosystems Assessment Reports Series on ecosystem services provided by Wetlands43

Critical natural capital - the eco-regulatory aspect of water De Groot and others44 point out that eco-system functions, (including those of water) can be grouped into four primary categories

(1) Regulation functions: this group of functions relates to the capacity of natural and semi-natural ecosystems to regulate essential ecological processes and life support systems through bio-geochemical cycles and other biospheric processes. In addition to maintaining ecosystem (and biosphere) health, these regulation functions provide many services, which have direct and indirect benefits to humans (such as clean air, water and soil, and biological control services). (2) Habitat functions: natural ecosystems provide refuge and reproduction-habitat to wild plants and animals and thereby contribute to the (in situ) conservation of biological and genetic diversity and evolutionary processes. (3) Production functions: Photosynthesis and nutrient uptake by autotrophs converts energy, carbon dioxide, water and nutrients into a wide variety of carbohydrate structures which are then used by secondary producers to create an even larger variety of living biomass. This broad diversity in carbohydrate structures provides many ecosystem goods for human consumption , ranging from food and raw materials to energy resources and genetic material. (4) Information functions: because most of human evolution took place within the context of undomesticated habitat, natural ecosystems provide an essential ‘reference function’ and

43 Millenium ecosystem assessment, Water and Wetlands, Synthesis Report, (2005) http://www.maweb.org/documents/document.358.aspx.pdf 44 Rudolf S. de Groot, Matthew A. Wilson, Roelof M.J. Boumans.A typology for the classification, description and valuation of ecosystem functions, goods and services. Ecological Economics 41 (2002) 393–408.






contribute to the maintenance of human health by providing opportunities for reflection, spiritual enrichment, cognitive development, re-creation and aesthetic experience.

As Table ? shows water resources perform complex and as yet imperfectly understood eco-regulatory functions. With respect to the global climate for example, water is now valued for its global eco-regulatory functions with respect to the interaction between the hydrological cycle and other aspects of climate, the global changes periodically associated with El Nino and La Nina providing the best example of global eco-regulation implicating the oceans as well as freshwater. From the eco-regulatory perspective, the argument is that beyond a certain threshold, disturbance of water and water-associated ecosystems risk disturbing eco-regulatory functions/eco-system services for the planet as a whole. From the conservation/preservation point of view, there is also the increasingly widespread and persuasive argument that options need to be kept open and that the diversity of water and water-associated resources need to be conserved since it is currently unknown what options for use these resources might offer in the future.

The result is that today we have a highly elastic and increasingly complexly elaborated concept of water as a resource. This elastic trend is driven by two factors: (1) the ongoing trend of new scientific discoveries; (2) the more sophisticated theories of what constitutes Sustainable Development and the emphasis within them on the concept of preservation of the globe’s overall regulatory functions as well as options and diversity within that eco-system. It is also posited that given the extent to which we have stressed global as well as local eco-systems what arguably requires attention now is how resilience of eco-systems and eco-regulatory functions occurs at global as well as lower than global scales. Water and its contribution to global as well as other levels of societal and natural resilience therefore takes on a new importance. So also do the ways in which humans as well as nature adapts to significant if not fundamental change. Again Table ? illustrates these issues further.

Clearly water’s valuable attributes go far beyond those aspects serving humans: (1) extractive and purely economic; (2) direct life-support when directly consumed by humans and other animals. The recognition of the critical eco-regulatory functions of water (expressed increasingly by the concept of environmental water) is contributing greatly to the re-shaping of water resources management today.


Environmental/ecological water concept general45 The concept of environmental or ecological water is now widely accepted. Accordingly in many highly industrialised countries as well as a few forward looking poorer countries, it is now recognised that a certain amount of water must be set aside for the environment or for the reproduction of eco-system services. Figure 1.14 – Ecosystem services provided by rivers and river flow levels46

Now that the concepts of natural capital and critical natural capital are more clearly understood, it can be seen that the concept of environmental water is in fact nothing other than a practical example of the concept of critical natural capital. Figure ? above shows the variety of ways in which the flow regime of a river provides critical eco-system regulation services. Whilst the concept of ecological or environmental water is very easily demonstrated or applied in the context of

45Richter, BD. Baumgartner, JV. Wigington, R. Braun, DP. (1997) How much water does a river need? Freshwater Biology 37:231-249; Naiman, RJ. Bunn, SE, Nilsson, C. Petts, GE. Pinay, G. Thompson, LC. (2002) “Legitimizing fluvial systems as users of water: an overview” Environmental Management 30: 455-467; Jewitt, G (2002) Can integrated water resources management sustain the provision of ecosystem goods and services? Physics and Chemistry of the Earth 27 887-895; Tharme, RE. (2003) A global perspective on environmental flow assessment: emerging trends in the development and application of environmental flow methodologies for rivers. River Research Applications 19: 397-441 46 Millenium ecosystem assessment, Water and Wetlands, Synthesis Report, (2005) http://www.maweb.org/documents/document.358.aspx.pdf



surface water, it is less obvious in the case of groundwater. EW aspects of groundwater are discussed more fully by Chapter 4.

The question of value As water resources have become more scarce and the multi-function attributes of water have become better recognised, the demand for better management has increased. A key part of this concern is reflected in the greater attention that is now paid to assessing the value of water and establishing means for its valuation in economic or monetary terms. In conceptual terms as well as in practice, different types of value are associated with the ecological goods and services provided by water and water-associated eco-systems. It is useful to have a systematic framework for understanding how society currently values water. From ecological economics the following concepts can be provided:

Figure 1.15 – Understanding Value and Valuation47

Use value is the benefit received from the resource – it may be active or passive.

Passive use value is the enjoyment one gets from a resource above and beyond any direct use. Passive use losses may arise ifindividuals feel worse off when they learn of the loss of an endangered species, closure of beaches, or other adverse impacts on other natural resources, even if they do not use these resources themselves. People might be willing to pay to prevent such losses, much as they might pay to preserve, say, an historically or culturally significant building or site, even if they never actually visit it.

Total value is the sum of use and passive use value.

47 Source: Bibeault, Water as Natural Capital, Issues, Possibilities and Challenges (copy with author).




Individuals also may have an option value when supply or demand of ecological services and goods is uncertain. Option value may be thought of as what you would pay to keep the opportunity open to later use a site or resource. Option value comes strongly into play where there is evidence to suggest that particular resources are being used unsustainably – they are being used at rates which do not allow regeneration of the resource – applicable principles to ensure that option value is preserved would be using resources in a precautionary way or observing a safe minimum standard approach with the onus of proving that resources should not be managed in a precautionary way resting on the commercial actors associated with that resource.

This question of the value of water is an important theme in this course since debates about governance arrangements are ultimately debates about the value of water to those affected by and contributing to the governance arrangements. There is also the dominant view that stakeholders negatively affected by proposed programmes or projects can be compensated for their losses. Compensation of those who lose as a result of changes requires that valuation be applied to assess the value of what has been lost.

The Role of Markets Value and valuation brings us of course also to the question of markets. Some natural resource services generated by water – the ability to help produce food for example - are exchanged in organized markets. Thus water as embodied in agricultural products is traded in various markets with these markets having a global or transnational character. This linkage between global markets and the use as well as value of water at farm level is particularly clear in Australia where global commodity markets for particular agricultural commodities (grains, rice, sugar) help shape the price that people are prepared to pay for water. However, a central feature of water as part of the economic system is that many of the services it provides are not traded on markets. The eco-regulatory and other services provided (water quality, recreation, scenic amenities and biodiversity) are not bought and sold on markets and as a result are often given inadequate attention in public policy. One of the key questions of water policy and governance arrangements is the precise role to be played by markets in good governance of water.

In the popular meaning, the common good describes a specific “good” that is shared and beneficial for all (or most) members of a given community. This is also how the common good is broadly defined in philosophy, ethics, and political science. However, in economics, the term “common good” is used to refer to a competitive non-excludable good. Water should be considered as a composite good combining elements of public and private goods. Water does possess an important characteristic of a public good, i.e. non-excludability – since the consequences of denying access would be culturally and politically unacceptable to much of mankind. Water ownership and use might be classified as “a good belonging to and managed by a community”. Water should therefore be considered as a “common good” that qualifies for both private and communal



ownership and use. This would allow for a wide range of water management systems that can suit various socio-economic, ecological and ethical conditions. The term 'Institutions' can be used in a number of different ways. In terms of water governance it covers two important elements: (a) organisations or agencies that operate within both the public and private sector; and (b) the mechanisms, rules and customs by which people and organisations interact with each other (i.e. the "rules of the game"). Examples of (a) include: the district department of health; the department of agriculture; the local branch of an NGO; DFID; a religious organisation such as a church or mosque; a workers union; a village committee; an informal organisation based around kinship, such as a clan. Examples of (b) include: the rules for deciding membership of a village committee; the conditions of membership in a co-operative; the norms which shape local customs, lending, cultural events; the contract between a company and its workers; the laws governing the way companies do business with each other; the codes and rules of an organisation or bureaucracy; the allocation of responsibilities in the policymaking process; the rules for enacting legislation; the mechanisms by which legislation is implemented at national and local levels; the procedures for voting in a new government; the rules governing the financing of a water users association; the mechanisms for facilitating good governance and accountability in the public sector; the chain of command within the government health service; religious ceremonies; marriage rules, laws and customs governing land tenure and rights to access for other assets.you should be aware that there is some controversy about the definition of institutions. You will come across situations in which organisations, (a), are excluded from the definition, with the definition being restricted to that provided by (b). However, in a number of domains organisations are often referred to as 'institutions' (e.g. financial institutions, charitable institutions etc). Earlier on,we presented a framework within which SESs could be analysed and managed. Turning specifically to water, we provide below, an application of the concept to the irrigation sub-sector of the water sector. Irrigation it will be recalled is one of the most important of the uses of water in all countries as Chapter 3 fully demonstrates. Applied specifically to the irrigation context, the SES concept allows us to specify the following domains as both fields of action to be analysed and understood but also domains that policy action and initiatives undertaken by water managers might seek to affect


Figure 1.16 – Conceptual Model – Irrigation Social-Ecological System48

48 Meinzen-Dick, in Going beyond Panaceas, Proceedings National Academy of Sciences September 25, 2007 vol. 104 no. 39 15176-15178, http://www.pnas.org/cgi/content/full/104/39/15176





WATER RESOURCE MANAGEMENT – DIFFERENCES BETWEEN DEVELOPED & DEVELOPING COUNTRIES

Table ? Characteristics influencing IWRM in more developed vs lesser developed

countries49 Developed Countries Lesser developed countries

Infrastructure High level of infrastructural development,

with infrastructure generally improving Infrastructure decreases vulnerability to

natural disasters (e.g. floods, drought) High ethos of infrastructure maintenance High quality data and information bases

available, well co-ordinated

Infrastructure often fragile and frequently in a state of retrogression

High vulnerability to natural disasters; heavy damage and high death toll

Low ethos of infrastructure maintenance Data and information bases not always

readily available

Capacity Scientific and administrative skills

abundantly available Expertise developed to local levels Flexibility to adapt to technological

advances

Limited scientific and administrative skills available

Expertise highly centralised Often in survival mode; technological

advances may pass by Economy Economy

Mixed, service driven economics buffered by diversity, highly complex interactions

Economically independent and sustainable Multiple planning options available Take a long term planning perspective Countries wealthy, money available for

planning and IWRM

High dependence on land, i.e. agricultural production; at mercy of vagaries of climate

High dependence on donor aid, NGOs Fewer options available in planning Take a shorter term planning perspective Wealth of countries limited, less scope for

planning and IWRM

Socio-political Population growth low or even negative Generally well informed public with good

appreciation of planning High political empowerment of

stakeholders Decision making decentralized

High population growth rates and demographic pressures on land

Poorer informed public, less appreciation of science/planning

Stakeholders often not empowered, afraid to act or to exert pressure

Decision making centralised Environmental awareness and management

High level of expectation of planning and IWRM

Lower level of expectation and attainment of goals

Desire for aesthetic conservation Need for basics for living

49 Roland E. Schulze, Some foci of integrated water resources management in the “South” which are oft-forgotten by the “North”: A perspective from southern Africa, Water Resources Management (2007) 21:269–294 at 276



Water questions of concern in developing country contexts50 Relationship between water & economic development

What are the economic activities that are impacted by water availability and quality? How to allocate water between sectors in a way that encourages economic development, while also considering poverty reduction and environmental sustainability goals? How to create a macro-economic environment conducive to good water What are the options for ensuring management?

Water and protection of ecosystems

How to allocate water for environmental flows? How to manage water to meet the water timing and quality needs of ecosystems, as well as the quantity? When evaluating trade-offs, how to value the goods and services ecosystems provide? How to reduce pollution?

Water and reduction of poverty/poverty alleviation

How to expand access to water for productive uses—for example through groundwater development, affordable small-scale technologies, and multiple-use supply systems? How to define poor people’s water needs? What types of water development and service provision are most appropriate given users’ needs, their ability to pay, and their capacity to manage and maintain infrastructure? What additional elements are needed for people to take maximum advantage of water for farming, livestock, fisheries, and cottage industries?

Water scarcity & competition for water

How to allocate water strategically? How to improve water efficiency and promote demand-side management? What is the potential for development of non-conventional water resources?

Relationship between water & human health

How can better water development and management reduce water-related diseases such as malaria, schistosomaisis, and diarrhoeal diseases? What are the options for improving sanitation in urban and rural areas? How can water and sanitation be linked to hygiene education programs? What are the options for ensuring sustainable delivery of water and sanitation services for the poorest populations?

Improving the situation of women

How to provide nearby access to good quality water for drinking and domestic use? What sorts of income-generating activities do women engage in that require water? How to ensure enforceable water rights for women? How to anchor women’s issues strategically in water-related issues and programs How to involve women in the dialogue on water and to ensure that their views and needs are heard? How to involve women in decision- making structures?

50 GWP, Catalyzing Change: A handbook for developing integrated water resources management (IWRM) and water efficiency strategies (2004) http://www.un.org/esa/sustdev/csd/csd13/documents/bground_5.pdf



Problems associated with modelling in lesser developed countries, as identified by practitioners and post-graduate students (adapted from Schulze, 2005)51 Government, Governance and Infrastructure Related Problems

Concepts, and the ”legitimacy”, of models and modelling are not yet established in departments of state

It remains difficult to convince the water resources “hierarchy” of the value of modelling

There is still a strong belief of “measure and analyse” among older managers

There is insufficient long-term support for model usage and, indeed, model development from the top, in part because long term water resources development plans are often lacking

“Directional pressure” is exerted by international bodies (e.g. World Bank, IMF) what to pursue with their money (e.g. sustainability instead of building infrastructure)

Moves to prioritise water supply will “leave locals out of the loop” Hydrological decisions are often based on

- politics and political pressures - personal (but subjective) experiences of influential people

Model results therefore often have little influence over policy formulations Modelling is frequently undertaken by donor organisations, using their own

countries’ models and staff The legacy of donors in modelling includes the following:

- donors often leave behind impressive reports and recommendations, but

- the recommendations are not always implemented; - expertise resides, and remains, with the donors; - there is a feeling of “donor dominance”; - they leave behind little, or no, real local capacity to operate their

models Governments often do not support local expertise; they believe “foreigners

are better”! There is often no leadership in technical and conceptual skills in

government departments Frequent changes in government lead to a lack of consistency in planning;

goalposts change and new paradigms are introduced Bureaucracy prevails; long times are taken for authorisation of water

related projects Human Resources Related Problems

There is little interest in modelling Local engineers/hydrologists are in a “comfort zone” with existing

techniques Only few engineers/hydrologists have intimate modelling

experience/expertise because - there is insufficient training in modelling; - there is little back-up for modelling; or - modellers tend to be academics rather than practitioners

There is little teamwork in modelling; it tends to be an “individual pursuit” There is confusion among model users when choices have to be made

which model to apply A “rugged personality” syndrome often exists with the individual “bullying”

personal views on models/modelling Practical Problems

Data problems exist, for example: - lengths of records for model input and/or verification are short and/or

poorly quality controlled




- input data are often housed in different institutions - data are difficult to access - data are often collected for data’s sake, and not for modelling

purposes - each donor brings their own countries’ monitoring equipment

Models developed in developed/donor countries may be - too data demanding - focussing on processes that are not appropriate to the hydroclimates

of LDCs; - too complex for users to interpret results effectively; - not answering the questions on the real on-the-ground problems

Problems of power politics are at play as to who should disseminate model output/information to potential users: - politicians? -water resources planners? - educators? -regional planners?

The use of “old” models prevails because of institutional inertia There is a lack of facilities (hardware, software, laboratories, libraries)



WATER AND POVERTY52

Millenium Development Goals

52 AhmadQK(2003)Towardspovertyalleviation:thewatersectorperspectives.IntJWaterResourDev 19(2):263-277; MolleF,MollingaP(2003)Waterpovertyindicators.Conceptualproblemsandpolicyissues.WaterPolicy 5:529-544; CullisJ,OíReganDP(2004)Targetingthewater poorthroughwaterpovertymapping.WaterPolicy6:397-411; SatterthwaiteD(2003)ThelinksbetweenpovertyandtheenvironmentinurbanareasofAfrica,Asia,and LatinAmerica.AnnAmAcadPolSocSci590:73-92; SoussanJ(2004)WaterandPoverty.FightingPovertythroughWaterManagement.ADB.Manila; SullivanCA(2002)CalculatingaWaterPovertyIndex.WorldDev30:1195-1210



Millennium Development Goal by 2015

Contribution of Improved Water Resources Management and Access to Water Supply and Sanitation

Poverty To halve the proportion of the world’s people whose income is less than $1/ day

Water is a factor of production in agriculture, industry and other economic activities

Investments in water infrastructure/services as a catalyst for local/regional development

Reduced vulnerability to water-related hazards reduces risks in investments and production

Reduced ecosystems degradation makes livelihood systems of the poor more secure

Improved health increases productive capacities, reduces burden on those who care for the sick

Hunger To halve the proportion of the world’s people who suffer from hunger

Water is a direct input to irrigation for expanded grain production Reliable water for subsistence agriculture, home gardens, livestock,

tree crops Sustainable production of fish, tree crops and other foods gathered

in common property resources (also affects poverty when such goods are sold for income)

Reduced urban hunger due to cheaper food prices Healthy people are better able to absorb the nutrients in food than

those suffering from water-related diseases, particularly worms Primary Education To ensure that children everywhere complete a full course of primary schooling

Improved school attendance from improved health and reduced water-carrying burden, especially for girls

Having separate sanitation facilities for girls and boys in schools increases girls’ school attendance

Gender Equality To ensure girls and boys have equal access to primary and secondary education

Community-based organisations for water management improve social capital of women

Reduced time, health, and care-giving burdens from improved services give women more time for productive endeavours, adult education, empowerment activities, leisure

Water sources and sanitation facilities closer to home put women and girls less risk for sexual harassment and assault while gathering water and searching for privacy

Higher rates of child survival are a precursor to the demographic transition toward lower fertility rates; having fewer children reduces women’s reproductive responsibilities

Child Mortality To reduce by two-thirds the death rate for children under five

Improved quantities and quality of domestic water and sanitation reduce main morbidity and mortality factor for young children

Improved nutrition and food security reduces susceptibility to diseases

Maternal Mortality To reduce by three-fourths the rate of maternal mortality

Improved health and reduced labour burdens from water portage reduce mortality risks

Improved health and nutrition reduce susceptibility to anaemia and other conditions that affect maternal mortality

Sufficient quantities of clean water for washing pre-and-post birth cut down on life-threatening infections

Higher rates of child survival are a precursor to the demographic transition toward lower fertility rates, and fewer pregnancies per woman reduce maternal mortality

Major Disease To halve, halt and begun to reverse the spread of HIV, malaria, other major diseases

Better water management reduces mosquito habitats Better water management reduces incidence of a range of other

water-borne diseases Improved health and nutrition reduce susceptibility to/severity of

HIV/AIDS and other major diseases Environmental sustainability To stop the unsustainable exploitation of natural resources and to halve the proportion of people who are unable to reach or afford safe drinking water

Improved water management, including pollution control and water conservation is a key factor in maintaining ecosystems integrity

Development of integrated management within river basins creates situation where sustainable ecosystems management is possible and upstream-downstream effects are mitigated

Biodiversity conservation, combating desertification furthered by sound water management



Water and Poverty Alleviation Projects Agricultural A watershed or catchment is an area from which all water drains to a common point, making it an attractive unit for technical efforts to harness scarce water resources and conserve soil for agricultural production and natural resource conservation. Watershed management is seen as a way to raise rainfed agricultural production, conserve natural resources, and reduce poverty in the world’s semi-arid tropical regions. These areas, found mainly in South Asia and sub-Saharan Africa, are characterized by low agricultural productivity, severe natural resource degradation, and high levels of poverty. They were little affected by the Green Revolution that transformed agriculture in more favorable areas. In the semi-arid tropics, watershed management projects aim to capture water during rainy periods for subsequent use in dry periods (Farrington, Turton, & James, 1999). These projects, which often operate at the level of a microwatershed within a single village, focus on conserving soil moisture for rainfed agriculture, recharging aquifers to augment groundwater irrigation, and capturing surface runoff water in small ponds. Where water harvesting is the main objective, the projects involve construction of small check dams in drainage lines. To be sustainable, water harvesting requires protecting the upper reaches against erosion that would deposit silt behind the structures, reducing their water-holding capacity. Accordingly, productivity and conservation objectives are highly complementary. Watershed projects are often complicated by the fact that multiple people use upper and lower reaches for multiple purposes. This poses a particular challenge where alternative resource uses are mutually incompatible and any intervention will impair at least one potential use. Upper watersheds often contain a large proportion of uncultivated common land that is often denuded. In this case protecting against erosion requires revegetating the landscape, which in turn means placing limits on grazing and firewood collection (Farrington et al., 1999). This imposes costs on poor, often landless people who rely on these lands the most, particularly women who use the commons for a variety of purposes. Rainfed crop lands on sloping upper watershed areas also are treated with soil conservation measures. Water harvesting benefits, meanwhile, accrue disproportionately downstream to the wealthiest farmers who typically own most of the irrigable land. Under these conditions, watershed projects ask the poor people who use upper watersheds to provide an environmental service to their wealthier neighbors in lower watersheds. Given the uneven distribution of benefits, successful watershed development requires either (a) developing institutional mechanisms to ensure that all parties benefit, or (b) forcing users of upstream areas to restrict resource use and provide the environmental service without compensation. Projects are unlikely to result in conservation and productivity benefits where agreements cannot be reached or downstream users cannot impose their will on upstream users.



THE TRANSFERABILITY PROBLEM

One of the most difficult questions facing the IWRM world is the question of whether it is possible to easily transfer 'ready-made' Integrated River Basin Management solutions from Australia, North America and Europe to developing countries. Whilst ease of transfer would be attractive to many donors and lead to much more rapid improvement in developing country conditions, recent work by a number of authors53 suggest that transfer is not that easy and that effective solutions need to be tailored to fit the realities of developing world basins. Transferability of Australian models – specifically the Murray-Darling model – has been investigated from a variety of perspectives n recent years, with analysts looking at transferability to China, Vietnam and the Solomon Islands.

Vietnam-Australia54 Malano, Bryant and Turral have examined whether the Australian IRBM model can be successfully transferred to Vietnam. Their investigation suggests that Vietnam has a long way to go before it is ready for the Murray-Darling prescription. However, the new water law of Vietnam already contains provisions to adopt an integrated river basin approach. And the World Bank and the Asian Development Bank have apparently held up funding to Vietnam until it forms the National Water Council to implement it. But the Ministry of Agriculture and Rural Development, which is at present in charge of water, does not relish the responsibility of IRBM. The progress in stakeholder participation, another Murray-Darling prescription, has been slow. Farmers view irrigation provision as a government responsibility; even so, irrigation charges in Vietnam are high by Asian standards. Yet, presumably under donor pressure, the government tried to eliminate irrigation subsidies. This was followed by massive popular unrest in 1998, whereupon, the government had to restore the subsidies.researchers in recent years.

China-Australia55

53Bandaragoda, D. J. 2006. Institutional adaptation for integrated water resources management: An effective strategy for managing Asian river basins. Working Paper 107. International Water Management Institute(IWMI). 44p; Bandaragoda, D. J. 2006. Limits to donor-driven water sector reforms: insights and evidences from Pakistan and Sri Lanka. In Water Policy, Volume 8, Number 1, February 2006; Shah, Tushaar; Makin, Ian; and Sakthivadivel, R. 2001. “Limits to leapfrogging: Issues in transposing successful river basin management institutions in the developing world”, in Charles L. Abernethy (ed.) Intersectoral management of river basins, 2001. Colombo, Sri Lanka: International Water Management Institute; Turral, H. 1998. Hydro Logic? Reform in water resources management in developed countries with major agricultural water use: lessons for developing nations. London, UK: Overseas Development Institute. 54Malano, Hector; Michael Bryant; and H Turral. 1999. Management of water resources: Can Australian experiences be transferred to Vietnam? Water International, vol. 24, no 4, pp 307 – 315; See for a summary of this study, IWMI : The Challenges of Integrated River Basin Management, http://www.iwmi.cgiar.org/Publications/Water_Policy_Briefs/PDF/wpb03.pdf 55Hu Xiandeng, 1999, Integrated catchment management in China: Application of the Australia experience. Water International, vol. 24, no 4, pp 323 – 328; See for a summary of this study, IWMI,



Hu explored the applicability of Murray-Darling experience in the Chinese context in the late 199s. He came to the conclusion that the Australian ICM model cannot be directly used in China because of: (1) the difficulty of coordinating authorities at different levels, (2) unclear ownership of resources, (3) small farming scales, and (4) poor education of resources users. He concluded however that the ICM/IWRM approach could be implemented provided the following pre-conditions were met in the Chinese context: by: (1) establishment of a clear ownership system of resources (land, water, and vegetation), (2) extension of the function of existing catchment management committees, (3) establishment of strong statutory frameworks; (4) establishment of monitoring and audit systems for resource use and conservation. His conclusion was that detailed implementation approaches for China need to be further studied.

Solomon Islands-Australia56 Hunt explored whether Australian success in enforcing the ‘user pays’ principle could be transferred to the Solomon Islands? He concluded that such transfer “is not viable” due to huge differences in political structures, national priorities, living standards, cultural traits, technological development, literacy levels, financial and infrastructural growth, and change-management competency. His conclusion was that there was a lack “contextual fit” between the policy development context (Australia) and the policy application environment (the Solomons).

56Hunt, Chris. 1999. Transposing of water policies from developed to developing countries: The case of user pays. Water International, vol. 24, no 4, pp 293 – 306; See for a summary of this study, IWMI, The Challenges of Integrated River Basin Management, http://www.iwmi.cgiar.org/Publications/Water_Policy_Briefs/PDF/wpb03.pdf



CHAPTER SUMMARY

This Chapter has introduced a comprehensive framework for analysing and understanding the many-sided phenomenon called water governance. We have seen that governance consists of formal institutions (for example, law, policy and government bodies) as well as informal institutions (activity by nongovernmental actors, cultural norms and values, religion, caste etc.). The formal and informal institutions together influence operational water management and through this the performance of the water sector. Water managers can benefit from analytical approaches which help explain, structure as well as anticipate the activity of individuals and institutions. It has been demonstrated that it is also useful to have a a sound basic technical understanding of the infrastructure and artefacts that these regimes are built around.

REVIEW QUESTIONS

1. How is BSWRM managed in your c ountry. Can you mane the

organisations involved and the kinds of issues that they typically deal with? How have you come to be informed about BSWRM in your country – news iterms, personal involvement etc. ?

2. List 5 things which could be changed to advance governance 3. List 5 impediments to change 4. List 3 areas of recent improvement 5. What do you think of the concepts: natural capital; critical natural capital &

ecosystems regulation – do they make sense ? are they practical and realistic concepts

6. Which factors and/or principles are essential for sustainable water and sanitation services

7. Which factors and/or principles are essential for good water governance? 8. Does the material presented here fit match your PWS experiences in your

home country, Australia, anywhere else/



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Frank A. Ward, (2007) ‘Decision support for water policy: a review of economic concepts and tools’ Water Policy 9: 1–31. D. Whittington, (2003) ‘Municipal water pricing and tariff design: a reform agenda for South Asia’ Water Policy 5: 61–76. Global Water Partnerhsip publications (all available online from http://www.gwpforum.org/servlet/PSP?chStartupName=_library

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practical steps for practitioner 4. Taking an integrated approach to improving water efficiency 5. Monitoring and evaluation indicators for IWRM strategies and plans 6. Tools for keeping IWRM strategic planning on track 7. IWRM and Water Efficiency Plans by 2005: Why, What and Ho 8. Water Management and Eco Systems: Living with Chan 9. Effective Water Governance 10. Risk and Integrated Water Management 11. Integrated Water Managemen 12. The Dublin Principle 13. Water as a Social and Economic Good: How to Put the Principle into Practic 14. Regulation and Private Participation in the Water and Sanitation Sector 15. Global Water Partnership, (2003). Toolbox. Integrated Water Resources Management.

http://www.gwpforum.org/servlet/PSP?chStartupName=_library

WATER GOVERNANCE – CONCEPTUAL UNDERPINNINGS AND DISCIPLINES

WATER GOVERNANCE CONCEPTUAL UNDERPINNINGS

TOPIC

2 & DISCIPLINES

INTRODUCTION TO THE TOPIC Water governance refers to the political, administrative, economic and social systems that are in place to manage water resources and services. Today, WG is expected to take place in accordance with two distinct but inter-related concepts – SD and IWRM. In that sense WG is a subset of SD. This is the approach used in this Unit and set out more fully in the discussion below. Although it has its roots deep in the field of the ecological sciences, the concept of Sustainable Development first came to public attention in the Bruntland Report put out in 1987 by the World Commission on Environment and Development as a preparatory document for UNCED, the Chaptered Nations Conference on Environment and Development, the Rio Summit held in Rio in 1992. The Bruntland Report defined sustainable development as development :

“meeting the requirements of present generations without compromising the ability of future generations to meet their own needs”

The IWRM concept also developed its fully fledged form at around the same time. WG as a subset of IWRM is discussed more fully by Topic 3. The goal of sustainable use and management of resources is to preserve, protect and enhance the environment for humans as well as for other species. Sustainable Development thinking is concerned with ensuring that the rate of taking from the environment does not exceed the ability of the environment to replenish itself. In that sense management to achieve Sustainable Development is a new way of planning for and reacting to ecological change.



At the end of this Topic, the reader will be able to:

Explain core concepts and principles underpinning water resources and governance policy as a subset of sustainable development policy

Appreciate the diversity of disciplinary perspectives underpinning water resources policy as a subset of sustainable development policy

More fully appreciate the diversity of discliplinary perspectives that must be taken into account by water resource management in the era of sustainable development

More fully appreciate the pollution control and environmental management aspects of water governance and IWRM policy.

THE ECOLOGICAL CRISIS Using water as the focal point, Topic 1 established that nature is important to human society in the following ways:

It is a source of raw materials for social needs, with water serving as a commodity for the production of other commodities

It is a sink into which society pours its wastes and polluting products It provides social meaning and identity (religion, historic heritage,

culture, recreation etc.) certain parts of nature are critical or essential for all other life on the

planet

The current environmental crisis is because this four-part relationship between people and nature is now under severe threat. The principal reason is that human economic activity takes away too much from nature without replacing adequately what is taken out – in short human use of nature’s resources is not sustainable.



ORIGINS OF THE SUSTAINABLE DEVELOPMENT CONCEPT In response to the ongoing ecological crisis the principal official goal of resource management around the world is now to strive towards sustainable development /management of natural and environmental resources. This was agreed by all Heads of State from around the world in Agenda 21, the official global blueprint for improving the world’s environment agreed in Rio at the Chaptered Nations Conference on Environment and Development in 1992. The concept of Sustainable Development itself was first stated in globally applicable terms in the Bruntland Report put out in 1987 by the World Commission on Environment and Development as a precursor to UNCED, the UN Conference on Environment and Development, - the Rio Summit. The Bruntland Report defined sustainable development as development “meeting the requirements of present generations without compromising the ability of future generations to meet their own needs”

THE DIFFERENT MEANINGS OF THE CONCEPT OF SUSTAINABLE DEVELOPMENT From the broad Bruntland definition there have been many other definitions each putting an emphasis on different issues and aspects as the extracts below show:

Sustainable Development is human intervention that meets the needs and aspirations of the current generation without compromising the ability to meet those of future generations.

Sustainable Development is a process in which development does not deplete the earth's resources or disturb fragile ecosystems

Sustainable development implies economic growth together with the protection of environmental quality, each reinforcing the other. The essence of this form of development is a stable relationship between human activities and the natural world, which does not diminish the prospects for future generations to enjoy a quality of life at least as good as that of the preceding generation. Many observers believe that participatory democracy, undominated by vested interests, is a prerequisite for achieving sustainable development

Sustainability: A state or process that can be maintained indefinitely. The principles of sustainability integrate three closely interlined elements—the environment, the economy and the social system—into a system that can be maintained in a healthy state indefinitely. In terms of extracting a resource, a more precise use is to refer to sustainable extraction which is a method of harvesting or using a resource so that the resource is not depleted or permanently damaged;

Development that meets the needs and aspirations of the current generation without compromising the ability to meet those of future generations;



Industrial development that does not detract from the potential of the natural environment to provide benefits to future generations;

Sustainable development is a concept which requires the pursuit of three goals contextually: (i) ecological integrity, specifically referring to genetic, species and ecosystem diversity, resilience and balance; (ii) economic efficiency, basically implying the replacement of the conventional concept of economic growth with that of ecologically responsible and responsive human development; (iii) social equity, essentially meaning safeguarding of cultural values as well as the preserving of rights of future generations.

It is this last definition which serves as the backdrop for later discussion throughout this course of study.

SUSTAINABLE DEVELOPMENT CONCEPT 1: THE ENVIRONMENT IS CENTRAL TO ALL ACTIVITY The most important consequence of the concept of sustainable development is that environmental issues are now viewed as central to the activity of all organisations. It would be difficult anywhere in the world today to find an organisation in either the public or private sector which will state publicly that it does not care about the environment and its impacts on the environment.

SUSTAINABLE DEVELOPMENT CONCEPT 2: NATURE AS A TYPE OF CAPITAL Sustainable development thinking basically takes the view that natural resources are capital assets. In effect the environment is a form of wealth, with the wealth embodied in the resources themselves. Like all other forms of capital assets -natural or otherwise – they provide valuable services and require proper management and investment. They must also be used at a sustainable rate – like money, nature as a capital asset, should not be “blown all at once”. In the ecological economics view, nature as a form of capital provides an income stream over time if maintained properly much like savings in a bank provides a flow of interest income. This concept of nature as a form of capital is in sharp contrast to the mainstream approach in neo-classical economics which more or less views nature as capable of being fully or almost replaced by man-made goods – a way of thinking viewed by ecological economists as techno-optimism and an over-reliance on substitution principle in economics. Sustainable Development thinking would characterise the different types of capital associated with nature as follows:

Natural Capital or biophysical – this concept describes those natural resources that directly or indirectly generate flows of goods and services used by humans. The value of these natural resources is derived from the dynamic between human action and the natural environment.



Critical Natural Capital - That portion of natural capital (KN) which, if converted to human capital results in irreversible ecological decline or that portion of natural capital which, if destroyed or altered, cannot be replaced or restored or a subset of natural resources, that once used by humans can neither adequately self-regenerate not be properly recreated by humans – eg. the Amazon rainforest or the ozone layer and certainly the oceans

Human capital is the human population and the knowledge and skills it acquires from formal and informal education associated with the occupational roles of natural resource extraction.

Social capital is the interactive network of humans that occurs within and between natural resource commChapteries. Social capital is key to the flow of other forms of capital, as well as central to the dynamics of governance and resource utilization.

Cultural capital is the behaviors, values, knowledge, and culturally transmitted behavior and ideas of a population, applied to the transformation and utilization of natural resources.

Manufactured capital is long-lasting manufactured goods (e.g., buildings, machines, tools, fishing vessels and gear) that enhance the ability to produce other goods and services.

SUSTAINABLE DEVELOPMENT CONCEPT 3: BROAD PRINCIPLES CAN BE USED TO IMPLEMENT THE SUSTAINABILITY CONCEPT

Principles Of Sustainable Development Implementing Sustainable Development is felt to be achievable by paying attention to and implementing the following broad principles in a variety of practical ways:

The principle of conservation of biological diversity and ecological integrity The principle of careful decision-making The Precautionary principle The principle of public participation The principle of public access to information The principle of inter-generational equity The principle of improved valuation, pricing and incentive mechanisms



The Precautionary principle Principle 15 of the Rio Declaration states:

In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.

This principle has proved to be the most controversial since in practice giving effect to it in law and/or policy has constrained the actions of economic developers. Whereas previously, if the science on an issue was unclear, it was assumed to be satisfactory to proceed, the Precautionary principle requires caution in the face of uncertain or incomplete scientific information and for decision-makers and private entrepreneurs to err on the side of caution. Particularly in situations where it appears that irreversibility will occur or there are very few substitutes for a resource, this principle urges caution and restraint so as to preserve options for future generations. Investment in the science to promote certainty would also be at the cost of the entrepreneur on the basis of the user pays and polluter pays principle where the Precautionary principle suggests caution. Applied to water, this principle can foreseeable have highly protective impacts. A widely accepted definition of the Precautionary principle is that:

Where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation. In the application of the precautionary principle, public and private decisions should be guided by: (i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment; and (ii) an assessment of the risk-weighted consequences of various options.

Particularly in the case of GW and also with management of salinity, the precautionary principle has the potential for positive gains if applied appropriately by decision-makers. The converse of the non-application of the precautionary principle, where the circumstances demand it, can be an irreversible deterioration in the environment, loss of ecosystems and biodiversity and destruction of economic opportunity. The precautionary principle is not absolute or extreme. It does not prohibit an activity until the science is clear. It does, however, change the underlying presumption from freedom of exploitation to one of conservation. The concept of ecological or environmental water is clearly driven by this principle.

The Ecological Integrity Principle The conservation of biological diversity and ecological integrity should be a fundamental consideration in decision making with the practical consequence that management and legislative options which support ecological integrity are to be preferred to those that do not. The promotion of ecological integrity as a basis for



public policy and decision making stems from scientists and others concerned about the threats of human activities to ecosystems and species, and from philosophers attempting to derive a more suitable ethic to guide the relationships between humans and the non-human environment. The concept of ecological or environmental water is clearly driven by this principle.

The Principle of intergenerational equity This principles means that the present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations. In practical terms, this principle requires explicit and demonstrated consideration of the long term impacts of policy proposals especially those with wide impact or those which affect bio-diversity or implicate irreversibility. The concept of ecological or environmental water is clearly driven by this principle.

The Principle of improved valuation, pricing and incentive mechanisms This principle can be said to consist of the following elements and has highly technical elements which are discussed particularly by Topics 9 and 10. The key elements of the principle are that:

(1) Environmental factors should be included in the valuation of assets and services (2) Persons who generate pollution and waste should bear the cost of containment, avoidance and abatement. (3) Users of goods and services should pay prices based on the full life cycle costs of providing the goods and services, including costs relating to the use of natural resources and the ultimate disposal of wastes. (4) Established environmental goals should be pursued in the most cost effective way by establishing incentive structures, including market mechanisms, which enable persons best placed to maximise benefits or minimise costs to develop solutions and responses to environmental problems.

SUSTAINABLE DEVELOPMENT CONCEPT 4: BROAD RULES FOR USING RESOURCES SUSTAINABLY MUST BE FOUND AND ADOPTED Sustainable development thinking especially the kinds of concepts that ecological economists have been doing suggest the following as a set of general rule to give effect to the concept of sustainability:

For a renewable resource – soil, water, forest, fish – the sustainable rate of use should

be no greater than the rate of regeneration



For a non-renewable resource – fossil fuel, high grade mineral ore, fossilized ground water – the sustainable rate of use should be no greater than the rate at which a renewable resource used sustainably can be substituted for it

For a pollutant the sustainable rate of emission should be no greater than the rate at which that pollutant can be recycled, absorbed or rendered harmless by the environment

SUSTAINABLE DEVELOPMENT CONCEPT 5: ALL ORGANISATONS AND GROUPS MUST MEASURE AND REPORT PUBLICLY ON THEIR USE OF AND IMPACT ON RESOURCES If society is to be able to use resources sustainably then it is also important to be able to measure all relevant details about the use of the earth’s resources or natural capital. This has generated a whole new area of thinking and organisational activity concerned with how to properly measure resource use and also report accurately and usefully on resource use so that unsustainable resource use can be addressed. Topics 9 and 10 address aspects of the reporting requirement as does the accountability /transparency and access to information concept within the political dimension of the concept of good governance. Topic 3 addresses the accountability aspects in more detail.

SUSTAINABLE DEVELOPMENT CONCEPT 6

A broad partnership across all the sectors of society required to achieve Sustainable development as shown by the diagram below:

Figure 2.6 Broad partnerships underpin sustainable development



THEORETICAL PERSPECTIVES ON SUSTAINABLE DEVELOPMENT Decision-making in water governance as a subset of sustainable development policy requires mastery of three broad areas of knowledge: the physical sciences pertaining to ecosystems or environmental phenomena; the relevant disciplines in the social sciences, such as economics, public policy and legal analysis; and the methods required for using knowledge from the physical sciences, biological sciences and the social sciences to arrive at the decision. That is why a walk through any good library rapidly reveals that books on sustainable development policy or better still sustainable development policy are to be found in different sections and that the language, charts, graphs and illustrations used in each cluster of books are markedly different. There are the books on sustainable development policy clearly written by economists, which are full of graphs with not a single picture of a tree or an endangered species in sight and the books written by natural scientists which are full of flow charts illustrating substance flows and movements of wastes in the environment or in the factory. Books written by geographers probably sit somewhere in between.

The diversity described above reflects the fact that different discourses and forms of expert knowledge are brought to bear on environmental problems with each strand seeing itself as undertaking sustainable development policy.

THE DISCOURSES OF SUSTAINABLE DEVELOPMENT POLICY One way of conceptualizing these differences and managing the complexity arising from these multiple perspectives is to understand that the physical environment is generally looked at through three different sets of glasses - each of the three perspectives evaluates and assigns values to the physical environment in different ways, although in reality the perspectives often overlap. Sustainable development policy and the academic thinking behind it are driven by these three perspectives in different ways. The perspectives are:

1. The scientific-technical or natural sciences perspective 2. The calculative or economic perspective divisible into ecological

economics and environmental /resource economics 3. The social-psychological perspective – addresses how people

perceive and relate to their environment – it has strong and weak forms

Using a scenic lake region high up in the mountains with a clear-running river flowing out of the lake– as an example, it can be seen that from the economic



perspective, such an area would be valued according to the price of the land and other factors that can be given a monetary value. Whilst in the past, such an area might easily be open to construction of a ski resort, today, such a region may be subject to all sorts of protections and limitations due to the fact that the lake is the source of water which goes elsewhere. This aspect now has an economic value as Module 1 has shown – existence, bequest – a number of other possible values. From the ecological perspective, the same area would be viewed as a unique water habitat. Ecologists would be interested in the eco-system, whilst economists would be interested in the rate of return on investment and the opportunities foregone (opportunity cost) through opening it up to development completely, partially or prohibiting development and construction all together. If the government is likely to make the buyer a grant of money if they maintain most of the lake in its current state, the economist would view this government policy as a good example of the positive use of an economic instrument provided the valuations attached to this process are robust. Persons not interested in this environmental protection burden being attached to their use of the lake would clearly go elsewhere. The social-psychological perspective would have its say as well, focusing on the human appreciation of the landscape/waterscape as the most important issue. The key issue from the point of view of the interaction between humans and nature is that all these systems of knowledge seek to provide information – information either about the environment itself or about humans in relation to the environment. Ideally they should be integrated and integrable – in practice they are currently not linked or as well integrated as they could be.

SUPPORTING WATER GOVERNANCE, IWRM AND SUSTAINABLE DEVELOPMENT WITH KNOWLEDGE - THE DIVISION OF LABOUR The division of labour is as follows. Expert knowledge from the natural sciences (eg hydrology, biology, ecology, eco-geography, chemistry, bio-chemistry) provides us with information on ecosystem conditions, functions and human impacts on these conditions and functions. Expert knowledge from the natural sciences in association with some of the social sciences also provides us with information on technologies and good practices in a given industry or sector of human activity that reduces impacts on the environment (eg organizational studies and management studies on innovation in environmental practice in a firm). Expert knowledge from the social sciences provides information on appropriate policy instruments, institutions and behaviours. These expert knowledges have more or less crystallised into conceptually different although



inter-linked approaches to securing information about the environment. From the point of view of mainstream sustainable development policy for water natural scientists undertake scientific-technical assessments (STA) and different schools of social science undertake socio-economic assessments (SEA), depending on which aspect of the society-nature interaction policy-makers wish to be informed about or are required by law to consider in decision-making. There is also the “poor cousin” of these mainstream knowledges – indigenous or local knowledge. The difficulty is where to place it in relation to its possible contributions to sustainable development policy.

THE NATURAL SCIENCES AND WATER GOVERNANCE AS A BRANCH OF SUSTAINABLE DEVELOPMENT AND IWRM

Scientific-technical assessments evaluates water issues in terms of looking at the actual state of things, focusing on issues such as ecosystem robustness, energy flows, species diversity, chemical concentrations, salinity, turbidity. Analysis of such issues provides the basis on which socio-economic and policy aspects are addressed. The natural sciences have a complex relationship to the more political aspects of public policy. It has been suggested that science plays at least the following roles in policy-making in water as well as other domains:

Table 2. 5 Relationship of natural sciences to water governance

Role of science Example Science drives political action in situations of urgency

Threats to the ecosystem health of the Murray Darling River system

Science is used as a justification for delay More research is needed before a policy response can be made

Science is used to comprehensively re-organise a sector or an industry

The use of science to support the National Water Initiative in Australia



THE SOCIAL SCIENCES AND WATER GOVERNANCE A wide range of social science disciplines all lay claim to a place in water governance. The principal disciplines that claim a place are: Table 2. 6 The Social sciences and water governance Social Science Category Disciplines and sub-fields Calculative Sciences Neo-classical economics

Ecological economics Statistics

Earth Sciences Geography, Hydrology & Geology Governance Disciplines Political science

Public policy Public administration International relations/international politics

Law Regulation Water law Environmental law International law

Management Sciences Organisational studies Quality management – ISO 9000 and ISO 14000 Strategic management – benchmarking performance and strategic environmental management Auditing – environmental auditing Accounting – environmental accounting and reporting

The next few pages provide a broad and, of necessity, oversimplified review of the approaches and perspectives taken by these different social-science disciplines to the field of activity called water governance.

THE CALCULATIVE SCIENCES This field of the social sciences is concerned with measuring and calculating the economic aspects, effects and impacts of our activity. It is concerned principally with the costs and benefits of choices in the context of scarce resources. Neo-classical economics is the oldest calculative science as far as water policy is concerned with early work undertaken as far back as the 1930s. Ecological economics is relatively new and so also is environmental statistics (a sub-field of statistics in general). Both have really only emerged as fields in their own right since the 1980s. In this Unit an outline account is given of both neo-classical economics and ecological economics. A good guide to information about environmental statistics can be found at http://www.wri.org/statistics/.

Neo-classical economics and sustainable development policy



Neo-classical economists have written the most books and journal articles about water policy and water governance and are currently the dominant influence on policy-makers in terms of designing individual instruments and the design, implementation and review of relatively simple policies. Neo-classical economists write across the whole field of water issues. On closer examination though it can be seen that the bulk of the policy work done by this discipline deals with the possibility of using prices to solve a range of relatively simple problems. Topics 9 and 10 explore this aspect in more detail as do the readings accompanying these Topics. Various terms are used to describe this dominant approach to water policy and water governance - it is referred to as orthodox economics, neo-classical economics or main-stream economics. In the orthodox or neo-classical approach, water problems are viewed as essentially resolvable by the application of supply measures as well as demand measures. From the point of view of mainstream economics, any change in human wellbeing is an economic effect and is measured in terms of “social costs and benefits”. These effects are made up of “external” costs and benefits (externalities) as well as “private” costs and benefits. Pollution is a typical external cost item as are virtually all environmental effects. An external cost exists when two conditions prevail:

1. An activity by one agent (say a firm discharging effluent to a river) causes a loss of wellbeing (welfare) to another agent (say a recreational fisher downstream of the discharging plant) since any decline in the water quality causes a loss in the ability of the recreational fisher to fish – a decline in their amenity values in relation to the river

2. Secondly, the loss of wellbeing incurred by the pollution sufferer remains uncompensated.

The policy response is to seek to correct this failure with a market or market like solution. The task of sustainable development policy is to specify precisely the correct price to overcome the market failure. Sometimes this correct price is known as a Pigovian tax. This is because a major theoretician of neo-classical economics Pigou proposed in a seminal publication The Economics of Welfare (1938) that environmental problems caused by firms could be corrected by a tax on such firms to force them to internalise their activity or pay the tax which would correspond to the external effects of their policies. In the example above the firm would be made to pay a tax which represents the calculated cost of its effluent discharge. (NB. The process of calculating the cost itself is a complicated exercise which may be precise or approximate, but it can be undertaken with some degree of accuracy). Thus, in orthodox policy analysis, environmental problems are seen in most cases as pricing problems. The existence of incorrect or inefficient prices (in the



selected example the price of putting effluent into the river is zero or close to zero) means that a wide range of distortions may occur throughout the economy with negative implications for economic welfare, productivity, employment and growth. Evaluation of environmental problems in terms of cost and efficiency criteria emerge as the principal feature of conventional economics and the specialized branches which deal with environmental and natural resource issues – environmental economics and resource economics. There are other aspects of the neo-classical paradigm which are integral to the focus on using pricing or market mechanisms to correct negative externalities.

Other features of the approach of conventional economics to environmental issues are:

1. The economic system is conceptually to be viewed as separated from natural and other social systems. It more or less exists by itself.

2. Human beings are supposed to be supremely rational beings who respond to price signals – indeed in neo-classical economics responding to a price signal is regarded as possibly the most rational activity possible.

3. Economic progress (generally this means industrialisation) is achieved through technical progress (ever more sophisticated and complex ways of doing things) and the market stimulating activity and rewarding those able to produce products that are desired by others.

4. Technical progress will continue forever – there is an infinite ability for substitution and technical change to overcome resource scarcity and environmental degradation (cf for example comments attributed to Lawrence Summers as follows - "There are no ... limits to the carrying capacity of the earth that are likely to bind at any time in the forseeable future... The idea that we should put limits on growth because of some natural limit is a profound error." – Summers is currently President of Harvard University and previously Chief Economist at the World Bank and Secretary of the US Treasury)

With respect to the place of the environment in the thinking of neo-classical economics, the following comments can be made:

1. The environment provides three functions from the point of the economic system: a sink function absorbing wastes and emissions; a source function in terms of providing raw materials for the economic system; life-support functions in a more general sense.

2. Until recently, nature was viewed as part of the price and market system only with respect to its role as a source of raw materials and energy– even here the role of nature with respect to the economic system was that it provided raw materials for the production process at no cost, except the cost of




extraction – nature in the earlier models of neo-classical economics was underpriced or not-priced at all – a price of zero or close to zero

3. Today, neo-classical economics has shifted position and states that assigning a zero value to nature is a distortion of the marketplace (for example water has an economic value eg. habitat for biodiversity)

4. All forms of nature can be: (1) assigned a monetary value either because they are traded or tradable goods or (2) shadow prices (approximate prices) can be found for them even when not tradable – in principle all of nature is potentially subject to the price system. Module 9 and 10 deals extensively with valuation and shadow pricing.

5. Creating a price for nature’s contributions to the economy will substantially resolve most if not all environmental problem since price signals drive all relevant human behaviour – thus for example pricing water will mean that it is no longer a free good, people will treat it more carefully because they have to pay for its use as a sink or in recognition of its value as a provider of life-support services

6. Nature however still has no special place in the scheme of things since in principle, all forms of capital can be substituted for each other – the assumption of complete or near-complete substitutability1 - with the following results:

a. natural capital can be replaced by other forms of capital when nature is depleted - thus, depleted resources or degraded environmental services can be replaced by more abundant substitutes, or by “equivalent” forms of human capital (people, machines, factories, etc.).

b. provided that there is monetary reward – that is correct price signals exist or are created - technical change will always find new substitutes for natural products which become depleted or scarce – thus for example technological development will lead to fresh water being replaced by desalinated water or recycled water when fresh water uses and problems now prove to be unviable – the demand for a substitute will lead independent entrepreneurs to solve the problems associated with desalinated or recycled water.

c. provided that there is monetary reward – that is correct price signals exist or are created - technical progress will always solve problems that the water system faces – if it is a pollution type problem that the water system has with assimilating and absorbing wastes and emissions the solution will be either an improved and cleaner process which generates less waste or

1 R.M. Solow, (1974), 'Intergenerational Equity and Exhaustible Resources', Review of Economic Studies, Symposium, p. 29-46; R.M. Solow, (1986), 'On the Intergenerational Allocation of Natural Resources', Scandinavian Journal of Economics, vol. 88, p. 141-149.


some way of altering water’s assimilative abilities will be found so that it can absorb more wastes and emissions.

d. economic development is sustainable if the overall stock of assets remains constant over time. Any one asset, including nature, can be reduced as long as another asset is increased to compensate for it – this is called the weak sustainability argument.

Figure 2. 1 The Interaction between “The Economy” and Nature

NATURE AS A SOURCE OF RAW MATERIALS Nature, as mentioned earlier, is the fundamental source of input into the economic system. Nature provides the resources and raw materials that are intentionally transformed into desired products by human beings using complex or simpler methods. To better understand the role of nature as a source of resources, an influential analysis makes a distinction between stock and flow resources, identifying a range of interesting and important consequences for policy that can be drawn from this distinction. This approach, drawn from Rees (1990), sets out the following categories.

Table 2. 1 Resources categorized as stocks and flows

Stock Resources Flow Resources



Single-Instance Consumption

Theoretically recoverable

Recyclable Critical zone Non-critical zone

Oil Gas Coal Uranium

All elemental minerals

Metallic minerals

Fish resources Forest resources Animals Soil Water in Aquifers (groundwater)

Solar energy Tides Waves Wind Water Air

The inter-relationship between stock and flow resources can be illustrated more dynamically as follows:

Figure 2. 2 Resources as stocks and flows

Stock Resources Stock resources are non-living components of the earth and are fixed in quantity. The use of stock resources by humans is limited by their extent since they are renewed over a geological time scale (millions of years) but are used over a human time scale (hundreds of years). Once the stock of these resources is exhausted it is no longer available. Water is not a stock resource although some aquifers especially those in North Africa have some of these characteristics as their rate of recharge is millions of years.

Innovation and substitution are crucial for maintaining stock resources. Price and commercial incentives should in principle provide a spur for substitues to be found.



However, In the long term society needs to requires production and consumption to adjust to situation where the stock runs out, either physically or commercially.

Figure 2. 3 Applying the substitution principle to stock resources

Single-Instance vs Multiple Instance Consumption A further distinction is possible between stock resources that are consumed only once and those that can theoretically be consumed a number of times. Fossil fuels are a good example of resources that can only be consumed once. After they have been burnt, they are effectively destroyed with their usefulness coming from the transformation that takes place when they are being burnt. Many minerals offer the



chance of multiple instance consumption as they can be re-used a number of times, depending on whether the technology is available to regain the original form of the mineral from the many commodity types it has been transformed into – gold for instance can be recovered in an original form from a large number of its end uses.

Stock resources can in the final analysis be classified as follows:

Table 2. 2 Stock Resources

Stock type Characteristics Examples Depletable, non-renewable, non-recyclable

excessively slow rate of renewal or replenishment in human terms;

no potential for increasing the stock or reversing the effects of extraction within any reasonable time-frame

changes to another form or state of matter - does not maintain its basic physical and chemical properties after consumption or use

Petroleum, Gas, Coal, Uranium

Depletable, non-renewable

&

recyclable

maintains its basic, physical and chemical properties during use

under appropriate technological and economic conditions can be recycled and reused

Copper - for instance, the recovery of copper wiring from a motorcar once it has become scrap or junk

Gold, Silver, Manganese, Cobalt, Titanium, Cadmium - etc.

Water, Stock Resources and Pollution Stock resources once consumed or used also do not simply disappear. They are transformed into other states or forms of matter. In many cases, water resources are impacted upon, directly or indirectly. Thus the output from burnt fossil fuels creates pollutants which are emitted into the atmosphere with further redistribution at local, regional and global scales via the hydrological cycle. Stock resources also leave solid or semi-solid residuals after use (eg coal).

Flow Resources Flow resources are resources that are continuously renewed by processes external to the use of these resources by humans. Flow resources are constantly reproduced, renewed or replenished by the cycles or processes of nature. A distinction is often made between critical zone flow resources and non-critical zone flow resources. Another distinction is between resources that depend on or respond to human intervention to continue to flow:



Table 2. 3 – Flow Resources

Flow Resources Critical zone Non-critical

Fish resources Forest resources Animals Soil Water in Aquifers

(groundwater)

Solar energy Tides Waves Wind Surface water Air

Exhaustion or Depletion of Flow Resources There are two crucial renewability or sustainability problems with flow resources, one of which has only recently emerged as a problem – the other – the classical problem - has always been present as part of human interaction with nature. The classical problem (the first resource management problem faced by ancient peoples) is the fact that flow resources become exhausted when the rate at which they are renewed or replenished is exceeded by the rate at which they are used. Recall here that stock resources are renewed as well (every 100 million years or so). By contrast, flow resources may be renewed every year (some types of fish animals and plants) or every ten years or every 100 years (for example the fish species called orange roughy). The issue then is the relationship between the rate at which flow resources are replenished and the rate at which they are extracted and used. The second problem is the unpredictable and generally disruptive impact of humans on the ecosystem regulatory arrangements underpinning reproduction of flow resources. Shocks to a whole range of eco-systems are now being caused by human activity such that reproduction of flow systems are now arguably seriously compromised. However these disruptions have a time lag element only becoming visible as permanent changes some time after they have become established.

Stock vs Flow Resources: Differences and Similarities There are a number of points of connection between flow resources and stock resources such that policy and management approaches can fruitfully cross-fertilise



each other in some circumstances. Alternatively and more harmfully, policies appropriate to one type of resource may be negligently or ignorantly applied to the other type of resource with negative consequences. From the point of view of sustainability the relationship is quite simple – provided what is produced by nature is not exceeded by what human beings take from nature there is no problem – once extraction rates exceed replenishment rates a sustainability problem arises. In terms of the terminology of flow and stock resources, critical zone resources become stock resources once their regenerative capacity is exceeded. Under extreme pressure from human exploitation critical zone renewable resource systems can be destroyed..

Figure 2.4 Stock resources and critical zone flow resources

STOCK RESOURCES

CRITICAL ZONE FLOW RESOURCES

Storage of Stock and Flow Resources This is another area of interaction. Some renewable resources can be stored; others cannot. For those that can be stored, storage provides a useful way of managing the allocation of the resource over time. Storage of renewable resources performs a different function from storing depletable resources. Storing depletables extends their economic life; storing renewables by contrast helps to smooth out “ups and downs” of supply and demand. Surpluses are stored for when supply is uncertain or there are shortages – this is the role played by storing water in dams and reservoirs.

Groundwater– Stock or Flow Resource? Groundwater is a resource that appears to fall somewhere between the stock and flow categories. This is because groundwater renews itself naturally but it does so more slowly than surface water but much more rapidly than the minerals identified as typical of the stock resource category.

Enhancing Flow Resources



Many flow resources can be enhanced in productivity by human intervention. In principle water flow can be enhanced by desalination and groundwater can be augmented by recharge.

NATURE AS A SINK

Stock Pollutants vs Fund Pollutants Conventional pollution control policy utilizes these two broad concepts to make sense of the use of nature as a sink:

Table 2. 4 Stock v Fund Pollutants

Pollutant type

Explanation and Characteristics Implications for water policy

Stock pollutants

These are pollutants for which the environment has little or no absorptive capacity.

Stock pollutants build up as a stock over time in the environment. - they constantly increase in volume and impact

Good examples are lead which accumulates in soil or the water table near the emission source and persistent synthetic chemicals such as dioxins and PCBs (polychlorinated biphenyls).

The water policy objective should be to prohibit emission of such substances or seek to drastically limit the amounts that are emitted into the environment.

Stock pollutants pollute the environment of future generations - benefits associated with their generation are not necessarily being passed on to future generations as negative impacts far outweigh positive impacts

Fund pollutants

These are pollutants for which the environment has some absorptive capacity - fund pollutants do not accumulate so long as the environmental ability to absorb them or break them down is not exceeded.

However eventually the fund capacity is exhausted – once exhausted, fund pollutants have become stock pollutants

Example 1: Organic pollutants emitted to oxygen rich water together with resident bacteria transforms pollutants into less harmful organic matter – the objective sought by water pollution control policy is to only permit emissions of effluent at times when they will be most rapidly rendered less harmful.

Example 2: Substances can be diluted or dispersed by the receiving medium (usually water or the sea) to remove or reduce harm to humans or the ecological system – the objective sought by sustainable development policy is to ensure that the quantity of the polluting substance in proportion to the receiving medium is minimal.

The use of nature as a sink for human society’s waste products or emissions depends crucially on the assumption that the different segments of nature (air, water, land) can absorb and neutralise these waste products. This assumption is fundamental to current pollution control policy. There is also a close relationship




between the use of nature as a sink and the use of nature as a source of raw materials, since the use of nature as a waste receptacle can severely degrade the quality of the resources that can be extracted from nature – a good example of this is the issue of contaminated groundwater supplies. Currently, individuals and enterprises have the right to load or emit wastes or pollutants into the environment, with the damage done by this load being dependent on the capacity of the environment to absorb the pollutant. If the emissions load exceeds the absorptive capacity, then the pollutant accumulates in the environment. From the economic point of view, this right to emit or “load” the environment with wastes is an important property right, which all of us have and without which it would be impossible to conduct business of any type or construct large urban systems such as cities. This simple but powerful truth is illustrated by the simple fact that a purchaser of a factory in any major city buys a useless property if he does not also purchase the pollution permits linked to the factory or rapidly acquire new rights if current rights to pollute have expired. The right to pollute is thus a valuable economic right and the more pressure there is on nature’s capacity to act as a sink, the more valuable the “right to pollute” becomes. This indeed is the basis for the application of market approaches to pollution control and the creation of markets in pollution permits, one of the new tools of sustainable development policy.

Figure 2.5 Transportation of contaminants in different Aquifer types2

2


As Figure 2.5 , shows, pollutants can also be analysed by their zone of influence and the distances moved in response to water and permeable soil.

The Kuznets Curve Finally, in a very contentious proposition, a strand of mainstream economics argues that economic growth (for which read industrialisation) improves environmental quality (the so-called Kuznets curve or U curve argument). It is posited by this school of thought that countries grow rich but on the way to growing rich, they pollute a lot (see diagram).

The Environmental Kuznets Curve

U

The left side of the U curve shows environmental quality falling – once rich, countries begin to devote resources to environmental protection and clean-up – this is the right-hand side of the U curve going up and showing an improvement in environmental quality. This argument is based on a co-relation between the growth of income in selected countries and the highly noticeable reduction in the levels of a small subset of pollutants. However as various critics have pointed out the data supporting this argument does not cover situations of the significant or complete destruction of natural capital or other forms of environmental degradation. In some cases as well, economic growth has been associated with continuing increases in other pollutants.

The Coase Theorem


A sub-field of neo-classical economics developed around the work of an American theorist called Coase, using the Coase theorem maintains that price is not even really the issue – pollution problems for instance can be solved by encouraging those suffering harm to trade with those causing the harm. Thus a factory polluting a river supplying water to a township should not be forced to cut its emissions but should be encouraged to find those in the township who wish to move away and pay them to do so, or alternatively, it may choose to pay people who stay and suffer from the pollution a reward for staying. Either way, the trading process can reveal those who prefer to stay and suffer the pollution. Alternatively, the trading process could reveal that nobody in the township wants to have the pollution, in which case, the factory can close down and locate somewhere else where people are prepared to tolerate its pollution levels. The factory-owners will in this trading have to be completely honest about the harms caused by their pollutants for the trading to be meaningful and for the market to be properly informed. This approach has been fairly influential in shaping some areas of sustainable development policy in the 1980s and the 1990s, as policy-makers have sought to facilitate transactions between polluters and the victims without any presumption that the polluter is under an obligation to limit their activity. In recent years the influence of the Coasian approach has declined


considerably since there are many issues that it does not adequately address such as (1) the costs of transacting in this way; (2) the difference in economic power between factory owners and poorer residents of the township; and (3) the factory owner’s incentive to hide information about the true nature of the pollutants put out by the factory.

Implications for water managers In terms of policy, analysis from neo-classical economics tends to focus on the traits and characteristics of individual instruments (e.g. emissions trading or taxes). Very little attention is paid to politics or to the complexities of implementation. Many texts are also frequently driven by disciplinary commitments or ideology. For example, many neo-classical economists have an ideological pre-commitment to particular types of instrument and will tend to advocate them in most circumstances. In the every-day world the views of neo-classical economists are not necessarily as influential as the volume of their theoretical work would suggest since their models often prove a bit too simple for the complex world of environmental politics and water policy.

Ecological Economics

Since the 1970s, researchers from various economic, social and natural science domains dissatisfied with the approach of conventional economics have sought to formulate new approaches. This new perspective has become known, since the creation of the International Society for Ecological Economics (ISEE) in 1987, as Ecological Economics. Ecological Economics does not completely reject neo-classical economics. It regards the results and techniques of neoclassical economics as still appropriate if the conditions of applicability of proposals and the limits of these propositions are made clear and proposals are placed in a wider framework of interpretation. Ecological economics advocates that economic science should open itself out to insights and analytical techniques that are used by other fields such as the life sciences, the humanities and technology assessment – it is argued in short, that price signals are not all.

Areas of focus within ecological economics include establishing the appropriate scale of the economy in relation to the environment; environmental valuation; full-cost accounting; and sociologically informed environmental risk assessment.

Ecological Economics as a Form of Extended Capital Theory For ecological economists natural capital refers to any stock of natural assets that yields a flow of valuable goods and services into the future. For example, a forest, fish stock or an aquifer can provide a harvest or flow that is potentially sustainable



year after year. The forest or fish stock is ‘natural capital' and the sustainable harvest is ‘natural income.' Natural capital also provides such services as waste assimilation, erosion and flood control, and protection from ultraviolet radiation. Thus, the ozone layer is a form of natural capital as are all the self-regulating processes of the biosphere.

In essence natural capital may be defined as stocks and flows of energy and matter, and the physical states, such as climatic conditions or ecosystem characteristics, to which they give rise. It includes the core and crust of the earth, the biosphere itself – forests, grasslands, wetlands, tundra, kelp forests, deserts, and other ecosystems - and the upper layers of the atmosphere. Its most critical and irreplaceable component is biological diversity at the scale of populations, species, landscapes, and the entire biosphere. Just as economic capital provides steady financial returns, natural capital provides steady environmental returns in the form of ecosystem services to human society. These services are incredibly varied and include:

Table 2. 7 – Eco-regulatory serv ices

climate stabilization stocks of fish, game, and domestic animals

buffer from ultraviolet radiation natural pest control

cycling of essential nutrients soil, water, and air purification

stormwater management oxygen production

flood control genetic resources

groundwater recharge Medicines

soil fertility foods, fuel, building materials, and fodder

pollination Beauty

crops Recreation

habitat heritage places and identities

It is argued by ecological economists that natural capital is often essentially beyond price, providing a source of cultural identity, of kinship with life, of learning, of evolutionary processes, and of soil, air, water, and biodiversity for which there are currently no substitutes. Natural capital can also provide many different functions at the same time (multi-functionality). Topic 1 has already set out aspects of these ideas for water. Competition between functions should be resolved by water governance policy and environmental management. The stress placed by human activity on one function makes it more valuable if it cannot be easily substituted and is essential.



Environmental Problems and the Concept of Natural Capital From the ecological economics point of view, because ecosystem services provided by natural capital including water are chronically under-valued in the marketplace, this creates perverse incentives to erode natural capital. In this sense, ecological economics appears to take the same position as neo-classical economics. There are some differences however, in that ecological economics does not (1) believe in complete substitutability such that natural capital can be replaced by human capital; (2) believes that some aspects of natural capital/nature/environment are not replaceable – the so-called critical natural capital component; and (3) has less faith in the price mechanism.

Taxing the use of natural capital To fully ensure that natural capital is considered as an input into production ecological economics proposes full cost accounting so that prices based on actual social and environmental costs can be generated for most if not all ecosystem services provided by natural capital. To achieve this “hard-core” ecological economists propose that general taxation should be focused on taxing the use of natural capital, not income (income tax) or the sale of goods and services (GST). The result for example is that large companies would be faced with a very large tax burden given their consumption of resources for on sale to consumers. Competition on price would ensure that the most efficient firms would keep both prices and the taxes that they pay down. Lower prices will ensure that they have customers, whilst lower taxes will represent efficiencies in the use of natural capital.

Critical Natural Capital The other crucial concept in ecological economics which attempts to even more tightly integrate the natural sciences and the social sciences, especially economics is the concept of critical natural capital - KN

C. For ecological economists, critical natural capital is that set of environmental resources, which performs irreplaceable and critical environmental functions and for which no substitutes in terms of human, manufactured, or other natural capital, currently exists. It is a dynamic concept, in that, depending on the existence of substitutes or the state of knowledge about the perceived importance of certain environmental functions, natural capital may change from being critical to not critical, or vice versa. Making the concept of critical natural capital operational requires judgments to be made in two areas:

the extent to which a substitute for some element of important natural capital exists and;

when an environmental function can be characterised as important.


In the ecological economics literature, critical natural capital is often defined as the set of natural resources which performs important and irreplaceable functions. When more precise definitions have been proposed, ecological economists refer to critical


natural capital as those natural assets providing essential ecological or life-support functions. While ecological criteria (rarity, fragility, etc.) and measurement units (i.e. minimum critical ecosystem size and other critical thresholds) from natural sciences are commonly called upon to identify critical natural capital, its valuation mainly relies on economic ones (market or surrogate market price techniques). However referring to the three perspectives approach from earlier on in the Topic, it can be seen that the psychological and cultural aspects of the concept also need to be addressed. The question which requires an answer from this perspective is what are the socio-political and cultural aspects which converge to make a type of natural capital critical. Thus, the critical natural capital concept ultimately leads to questions about the specific attributes of nature that individuals or parts of a community, consider so vital as also to be considered irreplaceable. This much more difficult question has not yet been properly addressed by ecological economics.

In trying to give meaning to the concept of critical natural capital, ecological economists are currently engaged in research which addresses the following questions: mixed social and natural science based research to support identification of

different natural capital systems for supporting sustainable economic activity. defining the relevant scales (in space and time dimensions) for which natural

capital systems may be critical. identifying the cultural and psychological factors that may contribute to a

natural capital component or system being judged critical at a particular geographical or ecological scale.

establishing when the Precautionary Principle should be invoked with regard to those environmental functions characterised by uncertainty

elaboration of safe minimum standards for those ecosytems functions, the loss of which may be irreversible or entail large costs.

Despite these difficulties, ecological economists argue that the innovative message of the critical natural capital concept is that it opens up the possibility of integrating the natural and social science disciplines into sustainable development policy for sustainability. It should be noted that the concept of critical natural capital is close to the widely accepted concept of protected areas for plants, wetlands and landscapes and endangered species for animals. The difference is that the determination of these categories of protected and highly valued resources is almost principally the domain of the ecological and biological sciences and a sense of public alarm driven by environmental NGOs. Economists currently play a minor role in deciding what is to be protected and what is to be regarded as endangered. The acceptance of the concept of critical natural capital and its easy operationalisation would move economics more squarely to the center of this field.




AREAS OF DIFFERENCE BETWEEN ECOLOGICAL ECONOMICS AND NEO-CLASSICAL ECONOMICS

The areas of difference between the two schools do have some implications for water governance and thus these areas need to be discussed to some degree. The principal difference relates to whether human artifacts made from nature can be substituted for nature itself – can human capital substitute for natural capital (KN vs KM). As demonstrated above, mainstream neo-classical economics argues that there is nothing inherently special about natural resource stocks or natural capital. In this view, human knowledge and human capital have a limitless capacity and are infinitely substitutable for natural resources and the environmental services provided by nature. It is recognized that there are difficulties arising from the lack of markets (and therefore prices) for environmental assets like water but, provided that an appropriate rent can be attached to reflect their economic scarcity, natural resources should be treated like any other asset in the human portfolio. Any preservation of natural resource stocks is thus a consequence of an economic cost-benefit calculation. In this view, a unit reduction in the stock of natural capital can be compensated for by an increase in the stock of some other form of man-made asset. Indeed, there is a principle in natural resource management3 called Hartwick’s rule which states that intergenerational equity and sustainability considerations are satisfied if the managers of an economy reinvest the proceeds from resource extraction in people and machines, which in turn can substitute for the resources lost through extraction. Ecological economics rejects the argument of substitutability maintaining that natural capital and human capital are generally complementary and that there is a critical aspect to natural capital which can never be replaced by human capital. The next area of difference concerns the question of “what is a sustainable economy”, an issue closely related to the different perspectives on substitutability discussed immediately above. The differences between ecological economics and the various branches of neo-classical economics can be summarized as follows:

Approach to sustainability

School of economics

Public policy prescription

Very strong sustainability

Ecological economics

Advocates as public policy that current economic activity should be cut in order to recognise the rights of non-human species and advocates a strong use of the precautionary principle

Strong sustainability


Advocates a public policy requirement that environmental assets not be damaged and a strong use of the precautionary principle

Weak sustainability

Environmental economics

Recognises a public policy requirement that full environmental costs should be included in economic decision making However as a matter of policy this should have equal weight with other considerations and should not lead to

3 J.M. Hartwick, (1977), 'Intergenerational Equity and the Investing of Rents from Exhaustible Resources', American Economic Review , vol. 67, p. 972-974.


constraints on profitability or national or corporate competitiveness or autonomy except in exceptional circumstances

Very weak sustainability

Mainstream non-specialised economics

Recognises a public policy requirement that environmental considerations be taken loosely into account when assessing development.

Clearly these varying approaches to sustainability have policy implications. Proponents of very strong sustainability argue for a 'critical environmental capital' base (critical natural capital – see Glossary) which must be protected at all costs, whilst at the other extreme lie weak sustainability proponents who see no special value for natural capital provided that some basic measures of protection are taken. Most governments currently subscribe to weak and very weak sustainability in their practice whilst their rhetoric may support strong sustainability from time to time. Table 2. 8 Comparing Neo-classical Economics and Ecological Economics

School of Economics

Perspective on interaction between economic activity & nature

Perspective on natural capital

Perspective on how to prevent and treat harm to nature

Perspective on resolving scarcity

Perspective on a sustainable system

Neo-classical economics

Economic system is a system by itself and is not a subsystem of nature

KN provides replaceable services – virtually all KN services can be replaced by technical change

Pollution is an externality Can be corrected by prices and taxes and use of the market

Substitute one resource for another Re-cycling Using limited resources efficiently Not sure that limits have been reached In principle there may be no limits

Very weak view of sustainability KN need not be sustained at level A if increasing KM to level Z is a substitute for KN being at A - KN can drop to level G without loss


Economic system is a sub-system of the overall ecological system

KN provides generally non-replaceable services to humanity KN is complementary to KM KM is dependent on KN

Pollution is integral to human existence

Recognises that there are limits to substitution and KM & KN

are not automatically substitutable Believes limits of substitutability have generally been reached

Both the levels of KN and KM should be kept constant



KN – Natural Capital; KM – Human Capital



WATER POLICY & THE TECHNICAL SCIENCES The three disciplines – geography, hydrology and geology - are called the earth sciences. Together with engineering they provide the basis for much of the intellectual and practical activity to do with water resources with the biological and chemical sciences and the hybrid domains associated with them providing support. It is only the relatively recent interest in economic instruments and harnessing market forces to support water policy through demand management which has led to neo-classical economics challenging the dominance of the technical sciences. In that sense economics has profited greatly from the collapse of the “hydraulic mission” that previously powered engineers and others responsible for the era of big dams and big water projects.

SUSTAINABLE DEVELOPMENT POLICY AND THE GOVERNANCE DISCIPLINES The governance disciplines are political science generally and the more specialized sub-fields which deal with public policy and administering public or governmental institutions – i. e. public policy and public administration. Political science studies the politics of environmental issues on a very broad canvas linking up environmental problems and issues with matters such as the strategies of environmental organizations, political parties and social movements. There is also a concern with the relationship of issues such as liberty, justice, equality, democracy, power, and issues of property with environmental issues. The specialized sub-field of environmental politics concerns itself solely with the politics of environmental issues, whilst other fields of political science, including in particular international relations also look at environmental issues quite closely. Studying and teaching sustainable development policy is one of the most important concerns of public policy and public administration. The focus in both of these very closely related disciplines is much wider than in neo-classical economics and attempts to explain the operation of sustainable development policy by examining both the characteristics of policy instruments and the variables within the context in which they are applied. Relevant context variables include the implementing organisation, the target group, other co-existing policy instruments, and the characteristics of the policy problem. Rather than being strongly committed to a particular instrument type, this approach argues that policy instruments should be chosen according to how well their performance characteristics ‘fit’ the requirements of a particular situation. This assumes that once the demands of the ‘job’ are clear, it is a straightforward matter to select the best fitting instrument.



Another branch of public policy downgrades the importance of particular instruments. The assumption is that the policy instrument is only one of many factors that determine the outcome of a policy process. This approach places particular attention on the study of implementation and assumes that the operation of the instrument will be shaped more by the complex process of implementing it than by the original conceptual design. This is particularly the case where complex policy problems require a high level of discretion on the part of the implementing agencies. Analysis therefore focuses on the implementation process rather than the instrument itself. There is also a well-developed strand within public policy which focuses on evaluation of the implementation of sustainable development policy. Indeed there is a field of public policy called evaluation studies which now has a sub-field called environmental evaluation.

SUSTAINABLE DEVELOPMENT POLICY AND LAW The contribution of law to the study of sustainable development policy focuses principally on issues to do with compliance with environmental laws, enforcement of laws and the problems and difficulties faced in this regard. Legal scholars also study the interaction of environmental issues with institutions and organizations such as courts and tribunals. Law thinking tends to depend on one or more of the other disciplines mentioned above for much of its theoretical framework. Legal writing on and in sustainable development policy usually presents itself as studying “regulation” rather than law per se. Economists, especially environmental economists also use the term “regulation”. The tell-tale sign that the writer is a lawyer is usually the absence of graphs, figures and calculations. The economists tend to go the other way. Topic 5 shows aspects of how law thinking interacts with sustainable development policy.

SUSTAINABLE DEVELOPMENT POLICY AND MANAGEMENT STUDIES Following hard on the heels of the rise to dominance of neo-classical economics has been the emergence of Management/Business Studies (organizational management; quality management; accounting; finance) as another source of expert knowledge on the environment. The concern from this sector of the social sciences has been more with making the firm or the company environmentally responsible. The contributions from this sector have been varied and are at least in theory quite important though it is too early to tell what changes will really flow from these contributions. We are referring here to a range of contributions the more prominent of which has developed well known sub-disciplines concerned with making firms or commercial companies more environmentally responsible, especially within their internal arrangements. We are referring here to the theory and practice of:



Environmental management systems – ISO 14000, EMAS Environmental reporting and accounting by governments (State of the

Environment Reporting and environmental statistics) Environmental reporting and accounting within the firm Eco-labelling Bench-marking environmental performance

INDIGENOUS KNOWLEDGE AND SUSTAINABLE DEVELOPMENT POLICY – THE “POOR COUSIN” Another area of expert knowledge that sustainable development policy in Australia and indeed in all other parts of the world has to take account of is that of expert knowledge that resides in communities which are in a position of subordination to Western culture and Western ways of doing things. Sometimes called traditional knowledge, the better term is indigenous knowledge and it has to be taken account of by sustainable development policy makers in many situations which involve locally embedded cultures or subordinated groups. The internationally accepted definition of indigenous knowledge is that developed by Louise Grenier (see Working with Indigenous Knowledge: a guide for researchers (IDRC, Ottawa, 1998)). Grenier defines Indigenous Knowledge (IK) as the unique, traditional and local knowledge existing within and developed around specific conditions of women and men indigenous to a particular geographic area. These systems of knowledge covering all aspects of life, including management of the natural environment, have been a matter of survival to the peoples who generated the systems. IK systems are dynamic - new knowledge is continuously added. Such systems innovate from within and also will internalize, use and adapt external knowledge to suit the local situation. In the Australian context, traditional knowledge refers to Aboriginal expert knowledge of the environment and ecology. In New Zealand, traditional knowledge would refer to Maori expert knowledge of the environment and ecology. In an African or Asian context, it would refer to expert knowledge of the environment and ecology which local communities have as a result of their struggle against an often hostile nature. The African/Asian example is interesting because institutions like the World Bank have found that the answers to many questions can be found in the views of local communities – the outside experts, often Africans/Asians trained in Western institutions, although indigenous to the societies concerned may not fully appreciate local ecological knowledge. IK can be contrasted with the knowledge generated within the Western-dominated international system of universities, research institutes and private firms. The often oral, rural and ‘powerless’ nature of indigenous knowledge has



made it largely invisible to dominant policy-makers and to global science. Indigenous knowledge has often been dismissed as unsystematic and incapable of meeting the productivity needs of the modern world. However since the Rio Conference in 1992, its importance has been increasingly recognized. Sustainable development policy-makers need to be aware of this.

TOPIC SUMMARY Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Sustainability is a balancing act between

1. environment and development 2. present and future 3. wealth maintenance and redistribution 4. essential needs and aspirations for progress

Sustainability can be thought of in different ways Environmental sustainability requires that industrial and agricultural

development conform to the expandable but limited carrying capacity of nature as a whole

Social sustainability requires that just and informed citizens participate in the governance and improvement of human commChapteries

Cultural sustainability requires that people partake of the educational and social opportChapteries inherent in a multicultural, multilingual world, while respecting and tolerating political and ethical differences

Economic sustainability requires that environmental costs be included in consumer prices and that wealth be shared more equitably.

Ecological economists argue that the principle of substitutability although strongly applicable with respect to certain familiar marketed commodities (e.g. the substitutions of optical fibre for some uses of copper wire) fails in relation to the majority of the goods and services of nature (e.g., the ozone layer and protection from ultra-violet radiation; the atmosphere and reasonably constant climate). Additionally ecological economists argue that many ecological problems relevant to systems integrity and human health have less to do with depleted sources than with overloaded sinks (e.g., climate change from excessive greenhouse gas accumulation). In the final analysis, ecological economists argue, humans have no readily available substitutes for most of the life-support services of nature. Also flowing from the framing of ecological problems as an issue of demand and supply, neo-classical economists see the price mechanism as having the principal role to play at the present time in shifting economic activity towards more ecologically sound outcomes. The issue is viewed as one of both market failure and government



failure such that in either case, costs of production (i. e the externality or environmental aspects) are not borne by the user of the resources. The view of neo-classical economics is that market arrangements should be changed such that the full cost of the use of natural and ecological resources is borne in the costs of production and the price that goods are sold at. Where prices are not currently available for goods and services, including ecological services, shadow prices should be constructed and factored into the production process. Market failure occurs because the current system of market prices allows ecological goods and services to be incorporated into the price of market traded goods at a zero or near to zero cost. Government failure would occur for instance where government subsidies to industry or agriculture result in the over-consumption of natural resources. In this example, where the industry or agriculture might have shut down government subsidies keep the industry afloat. An example from the neo-classical point of view would be certain types of distant-water fishing in which the price of fuel and other inputs compared to market returns has become prohibitive. However, government subsidies to the fisheries sector allow less efficient firms in the fishing sector to continue to catch fish, where a market without government intervention would have led to these firms exiting the industry. This perspective is sound in some respects and accounts for the strand of sustainable development argumentation which emphasises valuation and pricing. However, unlike its counterpart and competitor, neo-classical economics see no reason for attaching any intrinsic value to the natural environment and its ecological goods and services unless explicitly expressed and preferred by humans.

The neo-classical worldview also argues that the surest way to maintain environmental quality is through increasing incomes (i.e., sheer economic growth) and by expanding trade. Countries and communities which lack a particular good and desire it can acquire it from others through trade. Ecological economists argue that this emphasis on economic growth is flawed as it ignores the fact that the relatively clean environments of, for example many Western cities can be explained in part by the export of waste (often to the developing world), and to the exploitation of extra-territorial resources, including the global commons. Indeed, in the ecological economist’s view the wealth enjoyed by populations in the developed countries derives in part from the ecological capital and ‘natural income’ of the less developed world and the common natural heritage of humankind from in particular the oceans.

The belief in near-perfect substitution, combined with trade, leads neo-classical economists to argue that the concept of carrying capacity is irrelevant to humans; in effect, economic growth can continue indefinitely, free of material constraints. Ecological economists argue however that despite modern technology, human beings and their industrial economies remain dependent on the biophysical ‘goods and services’ provided by nature. Trade and technological advances merely foster the illusion that the economy is becoming ‘decoupled’ from the ecosphere, by distancing consuming populations from the impacts of their lifestyles.



REVIEW QUESTIONS

1. How is BSWRM managed in your c ountry. Can you mane the organisations involved and the kinds of issues that they typically deal with? How have you come to be informed about BSWRM in your country – news iterms, personal involvement etc. ?

2. List 5 things which could be changed to advance governance 3. List 5 impediments to change 4. List 3 areas of recent improvement 5. What do you think of the concepts: natural capital; critical natural capital &

ecosystems regulation – do they make sense ? are they practical and realistic concepts

6. Which factors and/or principles are essential for sustainable water and sanitation services

7. Which factors and/or principles are essential for good water governance? 8. Does the material presented here fit match your PWS experiences in your

home country, Australia, anywhere else/

LINKS BETWEEN THIS TOPIC & OTHER TOPICS IN THIS UNIT

LINKS BETWEEN THIS TOPIC & OTHER UNITS IN THE COURSE

REFERENCES McManus, P., (1996). Contested Terrains: Politics, Stories and Discourses of Sustainability. Environmental Politics, 5, pp.48-73

(1995). Extract on ‘Environmentalism’ from Conservation and Environmentalism – An Encyclopedia, ed) Robert Paehlke.

Dudley, R. L., (1990). A Framework for Natural Resource Management. Natural Resources Journal, V30: 107-122




Jordon, A. and T. O’Riordan, (1999). Environmental Problems and Management. Introducing Human Geographies. P. Clock, P. Clang, and M. Goodwin, (eds). London: Arnold.

Rees, J, (1990). Natural Resources: Their Nature and Scarcity. Natural Resources: Allocation, Economics and Policy. New York: Routledge.

Pimentel, D. et al., (1987). World Agriculture and Soil Erosion. BioScience 37(4)

Vitousek, P. et al., (1986). Human Appropriation of the Products of Photosynthesis. BioScience ,34(6).

I W R M & T H E D I V E R S E T A S K S O F T H E W A T E R M A N A G E R - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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IWRM &

THE DIVERSE TASKS

OF THE WATER MANAGER

CHAPTER

3 INTRODUCTION & OBJECTIVES OF CHAPTER As indicated, for the purposes of the Unit, water resources management is defined broadly and comprises the institutional framework (legal, regulatory and organizational roles), management instruments (regulatory and financial), and the development, maintenance and operation of infrastructure (including water storage structures and conveyance, wastewater treatment, and watershed protection). This Chapter addresses IWRM and the tasks of water management and within that good governance in more detail. Five key areas are covered:

A general outline of the IWRM concept - see also Chapter 1 and the handouts and information provided by Bruce Hooper as well as set readings

An overview of the range of practical tasks faced by water managers in the context of IWRM today

A brief overview of irrigation, given its status as the principal user of water in the developing world and the dependence of global food supply on irrigated agriculture.

A brief overview of the task of pollution control as an aspect of water management

At the end of this Chapter, the reader will: Be able to explain the basic concepts of IWRM Have a basic understanding of IWRM in the context of broad-scale water

resource management (BSWRM) Have a basic understanding of IWRM in the context of provision of water

services (PWS) Be able to explain the differences and similarities between IWRM in contexts

of water resource management (BSWRM) and provision of water services (PWS);

Be able to explain good water governance (GWG) as a subset of good governance



Be able to explain and apply the concept of actors and interests to the water sector

Be able to explain the basic elements of the concept of accountability and public participation in the context of the water sector.

Be able to describe the tasks of project oriented as well as day-to-day management in the context of IWRM using irrigation management and pollution control management as examples

IWRM & WATER GOVERNANCE Water governance’ (the manner in which people deal with water) is an integral part of governance (the mode of social organisation). According to the Global Water Partnership, ‘water governance’ refers to the range of political, social, economic and administrative systems that are in place to develop and manage water resources, and the delivery of water services, at different levels of society (Rogers and Hall, 2003). ‘Governance’ in its general sense refers to the processes and systems through which a society operates. It relates to the broad social system of governing, which includes, but is not restricted to, the narrower perspective of government as the main decision-making political entity. Governance refers to both formal and informal structures, procedures and processes. Linking WG and G generally in this way reflects the fact that that any water system is an inseparable part of the environmental system as a whole and that the societal and environmental systems are inextricably bound up with each other as well. Thus the water system use cannot be understood separately from

land use spatial planning soil management climate change demographic developments economic consumption and production public health, environmental management trade politics development cooperation national security

THE PRE-HISTORY OF IWRM Water resources management practice has undergone changes in management approaches and principles over time. It was previously characterised by what scholars refer to as the hydraulic mission era where the emphasis was almost

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solely on the engineering aspects at both the project construction stage as well as during the process of day to day management. During the heyday of the hydraulic mission approach, water resources managers and policy makers were driven principally by the need to manage and supply water to people for direct uses: domestic water, including in particular healthy water for drinking; health agricultural water for food and other fibre products, industrial water as well as energy water - water for hydro-electricity and for cooling of thermal electric plant. In many cases the objective was to try and supply as many of these types of water (agricultural, domestic and health water, industrial as well as energy water) from the same dam or set of dams. In terms of the two aspects of water management – supply enhancement and demand management, the focus was more on supply than demand.

Table 3.1 - Supply and Demand Strategies in water Supply enhancement strategies Demand management strategies 1. Build/enlarge dams 2. Drill/improve wells 3. Build interbasin water transfer

facilities 4. Repair leaky infrastructure 5. Build desalinization plants 6. Restructure reservoir operations to

release/store more water at specified times

1. Establish water conserving standards and codes requiring industry and domestic users to use demand-management oriented equipment and technology

2. ration water or constrain water use 3. establish water trading and water

markets as a tool for reducing/rationalizing demand and shifting water to higher value uses

4. Use pricing to shift demand in desired directions

5. educate water users about demand management options and consequences

CONSTITUENTS OF IWRM1 IWRM has the following elements

Management recognises the intrinsic value and importance of water and not merely its availability to satisfy economic needs.

Management manages land and water together given that every land use decision is potentially a water resources decision

water needs to be managed at the lowest appropriate level using a bottom-up rather than a top-down, approach;

1See generally, Roland E. Schulze, Some foci of integrated water resources management in the “South” which are oft-forgotten by the “North”: A perspective from southern Africa, Water Resources Management (2007) 21:269–294 at 271

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water allocation neds to take account of all affected stakeholders, including the often non-vocal poor and the environment;

water should be recognised as an economic good with the principles of demand management applied, with appropriate pricing policies, to encourage efficient usage of water between competing sectors such as domestic, agriculture, industry and the environment.

ELEMENTS OF AN IWRM SYSTEM 2 Concepts and elements of an IWRM system can be set out as follows:

Table 3.2 – Concepts and elemens of IWRM IWRM concept Areas to target for change

The enabling environment

(1) Policies – setting goals for water use, protection and conservation (2) Legislative framework – the rules to follow to achieve policies and goals (3) Financing and incentive structures – allocating financial resources to meet water needs

Institutional roles (1) Creating an organization framework – forms and functions (2) Institutional capacity building – developing human resources

Management instruments (1) Water resources assessment – understanding resources and needs (2) Plans for IWRM – combining development options, resource and human interaction (3) Demand management – using water more efficiently (4) Social change instruments – encouraging a water conservation oriented civil society (5) Conflict resolution – managing disputes, ensuring equitable sharing of water (6) Regulatory instruments – allocation and water use limits (7) Economic instruments – using value and prices for efficiency and equity (8) Information management and exchange – improving knowledge for better management

2 Wame L. Hambira, Natural resources accounting: A tool for water resources Management in Botswana Physics and Chemistry of the Earth 32 (2007)

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EVALUATING PROGRESS IN IWRM Hooper3 has suggested that the following indicators are worth exploring to assess whether progress is being made towards achievement of integrated river basin management, a key subset of IWRM. The themes identified are arguably equally applicable to IWRM proper. Chapters 7 and 8 explore a number of diagnostic tools which closely relate to these benchmarks and can be used to assist with development of policy initiatives and their evaluation. Hooper’s benchmarks are:

coordinated decision-making – the use of coordination mechanisms between and within agencies and basin organizations; consensus based decision-making; links between local water institutions and a basin organization; how relevant sectoral interests are engaged

responsive decision-making – decision processes which adapt to new knowledge and new conditions; promote efficiency; value cross-sectoral dialogue; promote best practices

goals, goal shift and goal completion – achievement of goals using an integrated approach

financial sustainability – evidence of ongoing financial support, cost-sharing, transparency, innovative water pricing and demand management

organizational design – the use of democratic processes; evidence of stable international agreements and evidence of national water policy conducive to river basin management; use of organizational structures which fit basin needs and avoid fragmentation

role of law – the existence of laws which support river basin management; laws characterized by strong & flexible arrangements

training and capacity building – the use of ongoing training and capacity building of staff relevant to basin needs

information and research – the existence of a knowledge system to aid decision-making, protocols to share information, and a culture of research-knowledge links

accountability and monitoring – evidence that basin organizations are accountable to constituent governments & citizens; use of transparent reporting mechanisms

private and public sector roles – evidence of stakeholder participation; clear specification of roles of private and public sector.

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3 Hooper, Key Performance Indicators of River Basin Organisations (2006), 31.



BROAD-SCALE WATER RESOURCE MANAGEMENT VS PROVISION OF WATER SERVICES The different uses of water generate overlapping but different sub-sections of the water sector. Each sub-sector has its own logic, approach and also discourse or specialized language. Standing above all these requirements, there is also the requirement that water sources – GW/SW be managed at a broad-scale, with respect to the resource itself but also in relation to and in competition with other resource systems. Water managers need The newest sector in water resources management – water for eco-regulatory purposes or environmental water exemplifies all the areas of interaction and contest that are possible in water resources management. In trying to make sense of this diversity, this unit makes a conceptual distinction between two categories: (1) Broad-scale water management (BSWRM); (2) Provision of water services (PWS).

BROAD-SCALE APPLICATION OF IWRM – THE RIVER BASIN APPROACH Broad-scale water resource management refers to frameworks for managing large physical areas such as river basins , catchment regions etc. BSWRM operates at some combination of national, regional, local and/or transboundary scales. BSWRM is one of the themes of this course of study and for our purposes is represented by the The Mekong River arrangements as well as the Murray-Darling arrangements. Integrated water management at this scale by definition means a cross-sectoral approach towards the manifold uses of the water resource, and the environment that re-generates that resource in the watershed. The scope of the issues to be addressed is set out by Figure 3.2 – 3.9 each graphic presenting the management task from a different perspective. Depending on region, country, history, available resources and patterns of water use, BSWRM would be involved in managing one combination or another of these types of physical infrastructure: dams, reservoirs, canals, aqueducts, irrigation schemes, hydroelectric plants, , navigation facilities (e.g. locks) etc.

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Figure 3. 1 Broad-Scale IWRM4

It is also now generally accepted that to achieve BSWRM there will be one organisation or preferably a network of organisations undertaking the following tasks:5

Short & long-term planning of the supply capacity of the basin/catchment, as well as issues of demand in the basin. This implies forecasting of changes in demand structure and in the geographical attributes of the basin (land use, industrialization, etc.).

Coordination of the activities of the different technical agencies and local governments in the basin in accordance with some form of basin/catchment plan.

Operation of the basin’s infrastructure to balance demand and supply on both short and long term bases

Allocation of water to competing users

4 Adapted from Roland Schulze, Uncertainties in Water Management - From Present into the Future, Newater Summer School 2006

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5 The combined member registry of the International Network of River Basin Organizations (INBO) and the Latin-American Network of River Basin Organizations (LANBO) shows approximately 250 affiliated entities.



Prevention and mitigation of conflicts among users notably between upstream and downstream stakeholders.

Conducting financial management, and ensure financial sustainability of basin management, through careful planning, cost recovery, and acquisition of supplementary subsidies.

Strengthening of public commitment to water management by extending information, instituting mechanisms that ensure that stakeholders participate and the agency is transparent and accountable.

Expanding availability of different types of water resource by financing and/or implementing non-structural measures (such as water re-use, or subsidies to households to lower water consumption)

Expanding availability of different types of water resource by supply augmentation, typically involving the financing and/or construction infrastructure.

This last aspect, supply augmentation, has historically been the dominant task of river basin organisations in both developed and developing countries. Today, large scale supply augmentation projects (or put another way, dams and yet more dams) have come under intense scrutiny and critical attention. Although supply augmentation is still on the agenda in many countries, it is much less so in the developed world. Supply augmentation especially when it involves more than one project or more than one possible site typically addresses

project location and size; evaluation of project reliability and resilience; allocation of project costs and benefits and associated financing issues scheduling and sequencing of projects; real-time operation of projects

Despite the broad The factors influencing the evolution and effectiveness of BWRM arrangements are highly specific as shown by Figure 3. 2

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Figure 3. 2 Factors influencing evolution & effectiveness of BSWRM 6

Figure 3. 3 Broad scale management – Technical and Physical Aspects7

6G.J. Alaerts, Chapter 18: Institutions for River Basin Management A Synthesis of Lessons in Developing Cooperative Arrangements in Guy Alaerts, Guy Le Moigne, Integrated Water Management at River Basin Level - An Institutional Development Focus on River Basin Organizations http://worldbank.org/html/fpd/water/waterweek2003/Presentations/Session%2027%20-%20Multi-sectoral%20approaches%20in%20River%20Basin%20Management/GuyAlearts-DevCoopArrangements_Paper.pdf

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7 Ximing Cai, Claudia Ringler, Mark Rosegrant, Modeling water resources management at the basin level : methodology and application to the Maipo River Basin, International Food Policy Research Institute Report 149 (2006)






Figure 3. 4 BSWRM – Policy Concerns and Information Requirements8

Integration Aspects of BSWRM As Figure 3.1 – 3.9 demonstrate, BSWRM poses enormous challenges as far as decision-making information, integration, policy formulation, implementation, co-ordination and system steering mechanisms are concerned. Fortunately, very few organizations are required to undertake each aspect of these levels and sub-levels of management/governance under one roof. However, IWRM does require that there be integration of all key aspects of activity across these levels. Finding methods to effect this integration is one of the key challenges faced by IWRM. Figure 3.. 2- 3. 9 provides an overview of the extent of the integration task.

8 Source: Ximing Cai, Claudia Ringler, Mark Rosegrant, Modeling water resources management at the basin level : methodology and application to the Maipo River Basin, International Food Policy Research Institute Report 149 (2006)

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Figure 3. 5 BSWRM – Economic-Ecological Integration Requirements 29

Figure 3. 6 BSWRM –Administrative Integration Requirements 10


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10Ximing Cai, Claudia Ringler, Mark Rosegrant, Modeling water resources management at the basin level : methodology and application to the Maipo River Basin, International Food Policy Research Institute Report 149 (2006).



Organisational structures for implementing BSWRM In terms of organisational structure Figure 3.7-3.8 set out ideal organisational arrangements that Broad-Scale organisations using IWRM approaches might usefully aspire to. Again it is important to note that the organisational components set out here do not need to be internalised within one large or super organisation – they are likely to be more effective when undertaken within some form of distributed or network arrangement.

Figure 3. 7 Ideal Type – RBO implementing Broad Scale IWRM11

Key

Terms of reference refers to the mandate of the organisation Requirements refers to what is required to achieve the objectives or mission of the organisation Management in a technical sense would deal with the artefacts and infrastructure at the heart of the system

including non-tangible aspects of operating those structures – technical knowledge etc.

------------------------------------------------------------------------------------------------------------ 11 Newater paper



Management in the business sense would deal with the business of the organisation – financial etc

Figure 3.8 Ideal Type – Activities of a RBO implement ting Broad Scale

IWRM12

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PROVISION OF WATER SERVICES

Provision of water services covers an equally diverse set of activities. Many water service arrangements are nested within broad-scale arrangements. Thus irrigation arrangements in NSW, operating as a collection of irrigation districts are nested within the larger broad-scale system – the Murray Darling physical and non-physical system or the Murray-Darling SES. Provision of water in urban areas is another good example of PWS. Typically, PWS for commodity/consumptive purposes occurs as follows with a single organization usually the dominant entity with respect to a particular geographical or service area:13

Within its area of concern, the water services or supply organization (WSO) supplies finished, processed or retail water to all entities (individuals, homes, families, irrigated farm sites, commercial industry, other water supply organisations etc.)

The WSO or utility may supply only one user group or it may supply multiple user groups – governance and consultation tasks may be relatively easy or difficult as a result & trust between supplier and consumers may also be high or low as a result

The WSO may be publicly, privately or collectively owned by a user group – a key governance question and closely related to the question of dispute settlement, privatization, accountability, transparency, corruption , water as an economic good issues etc.

The WSO may be a for-profit or a not-for profit organization – a key governance question and closely related to the question of privatization, participation, dispute settlement, accountability, transparency, corruption , water as an economic good issues

The WSO typically takes in raw, unprocessed or natural water from a surface watercourse or a groundwater aquifer (or both) and then transforms that natural water into the particular type or types of retail water appropriate to the needs of its client base – a key issue related to pricing, valuation and market-based or economic incentives as a theme in water governance

Some WSO may buy water from other suppliers – transparency, costs, pricing issues arise here

The WSO transformation tasks undertaken by the WSO may be few or many depending on the differences between the state of the natural or partially treated water taken in by the WSO and the types/quality of retail water desired by end-users

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13 This section on PWS and the duties of WSO is based on Ronald C Griffin, Water Resource Economics – The Analysis of Scarcity, Policies and Projects (2006) 13-15.



WSOs with simpler tasks would be irrigation WSOs as they may only need to move water from point A to point B – the water quality satisfies the irrigators and thus the tasks left to be tackled are pumping and conveying water to the farm gate

Irrigation WSOs would have to construct, manage and maintain pumping plants; conveyance facilities (canals, pipelines etc.)

Irrigation WSOs would have to pump energy and perform administrative tasks – planning, management, accounting, billing etc

User-based WSOs in developing country contexts would have other tasks of consultation to carry out under participatory irrigation management or irrigation management transfer arrangements

For both WSOs in urban and rural areas, politics is an important consideration around issues of supply enhancement, demand management, competing uses for their sources of water, pricing and shortages of water as well as energy supply.

Figure 3. 9 Relationship between PWS for municipal use and the GW/SW

cycle14

Urban WSOs have more complex tasks (pumping, conveying, transforming, planning, management, accounting, billing, operations and maintenance etc.)

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WSOs in urban areas typically serve different users and have to address user preferences with respect to reliability as well as rules to do with water quality

WSOs in urban areas typically also have to address issues of constantly pressurized water, shortages, leaks, illegal connections etc.

WSOs may have to engage in water treatment to meet quality and cultural requirements

WSOs in urban areas have mauch higher costs than rural or irrigation WSOs (treatment, pressurization, reliability, greater diversity of customers – all associated with more complex technological and management requirements)

Clearly PWS considerations are quite different from those of BSWRM with PWS nested within BSWRM arrangements. The two aspects of PWS dealt with in more detail in this unit are (1) irrigation services to agriculture; (2) water and sanitation in urban areas

GOVERNANCE ASPECTS Governance is defined in many different ways as shown by Chapter 1. The term governance is now used in many different situations and contexts: water governance, corporate governance, international governance, national governance, local governance. etc. Governance can be good or bad.

Good governance

Figure 3. 10 Characteristics of good

governance15

Good governance has 8 major characteristics. It is participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of law. It assures that corruption is minimized, the views of minorities are taken into account and that the voices of the most vulnerable in

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15 Source: United Nations Economic and Social Commission for Asia and the Pacific, 2004. Human Settlements: What is Good Governance. http://www.unescap.org/pdd/prs/ProjectActivities/Ongoing/gg/governance.asp



society are heard in decision-making. It is also responsive to the present and future needs of society.

Table 3. 3 Example of Good Water Governance practices in a developed country setting - PWS

Respect for the rule of law

Ensuring that minimum chlorine residuals are maintained in the water distribution system.

Accountability

Demonstrating adherence to capital plans for water and sewage infrastructure through publicly available audited financial statements.

Responsiveness Developing a long-term plan to ensure water and sewage system capacity to accommodate future growth.

Effectiveness and efficiency

Scheduling water main repairs at the same time as road repairs.

Transparency Making results of raw and treated water quality testing publicly available. Participation Soliciting public comments about restructuring options for restructuring the

water supply utility Financial sustainability

Full lifecycle investment needs are the basis for program spending.

Accountability, Transparency & Controllability Accountability denotes a relationship between a bearer of a right or a legitimate claim and the agents or agencies responsible for fulfilling or respecting that right. One basic type of accountability relationship is that between a person or agency entrusted with a particular task or certain powers or resources, on the one hand, and the ‘principal’ on whose behalf the task is undertaken, on the other. A duty to be accountable can be discharged in different ways, but all accountability mechanisms operate according to three principles:

Table 3,.4 Element Explanation Transparency requires that decisions and actions are taken openly and that sufficient

information is available so that other agencies and the general public can assess whether the relevant procedures are followed, consonant with the given mandate;

Answerability means an obligation on the part of the decision-makers to justify their decisions publicly so as to substantiate that they are reasonable, rational and within their mandate;

Controllability

refers to mechanisms in place to sanction actions and decisions that run counter to given mandates and procedures – often referred to as a system of checks and balances or enforcement mechanisms. The checks may take many forms, including shaming and praise. Impunity is the antonym of accountability and apportioning blame for harm done is an important component of accountability.

Access to information as an accountability mechanism Access to information refers to the right of interested parties (the public, NGOs, the media, etc.) to receive information held by government. This right, protected

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by international and national laws, provides that official documents should be generally available, and that any exceptions should be limited and specific. Access to information increases government accountability to its citizens and reduces opportunities for corruption.

WATER MANAGEMENT TASKS Previous discussion has established that water is a valuable resource requiring proper management. It has also been shown that management must frequently deal with a complex “system” composed of many interconnected parts. It is also often difficult to subdivide the original problem into independent sub-problems. A big picture person (often a social scientist or a technical person with large amounts of experience might pose the questions as follows:

How do we define the “system”? How large – questions of geographical scale ? Over what time scale? How much detail? What is the right balance between the technical aspects/physical

infrastructure and artefacts & social/political/economic/cultural institutions? The more practical person or at a lower level of planning and oversight requirements might see the task as follows:

River basin management – tasks here relate to facilities (reservoirs, aqueducts, irrigation infrastructure, etc.) and how to maximize benefit from the use of these artefacts

Aquifer management – tasks here relate to installation and operation of wells and recharge areas

Capacity expansion – how much should facilities be expanded, when? Real-time operations – what to do today, considering impacts on the

future (e.g. reservoir operations) Remediation – selecting the best mix of remedies for cleaning up

contamination, for example in a groundwater context Hazard prevention/mitigation – how should we respond to hazards such as

hurricanes and associated flooding, rebuilding, prevention, etc. Clearly WRM involves:

Working in conditions of constant uncertainty – future events, physical processes, etc.

Significant constraints or limits in terms of resources Undertaking balancing, compromises and tradeoffs (pitting benefits

against costs) against this difficult background

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THE CRUCIAL IMPORTANCE OF INFORMATION Water resource management has a very high level of requirements as far as information is concerned. It also requires the merging of diverse types of information, information fusion and assimilation having even more importance than just acquisition of information.

Table 3. 5 Managing a River Basin for agricultural purposes

Sample set of economic information requirements river basin level – Chile16

• Irrigation technology/Christiansen Uniformity Coefficient • Irrigated area by crop in each demand site • Crop production by demand site • Crop yield and relative crop yield (actual yield/potential yield) by crop and demand site • Irrigation efficiency (field application efficiency, system efficiency, and efficiency at the river basin scale) • Water application per hectare by crop and demand site • Total profit from all water uses • Profit for each demand site • Profit for each sector • Profit for each hydropower station and total hydropower profit • Profit per unit of water for each crop in each demand site and over the whole area • Profit per hectare for each crop in a demand site and over the whole area • Irrigation profit per unit of water supply in a demand site • Water market (amount of water bought and sold and water trading prices) • Agricultural inputs (water, fertilizer, pesticides, machinery, labor, irrigation investment, and seed for each crop in each demand site) and marginal return of each input

• Water withdrawals for each demand site • Flow through river and tributary nodes • Flow to pollution sinks and flow out of the basin (to the ocean or to another basin) • Flow diverted out of the basin • Flow reserved for instream/environmental purposes • Reservoir inflow, release, and storage • Energy generation from hydropower production • Water allocation by sector: agricultural, industrial, and municipal • Actual crop evapotranspiration (ETA) for each crop in each demand site • Water allocated to crop stages (including diverted water and local water) • Groundwater pumping to a crop field in each stage for each crop in each demand site • Groundwater pumping to municipal sites in each month • Groundwater table in each month • Effective rainfall for each crop field in each demand site • Deep percolation for each crop in each demand site • Drainage reuse in each demand site • Return flow from each crop field in each demand site • Salt concentration in river reaches, reservoirs, and groundwater sources • Salt concentration in drainage, return flow and deep percolation • Salt concentration in mixed irrigation water



Table 3. 6 Water Resource Management – A Diversity of Situations The following subsets of water resource management can be distinguished: Management Context and Type

Conceptual category

Core Features Balance between BSWRM and PWS

River basin/ Catchment management Management region typically covers a large area comprising numerous communities and local administrative units that otherwise would not be involved with each other.

BSWRM

Highly complex technically, politically, economically and socially Water in this context has public-good and common-pool-resource

characteristics, Highly costly Very high level of externalities both within and outside

management area Often trans-boundary further complicating technical, political,

social, participatory, cultural and economic complexity Integration and co-ordination requirements are very high

Principally BSWRM with PWS nested within the broad-scale framework

Institutionally problems arise where BSWRM and PWS aspects in the basin become confused

Depending on size of urban areas, irrigation sector and hydropower, PWS objectively may overwhelm BSWRM aspects

Urban water supply in developed urbanized contexts PWSO provides a service to individuals against a price, and benefits from economies of scale as all service takes place in a confined area

PWS Polar opposite from BSWRM at river basin level Water within this framework largely treated a private good & fewer

externalities exist Users (“customers”) are able and willing to pay a reasonable price,

ensuring sustainability Price instruments and demand management can be used

extensively Shows least technical complexity - complexity currently from

ecological demands, pressures to introduce water trading as allocation tool & search for higher sustainability of urban life styles

Competition between urban water and agricultural and ecological water sectors

PWS primarily but elements of BSWRM to manage competition with other users of water particularly agriculture but also from the point of view of wastewater, pollution control, provision of recreational and ecological services

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Management Context and Type

Type Core Features Balance between BSWRM and PWS

Urban water supply in developing poverty stricken urbanized contexts

PWS Highly complex at all levels (technical, social, economic and political)

Usually a core of reticulated services surrounded by layers of semi-reticulated and completely unserved and unsewered regions

Economic aspects particularly difficult due to poverty, cultural constraints, absence of supporting infrastructure encouraging culture of payment

Corruption and poor governance/government problems

Interactions between water, health and poverty particularly difficult to manage

Dependent on donor investment High level of informal institutional arrangements

and norms with considerations of class, culture, religion, caste, gender, age, patronage highly important in some contexts

Community based management very difficult Populations subject to governance not easily

amenable to governance Paradigm examples – Manila, Djakarta

PWS but depending on size and footprint of urban region, critical to BSWRM for the affected region

BSWRM elements also important to manage competition with other users of water particularly agriculture but also from the point of view of wastewater, pollution control, provision of recreational and ecological services

In practice BSWRM often ignored due to pressure to manage PWS aspects and difficulties of governance control and participation

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Type Core Features Balance between BSWRM and PWS

Irrigated networks developing country context

PWS/BSWRM More complex to manage than urban or rural water supply and often interlinked with rural water supply either officially or informally

Social frameworks often disconnected culturally from Official state system of particular country

Construction is normally heavily subsidized either directly or indirectly

Donor (Western and now Chinese) involved as suppliers of capital

Level of technical complexity higher than rural water supply, increasing risks and the need for information. Social systems in which irigation networks embedded are extremely complex and fractured by class, cultural, religious, caste, gender, age, patronage and other considerations

Subsidisation poses a twofold managerial challenge: (1) water must be allocated among competing users according to their cropping pattern; (2)

infrastructure must be maintained properly. Difficult to bar access to canal water, and

farmers can maintain the system only if jointly pay for it.

Farmers dependent on same system may live far apart and be fractured along complex lines of class, culture, group identity (assigned or assumed) religion, caste, gender, age, patronage, relationship to the official state system etc.

PWS/BSWRM both present – balance varies depending on size of the irrigation scheme

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Conceptual category


Irrigation networks developing country contexts continued

BSWRM applied to PWS

Key management tasks require a high degree of cooperation but many constraints based on class, culture, group identity (assigned or assumed) religion, caste, gender, age, patronage, relationship to the official state system

Networks often subject to two or three sets of institutional norms – customary/local highly embedded ones often constituting the actual rules in use and official rules either from the project of State law or a combination of project rules and State law Double or triple combination typically imposes a heavy burden in terms of transaction costs, efficiency as viewed from a Western rational neo-classical economics perspective and major constraint on effective governance from both a Western or non-Western perspective

Trend now towards irrigation management transfer or participatory irrigation management

Informal markets which are effectively lease markets or markets to purchase quantities of water from primary rights-holder

Networks based on groundwater different from surface water

Many networks use both groundwater and surface water

Increasingly producing globally traded goods


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Conceptual category


Irrigation networks in developed country contexts Paradigms are Chile and Australia

More complex to manage than urban or rural water supply in developed country contexts and often interlinked with rural water supply either officially or informally

Many subject to some form of water trading and water markets and ecological water rules

Many now in active competition with urban water and ecological water

High degree of technical sophistication, metering and price signals

Highly amenable to demand management Extremely dependent on global markets and prices


Rural water supply in developed country contexts

Halfway between provision of developed irrigation services and urban water supply

Highly linked with both irrigation services and urban water Not different from urban water supply in nearby larger cities May be subsidized for social reasons and population

depletion etc.

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Conceptual category


Rural water supply in developing country contexts

Halfway between provision of irrigation services and urban water supply with problems of both

A tap point or hand-pump usually serves more than one family with points scattered throughout the country side or dependent on groundwater

Users typically very poor & costs difficult to recover Communities often fractured along complex lines of class,

culture, group identity (assigned or assumed) religion, caste, gender, age, patronage, relationship to the official state system etc

Dispersion prevents economies of scale Subsidies open opportunities for patronage and corruption Highly informal and NGO driven sector with NGOs both

Western and other central to sector Considerable space for and success with user design and

management but subject to migration, culture and other challenges

Networks often subject to two or three sets of institutional norms – customary/local highly embedded ones often constituting the actual rules in use and official rules either from the project of State law or a combination of project rules and State law

Double or triple combination typically imposes a heavy burden in terms of transaction costs etc.

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Conceptual category


Wastewater management and pollution control Very well established in developing country context and very limited in developing country context

PWS/BSWRM elements

High technical with pollution coming from both point and non-point sources of pollution

Point source easier to manage than non-point Agencies typically manage water pollution as one of many

other types of pollution and are disconnected from water supply and water demand management agencies

Technical complexity and unit costs are much higher than those of water supply

Has aspects of both BSWRM and PWS

Delivery of Hydropower

PWS/BSWRM elements

Highly technical in both developed and developing country contexts

Major challenges posed by climate change Community support for dams and hydropower currently very

low in both rich and poor countries

PWS/BSWRM elements all mixed up with each other

Delivery of water as a recreational service

PWS/BSWRM elements

Highly developed in rich countries but emerging in others PWS/BSWRM elements all mixed up with each other

Delivery of ecological water services

PWS/BSWRM elements

Emerging BSWRM task


THE INTEGRATION TASK IN IWRM Co-ordination/integration within water governance has both internal and external aspects. coordination is of major importance in the areas of promoting water use efficiency, ensuring sustainable water use, encouraging equitable sharing of the limited water resources and providing environmental water or an environmental reserve of water. IWRM usually requires the development of institutions with the capacity to integrate, not necessarily the creation of new, completely different ones.

Types of integration in IWRM

Sectoral (and sub-sectoral) integration that takes into account competition and conflicts among various users Geographical integration, Economic, social and environmental integration that takes into account social

and environmental costs and benefits, Administrative integration that coordinates water resources planning and management responsibilities and activities at all levels of government.

Factors that can be mobilised to support integration in IWRM

Table 3. 7 Factors supporting integration17 Administrative discretion

The amount of discretion given to administrators at different levels of the administrative hierarchy to implement policy, including whether there are strict implementation rules or sufficient flexibility to ensure that their actions are effective.

Administrative flexibility

The capacity of the administrative system to adapt to new ideas and information, to shift resources, adopt new technology and deal with unforeseen consequences, and, conversely, the extent to which existing management structures simply reflect historical circumstances rather than current problems.

Administrative jurisdiction

The extent of responsibility held and shared between individual agencies, including the sharing of responsibility between agencies, the effectiveness of these arrangements, the level at which policy is formulated and developed.

Administrative structures

The manner in which individual agencies and groups of agencies are organised, and the relation of that structure to the objectives associated with the water resources management problem in the case study, and how it has been influenced by the various administrative jurisdictions of the agencies involved.

Data availability

The availability, methods and speed with which all types of information are made available to those involved in decision-making and policy

17 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262, 252

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implementation. Decision-making

The process by which specific measures to achieve objectives are formulated and developed, including the stages at which the various agencies are involved, the frequency of consultation, and the presence of inter-agency decision-making arrangements.

Enforcement powers

The legal and other arrangements that individual agencies and groups of agencies can use to encourage and persuade resource managers and users to adopt practices which are consistent with their objectives, including how these powers are related to the administrative jurisdictions of the various agencies associated with the water management problem.

Financial resources

The quantity of financial and human resources available to agencies, including the relation of this quantity to administrative structures, the role of the private sector and the effect of integration on resource needs.

Image The reputation that an agency or group of agencies present, and the way that this has affected the development of integrated water resource management policies.

Objectives The presence or absence of a formal statement of intention to achieve planned results, including how and where the objectives are formulated, whether common to more than one resource management agency, the frequency of review, etc.

Performance evaluation

The extent and manner in which agencies collect and use information to assist them with review of integrated policies.

Public accountability

The extent to which decision-makers are responsible to the public for their actions, and the consequences of either taking the wrong decision or not taking any action at all, including the extent of parliamentary, Ministerial and public involvement.

Staff quality The education, experience, knowledge, perspective, and capabilities of individual people responsible for decision-making and implementation, and the changes in staff necessary to make integration effective.

Achieving Integration – the most difficult management task?18 IWRM typically involves a broad range of government agencies, non-governmental organizations and individuals representing a range of interests and perspectives. Integration is thus central to attaining IWRM. At the same time, issues addressed through IWRM are complex, and co-ordination must be an ongoing enterprise to allow adaptation and mutual adjustment.19 One of the keys to operationalizing the concept is stakeholder co-ordination through clearly specified arrangements. A co-ordination diagnostic can be used to analyse possibilities and gaps for achieving integration. In combination with evaluation criteria and participant knowledge, it can be used to develop options for improving co-ordination arrangements.20 18 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262, 252 19 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262, 252 20 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262, 252

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Integration – Process and Power Issues Establishing effective integration processes requires two sets of questions to be addressed: (1) process issues; (2) power issues. As regards process, the participants involved in developing co-ordination/integration arrangements are all relatively autonomous entities that are generally not bound by formal hierarchy.21 As regards power, the questions that need attention and to which answers cannot be specified in advance are: (1) Who does the integrating? (2) Whose interests should be reflected in the integration process and how should such a process be governed to ensure that the interests of all stakeholders are equitably reflected? (3) How should disputes be resolved?

Co-ordination vs co-operation Co-ordination and co-operation are common terms used when analyzing or proposing integration. They have distinct meanings. Co-ordination is arguably interdependent decision making, whilst co-operation involves entities working together but seperately to achieve their respective individual goals.22 To the extent that co-ordination is different and more complex it is because it should in principle produce adjustments in the outlooks, objectives and operational methods of the entities involved.23 In contrast, co-ordination is more momentary and limited, as it appears to create linkages that are temporary and elaborated on in a simple way with effects on structure less likely.24 Given that co-ordination involves greater interdependence among the participants, it is also practically more difficult to achieve carrying higher transaction costs and a greater threat to organizational autonomy.25 This is because with co-ordination, entities must share information, develop shared outlooks and also resolve differences.26 In the context of IWRM, the resolution of differences is particularly critical as conflicts among participants can vary rapidly subvert the attainment of goals.27

21 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262 22 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262 23 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262 24 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262 25 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262 26 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262 27 Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262.


Table 3. 8 Providing Integrative/Co-ordination Activity with a structure28 Category Results to be achieved Explanation Scope What issues need to be addressed through an integrated approach?

Rules specifying the set of concerns being addressed through the co-ordination arrangements (e.g. array of watershed management activities, water allocation, remediation of polluted water and sites etc.).

Scoping defines the problem-shed, set/cluster/range of issues which require co-ordination. Some water management needs (for example control over waste disposal from an individual treatment plant) can be addressed in isolation from larger systemic issues. Other needs such as water allocation within a major river basin clearly require consideration of many issues within a larger scale. Participants in an integration exercise must clearly establish the overall scope as well as to some degree the parts of the overall 'problematic situation' being targeted. Example In River Basin C, State and Federal agencies, dam operators and other stakeholders came together to address dam re-licensing from a multifunctional, basin-wide perspective. The scope of these co-ordination arrangements was the basin-wide consideration of ecological, recreational and economic issues germane to re-licensing. Establishing this scope came about iteratively and after a significant number of meetings. It was not determined at the start of the integration process. However, explicit attention was paid to establishing the true scope of the exercise.

Rules governing structure Position

Rules that specify positions and the roles attached to those positions (e.g. agency, user group, co-ordinator, co-ordinating committee, co-ordinating organisation).

Position rules specify the entities involved in co-ordination activities and their roles in this setting. These roles could include stakeholder committee member, co-ordinator or co-ordinating entity. Example Stakeholders in a process to create legal rights for an aquifer in Country Z became involved through either their positions on a pre-existing inter-agency Technical Committee or Advisory Committee. Membership of the integration oversight committee for the process was open to any individual expressing an interest in being involved, but was formally authorized by a letter from the Department of Natural Resources for Country Z (boundary rule). These rules provided guidance as to who the participants in the co-ordination arrangements were and how they become/became participants. For example, the rules highlighted the roles of participants (technical or advisory position) and the role of Country Z’s Department of Natural Resources in determining membership (appointment procedure).

28

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Category Results to be achieved Explanation Rules governing process Authority

Rules that explicitly define the co-ordination activities (information exchange and conflict resolution) assigned to positions; and the constraints on autonomy and/or unilateral action; and the basis of the power.

Authority rules define the extent of the inter-stakeholder authority imposed upon position holders. Authority rules are defined by three components. Component 1: the rules identify the array of co-ordination activities in which the position holders

can or cannot participate (information exchange, conflict resolution). Component 2: the authority rules define how binding or permissive the co-ordination authority is on

position holders (i.e. the degree to which unilateral action is precluded). Component 3: the rules specify the basis of authority (e.g. law, plan, administrative policy, informal

agreement). Example For example, state agencies and local governments operating in Area M in Country J, co-ordinate operational management activities through a Technical Committee. The authority of this committee is defined in a management plan, which the principal officials of each participating entity have signed (basis of authority). The participating organizations agree to bring all pending permits to the committee so they can collectively review them and make a joint recommendation (array of co-ordination activities). The legal power of the jointly signed plan is unclear, but the participating organizations can apply peer pressure to attain compliance with these procedures (degree to which authority is binding). Importantly, the authority rules focus on the ability of co-ordination arrangements to constrain unilateral action. As noted above, each of the entities participating in the co-ordination arrangements may have a range of unilateral powers related to mission and function. In some situations, evaluating coordination arrangements may require a comparison between these unilateral powers and those that are constrained through the co-ordination arrangements.

Rules governing process Information to support the integration process

Rules that specify the kinds, forms, timing and processes of information exchange among the position holders (e.g. shared database, monthly meetings, electronic networks).

Information rules specify the content of the information that participants must exchange, the form of the information and the timing of the exchange. These rules may provide position holders with general guidance (reports on activities at monthly meetings), specific guidance (refer permits to another organization for comment), or detailed exchange procedures (submit monitoring data on a weekly basis to a joint database). Example For example, biologists and managers working on the UVW River in Country G have established regular processes for exchanging information on sediment disposal options. The Army Corps of Engineers for Country G notifies state and federal managers and other stakeholders of proposed sediment disposal sites and provides them with information on dredging and disposal options. The managers comprise an 'on-site team' that identifies potential beneficial uses of the sediment, conducts joint evaluations of proposed disposal sites, and provides a set of recommendations to the Army Corps.

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Category Results to be achieved Explanation Rules governing process Decision-making authority

Do participants have a clear and common understanding of how they make collective decisions and resolve conflicts at various points in the management arrangement?

Decision rules specify the processes by which the aggregated position holders make decisions (e.g. general consensus or voting procedures such as unanimity, super majority, simple majority or plurality). For example, the members of a policy oversight team can use a simple majority vote fo recommendations to implementation teams at Agency level. In this example, the authority rules determine the degree to which the team recommendations bind or influence decision making at operational leve. The decision rule is important for understanding how participants reach decisions, which may be valuable for evaluating both structure and process. For example, a stakeholder group that uses a voting decision rule will probably find that the boundary rules significantly increase in importance, because the group composition influences the outcome.

Tble 3. 9 Implemenging Integration/Co-ordination - Diagnostic Instrument for Gaps in Arrangements29

Theme Rule Questions Score 1-5 Problem domain

Scope Have the participants clearly identified the substantive breadth of their co-ordination/integration activities?

Rules governing structure

Position Do participants have a clear and common understanding of who is involved in the co-ordination enterprise?

Boundary Do stakeholders have a clear and common understanding re membership of framework ?

Rules governing process

Authority Do participants have a clear and common understanding of tauthorised co-ordination activities and authority base? These include: An understanding of the co-ordination activities that have been authorised; An understanding of the limits on autonomous action (binding or permissive); An understanding of the enforceability of any binding authority (law, informal agreement).

Information Do participants have a clear and common understanding of what and how information will be exchanged (including such factors as type, format, participants, timing)?

Decision Do participants have a clear and common understanding of how they make collective decisions and resolve conflicts at various points in the management arrangement?

29


MANAGING ACTORS, INTERESTS AND STAKEHOLDERS Stakeholders – those who are directly or indirectly affecting or being affected by a management decision 30 Management of Actors/Stakeholders and legal/policy regimes at River Basin Level can be conceptualised as follows

Figure 3. 11 - Management of Actors/Stakeholders and legal/policy regimes at River Basin Level

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30 Participation article Newater PPT



Figure 3. 12 - Urban Stakeholders in developing countries

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Figure 3. 13 Stakeholders in the Governance System for Water in the United

Kingdom31

Source: Bakker, K. 2003. Good Governance in Restructuring Municipal Water Supply: A Handbook. [http://www.powi.ca/pdfs/governance/goodgovernance.pdf] at 25

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MANAGING PARTICIPATION32

Good reasons for encouraging participation

supports decision making33 - additional sources of local knowledge and data

quality and quantity improved; additional sources of opinion; development of win-win plans; increase time and cost savings; better, efficient decisions; increased public awareness

increased support for plans increased involvement in maintenance, implementation and evaluation

Bad reasons for encouraging participation34 to manipulate public opinion to get other people to do your work for free improvement in public image to meet legal requirements

Different levels of participation35

Information provision - stakeholders are informed about management plans

Consultation- stakeholders are asked their opinion; stakeholders provide data/knowledge

Active involvement (co-designing) - stakeholders share responsibility and activities in creating possible plans, implementation and/or maintenance

Decision making (co-deciding) - stakeholders participate in final decision making

The role of information in stakeholder participation Main questions include:

Who specifies the information needs? How is this linked to the decision-making process?

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Does the information made available support stakeholders in coming to sound decisions?

32 Hart Participation article Newater PPT (2006) 33 Hart Participation article Newater PPT (2006) 34 Hart Participation article Newater PPT (2006) 35 Hart Participation article Newater PPT (2006)



Are best and worst plans/scenarios/ projections/expectations (models) communicated ?

THE IRRIGATION MANAGEMENT TASK

Overview Figure 3. 14 – Irrigation in context 1

Large dams and irrigation projects are a nested set of sub-systems involving the dams as source of supply, the irrigation system (including canals and on-farm irrigationapplication technology), the agricultural system (including crop production processes), and the wider rural socio-economic system and agricultural markets.Irrigated agriculture provides about 40% of the world’s food supply, but occupies only 17 % of the

planet’s cultivated land. The production of food and fibers under irrigation makes up 72 % of the world water abstractions. Both in Africa and Asia, irrigation water makes up more than 80% of the continents’ abstractions.

Figure 3. 15 irrigation in context 236

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36 Consuelo Varela-Ortega, Economic Incentives In Water Management: Efficiency, Cost Recovery And Equity, CGIAR Challenge Programme on Water and Food Baseline Conference Nairobi, Kenya 2-6 November 2003.



Figure 3. 16 Management Considerations in irrigation37

Economic considerations in irrigation The issues which require managerial attention would typically include: • Irrigated area by crop • Crop production • Crop yield and relative crop yield (actual yield/potential yield) • Irrigation efficiency (field application efficiency, system efficiency, and efficiency at the river basin scale) • Water application per hectare by crop and demand site • Total profit from all water uses • Profit for each demand site • Profit for each sector • Profit for each hydropower station and total hydropower profit • Profit per unit of water for each crop in each demand site and over the whole area • Profit per hectare for each crop in a demand site and over the whole area • Irrigation profit per unit of water supply in a demand site • Water market (amount of water bought and sold and water trading prices) • Agricultural inputs (water, fertilizer, pesticides, machinery, labor, irrigation investment,and seed for each crop in each demand site) and marginal return of each input

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37Consuelo Varela-Ortega, Economic Incentives In Water Management: Efficiency, Cost Recovery And Equity, CGIAR Challenge Programme on Water and Food Baseline Conference Nairobi, Kenya 2-6 November 2003.



Spatial apects38 Looking at Figure 3. ? ? - ? and focusing on the concept of a holon39 it is possible to conceptualise the governance issues facing (1) water users at farm and district level; (2) water managers concerned with broad-scale water resource management

Figure 3. 1740

Figure 3. 18 Structure and interconnections – Surface Water Irrigation System

38Jacinta Palerm-Viqueira, Irrigation institutions typology and water governance through horizontal agreements http://www.geocities.com/jacinta_palerm 39 Holon from the Greek word holos means something which is simultaneously a whole and a part. Irrigation systems are a complete or a whole management unit. They are also a part of the larger river ecosystem.

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Farm level considerations in irrigation

Figure 3. 19 41

Classifying and categorizing approaches to irrigation42 In providing order to the bewildering sub-aspects of irrigation, the following classifications are useful. All of them have important consequences for the analysis, design, evaluation and improvement of governance arrangements

water source – rain-fed, surface water, groundwater and conjunctive use irrigation – mixed balanced use of surface water and groundwater; mixed supplementary where one water source supplements another

irrigation intensity - single, double or continuous crop; crop type watering method informal vs formal systems government-owned vs community-owned government managed vs community managed but government-owned

41 Ximing Cai, Claudia Ringler, Mark Rosegrant, Modeling water resources management at the basin level : methodology and application to the Maipo River Basin, International Food Policy Research Institute Report 149 (2006) 42 See generally, IWMI (various authors) 2006. An irrigated area map of the world (1999) derived from remote sensing. IWMI Research Report 105.


Figure 3 20 Globally important types of irrigation by crop type and water source43

43 Source: IWMI (various authors) 2006. An irrigated area map of the world (1999) derived from remote sensing. IWMI Research Report 105.

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Figure 3. 21 Global rankings importance of irrigation by country44

44 Source: IWMI (various authors) 2006. An irrigated area map of the world (1999) derived from remote sensing. IWMI Research Report 105.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I W R M & T H E D I V E R S E T A S K S O F T H E W A T E R M A N A G E R

Management Aspects of Irrigation Management approaches in irrigation generally fall into three categories: (1) public sector management, (2) private sector management, and (3) users' organizations. This last type can be termed "userism," and the process of transferring management to users can be termed "userization". The concept of "userism" is quite different from "privatization" in that we are talking about transferring management not to a third party "owner" who would purchase the irrigation system from the government and then hire out irrigation services to farmers. Rather, the userism + concept is more akin to an employee owned business that gives equal shares . The role of users of irrigation systems Irrigation associations (IA) may perform a number of key tasks in water management and or may also have an instrumental role in water policy design, implementation and management. collect charges and levies from farmers – use and may transfer the revenue government They also have approved procedures for resolving conflicts among irrigators, organising irrigation turns, and developing and co-financing rehabilitation projects. IAs become more important where there is a need to build large and complex common facilities - often linked to the degree of water scarcity or aridity suffered in each area. – become irreplaceable organisations in situations where water must be stored and transported over long distances, and distributed through complex networks.

The economic costs to the State Official State system (OSS) expenses include all cost items directly related to the supply of irrigation water which are either covered by water charges and levies, or borne by taxpayers. Typically, these costs originate from two sources:

Operation, management and maintenance costs of multiple-user infrastructures owned by the State or government agencies

Investment and financial costs associated with construction of water works used to service farmers or regulating river runoff.

Managing irrigation’s social costs Social costs originate from irrigators’ use of valuable resources or from irrigators’ polluting production systems. Typical problems in mature irrigation systems include:


Over-appropriation of resources, meaning that the sum of the water rights exceed in normal years the amount of water available. This implies that downstream users make use of return flows generated by upstream users.

Severe environmental problems caused by salinisation processes, water pollution caused by chemical discharges and sedimentation. Increasing water supply and treatment costs for irrigation and other water users.

Significant reliance on taxpayers’ contributions to cover part of the irrigation district’s and official agencies’ running costs.

Increasing overexploitation of groundwater resources. Irrigation can affect the environment through:

direct impacts upon water resources direct impact upon soils direct impacts upon biodiversity and landscapes secondary impacts arising from the intensification of agricultural

production through conversion of rain-fed land into irrigated acreage. Full costing of irrigation water would require that these opportunity costs are calculated and added to the value and thus price of irrigation water. Currently very few of these costs are part of the price of irrigation water leading to inefficient use and waste. In many cases irrigation water is heavily subsidized.

Subsidies in irrigation Three kinds of subsidies exist:

direct subsidies of irrigation process inputs – eg – subsidies for the energy used to pump groundwater for irrigation in India

indirect subsidies - farmers’ contributions to cover State or public costs are not updated to match the growth of key cost items or to reflect inflation.

Indirect subsidies - State agencies exhibit low cost recovery rates. This second source of subsidies multiplies the effects of the first one.


Understanding irrigation governance institutions Institutions for the administration of irrigation systems, can be classified as follows:

Table 3. 10

governance type

governance by the irrigators themselves “self-governance”

governance completely by the State

hybrid

management type

non bureaucratic - the irrigators themselves carry out the fundamental tasks on the basis of a body of accumulated local knowledge, filling all of the necessary positions from among their ranks - and might be properly called “self management”;

Bureaucratic - fundamental tasks are done by hired specialized or professional staff external to the user group

Hybrid

THE POLLUTION CONTROL TASK When dealing with pollution control, water managers are dealing with issues of water quality as well as ecological load on the system. Pollution comes from two types of sources: point sources and non-point sources. Water quality has significant impacts on public health, especially domestic and household water, recreational possibilities as well as the economic uses of water.

Point-source water pollution comes from a specific source such as sewage treatment plants or industrial facilities and is much more easily controllable. Non point source water pollution is the introduction of pollutants into a system through a non-direct or unidentified route. Agriculture and forestry practices, septic systems, recreational boating, urban runoff, construction, and physical changes to stream channels are all potential sources of NPS pollution. NPS is often associated with rainfall or melted snow that runs over land or through the ground, picks up pollutants, and deposits them into rivers, lakes, and oceans.

The tables below set out the panorama of sources of pollution and their interaction with control of water pollution as a key aspect of the water manager’s task. Chapters 7-10 deal in more detail with water pollution control as a specialized aspect of water management.


Table 3. 11

NPS Pollutants by Type

Sources

Sediment Construction Sites Mining Areas Agricultural Lands Logged Areas Bank/Shore Erosion Grazed Areas

Nutrients

Agricultural Lands (Fertilizers, Grease, Nurseries, Orchards Organic Matter) Livestock Areas Lawns, Forests Petroleum Storage Areas Landfills

Acids and Salts Irrigated Lands Mining Areas Urban Runoff, Roads, Parking Lots Landfills

Heavy Metals Mining Areas (Lead, Mercury, Vehicle Emissions Zinc) Urban Runoff, Roads, Parking Lots Landfills

Toxic Chemicals (Pesticides, Organic,, Inorganic Compounds)

Agricultural Lands Nurseries, Orchards Building Sites Gardens, Lawns Landfills

Pathogens (Bacteria, Viruses)

Domestic Sewage Livestock Waste Landfills


Table 3.12 Pollution control aspects of surface water and ground water management RE SOURCE

ISSUE CAUSE OF STRESS IMPACTS ON THE ENVIRONMENT

SOCIAL IMPACT GOVERNANCE/MANAGEMENT RESPONSE

SURFACE WATER/GW

QUANTITY/ QUALITY

INDICATOR/EVIDENCE INDICATOR/EVIDENCE INDICATOR/EVIDENCE TOOLS/INITIATIVES/INDICATOR

Point Source pollution Non point Source pollution Other Activities

Discharge of Effluent Location of discharges Timing of discharges No. discharges/area No. type unauthorised discharges Liquid Volume BOD TSS Toxic materials Non-compliance Ammonia Nitrates Phosphorous Organic matter Heavy metals Sewage Treatment and Disposal

No size & type of plants Level of treatment Volume (Cu m/day) +/day BOD Tonnes of sewage sludge Sludge disposal practices Heavy metals No. untreated & treated discharges / population /

area Cooling water discharge (Cu/day) Temperature % land (ag., forest, urban) subject to nutrient runoff and sedimentation/unit area Runoff to flowing water Runoff to still water River control works Gravel extraction Sediment Destruction of deltas Pollution events/emergency spills and discharges (no., type).

Rate of eutrophication Levels of N, P, O Dissolved oxygen (diurnal changes) Nutrient level changes Algal blooms Fish Periphytes Macrophytes Phytoplankton Odour (unacceptable) Turbidity/TSS Colour/clarity Biological diversity/MCI Microbial indicators Fish kills Contaminant levels in selected sp. (shellfish)

Incidents of illness related to water-borne diseases, pollutants or consumption of contaminated fish/shellfish (no./capita/year) Shellfish beds where harvesting not recommended (no. and frequency/capita /year) Use of water bodies for recreation Water bodies where contact recreation not recommended (length, frequency) Public right to resource Access Cultural values Perception of water Intrinsic values Recreational fisheries Recreational use affected

Number and surface water off-takes not meeting set standards Numbers/proportion of rivers not meeting classification standards Length of waterway not meeting specified standards/compliance with WQ standards Use permit compliance monitoring program National policy initiatives Regional /provincial level policy initiatives Water pollution policies involving standards Formulation of management plans No. of return visits to holders of discharge permits No. landfills with use permits (land use and discharge permits) Consultation with indigenous groups Riparian management Water Conservation Orders Expenditure for Water treatment Sewage treatment Water resources management % length river with riparian strips


RE SOURCE

ISSUE CAUSE OF STRESS IMPACTS ON THE ENVIRONMENT

SOCIAL IMPACT GOVERNANCE/MANAGEMENT RESPONSE

SURFACE WATER/GW

QUANTITY/ QUALITY

INDICATOR/EVIDENCE INDICATOR/EVIDENCE INDICATOR/EVIDENCE TOOLS/INITIATIVES/INDICATOR

Surface water Ground water Ground water

Quantity Quality Quantity

Hydrological data Rainfall Mean/% low flow Water abstraction (cu m)

agriculture horticulture industrial domestic water supply (public) hydro-electric power thermal power (cooling) land development/natural causes

Floor control schemes Channelisation\

Water Storage Lakes Snow

Point Source Leachates Dairy sheds Underground storage tanks Landfills

Non Pt Source pollution Pesticides Fertilisers Water Abstraction (cu.m) Domestic (public supply) Agriculture Horticulture Industrial Overuse affecting recharge ability

Percentage change in critical flow indices (low, mean, peak flows)

Water quality as per water quality parameters/standards Ecosystems health and integrity Flooding & erosion Droughts Fish migration %/ rivers with natural, modified, controlled flows

Chemical Nitrogen Chlorine/conductivity Pesticides Hydrocarbons Physical PII Hardness Micro-organisms Salt water intrusion Ground water level change / fluctuations (m yr) Ground water depletion No. of instances of seawater intrusions No. wells going dry Impacts on stream flow and habitat

Restriction of Water Use Large takes Instream/recreational/uses Public water supply Effect on assimilative capacity of river Cost of damage & repair Area affected by loss of land Morbidity incidence from contaminated systems Number of groundwater well/bores unsuited for drinking unless treated % landfills without leachate protection Restrictions on water use (area) No. wells going dry Cost of access to use Reduced suitability for use

Use permits/licensing Voluntary agreements Water management policies involving allocation rules National policy initiatives Regional policy initiaves Regional plans $ spent on floodplain management works/$ floodplain damage (Index) Water conservation orders Policies to control fertiliser application Policies to control discharge Minimum standards Number of groundwater wells/bores not meeting acceptable standards which are “contaminated” Management plans Compliance monitoring Information provision Use permits/licensing Policies involving allocation rules which limit the rate of allocation Management plans Regional policy plans Artificial recharge

REVIEW QUESTIONS

LINKS BETWEEN THIS CHAPTER & OTHER CHAPTERS IN THIS UNIT

LINKS BETWEEN THIS CHAPTER & OTHER UNITS IN THE COURSE

REFERENCES Consuelo Varela-Ortega, Economic Incentives In Water Management: Efficiency, Cost Recovery And Equity, CGIAR Challenge Programme on Water and Food Baseline Conference Nairobi, Kenya 2-6 November 2003 Jacinta Palerm-Viqueira, Irrigation institutions typology and water governance through horizontal agreements http://www.geocities.com/jacinta_palerm Ximing Cai, Claudia Ringler, Mark Rosegrant, Modeling water resources management at the basin level : methodology and application to the Maipo River Basin, International Food Policy Research Institute Report 149 (2006)

Davis, J. "Corruption in Public Services: Experience from South Asia's Water and Sanitation Sector." World Development 32, no. 1 (2004): 53-71

IWMI (various authors) 2006. An irrigated area map of the world (1999) derived from remote sensing. IWMI Research Report 105.

Wade R, The System of Administrative and Political Corruption: Canal Irrigation in South India. Journal of Development Studies 18(3): 287-328.

Drechsel, P.; Graefe, S.; Sonou, M.; Cofie, O. O. 2006. Informal irrigation in urban West Africa: An overview. Colombo, Sri Lanka: International Water Management Institute. 40.p. (IWMI Research Report 102) 1UNDP, Water Governance Handbook Wame L. Hambira, Natural resources accounting: A tool for water resources Management in Botswana Physics and Chemistry of the Earth 32 (2007) Roland E. Schulze, Some foci of integrated water resources management in the “South” which are oft-forgotten by the “North”: A perspective from southern Africa, Water Resources Management (2007) 21:269–294 at 271 Roland Schulze, Uncertainties in Water Management - From Present into the Future, Newater Summer School 2006 G.J. Alaerts, Chapter 18: Institutions for River Basin Management A Synthesis of Lessons in Developing Cooperative Arrangements in Guy Alaerts, Guy Le Moigne, Integrated Water Management at River Basin Level - An Institutional Development Focus on River Basin Organizations http://worldbank.org/html/fpd/water/waterweek2003/Presentations/Session%2027%20-%20Multi-sectoral%20approaches%20in%20River%20Basin%20Management/GuyAlearts-DevCoopArrangements_Paper.pdf Ronald C Griffin, Water Resource Economics – The Analysis of Scarcity, Policies and Projects (2006) 13-15. United Nations Economic and Social Commission for Asia and the Pacific, 2004. Human Settlements: What is Good Governance. http://www.unescap.org/pdd/prs/ProjectActivities/Ongoing/gg/governance.asp (UNESCAP, 2004: http://www.unescap.org/huset/gg/governance.htm).

http://www.geocities.com/jacinta_palerm




http://www.unescap.org/huset/gg/governance.htm

Jarvis, T. 2006. Transboundary Groundwater: Geopolitical Consequences, Commons Sense, and the Law of the Hidden Sea. Oregon State University, Ph.D. Dissertation, Bruce Hooper, Key Performance Indicators of River Basin Organisations (2006) Penning-Rowsell Edmund, A general model for promoting the integration of national natural resources management, Geo Journal 43.3: 247–262, 252

T E C H N I C A L U N D E R P I N N I N G S - G R O U N D W A T E R


INTEGRATING TECHNICAL &

POLICY CONSIDERATIONS:

A CASE STUDY OF GROUNDWATER

INTRODUCTION & OBJECTIVES OF CHAPTER

This monograph sets out an interdisciplinary policy perspective on water governance. In Chapter 3, the reader was introduced to the range of governance tasks faced by the water resources manger. This Chapter continues this orientation further with a discussion of key technical aspects of groundwater. We do so because it is important for governance – essentially a social science activity – to properly integrate technical and scientific aspects into the regulatory system. The need for this kind of integration informs the technical-scientific approach that is taken in the Chapter. At the same time, the liberal use of graphics and charts provides examples of the kinds of communication tools that can be used to great effect by a water manager in charge of designing, implementing or managing a governance initiative. Essentially the Chapter is a basic introduction to the procedures for ensuring aquifer productivity and longevity, one of the less well understood aspects of water resources management given the dominance of surface water orientations. Water resource managers can benefit from having a broad understanding of this aspect of water resource management.

At the end of this Chapter, the reader will:

Be aware of the technical dimension to the extraction as well as pollution control aspects of groundwater – a matter of some importance given the critical role of groundwater in many developing countries

Have a sound appreciation of the technical and scientific matters that must be addressed in successful water regulatory/governance initiatives

Be aware of the scope of basic information that typically needs to be communicated to varying audiences during the design, implementation or evaluation of a policy initiatives

Chapter

4



GROUNDWATER –AN OVERVIEW

BASIC CONCEPTS Figure 4.1 Technical aspects of groundwater 11

Groundwater is water that occurs underground in a reservoir structure known as an aquifer. Groundwater is found in soil as well as well as rock structures. In soil formations, groundwater is said to be found in unconsolidated deposits. In rock, groundwater is found in rock fractures, voids and fissures. A unit of rock or an unconsolidated deposit is called an aquifer when it can yield a usable quantity of water. Groundwater accumulation in aquifers is caused to a large degree by infiltration, the movement of water from the surface into the ground. Groundwater accumulates in aquifers after rainfall infiltrates through the soil. Initially, the rainfall is taken up by plants. However, the excess enters deeper into the earth through the vadose zone or zone of aeration, eventually accumulating above levels of rock, impermeable to further infiltration called aquicludes. Water saturating the space above the impermeable bed forms an aquifer. Aquitards are related to aquicludes in that they slow the flow. Figure 4.2 Technical aspects of groundwater 22

The depth at which soil pore spaces or fractures and voids in rock become fully saturated with water is called the water table, the water table being the top of the zone of saturation. Immediately above that is the capillary fringe. Water in the vadose zone is effectively soil moisture. The phreatic zone is the area in an aquifer, below the water table, which relatively all pores and fractures are saturated with water. The phreatic zone is also known as the zone of saturation.

1 Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998) 2 Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998)

http://www.uiowa.edu/%7Ec012003a/14.%20Groundwater.pdf




Figure 4.3 Technical aspects of groundwater 3 3

As Figure 4.4 shows, the phreatic zone may fluctuate with changes in seasons and during wet and dry periods. Unlike soil moisture,

aquifer water/groundwater is not bound to the soil/rock and is free to flow under the force of gravity – for

instance into a well, but also into rivers, or where forced to the surface to a spring. As Figure ? shows, aquifers have sufficient water storage and transmitting capacity to yield useful water supply via wells and springs. To be able to do this, aquifers must demonstrate a capacity for groundwater storage as well as an ability to support groundwater flow.

Figure 4.4 Technical aspects of groundwater 44

3 Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998) 4 Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998)

3





Porosity & Permeability Porosity refers to the space between solid particles of soil or rock that can be filled by fluids. Typically, the majority of groundwater (and anything dissolved in it) moves through the porosity available to flow (sometimes called effective porosity).

Figure 4.5 Porosity & Permeability5

Permeability refers to the ease with which fluids can pass through a body of soil or rock. It is an expression of the connectedness of the pores. Thus an unfractured rock unit may have a high porosity (it has lots of holes between its constituent grains), but a low permeability (none of the pores are connected).

Aquifer Types

Unconfined Aquifers Watertable or unconfined aquifers are aquifers whose watertable (top boundary of the aquifer) are generally found relatively close to the land surface, and which contain layers of materials of high permeability extending from the land surface to the impermeable base of the aquifer. Recharge to such aquifers is mostly from the downward seepage of local precipitation and runoff percolating through the soil just above the ground-water table, or through lateral ground-water flow. Thus, the residence time of water in an unconfined aquifer may range from days to years.

Confined Aquifers Confined or artesian aquifers are aquifers overlain by strata of practically impermeable or low-permeability strata. Such aquifers are recharged through lateral flow of water from the recharge zones - surface areas, usually at distant higher elevations in the mountains or on high plateaus where the aquifer crops out on the land surface. Thus, the residence time of water in a confined aquifer generally ranges from centuries to aeons.

5



Figure 4.6 Aquifer Types6

Recharge and Discharge Groundwater is recharged from, and eventually flows to, the surface naturally; natural discharge often occurs at springs and seeps, streams and can form oases or wetlands.

Figure 4.7 Concepts of Recharge and Discharge7

Recharge and Discharge

6Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998) 7Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998)





Aquifers in Humid Regions Humid parts of the w

nd often visible rela water.

Figure 4.8 Aquifers in Humid Regions8

orld benefit from this kind of aquifer structure. There is a close tionship between surface water and grounda

Aquifers in arid regions This aquifer type with its complicated discharge/recharge system is typical of tMiddle East and Nor

he th Africa. The resources is arguably not a renewable

resource. At best it is quasi-renewable. tudy in Chapter 6.

Figure 4.9 Aquifers in arid regions9

See the relevant North African Case S

8 Foster, S. S. D., Lawrence A. R., and Morris B. L. 1998. Groundwater in Urban Development: Assessing

Management Needs and Formulating Policy Strategies. World Bank Technical Paper 390, 10

Management Needs and Formulating Policy Strategies World Bank Technical Paper 390,10 9 Foster, S. S. D., Lawrence A. R., and Morris B. L. 1998. Groundwater in Urban Development: Assessing



CONE OF DEPRESSION10 Pumping water out of wells lowers the water table near the well. This area is known as a cone of depression. The land area above a cone of depression is called the area of influence. Groundwater flows towards the well into the cone of depression. This can change the natural direction of groundwater flow within the area of influence around the well.

Figure 4.10 Cone of Depression11

Figure 4.11 Cone of Depression 2 12

Figure 4.12 Cone of depression impacts on subsurface contaminant flow13 Cone of depression effects can also quite dramatically impact on the direction of contaminant flows. As Figure 4.12 demonstrates.

10Groundwater stewardship in Oregon - http://groundwater.orst.edu/under/wells.html 11 Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998) 12 Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998) 13 Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998)






SUBSIDENCE In its natural equilibrium state, the hydraulic pressure of groundwater in the pore spaces of the aquifer and the aquitard supports some of the weight of the overlying sediments. When groundwater is removed from aquifers, due to excessive pumping, pore pressures in the aquifer drop, and compression of the aquifer may occur. This compression may be partially recoverable if pressures rebound, but much of it is not. When the aquifer gets compressed it may cause land subsidence, a drop in the ground surface.

COASTAL SALINIZATION OF GROUNDWATER Figure 4.13 Salinization of Groundwater14 Sea water moving inland is called a saltwater intrusion. As shown by Figure 4.13 , most aquifers near the coast have a lens of freshwater near the surface and denser seawater under freshwater. Seawater can penetrate the aquifer diffusing in from the ocean. The seawater is more dense than the freshwater. As shown by Figure B, where too much ground water is pumped out from the aquifer salt-water may intrude into freshwater aquifers causing contamination of potable freshwater supplies. Many coastal aquifers, for instance in the South Pacific Islands and the Indian Ocean have problems with saltwater intrusion as a result of over-pumping.

CONTAMINATION OF GROUNDWATER As the graphics above demonstrate, the hydro-geological context, for provision of water services from groundwater is extremely complex. The main problem is that because the resource is largely unseen, there is a tendency to extract the resource with very little attention to the local as well broader regional hydro-

14 Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf



geological features of the resource whilst the scattered points of extraction (millions of wells in the case of India) leads to mobilisation beyond resource limits with very little chance to regulate, shift or in any way affect patterns of abstraction.

Figure 4.14 Sources of groundwater contamination15

Figures 4.14 and 4.15 also show that the ways in which contamination interacts with aquifer characteristics are equally complex.

Figure 4.15 Differential Aquifer Aspects of Contamination16

15Cunningham et. Al Environmental Science, A Global Concern (1999) 9th edition 16 Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998)




Figure 4. 16 Transportation of contaminants in different Aquifer types17

GROUNDWATER IN URBAN CONTEXTS Using the Thai city of Hat Yal as an example, Figure 4.17 provides a graphic indication of the long term problems facing large cities in both developed and

Figure 4.17 - The large city as a long term source of contamination18

17 Source: http://www.uiowa.edu/~c012003a/14.%20Groundwater.pdf; Enger/Smith Environmental Science, A study of interrelationships (6th ed 1998) 18 Foster, S. S. D., Lawrence A. R., and Morris B. L. 1998. Groundwater in Urban Development: Assessing Management Needs and Formulating Policy Strategies. World Bank Technical Paper 390. World Bank, Washington, D.C15




developing worlds dependent on groundwater sources where the relationship is poorly managed. To understand this scenario we address the benefits first.

Services supplied by groundwater

Figure 4.18 Groundwater supply and demand aspects19 In urban contexts, groundwater supplies the following services and benefits. Typically these are delivered through a mix of well developed/maintained as well as poorly developed/maintained infrastructure. The services are:

Water for domestic and industrial use – essentially water as a factor of production

Water as a sink - elimination of domestic/industrial wastewater and solid waste.

The second function – water as a sink or as a medium for disposing of waste directly affects the underlying groundwater system in a variety of ways as shown by Figures 4.17 and Table 4.1

Table 4.1 Services provided by Groundwater – costs and benefits20

Groundwater Storage

Initial benefits Long-term costs

Water-supply source Low capital cost Staged development possible Initial water quality better Private & public supply can develop separately

Abandonment/reduced efficiency of wells

Saline intrusion risk Subsidence risk

On-site sanitation receptor

Low cost where community-built Permits rapid expansion Uses natural attenuation capacity of subsoil

Sustainability of groundwater abstraction threatened if contaminant load exceeds aquifer assimilation capacity

Receptor for stormwater drainage

Low capital cost Conserves water resources Roof runoff dilutes urban contaminants

Contamination from industrial/commercial areas & major highways

Sink for industrial effluent/solid waste

Reduces manufacturing costs May prejudice ground water quality Favours irresponsible attitude to

waste management 19Foster, S. S. D., Lawrence A. R., and Morris B. L. 1998. Groundwater in Urban Development: Assessing Management Needs and Formulating Policy Strategies. World Bank Technical Paper 390, 27 20S. S. D. Foster, ‘The Interdependence of Groundwater and Urbanisation in Rapidly Developing Cities’ (2001) 3(3) Urban Water 185, 186.



URBANISATION AND THE GROUNDWATER CYCLE Urbanisation has a number of complex relationships with the groundwater cycle, affecting infiltration of rainfall and other sources of recharge to groundwater storage – the aquifer - as well as impacting strongly on water quality. As is the case with groundwater in rural or peri-urban contexts, the relationship between the surface (in this case the city) and the underlying aquifer or set of supplying aquifers is crucial. Figures 4.19 and 4.20 show the kinds of complex relationships that develop over time between a growing city and its supporting aquifers. Table 4.2 also requires close attention

Figure 4.19 Mature urban use of groundwater drawn from shallow and deep Aquifers21

21Foster, S. S. D., Lawrence A. R., and Morris B. L. 1998. Groundwater in Urban Development: Assessing Management Needs and Formulating Policy Strategies World Bank Technical Paper 390. World Bank, Washington, D.C. 26



Table 4.2 - Interaction of Urbanisation and the Groundwater Cycle22

Urbanisation effects on infiltration Implications for water quality Process Infiltration Rates

Infiltration Area

Time base Impact Contaminant groups

Modifications to natural groundwater system Surface impermeabilisation and drainage

Stormwater soakaways

Mains drainage Surface water

canalisation Irrigation of amenity areas

Increase Reduction Reduction Increase

Extensive Extensive Linear Restricted

Intermittent Continuous to variable Seasonal

Marginally negative None None Variable

Cl, HC, DOC None None N, Cl, DOC

Introduction of water service network Mains water-supply leakage Sanitation system installation

In situ sanitation Mains Sewerage

Increase Major increase Some increase

Extensive Extensive Extensive

Continuous Continuous Continuous

Positive Negative Negative

None N, FC N, FC, DOC

Uncontrolled aquifer exploitation Falling water-table Induced downward leakage

Some increase Minor increase

Extensive Extensive

Continuous Continuous

Potentially positive Negative, causes pollution of deep aquifers + persistent contamination

Cl – Chloride; HC – Hydrocarbons; DOC – Dissolved organic carbon (organic load); FC – Feacal Coliforms; N – Nitrogen compounds (nitrate or ammonium); SO4 Sulfate

Impermeabilisation Impermeabilisation refers to the overall effect of urban development at both surface and subsurface levels. On the surface, the most immediate and obvious agents of impermeabilisation are roads, parking lots, industrial premises, paved areas. Underneath the surface, engineering and other works also affect groundwater systems. All this construction affects the soil and makes it more difficult and complex for direct infiltration of excess rainfall to occur. Evaporation is also lowered and generally affects surface runoff in complicated ways. The general trend is to increase and accelerate surface runoff although this is not always the case. In general also, overall groundwater recharge is affected, with the trend towards increase in recharge. Recharge however may be by varying types of contaminated/polluted water. A key factor in urban-origin recharge is how stormwater /pluvial drainage is organised or not organised within the specific urban region. Urban developments also affect the condition and direction of surface waterways affecting the groundwater system in complex ways.

22 Adapted from S. S. D. Foster, ‘The Interdependence of Groundwater and Urbanisation in Rapidly Developing Cities’ (2001) 3(3) Urban Water 185, 187.



Figure 4.20 23

Relationship over Time Between Groundwater Use and Urban Growth – Shallow Aquifer Example

23Foster, S. S. D., Lawrence A. R., and Morris B. L. 1998. Groundwater in Urban Development: Assessing Management Needs and Formulating Policy Strategies World Bank Technical Paper 390 4



GROUNDWATER IN RURAL CONTEXTS – AN INDIAN CASE-STUDY24 Recent research on groundwater use in India demonstrates (1) that this resource has become critical to Indian agriculture ; (2) that there is a crisis in the supply system. Supplying 27 million hectares of farmland, groundwater is used by 20 million private tubewell owners scattered over 600,000 villages. Groundwater now irrigates a larger total area than surface water at 21 million hectares sustaining almost 60% of the country’s irrigated land. The study concludes that in comparison with surface-water irrigation, groundwater irrigation has had the following impacts in India:

It covers more land and is expanding faster; It creates more wealth It has a greater impact in terms of poverty reduction.

The study also shows that this process has been led almost completely by the private sector. Whilst the official government sector has concentrated on regulating the large surface-water canal systems of India built during the colonial and early independence periods, the private sector – commercial suppliers and rich/middle/poor farmers have built up a dense network of groundwater wells which are both a blessing and now an increasing problem.

Figure 4.21 Changes in Groundwater use in India25

This change is most striking in northern India—the heart of the Green Revolution. (Figure 4.21 shows Northern India in darker shades of brown) Other figures showing the rapid increase include:

24 Aditi Deb Roy and Tushaar Shah, The socio-ecology of groundwater in India, IWMI-Tata Policy Briefing 4, http://www.iwmi.cgiar.org/Publications/Water_Policy_Briefs/PDF/wpb04.pdf. The research analyzed data covering more than 80% of both India’s land area and population. 25 Aditi Deb Roy and Tushaar Shah, The socio-ecology of groundwater in India, IWMI-Tata Policy Briefing 4, http://www.iwmi.cgiar.org/Publications/Water_Policy_Briefs/PDF/wpb04.pdf.

http://www.iwmi.cgiar.org/Publications/Water_Policy_Briefs/PDF/wpb04.pdf




mechanized and tube well numbers both rocketed in the last 40 years, from less than one million in 1960 to more than 19 million in the year 2000.

groundwater irrigated lands in India have increased by 105% since 1970. In contrast, the areas of surface-water irrigated land rose by only 28% over the same period (1970- 1994).

However in a striking failure of good water governance, the rapidly expanding groundwater sector has not been properly regulated or given direction by the various branches of India’s government – principally the National and Provincial levels. Groundwater use is not integrated with other developments and it is clearly not sustainable in its current form.

Groundwater as a blessing in India26 Groundwater is a blessing in India because because farmers who use groundwater can get as much water as they need, when and where they want it. Also, knowing that their crops will not fail because of drought, farmers invest more in high-yielding seed varieties, fertilizers and pest control leading to higher yields. There also appears to be an economic incentives dimension to the usefulness of groundwater with farmers being more careful about how they use it for their crops.

Figure 4.22 – A typical groundwater site in India This is because it costs farmers money to pump groundwater. They increasingly have to pay for the electricty to pump the water or where they do not own wells, they have to actually purchase the water. The result is that they use it more

26 Aditi Deb Roy and Tushaar Shah, The socio-ecology of groundwater in India, IWMI-Tata Policy Briefing 4, http://www.iwmi.cgiar.org/Publications/Water_Policy_Briefs/PDF/wpb04.pdf.




sparingly and efficiently, timing their irrigation carefully. The result is that in groundwater irrigation, crop production is higher per unit of water used than it is in surface-water irrigation. The result is that groundwater creates more agricultural wealth than any other irrigation source. In 1993, for example, groundwater use generated 132 billion Rupees while surface water use generated only 115 billion. This is a complete reversal from the corresponding values of 21 billion and 77 billion in 1970.

Groundwater problems in India The problems generated by unregulated expansion are as follows:

salinization of aquifers (due to seawater intrusion) pollution of aquifers (e.g., by arsenic and chromium) affecting drinking water

and agricultural water with serious health consequences Increased costs of pumping The abandonment of wells (cone of depression problems mean water can

no longer be pumped) Groundwater depletion is highest in western India. There, half of the wells once in use are now out of commission. This figure will increase as water tables decline. In fact, if the number of overexploited ‘blocks’ continues to grow at the present rate of 5.5% per annum, by 2018 roughly 36% of India’s blocks will face serious problems.

Explanations for the Crisis27 The principal reason for the crisis is that groundwater use has expanded without paying any attention to the resource base. Analysis of data for 225 districts showed that by the 1990s, the use of groundwater was not related to the availability of the resource. In fact, between the 1970s and the 1990s, the number of districts using high levels of groundwater—even though they had limited reserves of the resource—increased dramatically. These districts were mostly located in western and northern India. It is in districts like these—where there is high demand but low supply that problems are most severe. The research done to date suggests that groundwater in India has followed a particular path and that understanding this path may be relevant to other parts of the world where groundwater use is expanding. Parts of India can also benefit from understanding this pathway.

The role of cheap/subsidised electricity & cheap diesel pumps28 A key cause of the crisis has been energy policy and cheap/subsidised prices for the power used to pump up water. For quite some time, energy was paid for through a flat tariff based on pump capacity rather than metered consumption of power. There have also been virtually no controls on supply. The negative role of energy pricing has been maintained because of the importance of the farmer 27 Aditi Deb Roy and Tushaar Shah, The socio-ecology of groundwater in India, IWMI-Tata Policy Briefing 4, http://www.iwmi.cgiar.org/Publications/Water_Policy_Briefs/PDF/wpb04.pdf. 28 Sarah Carriger; Writer: Sandy Williams(Scriptoria); Sub-editing: Harshana Rambukwella, The Energy Irrigation Nexus, IWMI-Tata Policy Briefing (2002/2007);




voting bloc as well as violent resistance to change. A recent IWMI survey showed clearly that farmers accessing greatly subsidized electricity supplies run their pumps for between 40% and 250% longer than those who must buy diesel at market rates to run their pumps.

Figure 4.23 – Stages in the Indian Groundwater Crisis29

It can be seen from Figure 4.24 below that a farmer in Gujarat, for example, with a 5-horsepower (hp) pump pays only Rs 2,500 (US$51) per year for electricity, while in two of India’s states (Indian Punjab and Tamil Nadu) farmers receive up to 14 hours of power per day free. Electricity board losses in India alone are estimated to stand at Rs 26,000 crores (US$5.3 billion) per year.

Figure 4.24 – Energy-Water Pricing Relationships in India 30

29 Aditi Deb Roy and Tushaar Shah, The socio-ecology of groundwater in India, IWMI-Tata Policy Briefing 4, http://www.iwmi.cgiar.org/Publications/Water_Policy_Briefs/PDF/wpb04.pdf. 30 Sarah Carriger; Writer: Sandy Williams(Scriptoria); Sub-editing: Harshana Rambukwella, The Energy Irrigation Nexus, IWMI-Tata Policy Briefing (2002/2007) http://www.iwmi.cgiar.org/Publications/Water_Policy_Briefs/PDF/wpb10.pdf




Possible solutions to the problem include:

metering in ways appropriate to the geography and large numbers of farmers

precisely targeted power supply rationing involving (1) sharp cuts in overall power supply to farmers; (2) highly precise targeting of supply so that farmers get power when they need it the most.

The main barrier to change in India is however a political one.

GOOD GROUNDWATER GOVERNANCE – SOME POINTERS MANAGEMENT Tables 4.3-4.5 provide templates for organizing good groundwater governance. A key aspect of this process is delineation of the appropriate region for action, Figure 4.25 shows that this is a process which must take into account both aquifer as well as above-surface considerations

Table 4. 3 – Sample Protocol for Good Groundwater Governance 1

Urban Groundwater Problems And Management Requirements31 Underlying Cause Resultant Problems Groundwater Management Requirements

1. Inadequately controlled groundwater abstraction

Over abstraction of good quality resources within city limits Over abstraction of good quality resource around city periphery (competition between urban supply and agricultural irrigation)

Reserve good, deeper groundwater for sensitive uses and encourage use of shallow, poor groundwater for non- sensitive use

Reserve good groundwater for potable supply and substitute treated waste water or shallow, poor groundwater for irrigation

2. Excessive subsurface contaminant load

Contamination of municipal water supply boreholes / well fields. General widespread contamination of groundwater

Define source protection zones for priority control of surface contaminant load

Reduce contamination load in selective areas, especially where aquifer is highly vulnerable, by appropriate planning provisions or mitigation measures

Plan waste water treatment / landfill disposal sites taking account of groundwater interests and impacts

3. Excess urban infiltration

Rising water table beneath city causing:

Basement flooding Malfunction of on-site

sanitation units Reversal of aquifer flow

directions (with contamination of per urban wellfields by polluted urban groundwater)

Reduce urban infiltration by: Control of mains leakage Reducing seepage from on-site

sanitation unit by mains sewerage installation

Increase abstraction of shallow (polluted) groundwater for non-sensitive uses

31 S. S. D. Foster, ‘The Interdependence of Groundwater and Urbanisation in Rapidly Developing Cities’ (2001) 3(3) Urban Water 185, 190.




Urban Groundwater Supply Management: Objectives, Problems and Mitigation Measures

Objectives Problems experienced Targets Mitigation Measures

1. Maintain groundwater supply

Declining in well yields due to falling watertable

Constrain groundwater levels

Redistribute/reduce abstraction (includes mains leakage reduction)

Increase urban recharge

Unacceptable water quality for potable uses

Excessive treatment costs

Secondary quality nuisance effects

Moderate subsurface contaminant load

Restrict contaminant loading by identified sources, especially on vulnerable aquifers

Restrict density of residential development in vulnerable areas

Selective control of industrial effluents

Zone land for different uses Control landfill location and

design Separate waste disposal from

groundwater supply spatially

Increasing salinity due to river water intrusion

Induced contamination


Redistribute and/or reduce abstraction

Modify depths of water supply boreholes

2. Safeguard groundwater quality

Contaminants mobilized from contaminated land by rising water table


Increase abstraction of shallow polluted groundwater for non-sensitive uses

Reduce urban recharge


Strengthening of institutional framework Assessment of hydrogeological conditions Review of institutional responsibilities and legal provisions

Rapid survey of groundwater abstraction and utilisation

Identification of/ consultation with stakeholders: Water users Environmental groups Potential polluters

Evaluation of aquifer status and susceptibility to exploitation related side-effects

Promotion of political and public awareness

Groundwater pollution risk assessment Aquifer pollution vulnerability Subsurface contaminant loading Public water-supply protection zones and sanitary surveys

Promotion of management action plan Identification of priority actions For abstraction control For resource/source protection

32Venkatesh Dutta, Suresh K. Rohilla & Dr. P. S. Datta, ‘Five - point Guidelines for Urban Development with Groundwater Dimension’ http://www.gisdevelopment.net/application/miscellaneous/misc005pf.htm 33 S. S. D. Foster, ‘The Interdependence of Groundwater and Urbanisation in Rapidly Developing Cities’ (2001) 3(3) Urban Water 185, 190.

http://www.gisdevelopment.net/application/miscellaneous/misc005pf.htm


Figure 4.25 Delineating a Groundwater Resource Management area

Source: Héctor Garduño, Marcella Nann, Stephen Foster, Albert Tuinhof, Karin Kemper, Charles Dumars, Stakeholder Participation in Groundwater Management: mobilizing and sustaining aquifer management organizations, Briefing Note 6: Sustainable Groundwater Management: Concepts and Tools,

Groundwater MATE Series, p.




Applying the Environmental Water Concept to Groundwater34 The environmental water requirement (EWR) of a groundwater dependent ecosystem is the water regime needed to sustain its key ecological values. The EWR is analogous to the environmental flow requirement concept for surface water dependent ecosystems. The environmental water requirement of groundwater dependent ecosystems must be understood if the management of groundwater resources is to be consistent with the principles of ecologically sustainable development.35 Given the importance of the concept of critical natural capital, it should come as no surprise that the environmental water concept is increasingly being applied to groundwater as well as surface water. It is however much more difficult to apply to groundwater, or more accurately groundwater dependent ecosystems due to the relative invisibility of the resource. Groundwater dependent ecosystems comprise:

terrestrial vegetation – vegetation communities and dependent fauna that have seasonal or episodic dependence on groundwater;36

river base flow systems – aquatic and riparian ecosystems that exist in or adjacent to streams that are fed by groundwater base flow;37

aquifer and cave ecosystems – aquatic ecosystems that occupy caves or aquifers;38

wetlands – aquatic communities and fringing vegetation dependent on groundwater fed lakes and wetlands;39

terrestrial fauna – native animals that directly use groundwater rather than rely on it for habitat;40

estuarine and near-shore marine ecosystems – coastal, estuarine and near shore marine plant and animal communities whose ecological function has some dependence on discharge of groundwater.41

Groundwater dependent ecosystems vary from being marginally or only episodically dependent on groundwater (e.g. some terrestrial vegetation) to being entirely groundwater dependent (e.g. mound springs and the aquatic ecosystems

34Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 35 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 36 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 37 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 38 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 39 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 40 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 41 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra.



of caves and aquifers).42 Ecological processes in all types of groundwater associated ecosystems depend on key aspects like:43

level or pressure of groundwater; discharge flux from an aquifer; quality of water.

The water regime for some dependent ecosystems may also be characterised by variability in time.44

Meeting EW requirements of GDE45 Environmental water requirements may be derived from an understanding of four key factors:46

the nature of ecosystem dependency on groundwater; the water requirements of the ecosystem; the groundwater regime that will satisfy the water requirements of the

ecosystem; the impacts of change in groundwater regime on ecological processes.

Current work on environmental water aspects of groundwater dependent ecosystems suggest that three approaches are possible. The field is however in its infancy. The options are: Option 1

no specific provision –traditionally, groundwater resource allocation in many areas has ignored the requirements of groundwater dependent ecosystems and made no provision for a water regime that might sustain them.

Option 2 fixed environmental water provision – blanket environmental water provisions may be applied such that a fixed percentage of average annual groundwater recharge (for example) is allocated to provide a water regime intended to meet the needs of dependent ecosystems.

Option 3 environmental water provision based on consideration of environmental water requirement – the water regime necessary to meet the environmental water requirement of the groundwater dependent ecosystem is assessed. Allocation decisions are made through a process which is informed by an understanding of their economic, social and environmental costs and benefits.

Currently in many countries, even countries with significant resources like Australia, Option 1 is likely to be the one that is followed.

42 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 43 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 44 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 45 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. 46 Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra.



CHAPTER SUMMARY This Chapter has explored key aspects of the technical dimension to the extraction as well as pollution control aspects of groundwater – a matter of considerabel importance given the critical role of groundwater in many developing countries. The discussion has demonstrated that groundwater resources face increasing pressure from agricultural, mining, urban and commercial uses in both developing and developed countries and that the policy context is exceedingly complex.

REVIEW QUESTIONS





REFERENCES S. S. D. Foster, ‘The Interdependence of Groundwater and Urbanisation in Rapidly Developing Cities’ (2001) 3(3) Urban Water 185 Aditi Deb Roy and Tushaar Shah, The socio-ecology of groundwater in India, IWMI-Tata Policy Briefing 4, http://www.iwmi.cgiar.org/Publications/Water_Policy_Briefs/PDF/wpb04.pdf. Sarah Carriger; Writer: Sandy Williams(Scriptoria); Sub-editing: Harshana Rambukwella, The Energy Irrigation Nexus, IWMI-Tata Policy Briefing (2002/2007); Jarvis, T. 2006. Transboundary Groundwater: Geopolitical Consequences, Commons Sense, and the Law of the Hidden Sea. Oregon State University, Ph.D. Dissertation Sinclair Knight Merz, Environmental Water Requirements of Groundwater Dependent Ecosystems (2001), Environmental Flows Initiative Technical Report Number 2, Commonwealth of Australia, Canberra. Foster, S. S. D., and Lawrence A . R. 1995. "Groundwater Quality in Asia: An Overview of Trends and Concerns." UN-ESCAP Water Resources Journal Series C, 184: 97-110. Foster, S. S. D., Lawrence A. R., and Morris B. L. 1998. "Groundwater in Urban Development: Assessing Management Needs and Formulating Policy Strategies." World Bank Technical Paper 390. World Bank, Washington, D.C. Foster, S. S. D., and Skinner A. C. 1995. "Groundwater Protection: The Science and Practice of Land Surface Zoning." LAHS Publlication 225: 471-482. Foster, S. S. D. 1992. "Unsustainable Development and Irrational Exploitation of Groundwater Resources in Developing Nations-An Overview." IAH Hydrogeology Selected Papers 3: 321-336. Moench, M. 1994. "Approaches to Groundwater Management: To Control or Enable." Economic and Political Weekly (24 September 1994) A135-A146. Salman, S. M. A. 1999. "Groundwater: Legal and Policy Perspectives." Woirld Bank Technical Paper 456. World Bank, Washington D.C. Shah, T. 1993. Groundwater Markets and Irrigation Development: Political Economy and Practical Policy. Oxford: Oxford University Press.

Seyam, I.M., A.Y. Hoekstra and H.H.G. Savenije, 2003. The water value-flow concept. . Physics and Chemistry of the Earth, Vol. 28, pp. 175-182.

Héctor Garduño, Marcella Nann, Stephen Foster, Albert Tuinhof, Karin Kemper, Charles Dumars, Stakeholder Participation in Groundwater Management:




mobilizing and sustaining aquifer management organizations, Briefing Note 6: Sustainable Groundwater Management: Concepts and Tools, GW MATE Serie

Marcella Nannia and Stephen Foster, (2005) ‘Groundwater resources: shaping legislation in harmony with real issues and sound concepts’ Water Policy 7: 543–550.

INSTITUTIONS,

ORGANISATIONS, RIGHTS AND LAW CHAPTER OVERVIEW

This Chapter provides a conceptual understanding of the inter-related concepts (institutions, organisations, rights, law) and how they come together to contribute to the phenomenon called water governance. In accordance with our shift towards the institutional and legal domain, we introduce another definition of governance with more of a focus on these aspects. Governance in this definition covers the formal and informal arrangements, institutions and moral perspectives that structure:

Chapter 5

?


How and in what contexts/forms do institutional, rights, organisational and legal issues arise for the water manager? As is to be expected, once again, diversity rules – the situation is neither linear nor straight-forward. Rights, institutions, organisational forms and law require water manager attention in one or more of the following contexts:

As part of donor-funded projects As part of the response to situations of water scarcity which require

structural adjustment or fundamental “root and branch” reform; As part of a dispute settlement framework – the analyst needs to better

understand the legal and rights basis on which disputants are making their claims

As part of piece-meal or systematic law reform work As part of the process of reforming a water sector segment with the

objective of meeting an IWRM objective As part of day to day work.

Analysis needs to be able to distinguish between at least four different types of contexts in which water rights exercised

1

1. Rights within the framework of government controlled command and control frameworks for water rights, allocation and use – government typcially grants a licence and controls all key aspects of right of access to water, including whether or not you can permanently transfer your use right to another person and get monetary returns for it

2. Rights within the framework of projects to supply water for production purposes – typically irrigation projects or projects to supply drinking/domestic use water or supplementary water in periods of drought – similar to 1 above in many respects but usually limited to the area of the project

3. Rights within framework of tradeability/markets – eg Australia – to be developed more fully in Semester 2

4. Rights within framework of pre-colonial/pre-industrialisation/artisan arrangements which have survived colonial period with greater or lesser degree of change – usually locally demarcated or bound up with group identity, religion, culture – often referrred to as customary or traditional rights

With respect to law the most important issue is to understand the difference as well as interconnection relationship between:

rule frameworks and rights which are based on official State law (OSL)

systems rule frameworks or legal systems which although in some form of

interaction with the State law system are independent in origin. We call these frameworks rule frameworks of non-State origin (NSL). Often NSL operates at a more local level.

In managing its many sub-fields of focus, each of which is a Chapter in its own right, the thematic structure of this Chapter is as follows:

1. Institutions and Organisations 2. The distinction as well as inter-relationship between OSL and NSL 3. The concept of water rights in a generic sense 4. The concept of law as an aspect of water governance 5. The features of corruption as institutional phenomen in the water sector

This Chapter closely supports Chapter ? on transboundary aspects of water governance and Chapter ? on the role of economics and valuation methodologies. It is also closely related to Chapter ? on policy-making and governance initiatives.

2

DIFFERENT DEFINITIONS OF INSTITUTIONS

There is no single, universally accepted definition of the term “institution”. As Table 1 shows there are many different definitions. For our purposes, we use the definitions of Dovers and North interchangeably. Dovers (2007) defines an institiution as a persistent, predictable arrangements, rules, laws, processes or customs serving to structure and enable political, social, cultural and economic transactions and relationships in a society.2 Institutions may be Public or private, formal or informal. Organisations are manifestations of institutions. Society governs itself themselves, whether well or not, through institutions. Policy is formulated and implemented within institutional systems comprising complex, interactive systems of many institutions, organizations and actors.3 North (1989) offers one of the most widely used definitions of institution – highly useful step by step conceptual explanation. His definition (note the emphasis on enforcement characteristics of rules) works as follows:

1. Institutions are rules, enforcement characteristics of rules, and norms of behaviour that structure repeated human interaction.

2. Rules are Constitutions, statutes and common laws, and contracts (which) specify in formal terms the rules of the game, from the most general constitutional ones to the specific terms of a particular exchange.

3. Norms are defined as informal constraints on behaviour that are in part derivative of formal rules; that is, they are extensions of such rules and apply to specific issues.

4. Norms are “codes of conduct, taboos, standards of behaviour that are in part derived from perceptions that all individuals form both to explain and to evaluate the world around them. Some of these perceptions are shaped and moulded by organized ideologies (religions, social and political values, etc.). Others are honed by experience, which leads to the reaffirmation or rejection of earlier norms.

This is a very powerful definition which although it overemphasizes the formal aspects of rules and gives them a very Western or Eurocentric cast is nevertheless generalisable to virtually all contexts. The concept of enforcement aspects of rules is extremely important as well, since enforcement need not be by formal sanctions such as courts, police etc but may also be by social disapproval and other mechanisms of enforcement not associated with centralized authority.

3

Table 1 Definitions of the concept of institution4 Author Definition Ruttan & Hayami (1984)5

The rules of a society or of organizations that facilitate coordination among people by helping them form expectations which each person can reasonably hold in dealing with others.

Pejovich (1995)6

The legal, administrative, and customary arrangements for repeated human interactions. Their major function is to enhance the predictability of human behaviour”.

Aoki (2001)7

An institution is a self-sustaining system of shared beliefs about how the game is played. Its substance is a compressed representation of the salient, invariant failures of an equilibrium path, perceived by almost all the agents in the domain as relevant to their own strategic choices. As such, it governs the strategic interactions of agents in a self-enforcing manner, and in turn, reproduced by their actual choices in a continually exchanging environment.” Aoki also identifies five characteristics that are implicit in this conceptualization: endogenicity, information compression or summary representation, robustness or durability with respect to continual environmental changes and agents’ minor deviance from the implied rules, universality of relevance to all agents in a domain, and multiplicity.

UNDERSTANDING INSTITUTIONS – THE SES APPROACH

Ostrom, whose definitions we return to shortly, defined institutions in 1993 as follows:

people and the patterns of regular repetitive interactions among them that transform inputs into outputs.8

Ostrom and her colleagues offered families, private firms, government agencies, and local communities, as examples

of institutions. To see how institutions fit into an analysis of water governance, it is useful now to re-examine the graphical representations of institutions as set out in Chapter 1.Recall also that the Dovers definition from Chapter 1 demarcates institutions as: persistent, predictable arrangements, rules, laws, processes or customs serving to structure and enable political, social, cultural and economic transactions and relationships in a society.9 Basing our analysis on this definition by Dovers, it is clear that the categories in the right hand columns and the bottom rows of Figures 1 and 2 provide many of the sub-elements of water institutions or are themselves institutions. They are also central to thinking about, analyzing, changing or reforming rights, laws and organisations.

4

Figure 1 – Conceptual Model –Social-Ecological Systems10

5

Figure 2 – Conceptual Model – Irrigation Social-Ecological System11

6

WATER RIGHTS12

Water right - ‘a right to take and use water subject to the terms and conditions of the grant’. More broadly, WRs are socially recognized or contested claims to use, derive income from, or control water by individuals or groups that are recognised as legitimate by a larger collectivity/group than the claimants and that are protected or can be challenged through a form of law. Such law may be

Official state law systems(OSL) – law sources associated with governments or the State – Ghana Water Act 1970 for example Non-State Law (NSL) – religion, customs etc. Project law

WRs change over time and compete with each other. WRs are viewed as legitimate by rights holders but may be challenged by others. Water rights consist of various bundles of rights to access, consume, exclude, manage, and transfer water as well as the co-associated resources or resources within which water is embedded – for eg. Land. Water rights are usually structured differently and are more limited than rights to land and movable property, which is one reason why some prefer the term water "use" rights. Bundles of rights may be held by a single rights holder or may be dispersed among several rights holders. In most farmer managed irrigation systems, for example, male landowners have both use as well as decision-making rights over water in the system. Women however often have only use rights, even if the own the land. Decision-making is important – often more so than ownership since it controls how water is allocated and used – quantity, timing, types of use, relationship between different types of water sources – for example whether SW vs GW is used to irrigate etc. Decision-making can come from a variety of sources – chiefs, elected water-user committees, dam engineers etc. To give more substance to the analysis it is useful to look more closely at the following scenarios/questions taken from a useful article by Bryan Bruns13 as it shows a lot about the inter-related network institution – rights – organisation – law:

A farmer walking along an irrigation canal passing through a plot of land next to her land discovers it has been blocked by a small dam, preventing water from reaching her fields downstream – does the farmer have rights? What do these rights depend on? Does it matter that she is a woman?

Villagers find that the shallow wells on which they rely for drinking water have been dried up by mechanized tube-wells that draw from water deeper in the aquifer – do the farmers have rights? What does it depend on?

Water users agree to take over management responsibilities for their water supply from the government but later do not receive the supply that

7

is supposed to be available to them. Do the water users have rights? What can they do? Is it situation or context dependent?

A new bottled water plant obtains a permit to take water from a groundwater or surface water source without any advance notice to the irrigators who depend on the same source to water their crops. Do the irrigators have rights? What can they do? Is it situation or context dependent?

Dam operators adjust reservoir releases of water to suit electricity demand, ignoring formal plans and regulatory requirements which state that they must provide stable flows – irrigators, fishers and recreationalists are affected. Do these water users have rights? What can they do? Is it situation or context dependent? Where might their rights come from?

Water allocations in a river basin, previously directed towards irrigators are revised to favor urban needs, without consultation or compensation to irrigators. Does prior use and allocation confer rights? What can they do? Is it situation or context dependent? Where might their rights come from?

Is corruption a persistent predictable arrangement which serves to structure and enable transactions and relationships in the water sector of some countries today?

In some contexts, do religious norms shape behaviour with respect to water demand and perceptions of water quality and should these be taken into account by water managers in their planning?

Assume (1) that in society X, agricultural water use rights are never owned by women on the basis that women are lazy and cannot be trusted; (2) that there is a long war, in which a large number of men are killed; (3) during this war, production in those areas not affected by the war was carried out by women – is there potential for change in the norm/rule/persistent behaviour pattern that women do not inherit ownership of agricultural water use rights? Is it automatic that change will occur? What factors might speed up change? Impede change? Does this institution have anything to do with user group structure? Property rights? Group stability? Leadership? Equity of water distribution? Conflicts? Economic value of output? Etc.

Clearly in many cases, rights claims and their sources of legitimacy might be in conflict, and actors may have differing views of the legitimacy or otherwise of a situation or claim of right.

Sources of water rights

Water rights are brought into being from many sources. A good characterisation is to distinguish between OSL and NSL. Rights may also come from new rules under donor-driven projects & project procedures and allocation arrangements) IWRM initiatives etc. OSL is more likely to be concerned with water licenses, irrigation schedules, reservoir operations, drought plans, etc.). However, NSL

8

can also provide rules for irrigation scheduling through customs and local arrangements about taking turns to access water for instance.

OSL vs NSL

Key questions are: Are there any rules covering recognition or interaction with Non-State Law? What are these rules? Is there a clear statement of when NSL applies and OSL applies? To what extent is NSL incorporated into the OSL system?

Rights Scenarios: NSL and OSL arrangements in a Ghanaian Forest & Farming Community Context

Rights of access to water for domestic, farming and other uses, eg cultural, celebrational and performance uses are closely related to spatial location; community designation of the status of the space in which the water lies and associated jurisdictional authority attached to persons “owning” or having “authority” over the space.

OSL vs NSL

Understanding relationship between OSL and NSL in any given situation is a central key to good water governance. Thus in a project to improve water supply, the project usually driven by donors will allocate water a particular way. However to be successful it needs to take into account NSL whether it is NSL in a rural or urban context.

Water rights systems – history drives complexity

Where a society has practised irrigation for hundreds or thousands of years, there is usually a complex system of water concepts, water rights as well as water utilisation methods, norms and traditions. Spain, India, Persia, Egypt and large parts of the Middle East including Iraq, Syria, Jordan etc. are good examples. All these systems were in existence before the Western style bureaucratic State that we have today emerged. Such historically long established water rights or water governance arrangements were, and are still in their forms today, based on all types of hierarchies and assumptions: caste, the geography and history of who was conquered and who was not, degrees of conquest, religion, culture as well as hydrological or hydraulic phenemena. Water management always has to take such pre-existing arrangements into account.

9

Allocation of water rights results in institutions and organisations Water allocation – ‘assigning water from a given source to a given user for abstracting it or applying it to a given source’ This aspect is about power, politics, identity, history and is expressed in law whether OSL or NSL. Water allocations tend to be long term and once made are difficult to change.

Table ?Types of water allocation institutions – agricultural14

User group management

Official State systems

Water markets

Key characteristics Collective decision making among water users, for example, an irrigators’ association

Bureaucratic agency controls directly

Trading among users, temporary or permanent transfers

Advantages Legitimacy based on custom Local knowledge and experience Adaptable

Standard procedures Technical expertise River basin perspective

Voluntary Prices reveal opportunity costs for users, create incentives to conserve

Disadvantages More difficult if users do not know each other and lack existing relationships

Information intensive Difficult to customise to particular conditions

Risk of neglecting impacts on third parties If transactions rare or complex, then hard to establish prices

Analysing water rights – some key concepts

Water rights take many different forms. The most striking feature is that they tend to be practical and directly related to the context in which they are generated. They include shares in water held in storage, reservoirs, canals or ditches, taking turns in using water, licenses to extract water from a river or from an aquifer, shares in a company or organisation which extracts, processes or manages water, shares based on size and extent of land-holding. Water rights can also be attached to or exercised over water-extraction equipment (wells, pumps etc.) Water rights often also need to be measured by volume or by time allowed to access the water source etc.

Table ? Official state law versus non- state law governance15 Community governance/NSL

characteristics

Official state governance characteristics

Scale Smaller – within boundaries of communities, unless coordination among communities

Larger – crossing boundaries of communities

Typical resource application

Extraction for agricutual purposes Irrigation supply; pollution control; municipal utility supply

Information Specific, time and place Generalised, technical Social ties and norms

Powerful Weak

Rules Multiple depending on resources and users Tends to be uniform across resources and users

Monitoring and enforcement

Tend to be more informal, restsheavily on social ties and norms

Tends to be formal and independent of communities

10

11

Table ? Generic attributes of water rights across OSL and NSL arrangements – a comparison Attribute Meaning Quantity

The amount of water (volume) the holder of the right may abstract, or the amount of waste (volume/concentration or load) that the holder of the right may discharge

Attribute Meaning Quality The quality of the water to be abstracted or granted access to Attribute Meaning Source

The specific resource and location with respect to which the right is awarded

Timing

Restrictions on the time that the right applies, i.e., times that the volume may be abstracted or time that the waste may be discharged

Condition - ality

The conditions of use, particularly in terms of quantity and quality; some rights are absolute-100% guarantee of a certain quantity and quality, while other rights have variable assurance of supply and quality depending on the available resource; other conditions can include any "hands off" flow requirements to protect minimum environmental flows

Use

The specific use for which the water is abstracted (e.g. irrigation, mining, etc.) or the specific origin of the waste (e.g. canning factory, mine process)

Duration

The duration for which the holder is entitled to the rights conferred; some rights are permanent while other rights expire after a period of time

Transfer Whether the right may be sold, transferred or location, or inherited Security, enforcement &

Includes issues re powers/authority of entity with legal mandate to grant right & extent of mandate; extent to which rights guaranteed, measures to be taken if rights not fulfilled & compensation where rights fail or right is removed.

Dispute settlement frameworks

Framework for aggrieved rights holder to vindicate rights or for claimed rights to b challenged holder to be challenged

Links to various video clips on water rights arrangements – OSL vs NSL

Table ? Understanding attributes of water rights (does not cover waste-water or water pollution related rights)

Attribute Meaning OSL perspective NSL perspective Gap between official position (State; Non-State) and reality

Quantity

The amount of water (volume) the holder of the right may abstract, or the amount of waste (volume/concentration or load) that the holder of the right may discharge

Usually set out in a statute or set of regulations or project rules and may be autocratically decided by the State at national, regional or provincial level or may be subject to negotiation

Delimited in units of some type and often subject to variation depending on reliability of rainfall and other sources of supply

IWRM theory in principle influences OSL actions on this attribute of the right – reality falls far short of promise

Set out in customary law format specific to the particular society – may be written or unwritten and known to all key actors in the relevant social network

Agreed by negotiation or may be allocated authoritatively by relevant leader or leadership structure

Closely tied to land and production, usually agricultural production or artisan production arrangements

In many countries and societies/cultural spaces, wide gap between OSL position and actual reality – corruption, negligence, faulty equipment, social power/inequality etc play a key role

NSL situations often have a greater correspondence but inequality of access to water on basis of identity (social/class/caste/tribe or gender) the defining characteristic – difficult to cheat as close social monitoring of arrangements is the norm and all defaulters from norms are likely to be known

OSL rights holders often dispossess NSL rights-holders over time partially or completely

12


Quality The quality of the water to be abstracted or granted access to

As above – but in practice is likely to be different from official position – theoretically driven by formal Western science but reality differs sharply from place to place

IWRM theory not that significant as a driver whether in theory or in practice

Arena occupied by technical water standards and approaches from quality management and environmental management domains

Health driven water quality standards – WHO principally and implemented through

ISO 9000 and ISO 14000 standards approaches in reticulated contexts worldwide

Set out in customary rule/law format and often not scientifically based – however considerable base for use of Western scientific techniques

Project situations provide opportunity for mixture of Western and non-western definitions of quality

Intimately tied up with health issues

May be defined by reference to occupational status/caste/class/artisan production arrangements

Polllution, contaminants, health, education, social power and timing of access issues and misuse of water as pollution sink are the key factors affecting this aspect of both NSL and OSL rights in virtually all contexts. Groundwater particularly badly affected but also increasingly surface water

Arid country dimensions often different from non-arid

Arid situations much more problematic than non-arid as not enough water available to dilute pollutants etc

13


Source

The specific resource and location with respect to which the right is awarded

A key aspect of allocation and a long term issue with significant impacts over time

In theory based on Western scientific principles, water plans, water governance, IWRM

In practice unless significant augmentation occurs completely driven by natural conditions and rights relating to source of water may be progressively undermined to changes to overall hydrology, geology, contamination, land use changes/development etc

Arid countries and spaces much more sharply affected as far as this rights attribute is concerned

Widespread availability of water leads to source shifting and constantly disturbs planning approach officially central to OSL and IWRM

Technical information is the most critical element to making this attribute of the right effective

Multiple use of one source possible though often incompatibilities occur and needs management

IWRM theory and approaches highly relevant and may or may not be used properly

Set out in customary law/rule arrangements and closely tied to land arrangements as well as division of labour – within agricultural or between agricultural and artisan production

Also highly driven by identity and power issues – better sources of water – consistency of pressure, flow etc often monopolised by powerful in the society or the more powerful group at a broader scale or where competition exists between different types of users – cattle production versus agricultural production

Source issues major driver of conflict including violent conflict

Historical elements often decisive

Multiple use of one source possible though often incompatibilities occur and needs management

In both OSL and NSL contexts, gap between reality and theoretical allocation not that great due to the physical fixity and tangibility of this aspect of water – a source of water cannot be subject to corruption, negligence, error or intentional manipulation – it either exists or it does not

However it can change condition over

time and this is the most important problem as changes are not necessarily visible to owners/managers/users especially with groundwater

Changes in relevant attributes of

sources of water as sources of water are central to the quality of a rights holder with respect to a source of water

However changes which reduce the

quality or usefulness of this aspect of a water right may not be visible for a long period of time or may not be understood by users/managers/owners

Arid countries and spaces much more

sharply affected by problems as far as this rights attribute is concerned as scarcity limits source options

14

Timing

Restrictions on the time that the right applies, i.e., times that the volume may be abstracted or time that the waste may be discharged

Condition - ality

The conditions of use, particularly in terms of quantity and quality; some rights are absolute-100% guarantee of a certain quantity and quality, while other rights have variable assurance of supply and quality depending on the available resource; other conditions can include any "hands off" flow requirements to protect minimum environmental flows

Use

The specific use for which the water is abstracted (e.g. irrigation, mining, etc.) or the specific origin of the waste (e.g. canning factory, mine process)

Duration

The duration for which the holder is entitled to the rights conferred; some rights are permanent while other rights expire after a period of time

Transfer Whether the right may be sold, transferred or location, or inherited

15

16

Security, enforcement &

Includes issues re powers/authority of entity with legal mandate to grant right & extent of mandate; extent to which rights guaranteed, measures to be taken if rights not fulfilled & compensation where rights fail or right is removed.

Dispute settlement frameworks

Framework for aggrieved rights holder to vindicate rights or for claimed rights to b challenged holder to be challenged

Insert video list here – Examples water rights and institutions

Table ? Relative Strength of Rights Holding16 Right of Ownership status Full

ownership Subordinated

owner Claimant Authorised

user Authorised

entrant

Access X X X X X

Withdrawal X X X X

Management X X X

Exclusion X X

Alienation/Sale X

Table ? - Water use rights as property rights17

Charac teristic

Description Basic water usage rights

Full water market system

Right to possess The right to exclusive physical control of the thing owned (inclusive right to exclude)

Yes, within confines of use allocation

Yes as per allocation

Right to use The right to personal enjoyment and use of the thing (as distinct from 3 and 4)

Yes, although qualified by type of use

Yes, although qualified by license conditions

Right to manage The right to decide how and by whom a thing shall be used

Unclear (limited) Yes, although qualified by license conditions

Right to income The right to the benefits derived from forgoing personal use of a thing and allowing others to use it

No (formally prohibited)

From products; but not through transfer of water use rights

Right to capital The right to alienate the thing and to consume, waste, modify, or destroy it.

Right to consume, obligation to conserve

Right to consume as specified in license, obligation to conserve

Right to water security

Immunity from expropriation Yes, subject to priorities

Subject to allocation plans and priorities

Power of transfer

The power to transfer or bequeath the thing

Implicit Yes – subject to rules but fully permitted within rules

Absence of term Indeterminate length of one’s ownership right

Yes, for uses not requiring license

No, may be limited by term of license and renewal conditions

Prohibition of harmful use

Duty to forbear from using the thing in certain ways harmful to others

Yes Yes

Liability to execution

Liability to having the thing taken away for repayment of debt

No Yes – banks for example can take up water owner’s rights to meet a debt

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CASE STUDY 1 - rain-water fed agriculture – cocoa production in Ghana

Water in Ghana Forest Region Context

Location of source of water

Jurisdictional authority

Right of access Context in which rights of access become sharply contested

Water situated within village boundaries – well or spring historically understood as a common pool resource and not created by an external donor or NGO assisted project

Village as community with decision-making and allocation of rights by chief or clan group head or other demarcated authority

Dependent on membership of village community; age; indigenous/local ethnic identity vs migrant/refugee identity; gender Dependent on water use type – domestic principally

Changes in water patterns due to drought, large-scale diversions elsewhere in the river basin, problems with aquifer etc.;

Demographic pressure - sharp increase in migrant influx to take advantage of small-scale mining activity; or agricultural activity

Demographic pressure - large scale demographic change due to informal influx of refugees from nearby areas of conflict or siting of a refugee camp nearby

Water sources (spring/well) occurs on farmland under clear occupation by an owner May be absentee owner or locally present owner

Rights to water associated with land right

Right to farm the plot typically an individualised right and allocated to specific landowner either by reference to local identity/local group membership or sale of land to farm owner as an outsider farmer

Likely to be at discretion of land-owner although certain rights of access may need to be given to others

Rights of others would be demarcated at time of land right allocation decision (sale, group membership etc.)

Right of access, including content of right of access dependent on interplay b/nvillage/community authorities and landowner and may be legitimated by reference to tradition, custom etc

As above

Water situated within village boundaries – well with standpipes - common pool

Community based water user association

Defined by project rules/history etc.

May be set out in documentation of some

As above

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groundwater resource created jointly with assistance of external donor or NGO assisted project

May be dependent on payment of levy

May be based on previous NSL framework

May conflict with pre-existing NSL

May challenge gender/age/caste

Water sources lies within an area demarcated as a forest reserve by the Official State Strong free flowing springs and large pools Groundwater & Surface water

OSL demarcates this area a protected area only to be entered with permission Protected fauna use some of the water sources but not all Historically this is ancestral communal land of the nearby communities but was granted to authorities or seized during colonial era

Access either completely prohibited or only parts may be used by local community but on the basis of permits granted by Official State authorities

Access may be only for farming purposes and limited to particular times of area and particular water sources

From point of view of NSL access to whole area is permitted since NSL frameworks demarcates the springs as ancestral community land seized unlawfully or acquired monetarily under compulsion by the colonial or post-colonial State

As above

Insert Ghana cocoa production videos here

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CASE STUDY 2 – WATER RIGHTS IN IRRIGATED AGRICULTURE

Spatial apects1 Looking at Figure 3. ? ? - ? and focusing on the concept of a holon2 it is possible to conceptualise the governance issues facing (1) water users at farm and district level; (2) water managers concerned with broad-scale water resource management

Figure ? 173

Insert irrigation video lists here

1Jacinta Palerm-Viqueira, Irrigation institutions typology and water governance through horizontal agreements http://www.geocities.com/jacinta_palerm 2 Holon from the Greek word holos means something which is simultaneously a whole and a part. Irrigation systems are a complete or a whole management unit. They are also a part of the larger river ecosystem. 3 Lankford

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Figure 3. 18 Structure and interconnections – Surface Water Irrigation System

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OFFICIAL STATE LAW SYSTEMS

The concept of the State

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The concept of law

Commons (1968)4

What the individuals must or must not do (compulsion or duty), or what they may do without interference from other individuals (permission or liberty), what they can do with the aid of the collective power (capacity or right), and what they cannot expect the collective power to do on their behalf (incapacity or exposure).

Laws provide the wiring for the institutional system5

One way of understanding what law is to start off first by identifying the key objectives that are pursued on a daily basis by the State or the government. The example chosen here is based on the situation of a typical industrialised democracy run along market principles such as Australia or the United States

Objectives of the State in an Industrialised Democracy

Objective of the State

maintenance of territorial integrity of that State, its international relations, its commerce and the advancement of the internationally competitive political and economic position of the particular State.


maintenance of property rights and the raising of revenue within the national territory.


maintenance of minimum conditions for enhancement of wealth and social stability through operation of markets and the commercial sector generally.


regulating the impact of business on the environment and natural resources and on communities affected by polluting impacts, accidents and similar harms


maintenance of social stability through provision of minimum standard of living for people who are not working or who are dangerously poor


provision of a framework of shelter for citizens and other entities against the extensive powers of the State:

It can be seen from the discussion further on below that different areas or types of law are related to the objectives and functions of the State as set out above. These areas of law typically apply to both citizens and non-citizens whilst they are within the territory of a particular State. These rules also apply to corporations as well as natural persons. It should be noted as well however that 4Commons JR (1995) Legal foundations of capitalism (Rev Ed). Transaction Publishers, New Brunswick, NJ 5Steve Dovers, Adaptive Governance? Newater-ANU Meeting 28th August 2007

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the same rules can sometimes be applied differentially and with good reason. Some times however rules may be applied in a way which is regarded by many people as discriminatory. Also, whereas the focus of some of the objectives of the State are necessarily external, (e. g. what the State does in the area of international relations of water or the international relations of trade or issues to do with war or keeping illegal migrants our of Australia ) much of the operation of the State and law that are of interest from the point of view of water governance is internal. A systematic overview of the areas of law which flow out of the objectives of the State is provided further below. It is useful however to start by looking at the kinds of themes that a typical statute or piece of legislation dealing with water would cover

Understanding the Official State of Law of Water

Themes issues typically addressed by official state law are once again set out below. However, attention is focused now on how these objectives might manifest in the water sector or with respect to water issues. Objectives of the State in an Industrialised Democracy and manifestation of

these objectives in the water sector

Objective of the State Manifestation of these objectives with respect to the water sector

Maintenance of territorial integrity of that State, its international relations, its commerce and the advancement of the internationally competitive political and economic position of the particular State.

Maintenance of property rights and the raising of revenue within the national territory.

Maintenance of minimum conditions for enhancement of wealth and social stability through operation of markets and the commercial sector generally.

Regulating the impact of business on the environment and natural resources and on communities affected by polluting impacts, accidents and similar harms

Maintenance of social stability through provision of minimum standard of living for people who are not working or who are dangerously poor

Provision of a framework of shelter for citizens and other entities against the extensive powers of the State:

Link here to a variety of water statutes ? - India , Ghana, Australia etc.

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ANALYSING THE TYPICAL CONTENT OF A WATER STATUTE

Theme Issue requiring statutory attention Constitutional issues Is water mentioned in the Constitution or in the Bill of

Rights? Ownership of water Who owns water, or holds it in some other property or quasi-

property status (e.g., in trust for the public)? Abstraction and use Does the legislation provide for and regulate the right to

abstract water from a stream, lake or from under the ground?

Has the general public a right to use water for drinking, washing and bathing, for the watering of cattle, and for recreational purposes?

Are such rights linked to ownership of land? Are any uses exempted from licensing requirements? What are the criteria used for considering applications and

granting licenses? Does the legislation provide for the recording of water

abstraction licenses? Are water abstraction licenses subject to terms and

conditions? In particular, are they subject to a term of duration?

Can water abstraction licenses be lost/suspended/varied during their lifespan? Under what circumstances? Is compensation payable?

Can water abstraction licenses be transferred? Is transferability subject to restrictions?

What provisions exist in the legislation for the protection of 'vested' rights, i.e., and abstractions in existence at the time the legislation in force at the present time took effect?

Does the legislation provide for the monitoring and enforcement of water abstraction licenses?

Are charges payable against the abstraction of water from streams, lakes, underground aquifers and other water bodies?

Has the Government authority to respond to certain circumstances or to a particular state of affairs, e.g., drought or risk of depletion of a water body?

Administration What responsibilities does the Government have at the central/national/federal level?

In federal countries, what responsibilities do the member States/Provinces have?

Does there exist a special-purpose government administration at river basin level? If so, what responsibilities does it have and how is it structured?

Do local governments have any responsibility in water resources management/development?

Is the establishment of associations or other groupings of water users provided for and regulated?

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Theme Issue requiring statutory attention Pollution Control

Is permission required to discharge effluents? Are there exceptions to permission requirements? What are the criteria used for considering applications and

granting permits? Does the legislation provide for the recording of waste

discharge permits? Are waste discharge permits subject to terms and conditions?

In particular, are they subject to a term of duration? Are waste discharge permits subject to standards of effluent

quality and/or standards and objectives of ambient water quality? How are such standards set and reviewed, and by whom?

Can waste discharge permits be lost/suspended/varied during their lifespan? Under what circumstances? Is compensation payable?

Can waste discharge permits be transferred? Is transferability subject to restrictions?

Are there provisions in the legislation for the protection of waste disposal activities in progress at the time the legislation in force at the present time took effect?

Has the Government authority to declare areas or activities in respect of which restrictions will apply in response to certain circumstances or to a particular state of affairs, e.g., risk of contamination of a water body or of a source of drinking water supplies?

Does the legislation provide for the monitoring and enforcement of waste disposal permits?

Are charges payable against the disposal of waste into streams, lakes, underground aquifers and other water bodies?

Are there provisions in the legislation for the control of pollution of water resources from 'diffuse' sources - e.g., from the drainage and runoff of cultivated land where nitrates are used?

Groundwater Does the legislation regulate groundwater exploration and extraction?

Dispute Settlement

What are the provision concerning dispute settlement?

Interaction of statutory regime with Non-State Law

Are there any rules covering recognition or interaction with Non-State Law? What are these rules? Is there a clear statement of when NSL applies and OSL applies? To what extent is NSL incorporated into the OSL system?

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Law and the water sector – many points of connection 1. Objective of the State in relation to other States (1) maintenance of territorial integrity, (2) participation in international relations and trade; (3) advancement of the internationally competitive political and economic position of the particular State against other States6 The key areas of law which support this essentially external objective of the State include all the branches of public international law and the practice of international relations. Examples of branches of international law and international relations which directly support this objective are: trade law law of international transportation law of the sea air and space law law relating to diplomats and diplomatic representation customs law, criminal law, immigration law, war-making/military powers and functions, defence alliances and interests, the law governing peace-keeping, private international law regional organisations etc the criminal law both nationally and internationally to prevent, deter and

punish serious wrongdoing at the international level - e. g. genocide and trying to wipe out whole peoples and territories etc.

Student exercise – Glancing briefly at the materials for Chapter 6, Are there aspects of this domain of relevance to water governance?

6 For example seeking to advance the status of Australia compared to New Zealand as a site for foreign investment or preferred destination for migrants or enhancing the status of Australia as an international financial centre against Singapore.

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Objective of the State Maintenance of property rights and the raising of revenue within national territory Key areas of law supporting this objective are: property law law of contract law of torts taxation law in its many branches including law of income tax and GST the criminal law to prevent, deter and punish serious wrongdoing - tax evasion

etc. administrative law to control actions of government agencies and people with

official or State power Student exercise - Are there aspects of this domain of relevance to water governance?

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Objective of the State - Maintenance of minimum conditions for (1) wealth (2) wealth enhancement; (3) provision of wide-spread social stability such that effective operation of markets, businesses and the commercial sector to generate wealth can be assured Because this is a very complex objective the kinds of questions/issues that the law must address and the rules and procedures it must provide are equally complex. Key aspects are addressed in the tables below as a set of questions with a summary statement of the areas of law which help address these questions/issues

Questions/Issues

what are the forms of business enterprise permissible in Australia or the specific country of focus

what are the terms on which the Australian State or any other State will concede the right to its citizens to utilise these forms and procedures for carrying on business activities that the citizens decide to pursue?

Areas of law which provide relevant rules and procedures company law fair trading law securities law insolvency and bankruptcy laws partnership and agency law law of trusts law of contract

joint venture law special rules for constitution and

operation of Aboriginal business organisations

administrative law to control actions of government agencies and people with official or State power

criminal law to punish serious wrongdoing in this area.

Student exercise - Are there aspects of this domain of relevance to water governance?

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Questions/Issues what relationships will be encouraged and permitted amongst

those people whose capital or assets support the business entity types that are allowed in Australia or the State of focus

what relationships will be regulated or banned? Areas of law which provide relevant rules and procedures

company law, accounting and auditing law, law of trusts, securities law, partnership and agency law, contract law, insolvency and bankruptcy laws

law relating to co-operative organisations,

joint venture law criminal law to punish

serious wrongdoing in this area.



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Question/Issues what rules will govern relations between those who own and run

business entities and their employees/workers? Areas of law which provide relevant rules and procedures

labour and industrial relations (e.g. rules for industrial awards, parental leave laws, holiday laws, minimum wage laws)

health and safety in employment law

anti-discrimination law (gender, sexual choice, disability, race, religion etc),

privacy law

superannuation law, contract law,

law of torts as judge-made law

accident compensation law, law of trusts, especially the

concept of fiduciary obligations,


insolvency and bankruptcy laws,

criminal law to punish serious wrongdoing in this area.


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Question/Issues

what rules will govern relations between those who own and run business entities and their employees/workers?

what rules will govern relations between the business entity and people who contribute money or invest money to finance business operations in Australia Areas of law which provide relevant rules and procedures

securities law, company law, banking law, financial institutions law,

insolvency and bankruptcy law,.

law of trusts especially the concept of fiduciary obligations,


the aspects of superannuation law which support super-fund investments in business enterprises

criminal law to punish serious wrongdoing in this area


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Question/Issues

what sorts of relationships should be encouraged between the business entity and its customers/suppliers

what sorts of relationships should be regulated or banned as between the business entity and its customers/suppliers Areas of law which provide relevant rules and procedures

law of contract, consumer protection law (fair

trading act, consumer guarantees, hire purchase act, sale of goods act)

competition laws or anti-monopoly laws

credit contract laws administrative law to control

actions of government agencies and people with official or State power

criminal law to control serious wrong-doing


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Question/Issues

What sort of balance is to be maintained in terms of competitive/cooperative relations between and amongst business entities in specific or interlinked sectors of the economy?

Areas of law which provide relevant rules and procedures competition law and anti-

monopoly law, laws on government assistance

protection/support

GATT rules as national law taxation and subsidy rules administrative law to control


criminal law to control serious wrong-doing


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Objective of the State: Regulating the impact of business on the environment and natural resources and on communities affected by polluting impacts, accidents and similar harms

This aspect of the operations of the State is relatively recent in historical terms but is growing in importance especially given the existence of global threats such as global warming and the destruction of the ozone layer

Question/Issues

what is the right balance between the good things provided by business activity and the pollution and negative effects on the environment caused by business activity? Areas of law which provide relevant rules and procedures

tort law/accident compensation law

environmental law environmental impact

assessment law taxation law heritage management law conservation law biodiversity law wildlife law

building law, controls over hazardous

substances and genetically modified organisms

heritage management law, criminal law to control

serious wrong-doing administrative law to control



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Objective of the State: Maintenance of social stability through provision of minimum standard of living for people who are not working or who are dangerously poor The key areas of law here include social welfare laws; superannuation and pension laws and taxation laws.


Objective of the State: Provision of a framework of shelter for business entities against the extensive powers of the State The key areas of law here are: constitutional law, administrative law, non-legal institutions and practices (administrative decisions; influence; bribery; old-boy, old girl?) networks and other structures. This area of law is essentially concerned with what framework of stability and predictability will be offered by the State as a pre-condition for the undertaking of business - when people talk about the rule of law, this is partly what is meant by the term. This notion of the need to have some area of shelter from the power of the State is a key part of what in the Anglo-American and Anglo-Australian legal world is described as the rule of law. The key principles of the rule of law which many legal systems try to achieve are:

• all laws should be prospective., open and clear. • laws should be relatively stable. • the making of particular laws should be guided by open, stable, clear and general rules. • the independence of the judiciary must be guaranteed. • the principles of natural justice must be observed. • the courts should have review powers over the implementation of the other principles. • the courts should be easily accessible. • the discretion of the crime-prevention agencies should not be allowed to pervert the law.

Another part of the rule of law concept is the set of principles relating to what is called "natural justice". The rules of natural justice are guidelines imposed by the courts to ensure that bodies exercising powers and discretions do so fairly. Key elements of the rule of law include:

• a duty to afford the person or persons affected the opportunity to make submissions or answer a case against them.

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• an obligation on the decision-maker to act impartially in exercising the power granted to them under the law

All areas of law have to answer this question both in the way laws are formulated but also in the way they are applied or administered. The question can be framed another way: what are the ground-rules/conventions/understandings (stated and unstated) within which business decisions are to be undertaken in a particular country or even a region within a particular country? Issues to do with corruption and misuse of official power loom large here as well as relationships between powerful people in government/society and those engaged in business. This question is answered in Australia in a formal way through the operation of administrative law - a lot depends on the history, culture and economic position of the country concerned - this is true for Australia as much as for any other country. Are there aspects of this domain of relevance to water governance?

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Another emerging area of concern is what the right level of social responsibility and community obligation of the business enterprise should be? This area is a mixture of laws as well as exhortations and appeals to good conscience and moral obligation. Key areas of law with some influence on the different parts of this complex question include: tax law, law of trusts, law of non-profit organisations; environmental law; anti-discrimination law; gender issues law and practices; law supporting multiculturalism. More generally whether law has a place here is hotly debated (e. g. the debate in Australia on the community obligations of banks) and depends very much on the financial situation of businesses and the extent to which there is a sense of obligation towards the community amongst business entity owners/managers.

Additionally some objectives of the State as described below do not necessarily require that public and/or private sector business organisations be involved in their implementation. Conversely other objectives of the State have business organisations of both types as central to their types as central to their framing and their implementation

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Where is Official State Law to be Found?

Following on from the general background discussion, this section of the Chapter provides a basic introduction to national sources of law relevant to water management with a specific focus on Australia. These sources are Constitutions; legislation/statutes (Primary Acts); and delegated legislation. These are sources of law created by elected, selected, nominated or appointed groups of people as representatives of the larger community. Although case law (representing decisions on disputes laying down precedents for the future for people in similar situations handed down by higher level courts like the High Court) is important as a source of law it is not as important for marine resource management as statute law.

Constitutions: General A constitution is a set of rules for governing a country, a sub-unit of a country or any form of organisation that people enter into voluntarily and to some extent involuntarily. As far as countries or States are concerned one of the key concerns of a constitution is with rules for dividing power between different units of government. Constitutions also often govern relations between the rulers and the ruled. Constitutional rules may be based on tradition or may be written down in the form of a law or a number of laws. In some countries laws forming the constitution are ordinary laws which can be changed just like any other law. However to reflect their fundamental importance in most countries the laws forming the constitution have a special status and can only be changed through complex and lengthy procedures requiring some form of participation by the citizens, usually through a referendum. It should be noted that in a federal system there may be many constitutions – it is the constitution at national level which tends to be called the Constitution.

LEGISLATION AS THE RESULT OF ACTIVITY BY PARLIAMENTS/LEGISLATURES Legislation comes about through proposals reflecting public concern on an issue or the strategic importance of the issue to the government of the day. Where it comes about through social and political pressures on the government of the day it may either reflect a range of compromises or be quite partisan in character. Legislation reflecting the priorities of a government or its long-term strategy may also often involve compromises to accommodate groups only partially supportive of the proposals. Legislation is made with the intention to deal with future events and only rarely dos it address issues that have already happened (retrospective legislation). Legislation also has specific procedures to be followed for it to be valid, some of which include the rules about first and second reading and the opportunity for comment on the legislation before it is finally passed into law. Legislation also requires that the specific words be interpreted to see whether

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they fit the situation at hand. The person using the legislation cannot change the words of the statute because they do not fit the situation or because they do not like the word used by the legislature.This is why some commentators have described statutes as a “set of rules in fixed verbal form”. If change is desired, a procedure to change the currently existing verbal form of the rule is required – this is called amendment. When legislation is no longer politically or socially relevant, it is repealed. It may be replaced by another statute or no replacement may be provided. Proposed legislation has to go through two houses after having been first tabled in the originating house (usually, but not always, the lower house) as a Bill (a draft law or Act), accompanied by an Explanatory Memorandum. This is the first reading. The bills are drafted by public servants in the minister's department, with help from a special group of lawyers in the Office of Parliamentary Counsel OR the Crown Law Office in New Zealand. Every year the Australian Federal Parliament passes between 150 and 220 bills. An explanation of the bill and its purpose (called the "second reading speech") is then provided to the house by the responsible minister. This explanation is often referred to by courts in determining the purpose behind a particular legislative provision. The bill may then be debated in the house (sometimes over a period of weeks, or even months) and possibly referred to a 'standing' or 'select' committee for further consideration, including public hearings, and a report. Committees may send for public servants to explain parts of the bill that concerns them, and a Minister may be present to explain the ideas in the bill. Anyone with an interest in the bill may also present evidence. Hearings of committees take place in the committee rooms at Parliament House and are open to the public. Once passed by the originating house the process is repeated in the other chamber - and the bill may again be referred to a committee. Bills are often amended in the Senate because the government often does not have a majority in that Chamber. Very few bills are rejected. If a bill is amended in the Senate, the amendments need to be agreed to by the House of Representatives. Once a bill is passed by the Senate (or by the House of Representatives if the bill begins in the Senate) the Governor-General signs the bill into law. The law comes into effect at the time stated in the Act. Once legislation is passed by the second house (if it is), then the bill is sent to the Governor-General (for the Commonwealth) or Governor (for the States) for the Royal Assent. It is then published in its final "Act" form which comes into force either on the same day, or on a prescribed date in the future - stated in the Act or to be notified in a government gazette. If there is no information in the Act about commencement (stated in the first sections) then it automatically comes into force 28 days after the Royal Assent. These Acts, or session laws, are published initially in pamphlet form and then in bound volumes that collect together all of the Acts passed during a given year. Amended Acts are periodically subjected to a 'cut and paste' process where all amendments are incorporated, and reprinted, also as pamphlets. Typically, these

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are filed alphabetically by law libraries in binders. The table below presents aspects of this process in easy-to-recall format:

Table 4 Stages of law making in the House of Representatives/Senate

First Reading The minister introduces the bill into parliament, usually in the House of Representatives. The bill is given to all members to read, and becomes public.

Second Reading In the second reading, members of the Government and Opposition debate the bill in general. The Opposition may support the bill, or may strongly oppose it. The Government nearly always has its bills passed in the House of Representatives because it has the majority of members. Sometimes the House refers a bill to a committee for extra consideration.

Consideration in detail

Members may examine each part (or clause) of the bill in detail. Sometimes the Government and Opposition agree to make changes to the details of the bill. These changes are called amendments.

Third Reading This is usually a brief formality. A vote is taken on the bill, which is rarely opposed at this stage. The bill has then passed the House of Representatives.

DELEGATED OR SUBORDINATE LEGISLATION

Delegated legislation (som etimes referred to as subordinate legislation) arises from the power granted (delegated) to an agency or au thority by Parliament to create the rules and regulations under Primary Acts or S tatutes. Delegated legislation is used to add detail to primary legislation or to bring it into force. Usually a Minister of the Crown is delegated this power (although it m ay sometimes be a public corporation like the Maritim e Safety Authority o r a loca l a uthority) th ereby en abling that body to pa ss (a) ru les, (b) regulations, (c) orders (incl uding comm encement orders and orders in council) or (d) bylaws without the need for parliamentary approval. Once "m ade," a piece of deleg ated legislation is usually presented to Parliament to be reviewed by a standing committee and sometimes a join t com mittee (of b oth houses ). The Act will s tate w hat powers it is granting and how these should be exercised, if a body or minister goes beyond the powers granted it is said to be 'ultra vires' - beyond the powers - and the law can be challenged by anyone affected by itParliam ent must ensure that the delegate d legislation adheres to the scope of the primary legislation that enabled it and does not exceed the powers granted to that body. Delegated legislation has a variety of types and nam es. The m ost important ones are:

regulations statutory instruments ordinances of territories plans of management, for example, for fisheries declarations, approvals, principles and notices by-laws of statutory authorities navigation and aviation orders notices with respect to telecommunications standards, such as accounting standards declarations, such as quarantine or health declarations directives, such as seaworthiness directives guidelines, such as environmental compliance guidelines determinations, such as Parliamentary Service, Public Service and Defence determinations

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PRIVATISATION – THE CONTROVERSIAL WATER INSTITUTION

(TO BE WRITTEN – 3 PAGES)

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Insert video list here – PROVATISATION water sector examples

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CORRUPTION - AN ESTABLISHED & PROBLEMATIC WATER INSTITUTION

Corruption A definition Corruption can be defined as the abuse of entrusted power for private gain. It entails the misuse of public power, office or authority for private benefit – through bribery, extortion, influence peddling, nepotism, fraud, speed money or embezzlement.7 Corruption affects the governance of water, deciding who gets what water resources and services when, where, and how. It also affects how costs and benefits are distributed between individuals, society and the environment. A simple equation has been devised that points to causes of corruption: Corruption = (Monopoly + Discretion) – (Accountability + Integrity + Transparency)8 Viewed generally, the most common forms of corruption are:

Bribes to facilitate transactions and administrative processes Bribes to public officials to influence the legislative process, judicial and

regulatory decisions (Capture of the State) Bribes to win public contracts Leaks/losses in budgets and mis-allocation of funds and resources Purchase of public administration positions and nepotism

Corruption in the Water Sector9 Corruption in the water sector comes in many different forms and the scope varies substantially across types of water practices, governance structure and the perceptions and norms of actors involved.

Public to public corruption Inter-departmental collusion in selection and approval of water projects • Bribery for oversight in monitoring and control of urban pipe systems • Distorted site selection in favour of a public official’s residence • Bribery for promotions, appointments and transfers within public administration

7Håkan Tropp, Water Governance:Applying Anti-Corruption in Water, Capacity Building Workshop for Improving the Performance of Water Utilities in the African Region 6-8 December 2006 Nairobi, Kenyahttp://www.un.org/esa/sustdev/sdissues/water/workshop_africa/presentations/tropp.pdf 8 Håkan Tropp, Water Governance:Applying Anti-Corruption in Water, Capacity Building Workshop for Improving the Performance of Water Utilities in the African Region 6-8 December 2006 Nairobi, Kenyahttp://www.un.org/esa/sustdev/sdissues/water/workshop_africa/presentations/tropp.pdf 9 The material in this section of the Manual is drawn from U4 Anti -Corruption Resource Centre http://www.u4.no/document/glossary.cfm; Håkan Tropp, Water Governance:Applying Anti-Corruption in Water, Capacity Building Workshop for Improving the Performance of Water Utilities in the African Region 6-8 December 2006 Nairobi, Kenyahttp://www.un.org/esa/sustdev/sdissues/water/workshop_africa/presentations/tropp.pdf

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http://www.u4.no/document/glossary.cfm

Public to private corruption

•Kickbacks for awarding large-scale contracts •Manipulation of documents and facts to cover up use of uncertified

material in construction •Kickbacks to accept inflated bills (unit costs, and amount of material) •Preferential treatment of contractor •Manipulate information for auditing authorities •Corruption to falsify meter reading •Preferential treatment for services or repairs •Bribery to obtain access to water – installation, concealing illegal connections, avoiding disconnection

Impacts of corruption on the water sector

Reduces economic growth and discourages investments within the water sector. It also undermines performance and effectiveness of both public and private operators.

Decreases and diverts government revenues that could have been used to strengthen budgets and improve services, especially for poor people.

Misallocates scarce resources, both monetary and natural resources, such as water.

Renders rules and regulations ineffective. This can have very serious consequences for the environment and sustainability of water resources and related services.

Dilutes public sector integrity. Understanding Corruption in the Water Sector The water sector is characterised by a number of factors that increase the likelihood of corruption. These include

Discretionary powers and uncertainties in policy and law enforcement creating unpredictability and inequalities.

Large-scale construction monopolies High levels of public sector involvement Technical complexity, which decreases public transparency and leads to

an asymmetry of information A high demand for water services, which reinforces the power position of

suppliers and encourages bribery A high frequency of interactions between suppliers and consumers, which

fosters an atmosphere of discretionary action An important distinction also is the one between grand corruption and petty corruption

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Competitive bidding and opportunities for corruption Competitive bidding is a selection process based on the principle of open and transparent advertisement of an item or service, which ensures that the best bidder wins according to qualifications, value and other objective criteria (and consequently not according to family or friendship ties, bribery or threats). Competitive bidding processes are often required by law on public contracts and purchases above a certain value. As stated earlier, typical examples of corruption include falsified meter reading, distorted site selection of boreholes or abstraction points for irrigation, collusion and favouritism in public procurement, and nepotism in the allocation of public offices. The variation in sorts of corruption activities is partly explained by the large number of different kinds of actors engaged in the water sector. In the public domain, this includes political leaders, policy makers, procurement and regulation officials, law enforcement agencies, local water bailiffs and technical staff, as well as international development partners. In the private sector, actors range from senior management dealing with procurement to technical staff and consultants engaged in the preparation and implementation of contracts. Clientelism and Patronage Clientelism is an informal relationship between people of different social and economic status: a 'patron' (boss, big man) and his 'clients' (dependents, followers, protégés). The relationship includes a mutual but unequal exchange of favours, which can be corrupt. Patrimonial and clientelist practices can institutionalise hegemonic elites and political corruption, often reaching the highest ranks of state power. The water services sector is at high risk because it is a natural monopoly requiring capital intensive infrastructure development combined with weak regulatory and auditing powers as well as having limited transparency and accountability etc

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Active versus passive bribery Grand Corruption in the Water Sector – A Case Study

The Lesotho Highlands Water Project (LHWP) is the largest international water transfer in the world. Its aim is to provide extra water to the city of Johannesburg, South Africa, by transferring water from the Orange to the Vaal river. Lesotho receives royalties for the water – amounting to USD 31 million in 2004, roughly 5 % of its GDP. Phase 1 of the project has been completed and created four dams and 110 kilometres of tunnels at a cost of about USD 2 billion. It transfers 750 million cubic metres of water to South Africa annually. In 2001 the first Chief Executive of the Lesotho Highlands Development Authority (LHDA) in charge of overseeing the LHWP, Mr. Masupha Ephraim Sole, was on trial on charges of bribery and fraud. He was convicted on 11 charges of bribery and two of fraud and then sentenced to 18 years imprisonment (reduced to 15 years on appeal) for the way in which he awarded construction contracts on the project. He was paid these bribes by foreign construction companies working on the project. The prosecution of Mr. Sole was a victory in the fight against corruption – showing what can be done by a government which decides to take the issue seriously. In recognition that bribery has both a demand as well as a supply side, the next step the government of Lesotho took was to start prosecutions against the multinational companies who bribed Mr. Sole. Thus far three of the firms have been successfully convicted of bribery by the High Court of Lesotho, including Acres of Canada, Lahmeyer of Germany and Spie Batignolles of France. All three have paid their fines and Acres was also barred by the World Bank from bidding on projects. A major breakthrough in the trials was when the prosecution team gained access to the Swiss banking records of the accused – allowing them to construct a web of transactions from the multinational companies via intermediaries to Mr. Sole. Source: Earle, A., & Anthony Turton “No Duck no Dinner: How Sole Sourcing Triggered Lesotho’s Struggle; Stålgren, P. Corruption in the Water Sector: Causes, Consequences and Potential Reform. Swedish Water House Policy Brief Nr. 4. SIWI, 2006. http://www.cepis.ops-oms.org/bvsacd/cd60/etica/corruption2.pdf

Active bribery refers to the offence committed by the person who promises or gives the bribe; as contrasted to 'passive bribery', which is the offence committed by the official who receives the bribe. Active bribery occurs on the supply side, passive bribery on the demand side. Active bribery of public officials is defined as the " the promising, offering or giving by any person, directly or indirectly, of any undue advantage ... for himself or herself or for anyone else, for him or her to act or refrain from acting in the exercise of his or her functions". Similarly, passive bribery is "the request or receipt..., directly or indirectly, of any undue advantage, for himself or herself or for anyone else, or the acceptance of an offer or a promise of such an advantage, to act or refrain from acting in the exercise of his or her functions". It is important to note that "active bribery" does not always mean that the briber has taken the initiative. In fact, often the reverse is true. The individual who receives the bribe often demanded it in the first place. In a sense, then, he or she is the more "active" party in the transaction.

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Controlled vs. uncontrolled corruption Centralised, co-ordinated and disciplined corruption exists in some countries (controlled), while decentralised, disordered and irregular corruption exists in others (uncontrolled). These are ideal types (analytical categories); most countries can be characterised as somewhere in-between. In cases of controlled corruption, the ruling elite have a relatively strict control of the processes and proceeds of corruption. Examples include the former Soviet Union and the 'economic tigers' like South Korea and Taiwan which experienced economic expansion in tandem with high levels of (controlled) corruption. In cases of controlled corruption, businesses will also be able to forecast and estimate the level of corruption, and include it as a measurable expense. Therefore, controlled corruption will not be a major impediment to investments and trade. In countries with uncontrolled corruption, corruption tends to be more common and unpredictable. The rulers are not in command of who will gain how much, or from what. Uncontrolled corruption is generally considered more harmful for a country's economy, although controlled corruption also can have harmful economic effects in the long-term. Systemic corruption As opposed to exploiting occasional opportunities, endemic or systemic corruption occurs when corruption is an integrated and essential aspect of the economic, social and political system. Systemic corruption is not a special category of corrupt practice, but rather a situation in which the major institutions and processes of the state are routinely dominated and used by corrupt individuals and groups, and in which most people have no alternatives to dealing with corrupt officials. Examples of countries with systemic corruption might include contemporary Bangladesh, Nigeria, Cameroon, etc. Insert video list here – Corruption in water sector examples

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Petty corruption Corruption in the water supply and sanitation

sector in India – A Case Study10 A recent study of petty corruption in India’s water sector covering 7 cities recorded the following results:

Payments by customers to public officials 41 % of the customer respondents had made

more than one small payment(median payment (US$0.45) in the past 6 months to falsify meter reading to lower bills.

30 % of the customer respondents had made more than one small payment (median payment US$1.90) in the past 6 months to expedite repair work

12 % of the customer respondents had made payment (median payment US$22)

to expedite new water and sanitation connections.

Contractor side payments to officials

The study also addressed the frequency of side payments by contractors to public officials. Public officials questioned reported that side payments occur on a frequent basis: 17% said that it takes place every time. 33% claimed it was quite common 8% said that it takes place about half the time; 17% said that it occurs occasionally; 25% said that it occurs infrequently/never. The value of the kick-backs to public officials

normally ranged from 6% to 11% of the contract value. The study also suggests that side payments for transfers of staff occur on a frequent basis.

Interestingly, side payments for promotions were less common.

"Petty" corruption (also called administrative or bureaucratic corruption) is the everyday corruption that takes place where bureaucrats meet the public directly. Petty corruption is also described as "survival" corruption ("corruption of need"): a form of corruption which is pursued by junior or mid-level agents who may be grossly underpaid and who depend on relatively small but illegal rents to feed and house their families and pay for their children's education. Although petty corruption usually involves much smaller sums than those that change hands in acts of "grand" or political corruption, the amounts are not "petty" for the individuals adversely affected. Petty corruption disproportionately hurts the poorest members of society, who may experience requests for bribes regularly in their encounters with public administration and services like hospitals, schools, local licensing authorities, police, taxing authorities and so on.

10 The study was Jennifer Davis, “Corruption in Public Service Delivery: Experience from South Asia’s Water and Sanitation Sector”, World Development, Vol. 32, No. 1 pp. 53-71, 2004.

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RESPONSES TO CORRUPTION IN THE WATER SECTOR

Civil society plays a vital role both nationally and transnationally allowing demands and discontent to be voiced and playing a key role in advocating reform. Notable actors include the media, water stakeholder associations, environmental protection groups, as well as religious leaders concerned with social justice and sustainable development. A number of effective anti-corruption tools are now available including corruption mapping, corruption participatory assessments and surveys, project cycle corruption assessments, expenditure tracking, Ombudsman, consumer complaints redress mechanism etc. To support anti-corruption as part of good water governance, concerned actors and interests:

continue to build alliances across society and mobilize politically; argue for greater public participation or participation by civil society in

design and implementation of water schemes advocate for better access to information and dispute settlement; seek to enhance opportunities to apply corruption monitoring tools to the

water sector. Whistle-blower protection Successful law enforcement and anti-corruption strategies are largely dependent upon the willingness of individuals to provide information and/or to give evidence. Whistle-blowers are people who inform the public or the authorities about corrupt transactions they have witnessed or uncovered. These individuals often require protection from those they expose. Whistle-blower protection, therefore, refers to the measures (administrative or legislative) taken to shield the informer from physical, social and economic retaliation. Anti-corruption tools – integrity pacts Another approach is the integrity pact which is applied at corporate and governmental organisational level.

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South Asia Regional Workshop on

Transparency and Integrity in the Water Sector 3-5 November 2007, Dhaka, Bangladesh

DHAKA DECLARATION The South Asia Regional W orkshop on T ransparency and I ntegrity in the W ater Sector was held in Dhaka, Bangladesh dur ing November 3-5, 2007. I t was or ganized by Transparency International Bangladesh with the suppor t of the W ater Integrity Network (WIN) and the Roy al Nether lands E mbassy. T he suppor t of t he Bangl adesh W ater Par tnership, the I RC - I nternational W ater and Sanitation Centre - of Delft, the Netherla nds, UNICEF, the national chapters/organizations of Transparency International in India, the Maldives, Nepal, Pakistan and Sri Lanka as well as the Secretariats of TI and the WIN in Berlin were also critical to the success of the Workshop. 68 participants included representations from South Asian countries -Bangladesh, India, the Maldives, Nepal, Pakistan and Sri Lanka - and al so Canada,France, Ger many, the Netherlands and the United Kingdo m in this first ever initiative in South Asia on this subject. Dr. Huguette Labelle, Chair of the Board of Directors of TI inaugurated the Workshop on November 3. Mr. Md. Anwarul Iqbal, Honorable Adviser, Mini stry of Local Govern ment, Rural Develop ment and Cooperatives, Government of Bangla desh graced the Closing Sessio n on Novem ber 5 as Chief Guest and H. E. Ms Bea M. ten T usscher, Ambassador of the Nether lands in Dhaka attended as Special Guest. The Declaration: The Participants: Underscore that access to safe water is a fundamental human right, which should be ensured and safeguarded; Note that the water sector is pro minently prone to corruption b ecause o f its monopoly stru cture and lack of accountable decision-making and because it involves the implementation of large projects undertaken by the constructi on sector, which according to TI is perceived to be the sector most prone to corruption. A nexus of corrupt politicians, p ublic officials, cons ultants, civil works contractors and suppliers exacerbates this; Further note that corruption involving activities s uch as illegal connections, false meter re adings and inaccurate billing juxtapose d with unsatisfactor y collection levels coul d severely da mages the fina ncial viability of water utilities and ha mpers their effor ts in providing adequate water and sanitation services and coverage to consumers; Note with concern that corruption underm ines efficient m anagement of water resources, degenerates public institutions, results in unsustainable development, reduces economic growth, increases poverty and affect the quality of life; Note with concern that women, the poor and the disadvantaged are the major victims of cor ruption. Moreover, corruption is a m ajor impediment to meeting the targets o f development and poverty reduction, including the Millennium Development Goals in water and sanitation; Share the conviction that political will is the pree minent factor for fighting corruption and that t his nee ds to be su pported b y appropriate legislation and regul ation to pro mote transparency and accountability . In this regard, the constructive trip artite engagement of the public and private sectors as well as citizens is vitally important; and Note the importance of access to information as a key to combat corruption in water and other sectors. Recommendations The Participants: 1. Recommend that the policy and institutional fra mework, especiall y t he judiciary and l aw enforce ment i nstitutions confor m to practices pertaining to the rule of law. This will ensure effective control of corruption; 2. Recommend that a sector al integr ity study be under taken to guide sect oral policy for the water sector in each countr y, based on known good practice; 3. Recommend that a corruption risk assessment as well as a monitorable and accountable anticorruption plan (both of which should be updated, as r equired) be under taken as par t of all pr ojects suppor ted by Governments and develop ment partners. In particular, this should address forms of corruption t hat prevent equal access to water se rvices. In add ition, each project shou ld include an int egrity component to enable citizens’ participation in monitoring; 4. Recommend a s trict procure ment regime based on transparency and a ccountability. This w ould include the use of standardized procurement documentation, public disclosure of all major procurement-related decisions (including evaluation criteria and reports) as well as the active involvement of civil society organizations in monitoring the pr ocurement process to meet the highest stand ard of transparency and accountability and recommend applying Integrity Pacts, or similar tools, in all major water infrastructure projects; 5. Recommend effective involvement of local co mmunities in all aspects of project identifi cation, preparation, implementation and operations and maintenance to assure accountability and sustainability. Appropriate measures should be taken to ensure the effe ctive involvement of the poor and disadvantaged groups within the community including women and minority groups; 6. Reiterated the importance of citizens’ access to info rmation and recommended that appropriate legislation be enacted in count ries, which have not yet done so, and steps taken for effective enforcement of the same; 7. Stress the importance of promoting transparency and integrity, of mutual learning and sharing of experiences of best practice in the water sector among the countries of South Asia; and 8. Recommend widespread supp ort for W IN’s effor ts, r egarding awar eness r aising, deepening o f the knowledge base on sect oral corruption, development of anticorruption tools, capacity development and in particular for its small grant program for ‘on the ground’ activities to fight corruption. It was also recommended that the WIN take advantage of existing platforms within South Asia. Dhaka, Bangladesh, November 5, 2007

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CHAPTER SUMMARY

This Chapter has provided a range of conceptual tools and examples for understanding the diversity of institutional arrangements at work in the water sector.

REVIEW QUESTIONS



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REFERENCES

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APPENDIX I - A Sample Institutional Assessment for Groundwater Issues11

11 Calow RC, Morris BL, Macdonald DMJ, Talbot JC and Lawrence AR, 1999. Tools for assessing and managing groundwaterpollution threats in urban areas. BGS Technical Report WC/99/18, Keyworth UK, Chapter 5, pp 41-47

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APPENDIX I - A Sample Institutional Assessment for Groundwater Issues (continued.)12

NB – This assessment mixes up institutions, organisations and legal rules!!!

12 Calow RC, Morris BL, Macdonald DMJ, Talbot JC and Lawrence AR, 1999. Tools for assessing and managing groundwaterpollution threats in urban areas. BGS Technical Report WC/99/18, Keyworth UK, Chapter 5, pp 41-47

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APPENDIX II – SAMPLE INTEGRITY PACT – LATIN AMERICA13

Sectorial Transparency Agreement between pipe manufacturing companies for drinking water and drainage infrastructure

Argentina

The companies of Amanco Argentina S.A., Amitech S.A., Krah América Latina S.A., Nicoll Eterplast S.A., Petroplast S.A., Saint Gobain S.A., Steel Plastic S.A., Tigre Argentina S.A., and Tuboloc S.A., all represented in this act by their agents, with the accession of the Argentine Association of Sanitary Engineering and Environmental Sciences, and with the support of Citizen Power, the Argentine Transparency International Chapter and the Avina Foundation, agree to enter into a Declaration of Adhesion of “Business Principles of Transparency”. Furthermore, these companies have decided to commit themselves to the following general transparency policy in order to put it into effect within their companies, in their business relations and in their relations with the State. The contracting parties agree to the adoption and development of effective practices to counteract bribery, corruption and all practices of unfair competition. Furthermore, they promote confidence and credibility on the part of their clients and of other groups of interest, guaranteeing the sustainability of business and developing social responsibility in their business activity, tending towards respect of the law. Therefore, they have decided to adhere to the following specific guidelines centred on each one of the forms of bribery contained within the “The Business Principles for Counteracting Bribery14” and of the Chapters identified as structural for preventing these damaging practices to the sector. Considering the aforesaid, and given that this initiative of the participating Companies arises as a means of preventing and combating unfair or anticompetitive conduct within their sectors, under no circumstances should it be construed that the joint proceedings within the present framework amount to or are trying to obtain business or economic advantages, or encourage subsidised practices which may affect the free competition in the market: Declaration of business principles for transparency 1. Transparent biddings: The companies agree to establish a specification policy

for establishing conditions on the public bids. For the purposes of achieving transparency in the bidding processes, the companies agree to establish a specification policy which can be used for the drawing up of conditions in the public and private bids which cover the Chapters of price, quality and anti-monopolic conduct of trademarks in the bidding processes. In private and public transactions, companies should agree to be verified so that the specified product is delivered in accordance with the specifications contained in the conditions, without leaving room for

13 Original Spanish document available from Internet Holdings International Water Centre 14 “The Business principles for counteracting bribery” is an initiative of Transparency International and Social Accountability. December 2002.

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manoeuvre for the bribe. The reference price should not differ much from the real market price, unless a foreseeable variation in costs exists. In turn, technical inspections should be promoted on public contracting processes.

2. The companies agree to combat corruption in all its forms, including the

different methods of bribery15

The companies are forbidden to offer and/or accept proposals - whether in cash or in kind – for the sale and purchase of products. In turn, direct and indirect bribes and facilitation payments are prohibited. Charitable contributions and sponsorships shall be transparent and should be accurately registered in the accounts of each company. Sponsorships in cash and/or in kind are prohibited from company customers, suppliers and distributors whenever they constitute a subterfuge for bribery. Entertainment expenses and hospitality expenses must be reasonable, clearly reflected in the accounting reports and addressed to the employee and not their family. The gifts and expenses policy shall be defined in accordance with those already existent in each of the companies, and should be available to all members of the organization, sellers and sales agents. Information on the policies for gifts, expenses, contributions and sponsorships shall be controlled through the audit reports of the companies.

3. The companies shall not make political contributions

The companies agree not to finance political campaigns or to contract government employees whenever a conflict of interest exists. The same control mechanism employed in point 2 shall be used.

4. The companies shall act so that relations with sales intermediaries with whom they work shall not make political contributions

The companies shall act in pursuit of the extension of this agreement to the sales intermediaries with whom they work, incorporating the content of these points for the business relationships formalized in writing on a second stage.

5. The companies shall promote the fight against tax evasion

The companies shall promote the fight against tax evasion in all its forms, inclusive of income tax, taking into account the payment of taxes in all buying and selling operations. In turn, underbilling is not permitted in relations with private clients. Note: Attached to annex I are the factors that will make the agreement operational and in annex II is the glossary to which the footnote on page No 2 refers. In witness of acceptance of the foregoing, it is executed in the City of Buenos Aires on the 15th day of the month of December of 2005 by the following persons and public bodies: On behalf of the company signatories of the Agreement:

15 See Annex II: Glossary to this Agreement

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_________________ __________________ Gerardo Ourracarriet Gustavo Gascón Gerente General Gerente Comercial Amanco Argentina S.A. Amitech Argentina S.A. ______________________ _______________________ Gustavo Mastellono Patrice Lannou Presidente Gerente General Krah América Latina S.A. Nicoll Eterplast S.A. _______________________ _________________________ Fernando Acosta Víctor Guajardo Presidente Gerente Administrativo y Financiero Petroplast S.A. Tigre Argentina S.A. _____________________________ _____________________________ Carlos López Paulo Stellatelli Gerente Comercial Director Saint Gobain (Canalización Argentina) S.A. Steel Plastic S.A. ________________________________ Marcelo Santiago Presidente Tuboloc S.A. In concurrence with the signing of the agreement: ____________________________ Joaquín Brenman Representative AIDIS In support of the initiative _________________________________ ______________________________ Carlos Facal Carlos March Presidente Represente Oficina de Buenos Aires Poder Ciudadano, Capitulo Argentino Fundación Avina Transparency International Annex I:

Operational characteristics

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The present declaration establishes certain operational aspects to be borne in mind by the signatories:

1. Establishment of internal and audit controls The companies shall ensure adherence to anticorruption policy in the annual reports based on audit reports and shall agree to make public the section relevant to the balance report unless including a note from the auditor on this subject. The definition of these accounting criteria allows encouragement and improvement of the transparency of the financial statements.

2. Human resources

The companies shall incorporate the present policy as an integral part of the working contract, including training processes and induction programs for personnel of all sectors, on the philosophy proposed by this declaration, foreseeing a stage of internalisation for the aforementioned aspects, as established in regulations ISO 9000. The companies shall assure their employees that they will not be downgraded from their positions, sanctioned or shall they suffer adverse consequences by refusing to pay or receive gifts or any other advantage with the intention of carrying out a dishonest or illegal action, or which could give rise to loss of confidence in the conduct of commercial activities, even if this has a bearing on the loss of business for the companies.

3. Internal and external communication

The companies shall include anticorruption policy in their internal management codes and shall make it known throughout their internal and external communication. For their part, they shall promote the carrying out of sectorial and trade union campaigns in order to eradicate the practices and prevent acts of corruption, as well as the effective penalties incurred for improper behaviour according to the institutional framework. The managing directors of the companies shall be responsible for supporting the commitments brought about as a result of the agreement. They shall lead the implementation of the project, supervising its performance and instituting corrective reports. They shall inform the directors of the companies on the results of the agreement. 4. Reports and consultations Each company shall internally put in place the institutional guarantees necessary in the event of having to report any act of corruption within the company, thereby acting as a protective mechanism for the company itself. 5. Sanctions for non-compliance with the agreement A sanctions system shall exist for non-compliance with the agreement, based on three levels:

First level: Notification of all the signatories of the agreement of the non-compliance committed by any representative of the company.

Second level: Suspension, for an indeterminate period, of the use of the stamp or emblem that identifies the signatory companies of the “Business Principles for Transparency”.

Third level: Expulsion from the agreement. 6. Ethics Committee.

A committee shall be formed which will apply ethical sanctions within the framework defined by the signatories in accordance with what is laid down in point 5 of the operational characteristics of the

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present Agreement. The Committee shall resolve complaints over the application of the content of the agreement and the way in which the companies implement it. The Committee shall be tripartite, formed by an academic representative, an independent institution linked to the Chapter and a third independent party known for its probity. The position of the Ethics Committee shall be honorary and its running costs shall be assumed by the signatory companies. The decisions taken by this authority shall be binding in character for the report on which the decision falls, which will be revised in the second instance by the company signatories of the Agreement. The Committee shall report any persons guilty of misconduct to the proper authorities and will intervene in the justice system in the event that the complaint is of a legal nature. Citizen Power, as Argentine Transparency International Chapter, will act as inspector of the operational process of the Committee.

7. Appointment of a working group for promotion of the Agreement.

A working group from the agreement will be formed which will permit the continued monitoring of the implementation of the different strategies when applying the present agreement. This group shall define a plan of action which will establish the activities to be carried out, the people responsible and the necessary resources. Some key indicators shall be established which should facilitate the activities outlined in the plan of action. The achievement of goals will also be evaluated on the agreement, bearing in mind the opinion and comments of the actors involved with the aim of instigating the necessary adjustments.

8. Assignment of a budget for the company.

The company signatories shall assign a budget that guarantees the implementation of effective operational strategies of the Ethics Committee.

Annex II: Glossary The following concepts are included in the “Business Principles for Counteracting Bribery”, established by “Transparency International and Social Accountability”. Charitable contributions: As a form of bribery, understood to be payments made for

the benefit of the society, for charitable, educational or social well-being purposes, or associated causes used as a subterfuge for bribery.

Sponsorship: As a form of bribery, understood to be all commercial transactions

through which the company makes a payment, in cash or in kind, in order to associate its name with an activity or another organisation, in return for which it could obtain rights and unjustified profits.

Political contributions: As a form of bribery, understood to be all contributions, in

cash or in kind, carried out with the purpose of supporting a political cause in exchange for unjustified advantages in transactions of a commercial nature. Contributions in kind include a small gift of goods or services, publicity or promotional activities which support a political party, or the purchase of tickets for fund collecting events and contributions to investigative organisations with strong connections to a political party.

Facilitation payments: These are small sums of money which are handed over in

exchange for guaranteeing or speeding up the course of a proceeding or necessary

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Gifts: All kinds of goods, services or loans which are obviously offered as a symbol of

friendship or demonstration of appreciation. The gifts can be used to express a joint intention and the desire for future success and business prosperity. (It constitutes a form of bribery whenever it is granted in order to receive an unjustified profit).

Bribes: The offer or acceptance of any type of gift, loan, fees, salary or any other

advantage that is promised and offered by or to any person with the intention of inducing it to carry out a dishonest or illegal action, or which could give rise to a loss of confidence during the conduct of business activities of the company.

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Analytical table – Goa Groundwater Act for Student overnight exercise before Day 2 of Lecture session

Regulatory Theme/Issue Comment 1. Bearer/carriers of power &

Power, Duties & responsibilities

2. Subjects of power & Power, Duties & responsibilities

3. Relationships

4. Procedures

5. Status

6. Activities – prohibited, authorised, recognised

7. Space

8. Time

9. Consequences of authorised procedures/status/activity

10. Consequences of prohibited procedures/status/activity

11. Privileges conferred

12. Burdens imposed

13. Information requirements

14. Incentive regime

15. Disincentive/sanctions regime

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16. Conditions precedent and subsequent

17. Linkages to other statutes – why?

18. Objects

19. Artefacts Remember that the same thing can be in four or five different boxes – this is okay because statutes go for redundancy – the same thing can be viewed from a number of different stand-points or have a number of aspects – this is one of the things which make statutes so ambiguous

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1 Juda, L. and Hennessey, T. Governance profiles and the management of the uses of large marine ecosystems 32 Ocean Development and International Law 41-67, 44. 2Steve Dovers, Adaptive Governance? Newater-ANU Meeting 28th August 2007 3Steve Dovers, Adaptive Governance? Newater-ANU Meeting 28th August 2007 4See Chennat Gopalakrishnan, Water Allocation and Management in Hawaii: A Case of Institutional Entropy, Springer Berlin Heidelberg 2005 5 Ruttan VM, Hayami Y (1984), Towards a theory of induced institutional innovation. Journal of Development Studies 20: 203-223 as cited in Gopalakrishnan 6Pejovich S (1995) Economic analysis of institutions and systems as cited in Gopalakrishnan 7Aoki M (2001), Toward a comparative institutional analysis as cited in Gopalakrishnan 8Ostrom E, Schroeder L, Wynne S (1993) Institutional incentives and sustainable development: infrastructure policies in perspective as cited in Gopalakrishnan 9Steve Dovers, Adaptive Governance? Newater-ANU Meeting 28th August 2007 10 Ostrom et al. Going beyond Panaceas, Proceedings National Academy of Sciences September 25, 2007 vol. 104 no. 39 15176-15178, http://www.pnas.org/cgi/content/full/104/39/15176 11 Meinzen-Dick, iin Going beyond Panaceas, Proceedings National Academy of Sciences September 25, 2007 vol. 104 no. 39 15176-15178, http://www.pnas.org/cgi/content/full/104/39/15176 12 Schlager, Edella, and Elinor Ostrom 1992. Property-Rights Regimes and Natural Resources: A Conceptual Analysis. Land Economics 68 (3):249-62; Benda-Beckmann, Franz and Keebetvon. 2001. Recognizing Water Rights. 2020 Focus 9 (Overcoming Water Scarcity and Quality Constraints). Washington, D.C.: IFPRI; Boelens, Rutgerdand Paul Hoogendam, ed. 2002. Water Rights and Empowerment. Assen, Netherlands: Van Gorcum; Bruns, Bryan, and Ruth Meinzen-Dick, ed. 2000. Negotiating Water Rights. New Delhi; FAO. 2001. Water Rights Administration. Experience, Issues and Guidelines. FAO Legislative Study No. 70. Rome; IFPRI. 2003. Water Rights:Institutional Options for Improving Water Allocation. Papers from the International Working Conference, February 12-15, 2003, Hanoi, Vietnam; World Bank Groundwater Management Advisory Team. Groundwater Abstraction Rights--From Theory to Practice. Briefing Note No. 5. 13 Bryan Bruns, Irrigation Water Rights: Options for Pro-Poor Reform - http://www.adb.org/Water/Actions/REG/ABSTRACT-irrigation-water-rights.asp 14Bryan Randolph Bruns, Claudia Ringler, and Ruth Meinzen-Dick (eds) Water Rights Reform Lessons for Institutional Design 2005, 11 15 Bryan Randolph Bruns, Claudia Ringler, and Ruth Meinzen-Dick (eds) Water Rights Reform Lessons for Institutional Design 2005, 44 16Stuart Whitten and Mike Young, Market-Based Tools for Environmental Management: Where do they fit and where to next? 17 Bryan Randolph Bruns, Claudia Ringler, and Ruth Meinzen-Dick (eds) Water Rights Reform Lessons for Institutional Design 2005, 255



TRANNSBOUNDARY ASPECTS WATER GOVERNANCE


TRANSBOUNDARY ASPECTS OF WATER GOVERNANCE INTRODUCTION TO THE CHAPTER

This Chapter addresses transboundary issues in water governance. It discusses both surface water and groundwater aspects with a focus on (1) the kind of problems thrown up when water has a transboundary character; (2) legal responses to the transboundary dimension of water. As previous Chapters have established, the concept of governance refers to the formal and informal arrangements, institutions and moral perspectives that structure:

CHAPTER

6


Formal legal rules are an important part of governance and in the international context, transboundary surface water law and groundwater law are both highly developed subsets of the field of law, policy and politics called international law. International law, consisting of treaties, customary international law and soft law is an important factor shaping national law. It is thus useful for the water resoures manager to have a basic grasp of the key features of both domains: (1) international law and its instruments; (2) national law and regulatory powers under national law – national laws being expressed principally through constitutions, statutes and delegated legislation. The concept of sovereignty underlies the way in which all the sources of international law work. Most of international law is about either expanding the sovereignty of States or reducing that sovereignty. The concept of sovereignty also underlies national law and policy making under national law. The concept of sovereignty is explained further on in the discussion.

Effective TBW manager must be able to negotiate between divergent social, economic, and demographic systems, asymmetrical governmental structures, different policy mandates, and limited funding.

Two key standpoints for understanding TBWG - national level/international level. 1 Juda, L. and Hennessey, T. Governance profiles and the management of the uses of large marine ecosystems 32 Ocean Development and International Law 41-67, 44.



surface water and groundwater in a transboundary context.

Overview of water governance regimes and how they can be characterised (institutional settings at basin, national, global scales)

Actors in transboundary water and how they can be characterised

scales at which institutions and actors combine to generate/undertake RTBWG

how international law and national law intersect to create governance arrangements interplay between formal (e.g. legal frameworks, binding agreements) and informal (cooperative agreements, dialogues, customs)

OBJECTIVES OF CHAPTER

After completing this Chapter, you should be able to:

Explain the concept of TBWG Explain the concepts used to think about TBWG from political, legal

, policy design and institutional economics perspectives Explain the concept of international law and how it is created Explain how international law and national law intersect to create

governance arrangements for surface water and groundwater

Transboundary Water Governance Overivew

TBWG aims to generate a sense of cohesiveness, interdependence and common interest across national boundaries. The spatial organiser or integrator is in theory the river or the river basin (surface water) or the aquifer or set of aquifers (groundwater)

Transboundary waters are watersheds that cross political boundaries of two or more countries. Currently 263 watersheds/basins fit this definition in that they cross or demarcate international political boundaries. Geographically, Europe number (69) Africa (59), Asia (57), North America (40), South America (38).

Effective transboundary water governance is critical to development, especially water development in the developing world.

States sharing watersheds, freshwater ecosystems and aquifers joined by complex ecological interdependencies + one/sided upstream/downstream hydrologic relationships

TBWG evolves through action of multiple stakeholders, political pressures, and local institutional processes



TBWG depends on actors engaged in the process and is socially constructed and highly context dependent – difficult to successfully transplant A to B

TBWG arrangements also shaped by the nature and actions of policy entrepreneurs & epistemic communities: epistemic community - group of ‘‘networked professionals with recognized expertise and competence in a particular domain

KEY PRACTICAL AND EVALUATIVE QUESTIONS IN UNDERSTANDING AND DOING TRANSBOUNDARY WATER GOVERNANCE Key TBWG questions include:

What are the most relevant national and international water laws

and policies and what is their influence on transboundary water management?

Is the transboundary institutional setting coherent with the national organisational framework in water management?

What is the balance between informal co-operation and formal agreements and treaties in the target transboundary water management system?

Who are the main governmental and non-governmental actors; what are their main goals, strategies and capacities; how do they interact?

What is the influence of different national or organisational cultures?

Does the current transboundary regime reflect the negotiation culture in the respective region?

To what extent are stakeholders and the public involved in transboundary river basin management?

To what extent do management systems deal with uncertainty/change and the decreasing predictability of extreme events?

What regime changes have occurred in the past, how were these effected? What is the nature and speed of these changes?



Number of countries that share a basin

Number of countries (basins)

International basins

17 (1) Danube 11 (2) Congo and Niger 10 (1) Nile 9 (2) Rhine and Zambezi 8 (2) Amazon and Lake Chad 6 (8) Aral Sea, Ganges-Brahmaputra-Meghna, Jordan, Kura-Araks,

Mekong, Tarim, Tigris and Euphrates (Shatt al Arab), and Volta 5 (3) La Plata, Neman, and Vistula (Wista)

4 (17) Amur, Daugava, Elbe, Indus, Komoe, Lake Turkana, Limpopo,

Lotagipi Swamp, Narva, Oder (Odra), Ogooue, Okavango, Orange, Po, Pu-Lun-T'o, Senegal, and Struma

3 (49) Asi (Orontes), Awash, Cavally, Cestos, Chiloango, Dnieper, Dniester, Drin, Ebro, Essequibo, Gambia, Garonne, Gash, Geba, Har Us Nur, Hari (Harirud), Helmand, Hondo, Ili (Kunes He), Incomati, Irrawaddy, Juba-Shibeli, Kemi, Lake Prespa, Lake Titicaca-Poopo System, Lempa, Maputo, Maritsa, Maroni, Moa, Neretva, Ntem, Ob, Oueme, Pasvik, Red (Song Hong), Rhone, Ruvuma, Salween, Schelde, Seine, St. John, Sulak, Torne (Tornealven), Tumen, Umbeluzi, Vardar, Volga, and Zapaleri.

2 (176) Akpa, Alesek, Amacuro, An Nahr Al Kabirm, Artibonite, Astara Chay, Atrak, Atui, Aviles, Aysen, Baker, Bangau, Bann, Baraka, Barima, Barta, Beilun, Belize, Benito, Bia, Bidasoa, Buzi, Ca (Song-Koi), Cancoso (Lauca), Candelaria, Castletown, Catatumbo, Changuinola, Chico (Carmen Silva), Chilkat, Chira, Chiriqui, Choluteca, Chuy, Coatan Achute, Coco (Segovia), Colorado, Columbia, Comau, Corubal, Coruh, Courantyne (Corantijn), Cross, Cullen, Daoura, Dasht, Don, Douro (Duero), Dra, Elancik, Erne, Etosha/Cuvelai, Fane, Fenney, Firth, Flurry, Fly, Foyle, Fraser, Gallegos-Chico, Gauja, Goascoran, Golok, Great Scarcies, Grijalva, Guadiana, Guir, Han, Hsi (Bei Jiang), Isonzo, Jacobs, Jurado, Kaladan, Karnafauli, Klaralven, Kogilnik, Kowl-E-Namaksar, Krka, Kunene, Lagoon Mirim, Lake Fagnano, Lake Natron, Lake Ubsa-Nur, Lava (Pregel), Lielupe, Lima, Little Scarcies, Loffa, Ma, Mana-Morro, Massacre, Mataje, Mbe, Medjerda, Mino, Mira, Mississippi, Mius, Mono, Motaqua, Murgab, Naatamo, Nahr El Kebir, Negro, Nelson-Saskatchewan, Nestos, Nyanga, Olanga, Oral (Ural), Orinoco, Oued Bon Naima, Oulu, Oyupock (Oiapoque), Pakchan, Palena, Pandaruan, Parnu, Pascua, Patia, Paz, Pedernales, Prohladnaja, Puelo, Rezvaya, Rio Grande (North America), Rio Grande (South America), Roia, Rudkhaneh-ye (BahuKalat), Sabi, Saigon (Song Nha Be), Salaca, Samur, San Juan, San Martin, Sarata, Sarstun, Sassandra, Sembakung, Seno Union (Serrano),



Number of countries (basins)

International basins

Sepik, Sixaola, Song Vam Co Dong, St. Croix, St. John, St. Lawrence, St. Paul, Stikine, Suchiate, Sujfun, Tafna, Tagus (Tejo), Taku, Tami, Tana, Tano, Terek, Tijuana, Tjeroeka/Wanggoe, Tuloma, Tumbes-Poyango, Umba, Utamboni, Valdivia, Velaka, Venta, Vijose, Vuoksa, Wadi Al Izziyah, Whiting, Yalu, Yaqui, Yelcho, Yenisey (Jenisej), Yser, Yukon, and Zarumilla.

What are the modes of action/institutional forms for TBWG?

State-led/dominated forms Civil society forms Task/function-oriented forms

What are the key problems/ issues of TBWG water governance? Combining nature, science and politics Scientific and political information The communication of information – language, culture Socio-economic conditions Public participation Legal systems Organisational arrangements Actors in TBWG arrangements and how govern/influence TWBG Global actors – types, steering mechanisms, interests, power,

weaknesses Nation States – interests, steering mechanisms, power, weaknesses Local level actors – interests, steering mechanisms, power,

weaknesses International norms can be important factors in the social

construction of the institution - application of IWRM to TBWG example of policy approach globalized through influence of global actors at national level. Global actors such as the World Bank, IUCN, various United Nations bodies all advocate IWRM.

Nation states - economic interests associated with specific water basin and its resources - food security, production of hydroelectric power, development of industry especially sense of future needs; foreign policy interests – general as well as those associated with the water basin and its resources; national image and prestige; domestic policy interests – securitization, population, migration, group identity issues

Information important in TBWG use and communication of information in transboundary water regimes by institutions (formal



and informal), the public, marginalised groups, stakeholders, and political actors.

Key role of politics and power in TBWG Key political themes/concepts currently used to analyse/explain/structure/organise/understand what happens in TBWG

riparian position; sovereignty; absolute vs restricted sovereignty; securitisation vs descuritisation ; benefits-sharing; hydro-hegemony; hydro-strategic territory; hydro-politics; geopolitics; types of power: structural, bargaining, ideational conflict–the absence of war does not mean the absence of

conflict cooperation–the existence of a treaty does not mean cooperation

Institutional Themes in TBWG Arrangements

rules of access and participation; decision-making rules role of the secretariat; organization of the science-politics interface; monitoring and

verification mechanisms; connectivity to other institutions

Types of transboundary water governance arrangement - Informal vs Formal TBWG analysis covers both formal and informal agreements Informal agreements offer temporary solutions as permit quicker responses to changes in socio-economic and hydrologic conditions than formal agreements; do not require lengthy negotiation processes; provide a rational adaptation to uncertainty; are easily created as well as easily abandoned. Informal Institutions can take several forms such as joint declarations or tacit understandings between countries;

A temporary transfer of water from one state A to state B. A joint declaration between governments to reduce salinity. An temporary agreement to increase water flow from a wet

region to a dry region.



An agreement of understanding to control pollution by increasing water flow in the river.

A temporary agreement to reduce drought conditions Autonomy, Authority & Jointness

Autonomy extent to which the TBWG organisation can make decisions, policies, agreements, contracts, etc. on its own or stand on its own as a separate institution – requires analysis of the following elements: Independent vs dependent Secretariat; Budget and finance; ability to enter into own contracts; information aspects; power to initiate policy, set, influence and implement agenda; ability for affected publics to participate; scope for range of supporting implementing agreements; possibility for sub-regions to co-operate formally with each other

Authority - extent to which regional institution is able to take policy action that influences the functioning of the respective states – requires analysis of textent to which organization can undertake or be involved in its own right with the following types of legal instrument or organizational form: Formal Treaty/Convention; classifying and taking action with respect to a particular territorial region within the river basin; ability to make own regulatory policy; scope for joint planning and research; ability to extract useful information from participants.

Jointness - if the regional institution is to be a force for real change, then the collective needs to go beyond the formal and translate jointness into real actions and projects.

Jointness in a performative sense: the evolution of activities that are done jointly by all signatory states, or if individually, occur only because of the transnational program.

Jointness in a constitutive sense: the construction and subsequent realization of a new regional identity.

Relationship between TWBG and IWRM Until the 1970s, states privileged international treaties to govern their shared freshwater resources, and a public works management approach to govern their waters domestically. The international treaties sustained the insulation between international and domestic water governance, and maintained the dynamics restricted to the riparian countries. IWRM and networked behaviour has changed all that and now overlap between international law arena and IWRM arena TWBG – BSWRM/PWS/IWRM Transboundary water governance more likely to be BSWRM than merely PWS. Where BSWRM arrangements well established and co-operation between national partners and international actors well developed then PWS comes to the fore. Other than that TBWG is more



BSWRM than anything else. BSWRM at transboundary scale can take place in a number of ways:

TBWG as treaty-based international regime TBWG as an extension of national sovereignty with territoriality

and sovereignty as the dominant norms TBWG as an arena for national compromises on territoriality and

sovereignty to achieve international objectives TBWG as an arena for implementation of IWRM with many

compromises made with respect to territoriality and norms of national sovereignty

TBWG as an arena for implementation of IWRM with little regard for territoriality and norms of national sovereignty

What determines success in TBWG TBWG mode of decision-making involving public and private actors with many divergences Aims, expectations and issues; Size of the cooperation space and experience in cooperation among the cooperating entities ; existence of seeds for cooperation; possibilities for transformation of different administrative structures and the relation between politics and administration in cooperating regions/countries etc; language, social, political, economic and cultural differences; transaction costs and availability of financial resources including subsidies; Participating actors, their context, competences and resources; design and management of the communication process Trans- boundary communication processes are lengthy and costly while the results acheived in particular in early phases of cooperation and along “hard” cultural and language borders are limited to “soft results” like getting to know each other, trust-building and agenda-setting. Treaties and intenational law Treaty framework and rules have been developed multilaterally over the years as set out in the table below. These principles provide the framework within which countries have bargained and set up institutions like the Mekong River Commission and other bodies, over the years. Competing Principles: Absolute territorial integrity vs Absolute river basin integrity International law of water and international politics of water has long seen a tension between two principles - the absolute territorial sovereignty principle and the absolute integrity of the watercourse principle. Depending on a State’s geographical location, it would defend one principle or the other. Until the twentieth century, upstream states tended to claim absolute territorial sovereignty, under which they had the right to do whatever they chose to with the water, independently of



its effects on other States. Downstream States on the other hand, usually claimed an absolute integrity of the watercourse principle, under which States higher up the river could not do anything that might affect

the quantity or quality of the flowing water.

The recognition of this principle also implied that lower reach States did not have to compensate the upper reach States for the water flowing into the territory of the lower State. International Co-operation and Governance Regimes International co-operation has established a framework for governance based principally on actions by Nation-States within the following framework of linkages with other actors.

Content of treaties Planning of measures; Implementation of measures; Specification of property rights; Exchange of data & information; Monitoring; Enforcement; Dispute settlement What range of water uses is covered by agreements

The Current International Law position as set out in UN Water Courses Convention

Every watercourse state is entitled to participate in negotiations over the entire watercourse and consult on lesser agreements affecting that state (Article 4).



States must exercise “equitable and reasonable use” of international watercourses within their territories (Article 5).

States are obligated not to cause “significant harm” to other states sharing the watercourse (Article 7).

·States are obligated to cooperate on the basis of “sovereign equality, territorial integrity, mutual benefit and good faith” (Article 8).

Watercourse states shall regularly exchange information and data (Article 9).

States are required to consult with other watercourse states on the effects of any “planned measures” (Article 11).

States must give prior notification for any “planned measures which may have a significant adverse effect” on other watercourse states (Article 12).·

Environmental obligations are created to protect and preserve ecosystems, control pollution, prevent the introduction of alien species, and protect the marine environment (Articles 20-23).·

States are obliged to resolve disputes peacefully; the convention endorses arbitration and mediation and identifies procedures for fact-finding commissions (Article 33).

Importance of information sharing in TBWG2 Useful to analyse the use and communication of information in transboundarywater regimes by institutions (formal and informal), the public, marginalised groups, stakeholders, and political actors.

2 Hearns Bonn Conference



Reduces problem unccertainty Improves co-ordination/integration Helps identify and engage relevant stakeholders Supports precautionary principle, SD and resilience Increases trust between the parties Increases technical capaicyt Long-term minimisation of costs although initially costly and also

costly at time being undertaken/provided Increases equity Helps ability to manage and hedge against major risks – eg

climate change and major catastrophic events



The Transboundary Governance Task in Africa – An Overview3

(permission touse to be sought)

3 Source: Transboundary Freshwater Dispute Database http://www.transboundarywaters.orst.edu/ http://www.transboundarywaters.orst.edu/publications/register/tables/IRB_africa.html

http://www.transboundarywaters.orst.edu/publications/register/tables/IRB_africa.html



Key issues in transboundary governance – Africa4 First, water scarcity in Sub-Saharan Africa is primarily ‘economic’ water scarcity (Seckler et al. 1998); i.e., it is not lack of water but the lack of financial and human resources and poor governance that are the key issues. This implies that for Sub-Saharan Africa, the creation of institutions that facilitate the shared development of new water resources should receive highest priority, in contrast with the developed world and Asia, where transboundary institutions focus largely on allocation of scarce water among competing uses. In other words, the central question is less about how to divide a limited pie, but rather how to facilitate win-win options by increasing the pie through investments in new development in water resources, including groundwater, while conserving the environment. A second feature of Sub-Saharan Africa, which separates it from the developed world experience, is the overwhelming level of poverty and the strong dependence upon water for the livelihoods of the poor. The majority of Africa’s poor live in the rural areas where agriculture and livestock production, both water dependent, form the mainstay of livelihoods. For smallholders in particular, basic wellbeing depends intrinsically on water availability, reliability and the risks of flooding and drought. Within this group, women and their dependents are especially reliant on water resources outcomes. For example, poor women bear a disproportionate share of the unpaid domestic chores of household water supply. Further, while a relatively high proportion of African women are the primary farm decision-makers, their access to water resources and to water related decision-making forums at all levels and in particular the transboundary level, is limited. Given its high proportion of waters crossing international borders, it is clear that the poverty-transboundary water connection is especially strong in Sub-Saharan Africa. A third feature unique to Sub-Saharan Africa is the continued importance of indigenous arrangements in the management of natural resources, in particular land and water, within and among rural communities. “Indigenous” here refers to local level customary social and cultural values, perspectives, and organizational arrangements, as opposed to those often imposed from outside by the modern state, such as national policy and law and international arrangements. Indigenous principles can include mechanisms for consensus building and conflict resolution, priorities and equity considerations in resource allocation, normative frameworks for pollution prevention, notions of social and economic resource values, coping mechanisms for natural disasters, communication and information flows, and community-based 4Project brief, Transboundary water governance for agricultural and economic growth and improved livelihoods in the Limpopo and Volta Basins: Towards African indigenous models of governance,http://www.iwmi.cgiar.org/africa/atb/pdf/CP-47%20Final%20Project%20Proposal.pdf



processes for technical and institutional innovation. Often, though not always, indigenous arrangements cater well to high numbers of relatively small water users, unlike many formal water laws. While land legislation in most of Sub-Saharan Africa clearly recognizes indigenous arrangements, indigenous governance structures and practices for water development, use, and management are still largely ignored in higher level, in particularly transboundary, institutions (Mohamed-Katerere and Van der Zaag 2003, Van Koppen et al. 2002). So how can transboundary institutions be built which address sub-Saharan Africa’s unique conditions? While pure top-down approaches to transboundary water agreements, steered by government, may be appropriate in some circumstances, it is likely that such approaches could be enhanced by considering local conditions and local, that is indigenous, institutions. Thus we hypothesize that by combining an indigenous or “bottom-up” approach starting from local traditions and social arrangements and combining this with a top-down approach, and recognizing the issue of economic water scarcity, especially for poor smallholders, it will be possible to create more resilient and successful transboundary water institutions than would otherwise be possible, while also giving greater voice to the poor, women and men alike, in the process.



The Transboundary Governance Task in Asia – An Overview




Key issues in transboundary governance – Asia5

5Project brief, Transboundary water governance for agricultural and economic growth and improved livelihoods in the Limpopo and Volta Basins: Towards African indigenous models of governance,http://www.iwmi.cgiar.org/africa/atb/pdf/CP-47%20Final%20Project%20Proposal.pdf



The Transboundary Governance Task in South America – An Overview




Key issues in transboundary governance – South America



The Transboundary Governance Task in Europe – An Overview6


6 Source: Transboundary Freshwater Dispute Database http://www.transboundarywaters.orst.edu/



Key issues in transboundary governance – Europe7




The Transboundary Governance Task in North America – An Overview8

8 Source: Transboundary Freshwater Dispute Database http://www.transboundarywaters.orst.edu/



Key issues in transboundary governance – Noarth America9




Transboundary issues – Australia - The Only Continent Which is a Nation-State

1 Murray 2 Darling 3 Murrumbidgee 4 Lachlan 5 Campaspe 6 Yarra 7 Goulburn 8 Latrobe 9 Ovens 10 Snowy 11 Derwent 12 Shoalhaven 13 Hunter 14 Macleay 15 Clarence 16 Bogan 17 Macquarie 18 Namoi 19 Barwon 20 Condamine 21 Warrego 22 Dawson 23 Fitzroy 24 Mackenzie 25 Isaac 26 Burdekin 27 Suttor 28 Mitchell 29 Alice 30 Jardine 31 Staaten 32 Flinders 33 Leichhardt 34 Nicholson 35 Roper 36 Wilton 37 Daly 38 Katherine 39 Victoria 40 Ord 41 Drysdale 42 Fitzroy 43 Margaret 44 De Grey 45 Fortescue 46 Ashburton 47 Gascoyne 48 Murchison 49 Swan/Avon 50 Blackwood 51 Coopers

Creek 52 Barcoo 53 Thompson 54 Diamantina



55 Georgina 56 Finke 57 Palmer

Questions for reflection



Further reading Transboundary Freshwater Dispute Database http://www.transboundarywaters.orst.edu/ Wolf, A. T. 2007. Shared Waters: Conflict and Cooperation. Annual Review of Environment and Resources. 32: 3.1-3.29. Wolf, A. "Conflict and Cooperation Along International Waterways." Water Policy. Vol. 1 #2, 1998. pp. 251-265. Hamner, J. and Wolf, A. 1998. Patterns in International Water Resource Treaties: The Transboundary Freshwater Dispute Database. Colorado Journal of International Environmental Law and Policy. 1997 Yearbook. Biswas, Asit. Management of International Waters: Problems and Perspectives Water Resources Development. Vol. 9 #2, 1993.

http://www.transboundarywaters.orst.edu/publications/wolf_2007_shared_waters.htm



Transboundary Ground Water – an overview Transboundary aquifers come in many forms

A confined aquifer divided by an international boundary An aquifer that is entirely in the territory of a State linked

hydrologically with an international river An aquifer that is entirely in the territory of one State but is

hydrologically linked with another aquifer in a neighboring State An aquifer that is entirely in the territory of one State but whose area

of recharge is in a foreign State. The Relevant International law There is currently no global multilateral treaty in force covering transboundary groundwater in the way that the 1997 UN Convention covers surface water. There is however the recently drafted Convention



on the Law of Transboundary Aquifer Systems originating from the International Law Commission and approved by the UN General Assembly is not yet in force.



REVIEW QUESTIONS





REFERENCES

WATER GOVERNANCE POLICY INITIATIVES – THEIR DESIGN , & IMPLEMENTATION1

CHAPTER

7

INTRODUCTION TO THE CHAPTER

Policy analysis is a systematic evaluation of the technical and political implications of alternatives proposed to solve public problems. Policy analysis refers to both the process of assessing policies or programs, and the product of that analysis.

In its more complex forms policy design is sought to be achieved through iterative action with respect to the following matters:

Diagnosis of the policy problem to be addressed; broad specification of the expected outcome(s) from the policy

intervention – these may be formally stated as policy objectives; explicit or implicit formulation of the assumptions driving the policy

initiative identification of appropriate target group(s) for the policy intervention; identification of and creation of the appropriate tools or instruments,

including appraisal or ex-ante evaluation of the suitability of such instruments;

identification of and establishment of the implementation network for the policy;

identification and establishment of appropriate rules; identification and establishment of influencing mechanisms; and identification and establishment of simple or complex arrangements

for retrospective/ex-post evaluation as appropriate.

1 This Module draws extensively from the following materials: Patton and Sawicki, Basic Methods of Policy Analysis and Planning, 2nd ed. (Prentice Hall, (1993). Steve Sorrell, Interaction in EU climate policy - policy design and policy interaction - literature review and methodological issues May 2001 (copy with author); Mickwitz, Per – Evaluating Environmental Policy Instruments, Finnish Environment Institute, presented at the American Evaluation Institution Conference, Waikiki, November 2000 (copy with author).; Gunningham, Grabosky and Sinclair, ‘Instruments for Environmental Protection’ in Smart Regulation, New York: Oxford University Press, 1999.

International Water Centre 1

In its simpler forms, policy making can be characterised in formal terms as follows:

Figure 1 – A Simple Policy Making Framework

The discussion covers the following issues:

1. The design of integrated policy interventions or initiatives.

2. The interaction of assumptions with proposed interventions or initiatives.

3. Addressing constraints and the broader socio-political context of policy initiatives

4. Selected policy instruments and tools

5. Criterian for assessing policy instruments and tools



3

Box 1 – Responding to a Water Governance Problem2

Imagine an enchanting lake, surrounded by fields, forests, a fishing village and a few small hotels. The causes of stress within this Social-Ecological system are agricultural, industrial and domestic practices. They produce a flow of nitrogenous substances that reaches the lake, through agricultural land run off, or through direct or indirect discharge from the sewage system. Over time there is an increase in the trophic level of the lake, which causes algal blooms, anoxic conditions and mass fish death, and so, a variation in the condition of the lake. In this way two negative impacts or externalities are produced:

a reduction in fishing activity; a loss of the lake’s appeal to tourists.

In order to respond to the fishermen’s and hotel-keepers’ discontent, the regulatory agencies (Lake Regulatory Agency, The Tourism Agency, and the Environmental Protection Agency) decide to design an intervention. Using a joint-action framework, they form the Enchanting Lake Improvement Task Force, with this body able to choose choose from a menu of different interventions, including:

after reviewing the situation, decide to do nothing; pass a law regulating the use of nitrogenous fertilizers in

agriculture with sanctions for non-compliance; create a stage for the removal of phosphorous in the treatment plant that purifies the sewage prior to discharge;

collect the algae when blooms happen; inject oxygen at a certain depth to prevent lake waters from

becoming anoxic; tax the producers of the pollution to provide monetary

compensation for the damage to those affected; The Task Force is not limited to choosing only one of these interventions, each of which can be implemented in different forms and degrees. The Task Force also select a combination of these intervention to create an integrated and coordinated package. That package could be called a Project, Plan, Initiative or Programme as the case may be.

2 Rodolfo

Figure 2 – Another approach to Policy-Making


The work of the - water governance policy analyst3

The scope of work for a water governance policy analyst is clearly extensive.

Figure 3 – The work of a water governance policy analyst

WATER GOVERNANCE

ANALYST

Interactive communication

Knowledge utilisation

Materials Development

Policy Analyst

KNOWLEDGE Policy problems Policy futures Policy actions Policy outcomes Policy performance

PRESENTATIONS Conversations Conferences

Meetings Briefings Hearings

DOCUMENTS Policy memorandum Policy issue papers Executive summaries Appendices New release

STAKEHOLDER Agenda setting Policy formulation Policy adoption Policy implementation Policy assessment

3Joseph Opio-Odongo and Gregory Woodsworth, Guidelines On Policy Analysis For Integrated Environmental Assessment And Reporting, UNDP Regional Service Centre for Eastern and Southern Africa, Nairobi, Kenya http://www.unep.org/dewa/africa/docs/en/AEO_Policy_analysis_guidelines_IEA_Oct06.pdf



6

POLICY INITIATIVES Typical fields of water policy include:

Cosntruction of infrastructure Water resources assessment Water demand assessment Formulation of policies (strategies) on future water management Evaluation of alternative strategies Definition of an institutional framework Recommendation of institutional arrangements.

Structural (SA) and non-structural actions (NSA) Structural actions (most commonly called projects) are concerned with physical modifications of the system, as, for example, the location and dimensions of structures for the collection, transportation, distribution and use of the water resource. They are aimed in the first instance at constructed or built capital and significantly affect natural capital. Non-structural actions relate to the less tangible aspects of the system. Ideally they should build up the human capital associated with the system. The assignment of an action to one class or the other is not always straightforward. Examples of structural actions are:

the construction of a dam or a canal; the installation of an irrigation system; the construction of a waste water treatment plant; the re-naturalization of a river that has been extensively modified

in the past. Examples of non-structural actions are:

a law that introduces quality standards for effluents; setting tariffs for water services; an incentive programme for farmers to encourage sustainability

oriented behaviour (e.g. adopting crops that need less water or planting woody buffer strips)

establishing a water market or trading arrangements.


7

Table 1 Typical policy interventions in the water context4 Policy Intervention categories Examples Interventions to safeguard the quality of the environment5

constructing domestic and industrial wastewater treatment plants; improving the drainage network to counteract the salinization of soils;

enacting laws that establish quality standards for effluents or receiving bodies.

establishing a policy framework (incentives/disincentives) to drive the actions of the private sector/non-government actors in required directions with respect to any of above interventions

Interventions to increase water availability – applicable at different scales

constructing desalinization plants for brackish and marine water;

constructing structures for exploiting rainfall and flash floods;

constructing waste water recycling plants; constructing water treatment plants to provide

drinking water; constructing pumping stations for superficial or deep

aquifers; installing pumps for lifting water from interceptor

canals into the irrigation network; improving irrigation network efficiency, e.g. by

coating the earth canals; improving drinking water distribution efficiency, e.g.

by reducing seepage and leakage; extending the irrigation network into lands reclaimed

from the desert; changing irrigation method: eg a shift from the

flooding method, which is extremely water consumptive, to the sprinkler or drip methods.

establishing a policy framework (incentives/disincentives) to drive the actions of the private sector/non-government actors in required directions with respect to any of above interventions

Interventions to regulate water extraction and diversion

defining and implementing use policies for reservoirs

defining and implementing use policies for aquifers defining and implementing water distribution policies

between irrigation districts. establishing water trading/markets establishing a policy framework

(incentives/disincentives) to drive the actions of the private sector/non-government actors in required directions

4 Rodolfo

5


8

Interventions aimed at guiding behaviour

Regulating planting/farm areas used for particular crops; imposing taxes/subsidies on some crops; setting limits to urban expansion; improving ir rigation ef ficiency th rough edu cation

programs and economic incentives; setting taxes/subsidies for the use of chemical products; setting quotas, t axes/subsidies f or i mporting/exporting

certain foodstuffs; setting prices for products controlled by the government; defining tariff schem e for wat er ser vice users, both

domestic and industrial; establishing a framework for the settlement of farmers on

reclaimed lands establishing a p olicy framework

(incentives/disincentives) to driv e t he actio ns of th e private sector/non-governm ent acto rs in requ ired directions with respect to any of above interventions

Interventions to deal with floods

reafforestation constructing reten tion b asins fo r storm water in urban

zones; reducing the impermeability of urban ground; In ag ricultural zo nes: g iving in centives fo r su itable

agricultural practices an d crop s, an d regulating land management.

establishing a p olicy framework (incentives/disincentives) to driv e t he actio ns of th e private sector/non-governm ent acto rs in requ ired directions with respect to any of above interventions

Interventions for living with risk informing, sensitizing and educating the public;

inducing people to p articipate in d ecision-making and assume responsibility.

planning the management of emergencies: setting up ef ficient warning systems for flooding events

and appropriate emergency plans; equipping regions/actors to face these events. establishing a p olicy framework

(incentives/disincentives) to driv e t he actio ns of th e private sector/non-governm ent acto rs in requ ired directions with respect to any of above interventions

Interventions to raise water management responsibility:

informing, sensitizing and educating the public; inducing people to p articipate in d ecision-making and

assume responsibility

Planning actions vs Management Actions A second distinction can also be m ade between Planning actions and Management actions. The distinguishing factor is time, frequency or repetition. An action is a planning action when it has a discrete and finite


9

character - a typical example is the construction of a dam. An action is a management action when it is undertaken frequently or periodically.

Table 2 Planning actions – Water quantity/supply

Action Key policy/design considerations • Reservoirs:

location, size of the dam, characteristics of the outlets;

• Diversions:

location, regulatability, maximum derivable flow;

• Canals

location, layout, minimum and maximum flow, presence or absence of coating;

•Irrigation systems

location/extension, irrigation/drainage technique;

• Pumping stations

location, capacity, head;

• Aqueducts

layout, average and maximum flows, losses;

• Hydropower plants location, intake and outlet points, maximum and minimum flows of the turbines.

Table 3 Planning actions – Water quality • Curtains for pathogenic control or fixing nutrients in natural lakes and reservoirs

location and maximum reachable depth;

• Aerators in natural lakes in anoxic conditions or those requiring destratification

location, depth, power;

Table 4 Management actions

Action Key policy/design considerations

Releasing water from reservoirs

flow rate; minimum environmental flow (MEF), i.e. the minimum flow that must be released to the river downstream from a reservoir whenever the inflow exceeds the MEF

Broadcasting alarms and pre-alarms for floods:

area involved and characteristics of population

Land use regulations zoning, limits to expansion, urban regulation; Economic instruments: tariff schemes for water services, Altering mix of economic tools in the light of changing conditions

information on all relevant market and economic criteria

Information and education campaigns to increase awareness:

program, people, involved, budget, means employed, target population


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DESIGNING A POLICY INITIATIVE Designing a good policy initiative involves identifying the problem, specifying the policy objectives, the target group, the implementation network, the instrument type, the rules and influencing mechanisms, and the underlying assumptions at an appropriate level of detail. It also involves considerations which are more or less internal to the designers and over which they have some control as well as factors over which there is little control. Factors outside control usually constitute a constraint although they may sometimes also offer a window of opportunity. The assumptions that underlie policy design concern the sense that framers of policy have about the appropriateness in a specific context of instruments, rules, influencing mechanisms, constraints, target group(s) and implementation networks. Assumptions may be stated explicitly or implicitly. They are also closely related to and shape the following considerations in policy design – considerations which may change both as the policy design process moves forward and during implementation. the precision with which intervention objectives are stated the degree of intervention the degree of targeting the resource intensiveness associated with implementation the degree of stringency attached to a policy initiative.

Outcomes and Objectives

Outcomes refer to the effects of policy, whether intended or unintended. Policy objectives refer to desired outcomes. Typically, policies will have multiple objectives which may be defined with varying degrees of precision. Similarly, when in operation, policies will have multiple outcomes which may be valued as either positive or negative by different groups. Many of the outcomes may be unanticipated - indeed, this is a dominant theme in empirical studies of policy implementation. Outcomes may be either direct or indirect. Direct outcomes are the immediate outcome of a policy, while indirect outcomes are the result of a causal chain of processes. For example, the promotion of investment in cleaner production could be considered a direct outcome, while the resulting reduction in carbon dioxide emissions could be considered an indirect outcome. Policy objectives may refer to either direct or indirect


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outcomes. Since policy implementation itself involves a complex causal chain of processes, the classification of outcomes as direct or indirect is to some extent arbitrary.

Target group(s)

The concept of a target group or groups focuses attention on those individuals or organisations that the policy aims to influence in order to achieve its objectives. The selection of tools and the design of policy initiatives are shaped fundamentally by the characteristics of target group(s). The table below provides a good example of this issue. The focus is chemical pollution water, an important environmental issue. On the basis that it is possible to identify two distinct target groups, it can be seen that the range of instruments that has been, and is likely to be valuable in regulating the two groups is very different.

Table 5 Control of Pollution of Water by Persistent Chemicals – Differing Target Groups and Policy Options

Environmental Problem

Target group characteristics and overall context

Consequences for Policy

Chemical pollution and acidification originating from large chemical plants

large, powerful, highly visible players highly vulnerable to public pressure from

international and national environmental groups

reasonably vulnerable to pressure from local communities

highly vulnerable to financial pressure from banks, markets and mergers/take-overs due to financial weakness, mass-media commentary on environmental liabilities etc

players highly vulnerable to damage to brand image

factories and production activities easily monitored and regulated

significant financial resources to undertake forward-looking research and development

significant financial resources “deep pockets” to support sole or shared responsibility for clean-up of sites contaminated by their activity and products

well-organised industry associations

Communication between regulators and targets is easy

Range of influencing mechanisms is available to regulator

Voluntary agreements, economic instruments, taxes and CAC instruments are all available

Experiments and adaptive learning is possible with co-operative firms

Significant economic power can subvert regulatory regimes on economic grounds

Third-party regulators may be NGOs and banks

Chemical pollution and acidification originating from farm agricultural run-off to water and soil

Geographically isolated small units Shaky financial and economic position –

eg large degree of indebtedness to banks Highly dependent on suppliers of

equipments and inputs Diffuse target group not easily regulated

and monitored Considerable cultural resistance to

regulation Sector not targeted by environmental

NGOs Limited resources to invest in R & D Small subset of innovators amenable to

experimentation with mass reasonably conservative

Much more difficult sector to regulate generally

High degree of variability in response to instruments

Third-party regulatory influence may be suppliers rather than reputation and NGOs

Third-party regulators may be banks and commercial suppliers of inputs


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Although the table above does provide useful insights into the interaction between policy initiatives and target group features, it would be misleading to suggest that there is a good “science” of the interaction between target groups and policy initiatives or instruments. Despite much work over many years it has not been possible to develop a general theoretical framework linking policy frameworks to the characteristics of target group(s). All that can be said is that (1) good policy recommendations must take the relevant characteristics of the target group(s) into account if environmental policy is to have a lasting impact; and (2) target groups have to be investigated as rigorously as circumstances permit to allow for empirical verification of any assumptions made. Retrospective policy evaluations have a role to play in this respect. Chapter 8 addresses retrospective evaluation in more detail.

Target group location in the causal chain

Causal chains may be complex or simple. The primary criterion for selecting target groups should be their role in the causal chain of events with respect to the problem and the desired objectives. The table below depicts some possible target groups in the complex causal chain linking carbon dioxide emissions to the consumption of electricity. Policy instruments to reduce such emissions may be aimed at a number of points in this chain in an overall initiative as follows:

Table 6 Carbon dioxide emissions from the electricity industry

Target Groups Possible policy interventions

Fossil fuel suppliers Apply carbon tax to their emissions Electricity generators Set emission limits and a framework of trading Electricity suppliers Establish and implement energy efficiency obligations and

renewable energy obligations Electricity consumers Provide company and regulator based information schemes, tax

on excessive use Technology suppliers Measures to encourage or mandate development and sale of

energy efficient technology by suppliers to all levels in the supply chain

Directly affected and indirectly affected target groups

A distinction may also need to be made between those directly affected by a policy instrument or initiative and those indirectly affected. Those directly affected are normally defined quite precisely by the policy rules. But a number of groups may be indirectly affected at different stages in the causal chain. Policies may also have impacts on groups unrelated to


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the causal chain. These multiple effects are highly relevant when designing or evaluating a policy initiative.

Physical characteristics of the target group

There are two sets of considerations here. The first relates to the physical characteristics of the environmental problem. In the case of water pollution, this includes the nature of the pollutant(s), the geographical scope of the problem, the dependence of the problem on the location of the source(s), the relationship between discharges and environmental damage, and the ease with which the pollutant can be monitored. Taking ease of monitoring of pollutants as an example, this particular characteristic is important with respect to choice between regulatory and market based approaches, although the centrality of monitoring and the difficulties of undertaking it properly are not always acknowledged by advocates of market approaches. Simply put, monitoring is very difficult where a large number of chemical compounds are emitted from many different release points. Such situations are not managed well by either emissions taxes or tradable permits due to the difficulty and cost of emission monitoring. Conversely, market based instruments are easier to use to manage point source emissions of a single pollutant into a single medium. The second set of considerations relates to the physical and overall structural characteristics of target group(s). In the case of water pollution, this includes the number of sources (e.g. no. of firms), the size of the sources and the homogeneity of sources. As an illustration, water pollution emission trading schemes are at their most viable where there are a relatively small number of sources producing homogenous and well understood pollutants and where the enterprises concerned are sufficiently large and sophisticated enough to deal with the contractual, accounting and technical innovation aspects of permit trading. Capacity refers to the ability of the target group(s) to meet the objectives of the policy, or to respond to the obligations and incentives created by the policy. Capacity cannot, therefore, be judged in the abstract, but only in relation to specific objectives, obligations and incentives. Capacity can also increase or decrease over time and can be improved by focused or targeted measures. Capacity covers a subset of issues and factors and can be broken down for ease of analysis into technological capacity and economic capacity. Both economic and technical capacity are notoriously difficult to assess and are a common focus of political debate. There is also the tendency


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for firms to report their internal economic and technical capacities and needs inaccurately to the regulator. There is also the question of the informational, organisational and other resources available to the target group(s). Are these sufficient to either meet the objectives of the policy or to respond to the proposed incentives?

Table 7 - Capacity Capacity Type Issues Technological capacity. Can the objectives be met using existing technology, or

will the objectives require technological innovation? Does the timetable of (for example) emission targets correspond to the normal period of capital stock rotation in the target group? What is the rate of technological change in the target group?

Economic capacity

Can the targets bear the immediate and/or transitional costs imposed by the policy? What are the longer term consequences of costs for the target group(s) and for associated or linked groups?

Capacity is very relevant to the stringency of a policy initiative. The less capacity in a sector or in a firm, the less targets will be able to meet stringent or strict requirements. Motivation refers to the acceptability of policy objectives to the target group, and the likely response of target group(s) to the obligations and incentives created. As with capacity, motivation cannot be judged in the abstract, but can only be assessed in relation to specific objectives, specific incentives and specific timetables. Motivation can be assumed to depend largely on perceived economic costs and benefits. However, other factors such as environmental values, internal corporate culture and the presence of “environmental champions” in the target group or implementation network may also play a role. The level of motivation will depend upon the conflict or convergence between the objectives of the target group(s) and the objectives of the policy. This in turn will be based on perceptions of short term and long term costs and benefits. Thus, chemical firms increasingly see their environmental performance as affecting their public image and therefore the market position of their brands and thus potentially their economic performance. This may make such firms more receptive to the objectives of public voluntary schemes despite the costs that these might entail.


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Motivation will similarly depend upon the perceived stringency of the policy. Of particular importance is whether the policy will confer significant benefits on the target (the so-called win-win outcome situation), as against policies which are merely seen as imposing costs on targets with very uncertain and difficult final outcomes.

Political influence of the target group

Political influence refers to the role of organised interest groups in the process of policy formulation. Policy initiatives are not designed and imposed in a top-down fashion, but emerge through negotiations between governing bodies and relevant interest groups. Good policy needs to assess the political feasibility of any proposals made. Political feasibility can be expected to depend upon such factors as the stringency of the policy proposals, the degree of organisation of relevant interest groups and the extent of access of such interests to the policymaking process. Although this aspect of the policy environment and the policy design framework is very important, this is again another aspect of the policy framework where simple answers and a straight forward textbook approach are lacking. Generally, however it is to be expected that policy instruments that are perceived to impose relatively high costs on target groups will meet political resistance. Whether the target group(s) succeeds in obtaining low cost initiatives or has to be content with high ones depends upon their political influence. At the risk of simplifying what is a complicated discussion, the following general points can be made about the issues of political influence, target group(s) and policy outcomes.

1. Situations of regulatory capture: Within each policy area, interest groups cluster around one or more government departments or key politicians with the aim of influencing policy. At the same time, the government needs the support of these groups to make and implement policy. In areas where strong linkages exist between the target group(s) and government departments there is the possibility of substantial political influence as a result of regular and institutionalised contacts with decision-makers, control of information, technical expertise and often a shared view on the causes and solutions to the particular policy problem. Regulators may become captured by target groups. This tends to result in low cost policies being introduced.

2. Regulatory fluidity and policy openness: In contrast to situations of regulatory capture are situations where relations are much more fluid and there is much less of a cozy relationship between target groups and government. In such situations, there is greater scope for governments to introduce high cost policies.


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Of course political influence can also arise from other factors such as the economic importance of the sector concerned, their strategic profile, public concern with hazards or risk and a loss of public legitimacy on the part of the target groups. To properly understand the importance of political influence with respect to the design, formulation, implementation or success of a policy initiative, analysis would need to ask some of the following questions: Which groups are involved in the particular policy arena? What is the nature and quality of their interactions? In particular, what

are the relationships between the target groups and government bodies?

What are the beliefs, values and policy preferences of different interest groups in the policy arena? Is there consensus or conflict?

How reliant is government on the resources of key members of the policy arena?

What is the bargaining power of different interests? What is their ability to influence outcomes? This assessment is highly qualitative, but should give a picture of the strength of different interest groups, their political preferences and their ability to influence policy proposals. For example, if a country is particularly reliant on agricultural products from irrigation, this will give the interest groups representing that sector considerable political power on issues to do with the environmental effects of irrigation or changing energy pricing regimes to reduce over-use of water. Policy would almost inevitably be shaped by this. Assessments of the political dimension of policy making should help in making judgments about the feasibility, or political realism, of any policy proposals made. These judgments will in turn depend upon the timeframe of the policy proposal. Judgments about political feasibility guide the development of policy proposals, whether explicitly or implicitly. Political feasibility should also form one of the criteria against which policy proposals are evaluated – again this is done explicitly or implicitly. For policy analysts in government employ, analysis of political feasibility is one of the most difficult tasks, because it may affect their job security. In many cases, an external consultant may be the person best placed to make assessments of political feasibility. The design of policy initiatives is normally informed by a consideration of all the above elements. While this is rarely a systematic or precise process, a ‘matching’ of instrument to target group is generally implicit in environmental policy.

Implementation networks

This is the mix of public and private organisations which need to be mobilised to implement the policy especially with respect to influencing the target group(s). Conceptually, target groups can be viewed as nested within the implementation network.

Figure 3 Implementation networks

FP FP TP TP TP FP

TG/SP

Implementation Network TG – Target Groups SP – Second Parties FP – First Parties TP – Third Parties Despite the diversity of interests and actors that is typically present, the dominant picture that is often presented of the regulatory process is of a two-sided interaction between a single regulatory agency (first party) imposing requirements upon an industry or sector (second party or target group(s)). In fact it is often useful to view policy implementation and the networks to be mobilized to achieve objectives as a complex interplay between three broad groups, first parties, second parties and third parties.

First parties This category of actor is typically government and its agencies, especially regulatory agencies with delegated powers to manage environmental issues. Corporatised bodies and semi-privatized or fully privatized entities may also be important. The characterization of governmental bodies as “first parties” is not however simple and straightforward since in many cases, several agencies may be involved in a single policy arena and their objectives may even be in conflict. For example, there are typically conflicts between the objectives of economic regulators of privatized water utilities and those environmental protection and conservation agencies concerned with water quality. Effective policy through “first parties” may well require harmonization or integration of the policies of disparate agencies.



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Second parties These are the targets of the policy. While individual firms or farmers are generally the ultimate target of water sector regulation or governance initiatives, a significant role is played by various associations – usually some form of water user association. It is now quite common for associations to become engaged in the negotiation of regulatory targets, the monitoring of progress towards those targets, and in ensuring compliance among their members. The extent to which this is possible will depend upon the coherence of the sector and the ability of the association to ‘deliver’ its members.. One of the most crucial issues in policy design is the amount of discretion that is given to organisations within the implementation network.

Third parties The concept of the third party encompasses a wide range of commercial and non-commercial organisations. Many of these types of organisations and groups may be drawn into the regulatory process using a range of influencing mechanisms. The overriding problem though is always whether they have the requisite capacity to perform the tasks required. Anti-poverty groups, anti-pollution groups, pro-environment groups and other such groups are the most obvious example of a third party and can be involved in specific policy interventions either in a monitoring or watchdog role or through co-operative relationships. They have the potential to take the regulatory burden off government agencies and also to exert pressure on target group(s) in a variety of market and non-market ways.

Table 8 – Third parties

Co-operative roles Watchdog roles Non-confrontational verification of

environmentally beneficial trading Eco-labelling schemes Government support for scientific

research

Compliance supervision roles re. verifying monitoring data and compliance with emission targets.

Rights of court action to support policy initiatives

Government support for alternative scientific research

A large amount of attention should be devoted to identifying all possible third parties to see how best they can assist with an initiative. This is also because third party can also effectively block initiatives.


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Appraisal and selection of appropriate tools or instruments Tools or instruments are the activities introduced by policy-makers to address a particular problem and to achieve one or more specified objectives. Policy instruments generally have legal backing or authority although they are not always expressed in the form of law or legislation. We discuss tools or instruments in detail below. Criteria for their choice are also below. This aspect of the policy process is a form of evaluation – ex ante evaluation. It is useful to call it appraisal and selection of instruments so as to distinguish it from retrospective or ex post evaluation.

Rules A formal definition of a rule is that it is a principle, regulation, or maxim governing conduct in particular situations. When it is fully internalized by all actors for whom the rule is relevant, it becomes “normal” and is a dominant custom or habit. Rules can be set out in legal form. Rules tell the target group(s) and implementing organisations what they must (or may) do, when to do it, and how it should be done. Equally importantly, rules tell target groups what they must not do. Rules impose obligations, but this does not imply rigid, top-down implementation. Organisations may work within a framework of rules, but these may give considerable scope for discretion and professional judgment. Similarly, rules may imply varying degrees of conditionality (e.g. prohibitions; prohibitions with exemptions; concessions; licenses; obligation to notify etc.). It should be noted that the tools and instruments listed further below operate either as rules or influencing mechanisms depending on the context. A possible bright line distinguishing target groups from members of an implementation network would be that target(s) are more likely to be the subject of more rules than mere members of an implementation network would be.

Influencing mechanisms Influencing mechanisms are the means by which a policy ensures that actions are taken in accordance with the rules and in support of the desired objectives. Influencing mechanisms provide incentives for individuals or organisations to do things that they might not otherwise do, and/or enable individuals or organisations, to do things that they might not otherwise do. Influencing mechanisms can be set out in legal form. Types of influencing mechanism include:


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sanctions: which encourage compliance with formal rules and directives (e.g. fines);

positive economic incentives: which provide positive payoffs for desired behavior (e.g. subsidies, grants, loans, tax credits, tax exemptions);

negative economic incentives: which deprive targets of some material resource (e.g. taxes, levies, tariffs, fees);

capacity: which involve the provision of knowledge, information, resources, training etc. to enable individuals or organisations to take the desired actions;

symbolic activities: these do not change costs and benefits directly but aim to alter perceptions and values; and

influence exerted on targets by members of an implementation network.

The choice of influencing mechanism and its relationship to the target is not easy to determine. It is based on assumptions or where possible accurate knowledge about how different mechanisms will influence the behavior of target groups. This includes assumptions or information about the resources available to individuals and organisations and to the process of decision-making. Neo-classical economists commonly make the assumption that individuals and organisations are utility maximising and will respond rationally to price signals. This is a poor approximation to the reality of decision-making and may lead to ineffective policies. It is better to base influencing mechanisms on an empirically accurate model of individual and organisational decision-making, which takes into account their limited knowledge and, where relevant, innate conservatism, transaction costs and the influence of non-economic variables, such as values. With respect to projects which seek to influence organizations to purchase cleaner production technology to reduce water pollution for example, this may mean using evidence on how organisations make decisions on purchasing technology and using this as a basis for designing appropriate instruments as opposed to merely using prices and money signals as an indicator. If this argument is correct, more may be gained by spending money educating managers who make technology purchasing decisions about the relevant environmental issues rather than focusing on a policy response which emphasizes money and responsiveness to price signals. Again with respect to the use of information instruments, there is little point in expanding information based instruments if individuals and organisations lack the capacity or the time to use the information they already have.


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Retrospective review or evaluation To prevent waste of pubic resources (or in public understanding, taxpayers money) evaluation of policies and programmes has become an increasingly accepted practice. Retrospective evaluation takes place during or after implementation

Integrating stakeholders into the policy design process: some typical assumptions Various reasonable assumptions about the interconnection between first, second and third parties and the various elements of policy design are captured in an indicative way below:

Table 9 - Stakeholders and the Policy Design Process I

Element of Policy Design

First Parties Second Parties Third Parties

Formulation of Objectives

Yes – direct participant in setting objectives

Yes – direct participant in setting objectives with objectives shaped in significant measure by characteristics of second parties or target group(s)

Yes, but not may figure strongly as direct participants or as a focus of attention

Target Group Analysis

No Yes – primary focus Perhaps

Appraisal and selection of tools or instruments

Yes – key focus because of resource intensiveness and other considerations such as politics and legitimacy

Yes – critical connection with this aspect

Yes – critical connectin with this aspect

Implementation network

Yes – critical role – influencing mechanisms available to first parties will have to be precisely identified Rule-making requires similar level of attention

Yes – applicable influencing mechanisms and rules need to be identified

Yes – appropriate influencing mechanisms and rules matching degree of participation will need to be established extent of discretion granted to third parties in implementation network is a major issue

Rules Yes – critically linked

Yes – critically linked Yes – critically linked - extent of


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discretion granted to third parties with respect to rules is a major issue

Influencing mechanisms

Yes – critically linked

Yes – critically linked Yes – critically linked - Extent of discretion granted to third parties in implementation network is a major issue

Retrospective evaluation

Yes – critically linked

Yes – critically linked Yes – critically linked - extent of discretion granted to third parties at this stage is a major issue

A key issue in policy design is the extent of discretion that is to be offered to third parties with respect to their role in the implementation network; the design and implementation of rules; their role with respect to influencing mechanisms and their role in retrospective evaluation. Rules restraining third parties or making them carry certain costs with respect to their actions vis-à-vis second parties may be required in some situations.

Table 10 - Stakeholders and the Policy Design Process II

Fine-tuning policy

First parties Second parties Third parties

Precision of intervention objectives

Yes – closely concerned – determine final parameters

Yes – highly closely linked

Secondary consideration in many cases

Degree of intervention


Yes – TG characteristics and degree of intervention closely linked

Degree of targeting



Yes – may be highly influential in shaping this

Resource intensiveness



May or may not be directly involved or influential in this aspect May contribute to fine-tuning of stringency arrangements May be part of rule frameworks for stringency aspects

Degree of stringency

Yes – may not be that closely

Primarily a concern of this group

May or may not be directly involved or influential


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concerned Power to alter stringency through a range of measures either through rules or influencing mechanisms

May contribute to fine-tuning of stringency arrangements May be part of rule frameworks for stringency aspects

Issues of discretion and the extent of freedom offered to third parties also arise with respect to this dimension of the policy design process given the possibility of third parties misusing their power relative to second parties. Rules restraining third parties or making them carry certain costs with respect to their actions vis-à-vis second parties may be required in some situations.

THE BROADER CONTEXT Circumstances that prompt and mould policy formulation and pronouncement can vary considerably. They constitute the policy context. The context is either urgent or reactive when the policy maker is prompted to take policy actions outside the normal or routine policy-making process, such as would be the case when an emergency occurs. The context is routine when the policy is made as a matter of course following laid-down procedures, which may include extensive consultations with stakeholders. It can also be considered to fall in the grey zone when the situation prompting policy-making is neither urgent nor routine. The policy context is also fluid because of the dynamics of the domestic and global contexts in which the particular policy domain is nested. Definition of context includes many factors including obviously economic, political, legal, cultural, gender as well as religious factors. Although closely related to the more specific analysis of other dimensions discussed above, the emphasis here is really on a separate set of factors from those directly concerning the target group(s) or participants in the policy arena or the implementation network for the policy. Although this aspect of policy design is very important, it is not always easy to characterise these broader issues with the clarity that they actually require. Policy context requires attention because constraints that may limit policy design choices often come from the external context Chapter 5 on Institutions, including culture and gender discusses the broader context in more detail.


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TAKING CONSTRAINTS INTO ACCOUNT

The previous discussion identified features of the policy arena, target group(s) and wider policy context which must be taken into account in policy design. In an operational sense (working out what can be done with respect to the problem and doing it) all these matters can be seen as providing constraints on the design choices available. Constraints in the policy context may be characterized as hard or soft/manageable constraints

Table 11 – Constraints

Hard constraint Manageable or soft constraint You must rule out option A because of reasons R. To do otherwise would lead to consequences C which are considered unacceptable

You must proceed carefully with option A or

only implement it at 40% functionality because

of reasons R. To do otherwise would lead to

consequences C which are considered

unacceptable To identify a constraint is to identify what cannot be done and to identify why it cannot be done. Constraints are pervasive but also fuzzy – they may be known only imperfectly, and/or they may require interpretation. Constraints will also vary with time. In the long run, some constraints may disappear or become less important. At the same time, new constraints may arise which may or may not be anticipated. Policy appraisal or feasibility analysis aims to identify all actual or potential constraints and evaluate the significance of these constraints for different design choices. This includes estimating the costs & benefits of relaxing constraints that are not absolutely fixed. The feasibility of a policy proposal can only be judged against a list of specific constraints.

Relaxing or Changing Constraints Federalism is currently a major constraint on improving environmental aspects of water in Australia. In the example below a way in which the constraints could change or be relaxed is demonstrated as follows:


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Table 12 Federal Water Issues Possible constraint change or Relaxation

Can an Environmental Agency or Ministry relax these constraints?

1. Changes in government so all governments are Labour or Liberal

2. High Court decision in another area which strengthens the government’s hand

3. Financial incentive or inducement offered to State governments

4. major environmental crisis which demonstrates unsatisfactory character of federalism constraint

Probably not- Some require significant resources which only Treasury can authorize and others are outside the control of environmental agencies or environmental policy makers

Good policy aims to identify which constraints exist, why they are relevant and how they will impact on the design choices available. Constraints will result from the nature of the implementation network, the characteristics of the target group(s) and the characteristics of the wider context. In particular, constraints will result from situations or events outside the control of the decision-maker.

Constraints vs Evaluation Criteria It is important to distinguish constraints from evaluation criteria, such as efficiency and equity. The latter are desirable properties of a policy instrument, but they may be traded off against each other. For example, we may be prepared to accept a loss of efficiency provided we have greater certainty of an environmental outcome being reached. But a constraint cannot be traded off against another constraint. The logic of a constraint is that it must be met. As many constraints cannot not defined with precision, it is a matter of judgment whether the constraint has been met. The Time Element Four overlapping phases to be aware of in terms of context and constraints are:

the design phase for the project/policy/initiative – typically months, sometimes years

the implementation or construction phase - the period in which the project/policy/initiative is being effected – months or years

the transition period – the SES adjusts to the new condition; the steady-state period , i.e. the situation after the transition


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POLICY INSTRUMENTS – CLASSIFICATION AND ANALYSIS Policy instruments can be defined as: “the set of techniques by which governmental authorities wield their power in attempting to ensure support and effect or prevent social change”. (Mickwitz: 2000: 2 - citing Vedung 1998: 21). In the environmental protection context, we can define environmental policy instruments as: the set of techniques by which governmental authorities wield their power in attempting to affect society – in terms of values and beliefs, action and organisation - in such a way as to improve, or to prevent the deterioration of, the quality of the natural environment. In all countries, considerable discretionary power is exercised in the use of these instruments. Often their relationship to law may be obscure whilst coordination in their use may be problematic.

A Typology Of Policy Instruments It is common in the policy literature, especially the literature influenced by neo-classical economics to use a simple binary classification of policy instruments. ‘Command and control’ occupies one end of the spectrum and ‘economic instruments’ the other. This greatly oversimplifies the reality of resources policy given that in practice a much broader range of instruments is employed. There is also a tendency to treat the various policy instruments as alternatives to each other. However approaches to water governance based on single policy instruments are unlikely to work that well. All instruments have strengths and weaknesses and none are sufficiently flexible to be able to address the full range of problems. A better strategy is to harness the strengths of individual instruments while compensating for their weaknesses by the use of additional and complementary instruments. In the large majority of circumstances, a mix of instruments is required, tailored to specific policy objectives. There are numerous ways of classifying policy instruments, none of which are entirely satisfactory as there are numerous overlaps between instrument categories. Each type of instrument has strengths and weaknesses and is therefore more or less appropriate for specific environmental problems and for specific technical, economic or political situations. Moreover, the strengths and weaknesses of each instrument depend very much on details of their design. Nevertheless, some broad


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features apply to each category of instrument, key elements of which are set out in the comparative tables that conclude this Module. One way of categorizing water and other natural resources policy instruments is based on the degree of authoritative force involved. With this approach, we arrive at four broad categories of policy instruments: Regulation or command & control: including framework standards,

performance standards and technology standards. Voluntary approaches: including unilateral commitments, public

voluntary schemes and negotiated agreements; Economic instruments: including charge systems (taxes, levies etc.),

trading mechanisms, financial instruments, and removal of barriers to improved performance

Education, information & moral suasion: these involve the least use of force and are aimed at building on already established capacity to respond, making an appeal to values and/ or attempting to modify values.

Regulation aims to alter of the set of options open to agents. Regulatory instruments are typically: standards, bans, permits, zoning, and use restrictions. The use of regulation has been the most common regulatory approach in most industrialised countries’ environmental policy and as we know is called “command-and-control”. Voluntary instruments aim to mobilize already existing tendencies within the target group(s) to address the issue in question. The target may benefit reputationally or financially from the voluntary instrument in addition to bearing some of the economic costs. Economic policy instruments aim at altering the benefits and/or the costs of the agents. Key economic instruments are: grants and subsidies; taxes and charges; and market creation, through tradable emission or resource use quotas. Information as a policy instrument aims at altering the priorities and significance agents attach to issues. As an issue, information is all-pervasive since all other instruments partly depend on information. Information can however, also be considered an independent instrument. This duality has led Vedung (1998, p. 48) for example to emphasise the distinction between information on policy instruments and information as a policy instrument. Vedung (1998) has described information policy instruments as “sermons” whilst the OECD (1994) uses the term “suasive instruments”. These instruments include different forms of information campaigns, and education. Also included in the category of information as an instrument


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would be situations where the actual information dissemination is undertaken by the private sector but the framework authority is provided by governmental rules as is the case with eco-labelling and environmental management systems.

APPRAISAL OF POLICY INSTRUMENTS & INITIATIVES BEFORE DESIGN/IMPLEMENTATION To check whether particular instruments are suitable for an initiative, policy makers typically conduct a feasibility analysis, an appraisal or a pre-implementation evaluation of the various policy tools or instruments in common use for environmental protection. Typically the tools are assessed against various criteria and considerations such as: Targeting the most important problems Susceptibility to problem-shifting (does it convert one type of pollution

problem to another or shift it to another area or region?) Economic efficiency (comprising benefits and costs, cost-

effectiveness, macroeconomic effects) Implementability - i.e. the availability of resources — including

knowledge and organisation — to implement the policy instrument Stringency – impacts on target groups Legitimacy Transparency Equity Responsiveness to relevant social values (eg. public involvement,

non-intrusiveness, cultural sensitivity ) Flexibility Ability to meet future problems Lasting effects or sustainability Ability to generate useful information for the policy maker.

Table 13 Sample Set of criteria for assessing a new technology initiative

Theme Issue Score 1- 5

or devise other scoring

Affordability Requires little initial capital or requires high initial capital?

Local manufacturing aspects

Can be manufactured using local skills and requires limited skill and capital to design, service and maintain? or


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requires relatively sophisticated materials facilities including imported materials?

Payback period Will usually payback investment cost in one or two seasons or Reuires several years?

Compatibility with the farming system

Temperate farming system or tropical farming system etc.?

Technical aspects

Eg. pressure requirement Requires low pressure? Requires high pressure? Requires special skill & training?

Ease of technical understanding by users

Simple and easily understood or users need technical expertise + special skill & training?

Operational convenience

Low operational convenience & requires special skill & training or High operational convenience

Compatibility with local business and enterprise milieu

Compatible with local approach to micro-entrepreneurship ?


30

Table 14

Sample Set of Criteria for assessing a water allocation initiative Theme Issue Score 1- 5

or devise other scoring

Ecosystem Protection

Environmental water allocation Monitoring and enforcement for ecosystem

protection Creation and incorporation of ecological knowledge

Economic issues

Clear and stable allocation rules Water allocation and related information to make

economically sound decisions Ability to re-allocate water between users, sectors

and/or regions

Integration

Integration between groundwater and surface water resources

occurs Integration between water quality and water quantity Integration between land use planning and water

allocation Integration within institutional arrangements Minimal conflict between policy instruments

Equity and participation

Formal attention to issues of equity Sustained and meaningful stakeholder and public

participation Mechanisms to address potential conflicts at

different scales

Water Conservation

Economic instruments to support conservation Re-allocation of water to more efficient and less

consumptive uses Incorporation of water conservation practices

Climate Variability and change

Investments to understand impacts of climate variability and

Change Development and application of adaptation

strategies

Sensitivity of policy to competing jurisdictions and claims to authority

Is there an issue of coordination of water allocation systems across political boundaries

Problems with possible jurisdictional/political conflicts anticipated and mechanisms for management identified and implemented

Is there conflict with indigenous/customary/local allocation processes

Problems with indigenous/customary/local frameworks anticipated and mechanisms for management identified and implemented


31

Assessment of environmental risks associated with policies6 It is also useful to be able to assess the environmental opportunities and risks associated with various policies. Use can be made of criteria relevant to each policy theme in specifying the nature of the opportunities and risks. For each policy, the likely consequences of the policy action are assessed for each criterion in turn and the environmental opportunities and risks are identified using the rating. The rating is completed when the summary score is assigned.

Table 15 Sample tool for a ssessing a Policy Initiative for

Environmental Risks and Opportunities

Policy Area 1

Policy Area 2 Policy Area 3 Policy Area 4 Policy Area 5 POLICY

Policy Theme

Policy Theme

Policy Theme

Policy Theme

Policy Theme

Cri

teri

on

1

Cri

teri

on

2

Cri

teri

on

3

Cri

teri

on

1

Cri

teri

on

2

Act

ion

3

Cri

teri

on

1

Cri

teri

on

2

Act

ion

3

Cri

teri

on

1

Cri

teri

on

2

Act

ion

3

Cri

teri

on

1

Cri

teri

on

2

Act

ion

3

Policy 1

Opportunity Risk

Summary score for opportunity

Summary score for risks

New policy or policy reform

Policy 2

Score as follows: Policy provides opportunity

Score Policy carries risks Score

No opportunity/neutral 0 No risk/neutral 0 Slight opportunity 1 Slight risk 1 Substantial opportunity 2 Substantial risk 2 Great opportunity 3 Great risk 3

6 Joseph Opio-Odongo and Gregory Woodsworth, Guidelines On Policy Analysis For Integrated Environmental Assessment And Reporting, UNDP Nairobi, Kenya http://www.unep.org/dewa/africa/docs/en/AEO_Policy_analysis_guidelines_IEA_Oct06.pdf


32

Table 16 - Matrix – Identify and addressing emerging issues7

Impact Appropriate response Target

Emerging Issues

Character and level of import

Nature

En

viro

nm

ent

Liv

elih

oo

ds

Raise awareness

Get adequate data and information

Do solid policy analysis

Lobby/ advocate for new policy or policy reform

Issue 1

Issue 2

Issue 3

Issue 4

Issue 5

Issue 6

Issue 7

Issue 8

Issue 9

Issue 10

Table 17 - Matrix for reviewing capacity or organizations/entities involved in a governance initiative8

Capacity Role in Water Governance Structure

Policy analysis Policy dialogue Advocacy Financial Capacity

Quality of data/ information system

Organisation Organisation Type (NGO, WUA etc.)

Sectoral Multi-sectoral

Strong Weak Strong Weak Strong Weak Strong Weak High Low

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.




33

POLICY INSTRUMENTS FOR WATER RESOURCE MANAGEMENT There are a wide range of instruments for implementing water resource policy policy. However for our purposes it is important to note that there is a distinction between the structured and co-ordinated use of a bundle of instruments which effectively creates a Plan or a Policy Framework and the ad-hoc use of particular instruments to address specific or isolated issues.

Plans or Policy Frameworks

Plans are processes by which water resource management needs are identified, clarified and prioritised. There are many types of water resource management plans. They can however be classified broadly into three types:

Table 18 Plan Types in Water Resource Management

Plans Type Community Driven Resource Use Plans

This type of plan is created through a process with substantial direct input from stakeholders, including broad participation from the public

Science Based Plans

This type of plan is driven by the scientific community with relatively little involvement of the public - a good example is a process for drawing up a scheme of marine protected areas and experimenting to find the most appropriate approach – this is known as andadaptive management approach in the literature

Agency Based Plans

This type of plan can be used to address a variety of objectives but with the principal characteristic that work is undertaken by the agency with the advice of a select group of experts, usually scientists. The agency can also use the advice of selected representatives from stakeholders

Many plan processes can combine all these approaches at various stages or at the same time. Australia’s National Water Initiative is a good example of combining all three processes in a staged way. Experts from various sciences created a framework of and proposed various plan-based methods for managing resources within the identified regional areas. Community consultation processes have been ongoing together with other agency based processes and some further scientific information driven processes. Since then with respect to specific regions, different types of structured consultation and plan generation occur to achieve the overall plan.


34

Community Based Plans

This process typically incorporates inputs from some combination of resource managers, scientists, other regulatory agencies, NGOs, individuals and collectives of stakeholders not represented by NGOs (typically ad-hoc single issue groups or groups created in specific response to the proposed plan). Such a process generally yields the broadest possible range of proposals, discussion and information. In addition to the identified product of the plan process, the opportunities communication and mutual education of stakeholders embedded in the process often leads to productive outcomes for other processes within the framework of use of the marine zone either in the short term or medium term. The principal disadvantage of the community based plan approach is that it can be extremely expensive in both time and money.

Table 19 Selected Instruments for Water Resource Management

REGULATORY INSTRUMENTS Zoning

Division of areas of concern to water management into zones for different use

For instance, zoning can be used to secure the quality of groundwater for drinking purposes by- land-use control rules in in areas or catchments where groundwater is used for urban PWS.

Codes of practice – mandatory; negotiated voluntary

Control s operational practices and establishes and diffuses best-practice standards and techniques. This is very important with water quality standards and pollution control. Water markets (demand/quantity) also uses codes to control behaviour in water markets.

Moratoria and interim development regulations

Temporary development bans designed to restrain development until a protection plan can be developed or implemented or until public facilities related to a water quality or quantity problem can be constructed or upgraded.

Permits to construct water facilities (dams, wells, etc)

Issuance of permits or license is required prior to construction or implementation of proposed development

Water use permits under command and control regimes

National, state or local permits for use of water resources under specified terms and conditions


35

Critical area protection –for water area/Dam/Reservoir region

Prohibit or significantly limit certain uses within a strip or band near critical water facilities. Restricts development and use. May include buffer zones surrounding the resource area or special environmental assessments. Exclusions or restrictions on activity need to be policed

Historic preservation rules

Establish a process for designating historic properties and for the review of alterations to or demolitions of designated historic properties

Mandatory policies for critical areas or issues

Requirements or guiding principles for managing sensitive areas and other resources as for example in the River Murray Basin

ECONOMIC INSTRUMENTS

Transferable use rights & markets

Right to transfer use rights – fisheries etc.

Capital gain taxes on valuable property rights associated with water or water right itself

Type of capital gains tax applied to increases in value of resources between the time of initial purchase and subsequent sale or exchange of resource

Ecological impact and betterment fees

One-time payments made by developers or industry at the time of development approval, calculated to be proportionate to the cost of providing physical infrastructure and environmental services to increase carrying capacity while protecting the environment

Environmental performance bonds

Sum of money as insurance against specific event

Grants and low interest loans

National government provide grants or low interest loans to state and local governments or private entities

Insurance against catastrophic events

Insurance against catastrophic events

GRANT OF OWNERSHIP RIGHTS Full ownership of rights in water

Government establishes or improves system for clarifying ownership and boundaries and


36

equivalent to land property rights but taking into account unique characteristics of water can be granted to individuals, companies, community groups or NGOs

provides secure long-term tenure to users of particular areas

Ecological commitments can be made a condition of full ownership

Pre-condition for establishment of water trading or water markets

INTERVENTION IN MARKETS AND USES BY GOVERNMENT FOR WATER PURPOSES

Voluntary acquisition of associated land rights and areas by government to limit use of areas critical for water provision

Acquisition of land as reserves, natural parks etc. where land area is integral or a pre-condition to water uses – main focus of regulation is protection of uses not the land itself

Purchase and sellback (or leaseback)

Government agencies can purchase land next to a critical water resource region, attach restrictions to the deed, and then resell or lease the restricted land

Expropriation of established marine use rights by declaration of no-take or no-use zone

Government pre-empts water use A(commercial fishing) and substitutes no use or water Use B (recreational purposes)

Government may or may not pay compensation

Purchase of water use rights in established water market

Governments purchase rights permanently, temporarily or upon a particular trigger to shape market behaviour or outcomes to achieve ecological objectives – environmental water purchases

GOVERNMENT PROVISION OF INFRASTRUCTURE Providing basic infrastructure

Dams, Reservoirs etc.

EDUCATION AND INFORMATION TOOLS Remote sensing Process of recording information from sensors

mounted either on aircraft or on satellites Geographic information system (GIS)

Systematic means of combining various data about a geographic area (ie nation, region, city)


37

Water resource information system (WRIS)

Data base containing spatially referenced data for a specific area or specific use as well as procedures and techniques for the systematic collection, updating, processing and distribution of the data

Atlases and data banks

Systematic compilations, interpretation, and display of data linked key issues

Hazard maps Tools for analysing vulnerability risk, especially when combined with critical facilities mapping

Maps of ecologically critical/fragile areas

Provide geographical references that include information on the location, capacity, and service area of facilities which if destroyed or damaged can impose serious costs

Natural hazards assessment

Tool for determining the probable location and severity of dangerous natural phenomena and the likelihood of their occurring within a specific time period in a given area

Vulnerability assessment

Tool for estimating the degree of loss or damage that would result from the occurrence of a natural phenomena of given severity

Environmental impact assessment

Impact of proposed use on environment and other uses

Critical habitat assessment

Assesses state of critical habitat for fish stocks and other living resources

Water resources assessment

Assesses state of water periodically or before major policy intervention or project

Cultural resources inventory and registration

Systematic listing of structures

Periodic valuations - priced and un-priced uses in water markets

Tool providing accurate and timely data based on the operation of the market for water in a given area

Advisory guidelines

General directions for an activity

Public education and participation

Activities to educate the public about environmental and hazard related issues and to involve groups in planning and decision making


38

Demand Management – Selected policy aspects and instruments A lot of water policy in both developed and developing countries claims now to be about demand management. Even though demand management in developed countries is different from demand management in developing countries, the objectives are the same: rationalisation and control of water use, reduction of waste and increasing use efficiency of water and to the extent possible, ensuring equity in access to limited supplies. With supply management the primary strategy is to meet demand by increasing the supply. With demand management, the strategy is to manage demand. To date, demand management appears to be much more successful in developed countries than in developing countries. There is a need to be careful not to recklessly duplicate developed country approaches in other contexts without careful attention to context as well as the policy instruments to be used. It is useful once again to recall the key differences between developed and developing countries as set out in Chapter 1. In particular, since demand management is based a lot on precise information about what consumers of water are doing, sound information and the ability to model the future is critical to effective demand management.

Table 20 Characteristics influencing IWRM in more developed vs lesser developed countries9

Developed Countries Lesser developed countries

Infrastructure High level of infrastructural

development, with infrastructure generally improving

Infrastructure decreases vulnerability to natural disasters (e.g. floods, drought)

High ethos of infrastructure maintenance

High quality data and information bases available, well co-ordinated

Infrastructure often fragile and frequently in a state of retrogression

High vulnerability to natural disasters; heavy damage and high death toll

Low ethos of infrastructure maintenance

Data and information bases not always readily available

Capacity Scientific and administrative skills

abundantly available Expertise developed to local levels Flexibility to adapt to technological

advances

Limited scientific and administrative skills available

Expertise highly centralised Often in survival mode; technological

advances may pass by



39

Economy Economy Mixed, service driven economics

buffered by diversity, highly complex interactions

Economically independent and sustainable

Multiple planning options available Take a long term planning perspective Countries wealthy, money available for

planning and IWRM

High dependence on land, i.e. agricultural production; at mercy of vagaries of climate

High dependence on donor aid, NGOs Fewer options available in planning Take a shorter term planning

perspective Wealth of countries limited, less scope

for planning and IWRM

Socio-political Population growth low or even

negative Generally well informed public with

good appreciation of planning High political empowerment of

stakeholders Decision making decentralized

High population growth rates and demographic pressures on land

Poorer informed public, less appreciation of science/planning

Stakeholders often not empowered, afraid to act or to exert pressure

Decision making centralised

Environmental awareness and management High level of expectation of planning

and IWRM Lower level of expectation and

attainment of goals Desire for aesthetic conservation Need for basics for living

Table 21 Problems associated with modelling in lesser developed countries, as identified by practitioners and post-graduate students

(adapted from Schulze, 2005)10 Government, Governance and Infrastructure Related Problems

Concepts, and the ”legitimacy”, of models and modelling are not yet established in departments of state

It remains difficult to convince the water resources “hierarchy” of the value of modelling

There is still a strong belief of “measure and analyse” among older managers

There is insufficient long-term support for model usage and, indeed, model development from the top, in part because long term water resources development plans are often lacking

“Directional pressure” is exerted by international bodies (e.g. World Bank, IMF) what to pursue with their money (e.g. sustainability instead of building infrastructure)



40

Moves to prioritise water supply will “leave locals out of the loop” Hydrological decisions are often based on

- politics and political pressures - personal (but subjective) experiences of influential people

Model results therefore often have little influence over policy formulations

Modelling is frequently undertaken by donor organisations, using their own countries’ models and staff

The legacy of donors in modelling includes the following: - donors often leave behind impressive reports and

recommendations, but the recommendations are not always implemented;

- expertise resides, and remains, with the donors; - there is a feeling of “donor dominance”; - they leave behind little, or no, real local capacity to operate

their models Governments often do not support local expertise; they believe

“foreigners are better”! There is often no leadership in technical and conceptual skills in

government departments Frequent changes in government lead to a lack of consistency in

planning; goalposts change and new paradigms are introduced Bureaucracy prevails; long times are taken for authorisation of

water related projects Human Resources Related Problems

There is little interest in modelling Local engineers/hydrologists are in a “comfort zone” with existing

techniques Only few engineers/hydrologists have intimate modelling

experience/expertise because - there is insufficient training in modelling; - there is little back-up for modelling; or - modellers tend to be academics rather than practitioners

There is little teamwork in modelling; it tends to be an “individual pursuit”

There is confusion among model users when choices have to be made which model to apply

A “rugged personality” syndrome often exists with the individual “bullying” personal views on models/modelling

Practical Problems

Data problems exist, for example: - lengths of records for model input and/or verification are short

and/or poorly quality controlled - input data are often housed in different institutions - data are difficult to access - data are often collected for data’s sake, and not for modelling

purposes - each donor brings their own countries’ monitoring equipment

Models developed in developed/donor countries may be - too data demanding - focussing on processes that are not appropriate to the

hydroclimates of LDCs; - too complex for users to interpret results effectively; - not answering the questions on the real on-the-ground

problems Problems of power politics are at play as to who should

disseminate model output/information to potential users:


41

- politicians? -water resources planners? - educators? -regional planners?

The use of “old” models prevails because of institutional inertia There is a lack of facilities (hardware, software, laboratories,

libraries)

Demand instruments are tools available to those responsible for the management of water resources with which they are able to influence demand. Key aspects of demand are: Making choices on what water is to be used for – rice v sugar-cane;

cattle vs wine; sheep vs chemical factoris; urban areas vs irrigated agriculture

Quantity and efficiency of use within particular sectors Quality - changes in quality demanded and patterns of use Intensity (space & time) - how much water is used per a given unit of

land or per factory product and how much water is used over a given period of time

Changing use patterns so that the demands of the environment are met.

Key factors shaping effective implementation of water demand management policies11 Climate & Hyrdrography The state of the resources Culture Income Water Price Ability to measure water use Ability to model future water use Community profiles The availability and suitability of water demand management

technologies Spatial and temporal residency patterns – eg tourism is a temporary

residence pattern – so also is nomadic pastoral agriculture Agricultural demand12 Crop values Crop tolerance to water shortages Ability to change crops Ability to change irrigation methods

11 Jeffrey Newater Paper 2006


Availability of alternative water sources Industrial demand Production specifics of the industry Economic cycle of the industry Types of technology used in the industry and its flexibility with

respect to water use Tools for Forecasting demand – Developed country examples and can these be extended to developing countries13 Extrapolation of historical demand (Time series analysis) Forecasting based on prior information about ways in which water is

used in the production process Regression analysis Disaggregated demand forecasting (Component analysis) Extrapolation methods14 The issue though is extrapolating to where ???15 In the absence of overall water planning at some macro-level, extrapolation tools are not very useful.

Figure 4 Extrapolation

Water Use Co-efficients16 13 Jeffrey Newater Paper 2006






43

The term co-efficient means that which unites in action with something else to produce the same effect. Finding water-use co-efficients is trying to estimate on average how much water is typically used to achieve a particular result. Once that co-efficient is obtained, it is possible to use it to predict water demand for that seftor and other sectors. It is also possible to track whether water demand is changing by measuring co-efficients or using them as targets. This approach to demand forecasting and management is well advanced in developed countries, where commercial water-use coefficients are typically based upon Standard Industrial Classifications (SIC) codes and industry types. Even in these contexts there are however, large variations within SICs driven by location, climate, production systems etc.17

Table 22 Commercial and institutional water use coefficients Business type Gallons/ employee/ day

Car dealers & service stations 48.9 Eating & drinking places 156.2 Hotels & other lodging places 229.8 Nursing home facilities 196.7 Hospitals 75.4 The co-efficient approach to demand forecasting is not widely used in developing countries due to the absence of data. The method can however be adapted to suit different contexts. Regression analysis18 This approach employs statistical techniques such as least squares

Figure 4 Regression Tables



regression to model water use as the function of one or more explanatory variables.19 Regression analysis is in principle applicable in a wide variety of contexts. It is used a lot to estimate demand for irrigation water. Component Water Use Forecasts20 Disaggregated demand method (advanced version of coefficient approach) which separates the water demands of a utility into more uniform groups of users as the basis for future projections. Classification influenced by:21 Geography Water use category Season Economic cycle

Communication and Education Tools22 Examples: Competitions, awards and recognition programs. Demonstration sites and information centres. One-on-one meetings with major water users. Social marketing campaigns such as public broadcasting

announcements, brochures and handouts, public displays, slogans, bill inserts, internet sites, door-to-door campaigns, newspaper articles and radio/television programs;







45

Published materials such as "how to" manuals, case studies, technical reports, resource libraries;23

School programs including activity books, games, videos and CDs, poster contests, in-class visits, "teach the teacher" guides, curriculum guides;

Special project committees, seminars and workshops with specific water users.

Communication and Education Tools – Design and Use Considerations:24 Communication and education is based on an assumption that action

is influenced by awareness and understanding. Some tools are aimed very broadly or indirectly at water consumers,

resulting in low or immeasurable results. Communication and education requires a good understanding of how

people learn and how they are motivated. The focus is most commonly aimed at individual behaviour change,

which requires a high critical mass and takes time before results are noticeable.

Water conservation messages are difficult to market. Messages should be phased to: create awareness and interest, persuade and motivate, educate and provide skills or other tools to enable people to

conserve, create actions, and maintain behavioural changes.



Figure 5 Yarra Valley Water – household water bill25

You can compare your water usage to that of a similar sized water efficient household for the same period.



A keyline message provides key information that the supplier believes you need to be aware of.

The table and graph compares your average daily water usage over the last 15 months. It also compares your current water usage to the same time in the previous year.



48

REVIEW QUESTIONS



E V A L U A T I N G W A T E R G O V E R N A N C E I N I T I A T I V E S

EVALUATING WATER Chapter

8 GOVERNANCE INITIATIVES1

INTRODUCTION TO THE CHAPTER Evaluation in the water governance policy initiative context is the careful assessment of the merit, worth and value of water sector instruments or as appropriate policy initiatives, programmes or interventions. This is done either ex ante – before the event or ex post – after the event. In Chapter 7 we addressed the content and characteristics of some of the most commonly used policy instruments and the design governance initiatives policy. Evaluation was implicit in all the previous discussion and was explicitly mentioned as we progressed. This Chapter now addresses evaluation as a field of action in its own right by introducing students to systematic approaches to evaluating, appraising or examining policy instruments or initiatives in the water governance arena.

OBJECTIVES OF CHAPTER 8 After completing this Chapter students should be able to:

Understand various criteria and approaches for evaluating water governance or policy initiatives before, during and after formulation and implementation

Understand various criteria and approaches for evaluating water governance instruments before, during and after formulation and implementation

Be aware of various tools for undertaking evaluations.

Design basic protocols or procedures for evaluating general policy proposals or initiatives at different stages of the policy life-cycle

Design basic protocols or procedures for evaluating specific water policy instruments at different stages of their use

1 This discussion is based on materials and insights from the following publications: Per Mickwitz, Evaluating Environnmental Policy Instruments http://www.vyh.fi/eng/research/projects/policyev/aea/EnvPEval.pdf; Vedung, Public Policy and Program Evaluation 2000 Transaction Publishers; Knaap G. and Kim T. (eds.) 1998. Environmental Program Evaluation: A Primer, University of Illinois Press, Urbana.


http://www.vyh.fi/eng/research/projects/policyev/aea/EnvPEval.pdf


EVALUATION - GENERAL

In all policy fields different objects can be chosen as the core of an evaluation. The object or focus of the evaluation is formally called the ‘evaluand’. It is possible to evaluate persons, performance, programs, proposals, products and possibilities (future courses of action or events). In terms of the time at which evaluation takes place, evaluation is of two types – pre-design evaluation and post-design evaluation, or in Latin, ex-ante evaluation and ex-post evaluation. Pre-design or ex-ante evaluation evaluates policy instruments and other aspects of the proposed initiative to determine whether the “right” choices are being made. In this Unit, this type of evaluation is referred to as appraisal. Retrospective or ex-post evaluation looks at the policy or initiative after it has started. This can be during implementation of the policy or after the policy or programme has ended. In all cases the objective is to learn about the policy and decide whether to alter it in some way, continue it unchanged or abandon it altogether. Retrospective evaluation during or after a discrete sequence of events tends to be more highly structured and more easily correspond to Vedung’s definition of evaluation as a “careful, retrospective assessment of merit, worth, and value of the administration, output and outcome of government interventions and which is intended to play a role in future practical action situations’. By contrast, ex-ante evaluation or appraisal tends to be more rough and ready and is more likely to be conducted as a “back of an envelope” exercise.

Figure 1 An overview of Evaluation




3

EVALUATION OF RESOURCES POLICY AND POLICY INSTRUMENTS - COMMONLY USED CRITERIA

There is no one uniform set of criteria that is used for evaluation of policy instruments and or initiatives. Appraisal focused on selecting tools or instruments tends to focus on a sub-set of the following criteria: Ecological effectiveness Managerial effectiveness Economic efficiency Legitimacy Transparency Equity Responsiveness to relevant social values (eg. public involvement, non-

intrusiveness, rights of indigenous or other relevant groups ) Flexibility Ability to meet future problems Lasting effects or sustainability Retrospective evaluation uses reasonably similar criteria but may focus on criteria which more accurately reflect the fact that evaluation is taking place at an end point rather than at the start or during a process of implementation. The key question for ex-post evaluation is deciding whether the situation being observed is the result of the policy or instrument or is due to some other factors. These various evaluation criteria can be further fine-tuned as follows:

Table 1 – Criteria for undertaking evaluations

Criterion Meaning during appraisal Meaning ex-post

Ecological effectiveness

The degree to which the policy or measure is likely to protect the environment or natural resource. For example, with regard to a policy or instrument to control pollution the issue is whether the policy actually results in a reduction of pollution. It has various aspects for example: 1. the extent to which the instrument

will lead to an actual reduction of relevant pollution levels

2. the extent to which the policy or instruments is likely to lead to problem-shifting (i. e. will the policy or instrument convert one

Did the policy or measure manage to cover the problems that it was targeted at? Did it also address other problems



4

type of pollution problem to another or shift it to another area or region?)

Managerial effectiveness - targeting

The extent to which the policy or instrument is likely to achieve adequate targeting of the most important problems (pollution type, polluted area etc.)

Did the policy achieve the targeting that was intended? What unexpected coverage occurred if any?

Managerial effectiveness – implementation

The availability of resources including knowledge and organizational ability to implement the policy instrument

What level of resources was available? What level of resources was used?

Allocative efficiency

Efficiency or 'allocative efficiency' refers to the use of society's resources in an optimal way, i.e. without any wastage or additional costs. The key question is whether this is the least cost method for achieving the objective?

Are the benefits that have accrued to date worth the costs? This question is usually posed in monetary terms although it can be posed in terms other than money. For a policy to be considered 'efficient', the total costs (including costs to the government, individuals and firms) involved in implementing the policy must not outweigh the total benefits. Benefits must be more than costs.

Dynamic efficiency

Will the instrument encourage economic efficiency and technical innovation? Strict rules may not be dynamically efficient since they restrict or stall initiative. A tax may be dynamically efficient since it may stimulate innovation to avoid having to pay the tax – it may however be costly to implement and would not be efficient in a static or allocative sense

What innovations and improvements are discernible? To what extent are they attributable to the instrument or initiative?

Legitimacy Is it politically acceptable and regarded as legitimate especially by target groups and the implementation network

To what degree did a range of stakeholders accept the policy initiative or instrument? Were there opportunities to influence the process?

Transparency To what extent are the processes associated with the policy or instrument observable and comprehensible by outsiders?

To what extent was implementation observable by and comprehensible to outsiders? Outsiders may mean the implementation network and others outside the implementation network



5

Equity How does it distribute burdens and benefits within present-day and future stakeholders? For example, impacts on poor people or people who live far away from the cities or lack access to the internet may be relevant in deciding whether or not to use a policy measure or instrument. The impacts of the policy on the profitability and competitiveness of local industry may also be a concern.

How have the outcomes and costs of the policy been distributed?

Responsiveness to relevant social values

This may include public involvement, non-intrusiveness, rights of indigenous or other relevant groups etc.

How did the policy take account of the relevant social values?

Flexibility & adaptability

Whether policy measures are “right” may also be judged by the extent to which they can be adapted to changing conditions such as change in information on what is causing a problem, changes in technology, and changes in public attitudes. For example, the degree of flexibility of an emissions charge can be determined by the extent to which the agency in charge can react quickly to changes in emissions and whether it has the legal authority to make such changes.

How well did the policy cope with changing conditions?

Dependablity How reliable is the instrument and can it withstand contextual changes?

How robust was the instrument or policy when situations of stress emerged?

Predictability Are the administration, outputs and outcomes of the policy initiative or instrument possible to foresee? Is it possible for target groups and the implementation network to plan for the policy instrument?

How predictable was the instrument?

Instruments and or initiatives can also be explicitly assessed from the point of view of whether they support broader principles of sustainability - examples are user pays, polluter pays and the precautionary principle.



6

Table 2 Criteria for assessing a water allocation initiative

Theme Issue Score 1- 5 or

devise other scoring

Ecosystem Protection

Environmental water allocation Monitoring and enforcement for ecosystem protection Creation and incorporation of ecological knowledge

Economic issues

Clear and stable allocation rules Water allocation and related information to make

economically sound decisions Ability to re-allocate water between users, sectors

and/or regions

Integration

Integration between groundwater and surface water resources

occurs Integration between water quality and water quantity Integration between land use planning and water

allocation Integration within institutional arrangements Minimal conflict between policy instruments

Equity and participation

Formal attention to issues of equity Sustained and meaningful stakeholder and public

participation Mechanisms to address potential conflicts at different

scales

Water Conservation

Economic instruments to support conservation Re-allocation of water to more efficient and less

consumptive uses Incorporation of water conservation practices

Climate Variability and change

Investments to understand impacts of climate variability and

Change Development and application of adaptation strategies

Sensitivity of policy to competing jurisdictions and claims to authority

Is there an issue of coordination of water allocation systems across political boundaries

Problems with possible jurisdictional/political conflicts anticipated and mechanisms for management identified and implemented

Is there conflict with indigenous/customary/local allocation processes

Problems with indigenous/customary/local frameworks anticipated and mechanisms for management identified and implemented



7

CLASSIFYING EVALUATION CRITERIA The evaluation criteria set out above can also be analysed from the point of view of their inherent or underpinning characteristics. The question to be answered in this case is whether the criteria being used in the assessment are ecological criteria; economic criteria; managerial criteria or political criteria linked to the functioning of democracy and public participation? This question and the answers arising from it can be quite decisive in deciding what methods are going to be used to actually evaluate the instruments proposed. Thus ecological effectiveness is more appropriately measured using the tools and methodologies of the natural sciences and the earth sciences than the tools and methodologies of economics for example.

It may also be possible to come to the conclusion using this analytical framework that the criteria being used in the evaluation (whether ex-ante or ex-post) are too sharply weighted in favour of one criteria type (economic, political etc.) and need to be changed to reflect a greater diversity of considerations.

Table 3 – Classifying Criteria

Criterion Criterion Type Ecological effectiveness Ecological Managerial effectiveness targeting Managerial, ecological, economic Managerial effectiveness implementability Managerial and economic Allocative efficiency Economic, managerial Dynamic efficiency Economic, mangerial Legitimacy Political Transparency Political Equity Political Responsiveness to relevant social values Political Flexibility and adaptability Managerial, ecological, economic,

political Dependablity Managerial, ecological, economic,

political

EX-POST EVALUATIONS As indicated above, ex-post evaluations tend to be much more systematic and structured. There are therefore much more elaborate approaches to this type of evaluation. Some view these models as incompatible and advocate only the use of a particular model, while many see these models as complementary and stress that the one that is most appropriate in any particular situation depends on the circumstances.



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The oldest evaluation model is the “goal-achievement model”. The rationale behind this model is simple; it is based on the question “are the results in line with the goals?” followed by the question “are the results due to the evaluand?”. This is a simple and powerful model which tends to be highly focused in its operations and outcome. However in the resources or environmental context, the high degree of focus of this model may limit its usefulness as it disregards side effects and unanticipated effects; it does not necessarily consider costs; and the relevance of the goals that are pursued are not questioned. Other models are the “stakeholder model” and “client-oriented evaluation model”. Both of these approaches make those affected by the policy central to the evaluation process. The first task is thus to define the stakeholders or the clients. The base for the evaluation is then either the desires, expectations and concerns as expressed by clients or stakeholders or by their needs as determined by the evaluator.

UNEXPECTED CONSEQUENCES AND SIDE-EFFECTS EVALUATION Due to the complexity of many water policy problems it is to be expected that negative effects will be observable either inside or outside the specific geographical or organizational focus of the policy initiative. Water policy instruments may also have unanticipated environmental effects as well. One of the most difficult but also clearest examples of side-effects is the situation in which water policies address a problem but end up shifting the problem – the shift is either a spatial shift i.e. regionally; or by increasing other problems - e.g. pollution of other substances. Successful policies may also end up postponing the problem. Unanticipated effects that will be evaluated can only partially be known before any study is actually undertaken. An important part of an evaluation will thus be to draw a more complete picture of the unanticipated effects of the policy instrument(s) that are evaluated. Whichever approach is chosen, the importance of unanticipated outcomes in policy means that “side-effects evaluation” should be an important component of the evaluation methodology or protocol. A good procedure is to divide the effects of instruments or initiatives under review into anticipated and unanticipated effects and also examine whether effects occur inside or outside the target area. The third level is a qualitative categorisation of both types of effects.



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Finally, effective ex-post evaluation may also need to get involved with politics in the sense that there may be a need to assess the process which eventually led to the policy being formulated. This is because many policies are compromises reflecting the conflicting interests involved in the various arenas. Such a “tracing back” ensures that the evaluation does not limit itself merely to the goals set out in the compromise and includes the concerns of groups frozen out of the process or inadequately represented.

ARE CHANGES OBSERVED ATTRIBUTABLE TO THE POLICY INITIATIVE? This is the most important and difficult question in retrospective evaluation. The most natural baseline would appear to be the situation without the particular policy. To predict what will, or would have happened, without a policy is, however, far from easy. As Vedung (1977) has observed in his book on ex-post evaluation, “the fundamental intricacy to be faced is to disentangle programmatic from non-programmatic effects. Outcomes might be contingent upon non-program events, occurring simultaneously or before the program. Generally speaking, this impact problem is extraordinarily difficult to solve.” This is particularly so in the water policy context, due to the characteristics of complexity, uncertainty and the long time lag between policy action and results. There is no single or clear answer to the impact problem in the water policy context. An often recommended approach is the use of multiple methods of analysis as well as multiple data sources. The many methods that could be used include statistical analyses of data at different levels of aggregation, qualitative analyses of documents, questioners and thematic interviews. A practical example of use of multiple methods is offered further below in the module.

SIMPLE RETROSPECTIVE EVALUATIONS This section provides some pointers on the issues to be addressed in relatively simple or issue specific retrospective evaluations of the sort that would be appropriate for policy design with respect to the Case Studies for this Course.



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Table 4 – Making Evaluations Focused

Evaluand Areas Of Focus For Evaluation Regulatory frameworks

Assessment activity related to regulation can profitably focus on: Assessment of economic efficiency and costs of regulations Assessment of extent of compliance with regulations in priority

sectors Monitoring and assessing changes in behaviour following

introduction of new regulations Standards Assessment activity related to standards can usefully focus on:

Measuring compliance Measuring the reasons for compliance/non-compliance

Market-Based Incentives

Essential foci for evaluation would be: Assessing the extent to which firms or individuals are

responding to the incentives Checking whether behaviour has changed Checking whether environmental or water quality has

improved Checking whether economic benefits or profits have been

made from the incentives Establishing who has lost out from the use of the incentive and

whether it is possible to compensate them for their losses from the benefits gained by those who have benefited

Education/behaviour modification

Evaluation would focus on checking the effectiveness of promotion, education and awareness activities in changing behavior or improving compliance

Evaluation methods can be developed for all these issues which are a mix of quantitative and qualitative techniques.

COMPREHENSIVE EX- POST EVALUATIONS Comprehensive ex-post evaluations of policy initiatives are quite common and use multiple methods. Thus quantitative or statistical analysis may be used in parallel with qualitative analysis of thematic interviews and documents. With the use of multiple methods answers can be provided for various questions: The extent to which the selected policy instruments met the chosen

set of evaluation criteria

The extent to which innovations or changes identified could be traced back to the chosen policy instruments and the overall initiative

Which aspects of the policy instruments and their implementation had the greatest effect, positive or negative on the changes observed



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Whether feedback mechanisms associated with the policy instruments worked

How the introduction of new policy instruments and the development of existing ones affected the policy arena and the nature of networks within the policy arena

Comprehensive retrospective evaluations can also be compared with complex pre-project modeling if any was done, thereby establishing “rich” feedback between what was proposed and what actually happened.

SELECTED BROAD SCALE EVALUATION TOOLS These tools can be used for both ex-ante and ex-post evaluation. Assessing policies for integration potential and overall compatibility2 This is a matrix for assessing integration through assessment of policy compatibility Policy 1 Policy 2 Policy 3 Policy 4 Policy 5 Policy 6 Policy 1 Policy 2 Policy 3 Policy 4 Policy 5 Policy 6 Score as follows: Policies are mutually supportive of each other (+) Policies have the potential for conflict with each other (-) No significant interaction, positive or negative exists between policies (o)

2 Adapted from Joseph Opio-Odongo and Gregory Woodsworth, Guidelines On Policy Analysis For Integrated Environmental Assessment And Reporting, UNDP Nairobi, Kenya http://www.unep.org/dewa/africa/docs/en/AEO_Policy_analysis_guidelines_IEA_Oct06.pdf



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Assessing water policies against Sustainable Development and Dublin Principles norms3 At the broader policy level, it is also useful to be able to evaluate policy initiatives or instruments against SD or the Dublin principles as shown below. 1) Environmental

Criteria 2) Social Criteria 3) Economic Criteria

A B C D E F G H I

Policy 1 Policy 2 Policy 3 Policy 4 Policy 5 Policy 6 Score as follows: 0 stands for “irrelevant” 1 stands for “works strongly against the aim of sustainability” 2 stands for “works against the aim of sustainability” 3 stand for “being neutral” 4 stands for “supports the aim of sustainability” 5 stand for “strongly supports the aim of sustainability.” Assessment of environmental risks associated with water policies4 Because environmental impacts are some of the most critical unanticipated results from policies, It is useful to be able to systematically assess the environmental opportunities and risks associated with policies. In the matrix below, for each policy, the likely/actual consequences of the policy action are assessed for each criterion in turn and the environmental opportunities and risks are identified using the rating. The rating is completed when the summary score is assigned.





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Policy Area 1

Policy Area 2

Policy Area 3

Policy Area 4

Policy Area 5

POLICY

Policy Theme

Policy Theme

Policy Theme

Policy Theme

Policy Theme

Cri

teri

on

1 C

rite

rio

n

2 Cri

teri

on

3 C

rite

rio

n

1 Cri

teri

on

2 A

ctio

n 3

Cri

teri

on

1 C

rite

rio

n

2 Act

ion

3

Cri

teri

on

1 C

rite

rio

n

2 Act

ion

3

Cri

teri

on

1 C

rite

rio

n

2 Act

ion

3

Policy 1

Opportunity Risk

Summary score for opportunity

Summary score for risks

New policy or policy reform

Policy 2

Score as follows: Policy provides opportunity

Score Policy carries risks Score

No opportunity/neutral 0 No risk/neutral 0 Slight opportunity 1 Slight risk 1 Substantial opportunity 2 Substantial risk 2 Great opportunity 3 Great risk 3



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Evaluation matrix implementation status of proposed actions under governance initiatives5 Another area of evalution is assessing progress with the initiatiave as shown by the evaluation table below.

Actions taken Policy actions with immediate and medium term timeframe

Action Agency Timeframe Source of Support

Lessons learnt so far

Issue 1

Issue 2

Issue 3

Issue 4

Issue 5

Issue 6

Issue 7

Issue 8




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CHAPTER SUMMARY After completing this Chapter students should be able to:

Understand various criteria and approaches for evaluating water governance or policy initiatives before, during and after formulation and implementation

Understand various criteria and approaches for evaluating water governance instruments before, during and after formulation and implementation

Be aware of various tools for undertaking evaluations.

Design basic protocols or procedures for evaluating general policy proposals or initiatives at different stages of the policy life-cycle

Design basic protocols or procedures for evaluating specific policy instruments at different stages of their use

REVIEW QUESTIONS




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REFERENCES Per Mickwitz, Evaluating Environnmental Policy Instruments http://www.vyh.fi/eng/research/projects/policyev/aea/EnvPEval.pdf; Vedung, Public Policy and Program Evaluation 2000 Transaction Publishers; Knaap G. and Kim T. (eds.) 1998. Environmental Program Evaluation: A Primer, University of Illinois Press, Urbana.

http://www.vyh.fi/eng/research/projects/policyev/aea/EnvPEval.pdf

WATER RESOURCES PLANNING – KEY CONCEPTS AND SELECTED CASE STUDIES

CHAPTER

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INTRODUCTION TO THE CHAPTER

The aim of this Chapter is to introduce the concepts of water planning. It begins with an introduction to water planning and the historical discourses that have influenced and shaped the way that water resource projects are planned and managed. It then discusses a number of water planning approaches applied in water related projects, summarising the advantages and disadvantages of each approach. The principal reference points for the analysis offered here are two seminal publications based on developed and developing country perspectives respectively: Lund, Lund, J. (2002). Approaches to Water Resources Planning.

Schulze, R. (2007). Some foci of integrated water resource management in the "South" which are oft forgotten by the "North": A perspective from Southern Africa. Water Resource Management , 269-294.

What is Water Resource Planning? Water resources planning is an ancient activity dating back to flood control and water supply activities by the first human civilisations. The construction of rudimentary irrigation by the first humans in the Nile, Indus and Yangtze Rivers are examples of the earliest human records of natural and water resource planning and management some nine to ten thousand years ago (Mays, 2001, p. 2). To a certain degree, the success of most civilisations rested on their ability to manage water (China, Indus, S. Europe and Central America), and the demise of many ancient civilisations has been directly linked to the failed management and consideration of regional water resources (Peru, Mesopotamia) (Lund, 2002, p. 1).



2

Water planning, in the present day Australian context, can be defined as: “An important mechanism to assist governments and the community to determine water management and allocation decisions to meet productive, environmental and social objectives” (Cullen, 2006, p. 1). Water related projects are generally complex and can at times carry with them a high degree of controversy and expense. Each water project is unique in its issues and the planning approach taken in the development of a water related project will depend upon the project objectives, and the context within which the project is set. A History of Water Planning From these earlier beginnings of civilisation to the onset of the industrial revolution, known as the pre-modern paradigm in academic discourse, water projects during were largely focussed on the production of water for consumption, water for food production and water for livelihoods. Projects were generally for societal needs, and were undertaken and planned with limited technical and organisational capacity (Allan, 2003, pp. 13-15). However, historical information does support that both quantitative analysis and economic thinking were evident in the planning of water resources dating as far back as Roman times (Lund, 2002, p. 1). The industrial revolution was to change the landscape of water resource planning dramatically. It gave rise to technological and engineering advances enabling governments and private industries to consume greater volumes of water. New technologies were able to distribute, store and harness the energy of water on a much larger scale than was previously possible. The paradigm of water resource planning and management of this period has been described by scholars as Industrial Modernity (Allan, 2003, pp. 13-15). Water resources were viewed as an essential driver of economic development, and exploited as such. Engineers endeavoured to “command and control” water resources in order to establish highly predictable outcomes for the betterment of industry profits and for national economies (Meffe, 1996, p. 328). The water resource projects and the subsequent planning that emanated from this new level of capability were generally uni-sectoral, and were driven by highly scientific methods and technological innovation, with the project planning having a strong focus on supply and maximising yield (Hooper, 2005, p. 3). In the developed world, the Industrial Modernity paradigm was truly realised in the hydraulic mission of the mid twentieth century, typified by the building of large dams, a process which was exported to, and is still in the process of being exported to, lesser developed countries today (Allan, 2003, pp. 13-14). This control and technological logic was underpinned by the development discourse of the time which prioritised economic


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growth and asserted that the application of scientific and technological knowledge was the route to prosperity (Moriarty, 2003, p. 15). Mounting ecological crises during the 1970s mobilised a growing environmental movement which questioned the hydro-centric and technocratic nature of water resource projects and their planning and management, initiating a new Post Modern paradigm in water resource management which had its official beginnings with the global endorsement of sustainable development theory in the 1980s by the United Nations. Post Modernism, underpinned by sustainable development theory is the current paradigm within which water resource projects are planned and managed today. Sustainability theory is built on the pursuit of three different goals, Ecological Integrity, Economic Efficiency and Social Equity (Mfodwo, 2008). These three goals have had the following effects on the planning and development of water resource projects:

Ecological Integrity: Environmental issues are to be viewed as central to the activity of institutions and organisations. It was recognised that the environment was a legitimate user of water.

Economic Efficiency: Water is recognised as an economic good. Water pricing, water markets and the privatisation of water supplies were seen as a way to move away from a supply to a demand mentality.

Social Equity: Water as a human right, bottom up approaches to water management, decentralisation of services, participatory approaches and community based management.

Adapted from: (Mfodwo, 2008) (Moriarty, 2003) (Allan, 2003) In terms of a water planners or planning approach, this has meant that the structure and systematic approaches by which information is gathered, deliberated on and decisions made have been changing over the past few decades, as the planning process must now include engineering, environmental and economic expertise plus liaison and consultation with stakeholders and communities which may be affected by a particular project. It may also mean that numerous government agencies, dependent on the scale of the project, may be involved in the support, planning and implementation of the water project offering up significant political, as well as economic, environmental and social considerations. This bundle of considerations has become known as Integrated Water Management (Cammerman, 2008).


4

Major types of water use and water projects Water resource planning and management can be applied to the design of remediation, water supply and storage, flood control, navigation facilities and different types of hydraulic structures (Prakash, 2004, p. 1). These activities are not just restricted to the gathering, treating, transportation, storing and distribution of water, but also include the collecting, transportation and treating of waste water, all of which are generally extremely capital intensive (De Groot, 1999, p. 7) . Table one outlines some major purposes of water use. Water Use Purpose Definition Domestic use Water for household, personal and

sanitation needs. Commercial use Water for hotels, restaurants,

commercial buildings, facilities and institutions.

Irrigation use Artificial application of water on lands to assist in the growing of crops or vegetation or to maintain parks or golf-courses.

Industrial use Water for industrial purposes such as fabrication, processing, washing and cooling.

Livestock use Water for livestock and other on farm needs

Mining use Water for the extraction and processing of minerals.

Public use Swimming pools, fire fighting, recreation

Rural use Water for sub-urban or farm areas for domestic and livestock needs that is generally self supplied.

Water for re-use Water treatment plants Hydropower power use Water for the generation of energy Table 1 Major purposes of water use - Adapted from Mays 2001

Water Planning Approaches Whilst there are substantial differences in the methods and approaches to water resource planning, there are certain theoretical basics (see table two) that can be used as a framework applicable to all disciplines involved in a planning process, independent of typology (Turjoman, 1988, p. 289). Step Project Phase Key questions


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1 Determine the objectives What does the client/project need to achieve?

2 Designing a plan of study (Planning to Plan).

What planning approach best suits the project context? How are resources allocated to achieve desired outcomes?

3 Obtain the Data Quality and Quantity are important

4 Formulate alternatives Option analysis 5 Decide on a plan Decided by client 6 Plan Implementation 7 Post evaluation

Not usually undertaken by the planner, but the planner should be involved in these steps

Table 2 The Planning process - Adapted from Turjoman, 1988 p.290

The steps outlined are usually, but not always, chronological as steps might often be re-visited as new technical or stakeholder information comes to light, or due to changing events. Most of the approaches discussed in this section belong to a planning approach called “rational planning”. Rational planning is a procedure for resolving problems that might occur in the future, through a largely sequential rational planning thought process (Lund, 2002, p. 2). However, changing political, economic, social and cultural circumstances mean that a long term planning approach is not often feasible. Therefore, in some circumstances it can be more effective to take a shorter term approach, making small improvements in a desirable direction. This approach is known as Disjoint Incrementalism may be colloquially known as “muddling through” (Lund, 2002, p. 10). Turjoman highlights in particular, step two, designing the plan of study, linking the planning approach with the planning context or environment as a crucial step in the planning process (Turjoman, 1988, p. 290). This would also determine whether a rational planning or a disjoint incrementalism approach would be deemed more appropriate. Approaches to Water Resources Planning - A Master Perspective from Lund Professor Lund, a multi-disciplinary US engineer and water expert has set out a compelling typology of water resource planning approaches. It is useful because it is historical but also allows the analyst to see how different forms can co-exist or may be amalgamated in particular contexts either purposefully or incrementally as a result of “muddling through”. His typology is as follows: Requirements based planning

Benefit-cost based planning Multi-objective or multi-criteria planning Adaptive management planning Market based planning Muddling through Figure ? Lund on different approaches to Water Resources Planning

Requirements Based Planning The technical approach to water resource planning during the pre-modern and the modern industrial age was very much “requirements based”. This traditional approach defines the functions, with appropriate levels of safety, which a system must satisfy and is most common in water storage projects. The project is then planned, designed and operated to meet requirements at the lowest possible cost or for the greatest degree of reliability for a specified budget (Lund, 2002, p. 2). The main focus of planning efforts is on supply, and water use is forecast and normally remains fixed. In the case of water storage systems a reservoir is then constructed to a size that will meet this forecast demand, usually using historical hydrological data (Lund, 2002, p. 2). The main disciplines of hydrology and hydraulic engineering are involved the formulation of a requirements based plan. One of the main considerations of a requirements based planning project is that of yield.



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Yield is the amount of controlled water released from a reservoir and can be expressed as a ratio or percentage of the mean annual inflow into the river. Other terms which are used in conjunction with yield are release, regulation and draft (the required planned demand). For example, a reservoir yield is the water available for release to a demand centre for a given storage capacity and a given level of security, and is often referred to as Storage – Yield - Performance (Mays, 2005). This type of planning approach, prevalent in the United States during the twentieth century, often led to inadequate and overly expensive solutions as the cost of providing high supply reliability outweighed the costs of water scarcity (Resiner, 1987). The technical information, for example, hydrological data, may also be inadequate, leading to ineffective outcomes over the longer term. Benefit-Cost-based Planning Benefit-Cost-based planning was an attempt to consolidate the impacts of each design alternative or plan into monetary benefits and costs. Initially born out of the Unites States in the 1930s to address flood control measures, it has been applied to navigation, water supply, hydropower and recreational uses of water (Lund, 2002). Its application involves the integrating of economic perspectives into a technical planning process to ascertain variability, reliability and uncertainty within a project. Its application assists in the weeding out of unworthy projects and to facilitate better debate in marginal projects. However, there are inherent limitations in the monetising of all alternatives (Lund, 2002). Multi Objective or Multi Criteria Planning Multi- criteria Analysis planning will only be touched upon briefly here as it is the intended topic of a subsequent paper. However, it is worthy of mention that this form of planning evolved from Benefit-Cost-based planning as a planning tool in water projects which can be used to rank or score decision options against multiple objectives, where not all objectives can be measured in the same units, thereby identifying solution alternatives (Hajkowicz, 2006). Adaptive Management Planning Adaptive management planning was developed as a result of the growing environmental movement of the 1970s and 1980s and further established with the global endorsement of sustainability theory, and gained further ground with the recognition of the environment as a legitimate user of water (Lund, 2002, p. 7). In the 1970s the United States set out to protect


8

the environment by creating laws and policy instructing water project proponents must ensure that environmental information pertaining to the water project is made available to public officials and to citizens before decisions regarding project viability are made. This is formalised in a document called an Environmental Impact Statement (EIS), where an environmental impact includes: “All beneficial or adverse impacts or alterations in the hydrological regime attributable to the construction, modification and operation of a dam, diversion of flow, or the implementation of other water resources engineering activities. Impacts can be structural; non-structural; ecosystem related; aesthetic; archaeological; water-, sediment-, soil-related; economic; water quality related; geomorphic; socio-economic; cultural and recreational.” (Prakash, 2004, p. 300) In theory, this was to have broad ramifications for the way that water resources were planned as the pure engineering disciplines could no longer have the capacity to undertake a planning exercise. It called for an interdisciplinary approach involving input from the natural and the social sciences as well as the environment design arts (Prakash, 2004, p. 300). However, in practice the EIS can sometimes be seen as an add-on exercise as part of design study, rather than an integral part of project sustainability, especially in countries that have not, for whatever reason, embraced the sustainable development discourse. Another important development to be borne out of this school of planning, combined with the technologically advances in computer technology, is the use of computer simulation and optimisation models (Lund, 2002, p. 9) (Heinz, 2007, p. 1105). The objective of these models was to provide consideration of uncertainties in the planning process and to develop and implement management alternatives that respond to environmental, socio-economic and legal-political objectives and which can even include stakeholder concerns (Heinz, 2007, p. 1105). Modelling and optimisation can be used on a catchment scale or in broad scale water resource management (Ross, 2007), or at a more local level in the provision of water services, including sanitation services, both of which will be discussed in more detail in sections 2.6 and 2.7. Market based Planning Market based planning operates on the philosophy that water is an economic good, and includes water for consumptive purposes and water for commodity purposes. It includes water supply, water for irrigation and water for sanitation and is normally nested within a much larger regional water planning regime (see section 2.6 Broad Scale Water Resource Management). It can also be termed as Provision of Water Services, and


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the technical focus of the planning cycle is heavily reliant on economic information and modelling (Mfodwo, 2008). In essence, market based planning is a decentralised form of planning, and generally occurs within a singular entity responsible for the delivery of water services within a particular geographical location. It involves markets, negotiating contracts and water exchange providing the capacity to adapt to short term hydrological, economic and water demand variability (Lund, 2002, p. 9). It has also been applied in a European context to combine economic concepts with engineering expertise creating economic-engineering-hydrological models to provide a greater degree of certainty when modelling for longer term water resource planning (Heinz, 2007, p. 1121). The limitations of market based planning are that it uses an economic framework to provide solutions to a public resource problem. Issues of service, pricing, end of product quality, accountability, transparency and dispute resolution corruption are all imperfections of a market based system (Mfodwo, 2008). These issues can be magnified when the regulatory authority has issues of governance, as seen in many developing country contexts (Schulze, 2007). Conflict resolution based planning Planning to resolve conflicts differs fundamentally from other planning settings. The objective is to reconcile individuals or groups with conflicting objectives for water management to a single plan or plan strategy. In most conflict settings, planning occurs in a political environment where parties have alternatives to participating in a formal planning process. Responding to the common difficulties of planning in many real institutional and political situations, several forms of conflict resolution-based planning have emerged (Viessman and Smerton 1990; Delli Priscoli 1990). These various approaches typically emphasize the need of various parties or stakeholders to communicate, understand, and negotiate as necessary conditions for any solution to be accepted politically. Often considerable emphasis, effort, and time is required to establish broad confidence and communication in both technical and decision making processes as part of developing and implementing solutions. Conflict resolution-based planning typically gages its success based on how well a "consensus" solution is achieved, and may not be as concerned with the Pareto-optimal rationality of a solution. Any plan agreed upon by the diverse stakeholders is generally thought to be a good plan. While consensus-based conflict resolution processes appear to be useful, they have been far from universally successful, perhaps because such problems are tremendously messy and difficult (Walters 1997). Even where formally unsuccessful, such processes can serve an important long-term role in improving communications and other conditions needed to work on solutions in the future.


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Disjoint Incrementalism As mentioned earlier, environments face ever changing political, economic, social and cultural circumstances, meaning that a long term planning approach may not be appropriate. Where this is the case it may be beneficial to adopt a planning approach which ascribes to incremental alternative evaluations and directions, or simply put, “muddling through” (Lund, 2002). This type of approach has the advantage of being responsive to perceived problems, and can either occur independently or as an element or functional unit within a broader planning framework such as BSWRM (Turjoman, 1988, p. 293). Turjoman and Helweg comment that a disjoint incremental approach is more appropriate on a smaller scale where the planner or community actually has control of the planning process, rather than a larger bureaucratic entity or where the plan is cost driven.

Table 5 – Planning Approaches and conflict, authority and integration(Lund, 2002)


Table Six –Planning Approaches and data, variability and assessment (Lund, 2002)


Table Seven – Planning approaches with common forms of analysis (Lund, 2002)


Table Eight – Hypothetically good conditions for different planning approaches (Lund, 2002)



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Broad-Scale Water Resource Planning (BSWRM) versus Provision of Water Services (PWS) Broad-Scale Water Resource Planning Broad-scale water resource management refers to the management of large physical areas and can refer to a river catchment, or a number of catchments in a larger river basin planning unit, which could entail the co-ordinating and planning of water resources on a local, regional, national or transboundary scale (Mfodwo, 2008). BSWRM is based on the theory of Integrated Water Management (IWM), which emerged in the 1990s as the new paradigm in water resources planning and management as a result of the uptake of the sustainable development discourse which underpins IWM. IWM uses stakeholder participation, cross-agency co-ordination and other tools to plan and manage water resources (Hooper, 2005, p. 5) Figure one outlines the different perspectives involved in a broad-scale approach, and highlights the engineering focused supply/demand perspective, the ecologically focused river basin perspective and the organisational perspective which aims to find a balance between community and institution (Schulze, 2007, p. 278). The emphasis of this type of planning approach is on consensus building involving major stakeholders and agencies. Lund comments that this type of planning appears to be more successful where there is a balance between expectations and resources/funding, as one of its major limitations is the need for extended studies, funding and commitment from the different stakeholders involved, including political commitment. Effective leadership and management, trust and flexible informal structures are also seen to aid success (Lund, 2002, p. 8). Given the institutional and funding limitations mentioned above, there are also limitations with applying this type of planning approach to lesser developed countries, or countries with weak governance systems (Schulze, 2007). Even though the range of responsibilities affecting BSWRM is very broad, the factors influencing the evolution and effectiveness of BSWRM arrangements are very specific. The demand for water is largely influenced by the dynamics of the economic and social development within the basin. However, this relationship is reciprocal and Demand Responsive Approaches applied properly within a BSWRM context will assist in promoting a more efficient, equitable and sustainable use of


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existing water resources from a multi-disciplinary and multi-stakeholder perspective, directly in line with the values of IWM (Brooks, 2007, p. 2). Provision of Water Services Provision of Water Services (PWS) covers an equally diverse set of activities, many of which are nested within broad-scale arrangements; an example of which is the provision of water in urban areas by a private or public utility. Characteristics/considerations regarding PWS entities include the following:

Within a given geographical area, the water services or supply organization (WSO) supplies finished, processed or retail water to all entities (individuals, homes, families, irrigated farm sites, commercial industry, other water supply organisations etc.)

The WSO or utility may supply only one user group or it may supply multiple user groups – governance and consultation tasks may be relatively easy or difficult as a result & trust between supplier and consumers may also be high or low as a result.

The WSO may be publicly, privately or collectively owned by a user group. It may be a for-profit or a not-for profit organisation. This an important consideration, as it relates to issues such as dispute settlement, privatization, accountability, transparency, corruption, water as an economic good rather than a human right.

The WSO typically takes in raw, unprocessed or natural water from a surface watercourse or a groundwater aquifer (or both) and then transforms that natural water into the particular type or types of retail water appropriate to the needs of its client base. Therefore there are key issues related to pricing, valuation and market-based or economic incentives.

Some WSO may buy water from other suppliers which may create transparency, costs or pricing issues.

The WSO transformation tasks undertaken by the WSO may be few or many depending on the differences between the state of the natural or partially treated water taken in by the WSO and the types/quality of retail water desired by end-users.

User-based WSOs in developing country contexts would have other tasks of consultation to carry out under participatory irrigation management or irrigation management transfer arrangements

For both WSOs in urban and rural areas, politics is an important consideration around issues of supply enhancement, demand


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management, competing uses for their sources of water, pricing and shortages of water as well as energy supply.

Urban WSOs have more complex tasks (pumping, conveying, transforming, planning, management, accounting, billing, operations and maintenance etc.)

WSOs in urban areas typically serve different users and have to address user preferences with respect to reliability as well as rules to do with water quality

WSOs in urban areas typically also have to address issues of constantly pressurized water, shortages, leaks, illegal connections etc.

WSOs may have to engage in water treatment to meet quality and cultural requirements

(Mfodwo K. , 2008) Figure three shows the relationship between provision of water services, surface water and groundwater. Comparison of BSWRM and PWS in different management contexts As described earlier, if the PWS is privately owned it is likely that it will operate on the premise that water is an economic good, therefore, it will view water as a commodity with a strong technical and economic viewpoint in the modelling of supply and demand. This is likely to involve markets, negotiating contracts and water exchange providing the capacity to adapt to short term hydrological, economic and water demand variability (Lund, 2002, p. 9). The PWS will be heavily reliant on econometric based tools and market based planning to assess demand and, as discussed, issues of service, pricing, end of product quality, accountability, transparency and dispute resolution corruption are all imperfections of a market based system (Mfodwo, 2008). These issues can be magnified when the regulatory authority has issues of governance, as seen in many developing country contexts (Schulze, 2007). Table three compares and contrasts the core features of different management contexts which may conceive as either BSWRM or PWS domains.


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TABLE Three - Water Resource Management – A Diversity of Situations

(Mfodwo, 2008)


Conceptual category


River basin/ Catchment management Management region typically covers a large area comprising numerous communities and local administrative units that otherwise would not be involved with each other.

BSWRM

Highly complex technically, politically, economically and socially

Water in this context has public-good and common-pool-resource characteristics,

Highly costly Very high level of externalities

both within and outside management area

Often trans-boundary further complicating technical, political, social, participatory, cultural and economic complexity

Integration and co-ordination requirements are very high

Principally BSWRM with PWS nested within the broad-scale framework

Institutionally problems arise where BSWRM and PWS aspects in the basin become confused.

Depending on size of urban

areas, irrigation sector and hydropower, PWS objectively may overwhelm BSWRM aspects

Applyiing Lund master planning criteria to this type of WRM


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Urban water supply in developing poverty stricken urbanized contexts

PWS Highly complex at all levels (technical, social, economic and political)

Usually a core of reticulated services surrounded by layers of semi-reticulated and completely unserved and unsewered regions

Economic aspects particularly difficult due to poverty, cultural constraints, absence of supporting infrastructure encouraging culture of payment

Corruption and poor governance/government problems

Interactions between water, health and poverty particularly difficult to manage

Dependent on donor investment

High level of informal institutional arrangements and norms with considerations of class, culture, religion, caste, gender, age, patronage highly important in some contexts

Community based management very difficult

Populations subject to governance not easily amenable to governance

Paradigm examples – Manila, Djakarta

PWS but depending on size and footprint of urban region, critical to BSWRM for the affected region

BSWRM elements also important to manage competition with other users of water particularly agriculture but also from the point of view of wastewater, pollution control, provision of recreational and ecological services

In practice BSWRM often ignored due to pressure to manage PWS aspects and difficulties of governance control and participation


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Irrigated networks developing country context

PWS/BSWRM

More complex to manage than urban or rural water supply and often interlinked with rural water supply either officially or informally

Social frameworks often disconnected culturally from Official state system of particular country

Construction is normally heavily subsidized either directly or indirectly

Donor (Western and now Chinese) involved as suppliers of capital

Level of technical complexity higher than rural water supply, increasing risks and the need for information. Social systems in which irrigation networks embedded are extremely complex and fractured by class, cultural, religious, caste, gender, age, patronage and other considerations

Subsidisation poses a twofold managerial challenge: (1) water must be allocated among competing users according to their cropping pattern; (2)

Infrastructure must be maintained properly.

Difficult to bar access to canal water, and farmers can maintain the system only if jointly pay for it.

Farmers dependent on same system may live far apart and be fractured along complex lines of class, culture, group identity (assigned or assumed) religion, caste, gender, age, patronage, relationship to the official state system etc.

PWS/BSWRM both present – balance varies depending on size of the irrigation scheme



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Key management tasks require a

high degree of cooperation but many constraints based on class, culture, group identity (assigned or assumed) religion, caste, gender, age, patronage, relationship to the official state system

Networks often subject to two or three sets of institutional norms – customary/local highly embedded ones often constituting the actual rules in use and official rules either from the project of State law or a combination of project rules and State law Double or triple combination typically imposes a heavy burden in terms of transaction costs, efficiency as viewed from a Western rational neo-classical economics perspective and major constraint on effective governance from both a Western or non-Western perspective

Trend now towards irrigation management transfer or participatory irrigation management

Informal markets which are effectively lease markets or markets to purchase quantities of water from primary rights-holder

Networks based on groundwater different from surface water

Many networks use both groundwater and surface water

Increasingly producing globally traded goods




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Rural water supply in developing country contexts

Halfway between provision of irrigation services and urban water supply with problems of both

A tap point or hand-pump usually serves more than one family with points scattered throughout the country side or dependent on groundwater

Users typically very poor & costs difficult to recover

Communities often fractured along complex lines of class, culture, group identity (assigned or assumed) religion, caste, gender, age, patronage, relationship to the official state system etc

Dispersion prevents economies of scale

Subsidies open opportunities for patronage and corruption

Highly informal and NGO driven sector with NGOs both Western and other central to sector

Considerable space for and success with user design and management but subject to migration, culture and other challenges

Networks often subject to two or three sets of institutional norms – customary/local highly embedded ones often constituting the actual rules in use and official rules either from the project of State law or a combination of project rules and State law

Double or triple combination typically imposes a heavy burden in terms of transaction costs etc.


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Applyiing Lund master planning criteria to this type of WRM Wastewater management and pollution control Very well established in developing country context and very limited in developing country context

PWS/BSWRM elements

High technical with pollution coming from both point and non-point sources of pollution

Point source easier to manage than non-point

Agencies typically manage water pollution as one of many other types of pollution and are disconnected from water supply and water demand management agencies

Technical complexity and unit costs are much higher than those of water supply

Has aspects of both BSWRM and PWS



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Delivery of Hydropower

PWS/BSWRM elements

Highly technical in both developed and developing country contexts

Major challenges posed by climate change

Community support for dams and hydropower currently very low in both rich and poor countries

PWS/BSWRM elements all mixed up with each other



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CASE STUDY 1 PLANNING FOR WATER INFRASTRUCTURE - RESERVOIRS AND DAMS Overview comments on planning for water infrastructure – Water as degradable, renewable/quasi-renewable natural capital

Water as a consumption commodity in urban contexts Water as a production factor in agriculture, especially irrigated

agriculture Water as production factor in industry Water as conservation resource for the environment Water as environmental management input across all sectors Water as source of intangible value – culture, aesthetics, identity

etc. Water as a key contributor to the stability, resilience and

adaptation of the global eco-system – a system we all agree is under a high degree of threat from human activity.

Infrastructure/engineering , elements & watershed modification – an overview



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Developed country considerations in water planning for infrassructure


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Developing country considerations in water planning for infrastructure


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Disciplines of Water Resource Planning underpinning dambuilding Technically driven approaches to water resource planning are underpinned by the engineering disciplines, which have been broadly categorised in Table One. Hydraulics and Hydrology

The water cycle, water flow, evaluation of surface water and groundwater, how data from the analyses of these factors can be simulated to achieve optimisation of a water resource project.

Hydrodynamics and Sediment Transport

Addresses the interaction between water and sediment transport. Important in the maintenance and repair of hydraulic structures.

Geology and Geotechnical Engineering

Investigates the engineering properties of natural or treated geological materials, and the geological processes that may affect materials or structures built on them. Geotechnical models are used to forecast the strength of structures such as dams.

Structural Engineering

Addressing the ability of structural systems to withstand load.

Risk and uncertainty aspects of engineering analysis

Project design is augmented to by a safety factor to withstand the risk of an extreme event.

Environmental Engineering

Evaluation of all conceivable beneficial and adverse environmental impacts of a water resource project.

Economic Analysis of water Resources

Involves the comparison of the costs and benefits of projects or alternatives of the project.

Table One- Main engineering disciplines involved in Water Resource Projects - Adapted from US Army Corps 2004, and Prakash, 2004.

Engineering provides the technical analysis for the construction of necessary infrastructure for a given water project. Given the high degree of technical analysis, the planning approach is usually highly rational. Figure Two follows Prakesh (2004) in showing a generic framework, and tasks that need to be addressed in an engineering planning study that may be used in a technical approach to water resource planning.

Figure Two- Example framework of a technical planning approach - Prakesh, 2004

However, as shown in Figure Three, Lund states that the three most important phases, as shown in figure three, that dominate a rational technical approach to water resource planning, which also correspond to the generic planning steps highlighted by Turjoman (Table One),are as follows:

Figure Three Adapted from Lund 2002 The rationality or logic that drives a technical approach is that of mathematical optimisation. Each design component of the engineering phase will often rely heavily on a number of assumptions in order to



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produce a number design alternatives based on forecast scenarios or conditions, to which a final design will be chosen as per the statement of objectives. The project is then planned, designed and operated to meet requirements at the lowest possible cost or for the greatest degree of reliability for a specified budget (Lund, 2002, p. 2). Examples of assumptions for the major technical disciplines can be seen in Table Two. Domain Assumptions Hydraulics and Hydrology

If the project is dependent on levels of forecast rainfall, assumptions of future rainfall are usually made based on historical hydrographs. This can be an issue if there are incomplete data sets from which to accurately predict future patterns.

Hydrodynamics and Sediment Transport

Assumes a certain sediment load within a waterway. That load may be constant, or assumptions for extreme events.

Geology and Geotechnical Engineering Structural Engineering

Assumptions are made regarding future tectonic events, based in the geological domain, and fed directly into the structural design of the project. Common in dam projects where the structure must be constructed to the Design Basis Earthquake (DBE). DBE is the earthquake which the structure can safely withstand.

Risk and uncertainty aspects of engineering analysis

Using the initial data embedded in the hydrological and geological forecast, projects are designed to withstand a certain level of risk. For example, probable maximum precipitation and probably maximum flood, maximum design earthquake are all key terms which are largely based on assumptions.

Environmental Engineering

Assumptions are made in prediction of ecosystem function and processes. For example the modelling parameters of environmental flows (water given back to the environment in order to restore or mimic the natural flow regime).

Economic Analysis of water Resources

Assumptions are based on the economic market itself as well as, water demand, value estimations, cost benefits.

Table Two – Assumptions within the main engineering disciplines.

Advantages of a technical approach to water resource planning


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As described in Chapter One, requirements based planning is the mainstay of the engineering disciplines, and until relatively recently was the dominate form of water planning. The advantage of this type of approach is in the planning or designing of specific components where performance is fixed or standardised, for example in pump stations, distribution lines, irrigation, and local drainage (Lund, 2002, p. 5). It is a very useful approach where a more detailed “holistic” approach is too expensive relative to potential improvements. In larger scale projects, engineering information combined with economic perspectives, and environmental and social approaches (cost benefit, adaptive management and market based approaches) have allowed for greater incorporation of variability, reliability and uncertainty into projects. It has also allowed for the synthesis of different technical knowledge from different domains into a modelling, simulation or optimisation process which can aid in the development and negotiation of different management alternatives at a number of differing temporal and spatial scales (Cammerman, 2008). Limitations of a technical approach to water resource planning From a technical point of view, planning analyses are limited by the quantity and the quality of the data that is available for the proposed project. Poorly collected hydrological data and incomplete historical data can create issues for the prediction of future patterns which relies upon temporal information in order to model uncertainty and variability by using probability analysis. Another issue which arises, predominantly in the more recent holistic simulation and optimisation modelling, is that as the technology and the theory is relatively immature, there can often be differences in scientific opinion over how empirical data should be assembled or interpreted, especially with biological and ecological data (Lund, 2002, p. 14). The communication of scientific and technological data can also be another challenge which may occur within a technical approach to water resource planning. Complex probability studies and modelling terminology resulting in a number of different project alternatives are difficult to explain to decision-makers, the public and even technical people themselves. Herein lays another limitation of a technical approach as large scale water projects or regional planning water planning exercises are often highly politicised. Therefore the technical aspects, at times, do not carry as much consideration as the interests of society, governments, social movements and industry (Allan, 2003, p. 15). The in country context in which the project is to occur can also be a factor limiting the suitability of technical approaches to water planning. Schulze documents, in great detail, the issues that arise when modelling procedures are used in lesser developed countries. Problems such as governance, politics, capacity, data problems, funding, and lack of


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facilities can be greatly compounded when attempting to implement a planning exercise (Schulze, 2007, pp. 290-291). UNDERSTANDING DAMS Two approaches to shaping river to provide water resources

Run of river schemes Impoundments – dams/reservoirs

Both can address the following objectives: Storing water for farm irrigation, hydro-electricity-, water supply to

town or industry, prevention of flooding, maintaining the water level in the highest reaches of canals, etc.

Forming an artificial lake for navigation, leisure, activities, etc. Preventing water from the downstream side moving inland to

protect farmland against seawater encroachment, maintain a reserve of fresh water in an estuary, create polders for land reclamation, etc.

However impoundments leading to dams are much more reliable as run of river schemes are subject to too many fluctuations in river quality and quantity. However run-of river schemes are more easily adapted to new situations. Run of river schemes Run-of-river schemes (ROR) utilise the natural flow of a river. However, ROR is subject to fluctuations in quality and quantity (pollution, sediments, turbidity, changes in rainfall patterns etc.) ROR design considerations include relationship between the abstraction rate and minimum river flow, location and type of intake, water treatment works, transmission and distribution of water and whole-life cost of water produced. ROR can be used for hydro as well as water supply. However the energy levels associated with ROR in terms of water velocity and height etc do not lead to high levels of energy unless the ROR is undertaken in the headwaters of a river where gradients are high and energy levels support strong generation possibilities for electricity.


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Barrages are a special case, consisting of a line of large gates which, when closed, transmit the water load to flanking piers. Barrages are run of river schemes. Contributions of Run of River Schemes to Supply – Run of river schemes (ROR)

ROR issues in developing countries:

Less issues with settlement Less land lost (agricultural and cultural/historical sites) Potential for less environmental impact Easier to get approval from civil society Less ethnographic impacts Less impact on fisheries Less/more hydro-potential Less expensive Location/flexibility

Impoundments/Dams1 A dam is a man-made obstacle to naturally flowing water built for one or more of the following purposes: The type of dam to be built depends of a range of factors:

the height of water to be stored the shape and size of the valley at the proposed construction site the geology of the valley walls and floor the availability, quality and cost of construction materials the availability and cost of labour and machinery.

The ability of the dam to withstand the pressure of water built up behind it depends on its weights and/or shape. The dam also needs to be made of (or contain) material that prevents water flowing through it. Barrages are a special case, consisting of a line of large gates which, when closed, transmit the water load to flanking piers. Barrages are built on wide, slow-moving rivers and are known as run of river schemes. Contributions of water resource schemes to supply - Impoundments

3.3 Reservoirs

1 Hydro-Tasmania, Hands on Energy Discovery centre http://www.hydro.com.au/handson/students/hydenviro.htm;


http://www.hydro.com.au/handson/students/hydenviro.htm


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Reservoirs augment supply and help with its management by providing storage which addresses fluctuations either in the supply of water from a natural source or in the demand of water by a community. Storage or impounding reservoir stores water in excess of demand from a natural source during periods of high flow for later use during periods of low flow. Distribution or service reservoirs hold stores, potable water generally supplied at a steady rate from a water treatment plant to cater for varying demand of a town or city. Impounding reservoirs are designed to provide capacity for longer periods than service reservoirs. Key concepts – reservoirs Dead storage – mainly required for sediment collection, recreation of

hydro generation Normal impounding reservoir level is the level to which the water rises

during ordinary operating conditions. For most reservoirs this is determined by the level of the dam spillway crest. The volume between normal water level and the level of the lowest intake is useful or active storage

Active/useful storage – used for conservation purposes, including water supplies, irrigation, navigation etc.

Flood control storage – reserved for storage of excessive storage volume flood volume to reduce potential downstream flood damage. Flood control or surcharge storage exists only while a flood is happening and such water cannot be retained for later use. It is allowed to clear the dam via the spillway

Probable maximum flood (PMF) – All impoundments pose hazards to life and property downstream in times of flood. All impoundments must therefore address threats of floods. This is done by estimating the maximum possible flood and designing both dam and spillway to take that into account. PMF is derived from calculations of PMP or probable maximum precipitation – estimated maximum rainfall in order of 110,000- 1000,000 years. Various methods for calculating both PMF and PMP which need not concern us here apart from noting that there are statistical methods and computations based on storm models. PMP is converted into PMF using hydrographs based on the worst possible assumptions about catchment response.

High levels of risk from PMF require much more care than low levels of harm – low levels of anticipated harm lead to less rigorous spillway requirements.

Return period – estimation of the peak discharge which is likely to be equaled or exceeded on average once in a specified (T) number of years. This called the T year event and the peak flow QT is said to have a return period or recurrence period of the relevant number of years. A flood with a return period of 100 years means that there is a

1% chance that a flood of that magnitude or greater will occur in any given year.

Controlling for drought – drought occurs when during a period of time the rainfall and thus the runoff consistently falls short of the climatically expected amount. Low river flows have to be considered in the context of many reservoir functions: water supply, return of sewage to a river, irrigation, navigation, power, fish migration and the preservation of recreation and bio-diversity values and also siltation and salinity. Necessary to work out when the minimum rate of flow during the year is most likely to happen and also the number of days that flow will be less than a specified critical value. From these calculations, the reliable or safe yield is calculated. This is sometimes called the dry weather flow. Dry weather flow influences design considerations from the lowest level of intake and operation of the reservoir.

Reservoir concepts – Storage zones

Reservoir concepts – Water levels


3.4 Dams and Flood Protection To give effect to PMF and PMP considerations, it is necessary to build spillways. Spillways are overflow structures designed to discharge the maximum flood expected at the dam location. The maximum design flood is routed through the reservoir to determine the maximum spillway discharge through modeling. Dams and Flood Protection 1


The effect of reservoir storage is both to lessen magnitude of outflow from the reservoir but also shift the time of occurrence of the peak outflow. Dams and Flood Protection 2

Dams and Flood Protection 3


3.5 Spillways2 A spillway is a structure used to provide for the controlled release of flows from a dam or levee into a downstream area, typically the river that was dammed. Spillways release floods so that the water does not overtop and damage or even destroy the dam. Except during flood periods, water does not normally flow over a spillway. In contrast, an intake is a structure used to release water on a regular basis for water supply, hydroelectricity generation, etc.3 A spillway is located at the top of the reservoir pool. Dams may also have bottom outlets with valves or gates which may be operated to release flood flow, and a few dams lack overflow spillways and rely entirely

on bottom outlets.4 There are two types of spillways: controlled and uncontrolled.5 Spillway 6

ntrolled Spillway 1 7

2 http://en.wikipedia.org/wiki/Spillway 3 http://en.wikipedia.org/wiki/Spillway 4 http://en.wikipedia.org/wiki/Spillway 5 http://en.wikipedia.org/wiki/Spillway 6 http://users.rowan.edu/~orlins/hyd/downloads/spillways-2.pdf 7 http://users.rowan.edu/~orlins/hyd/downloads/spillways-2.pdf


http://en.wikipedia.org/wiki/Image:Llyn_Brianne_spillway.jpg�

Controlled Spillway 1

A controlled spillway has mechanical structures or gates to regulate the rate of flow. This design allows nearly the full height of the dam to be used for water storage year-round, and flood waters can be released as required by opening one or more gates.

Controlled Spillway 28

8 http://users.rowan.edu/~orlins/hyd/downloads/spillways-2.pdf


Uncontrolled Spillway9

An uncontrolled spillway, in contrast, does not have gates; when the water rises above the lip or crest of the spillway it begins to be released from the reservoir. The rate of discharge is controlled only by the depth of water within the reservoir. All of the storage volume in the reservoir above the spillway crest can be used only for the temporary storage of floodwater, and cannot be used as water supply storage because it is normally empty.10

Uncontrolled Spillway 1 11

9 http://users.rowan.edu/~orlins/hyd/downloads/spillways-2.pdf 10 http://users.rowan.edu/~orlins/hyd/downloads/spillways-2.pdf 11 http://users.rowan.edu/~orlins/hyd/downloads/spillways-2.pdf


3.6 Dams and Hydropower

Reservoir Operating Rules12

Operational practices adopted for use of a reservoir will inevitably affect on site impacts and downstream hydrology. In a pure-hydro system, the function of the reservoir is to provide flow regulation, which is determined by the load requirements and by the total developed head.

Flow regulation is usually dictated by rule curves (derived from historical data of river flows and energy demands) which show storage requirements during a specified period and give guidance for the operation of reservoir from day to day. It is important to note that any rule

12 http://www.worldbank.org/html/fpd/em/hydro/orhrp.stm



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curve, representing the deficiency between energy requirements and dependable stream flow, is only valid for the load and flow conditions under which the curve was drawn.

Moreover, there is always the possibility of encountering lower than recorded reservoir inflows. If a reservoir is operated on the basis of the rule curve derived from historical flow conditions, the result could be an empty reservoir with consequent power shortage. Similarly, during flood seasons, one may run the risk of discharging useable flow.

When the reservoir serves two or more purposes, including providing power, flow regulation is more complex. During normal flows, the reservoir will be maintained and kept at the rule curve level. During floods, the pool level will be above the rule curve. If exceptional floods occur, which can sometimes be predicted in advance, the reservoir is drawn down below the rule curve before the flood arrives. If low flow conditions prevail, the reservoir is drawn down below the rule curve to release the design dependable flow to satisfy downstream needs. During drought periods the reservoir may be completely emptied.

Operation of multi-reservoir systems is based on the same principles as that of a single hydro storage project except that cumulative impacts downstream must be considered both in terms of subsequent power generation and other non-power requirements. This means that the analysis involved is much more complex and computer modelling is often a necessity.

Rules for Environmental Flows - Minimum Downstream Flow Requirements

Maintenance of adequate flow to meet downstream requirements is a key aspect of operational strategy. For a run-of-river hydro project, the streamflow passes through the project without much modification. Specific flow release requirements are therefore not generally needed. At a run-of-river plant with limited storage, the flow releases through the powerhouse may fluctuate hourly, daily, and/or weekly during all but flood periods. Special release requirements (minimum flow, rate of change in flow, etc) are necessary to protect both in-stream needs and appropriate water rights for flow diversions downstream.

For reservoir storage plant capable of storing seasonal or yearly floods for hydro generation during low flow season, the plant discharges may still fluctuate considerably on a daily basis. In this case, it is desirable to regulate the minimum flow and the rate of change in flow releases.

Downstream flow requirements must also be considered for:


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navigation; fisheries; water quality and waste assimilation; aesthetic values; flushing to remove sediments from the reservoir and/or streambed

downstream; flood control (evacuating storage space before flooding); replication of beneficial natural floods for flood plain agriculture and

prevention of land salinisation; downstream channel between the dam toe and the exit of the

power plant's tailrace; irrigation; municipal and industrial water supply (including cooling water

supply); streamflow required to prevent saline intrusion.

Operating Rules for a Hypothetical Reservoir Project13

(In descending order of priority)

When reservoir elevation approaches the top of flood control pool, spillway gates are opened to pass inflow, to prevent overtopping of dam.

Flood control storage space is not to be filled except to control floods.

Flood control storage will be regulated to maintain a maximum flow.

Flood control regulation may require total project discharge to be reduced to zero, thus discontinuing power generation and releases for maintenance of downstream flow.

Primary flood control zone (upper two-thirds of flood control storage) is to be evacuated as rapidly as possible following the flood without exceeding downstream channel capacity.

Secondary flood control zone (lower third of flood control storage) is to be evacuated as rapidly as possible within constraints of power plant's hydraulic capacity.

The diversions must be provided at the dam for a local municipal water system.

A minimum discharge to maintain fish population in reach below dam.

Energy requirements must be met.

13 http://www.worldbank.org/html/fpd/em/hydro/orhrp.stm


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If reservoir is at or below critical power rule curve, only firm power requirements will be met.

The minimum desirable discharges will be met if possible for downstream navigation and water quality.

To protect dependable capacity, the reservoir will not be drafted below rated head except to meet firm energy requirements.

While in the conservation storage zone, discharge will not exceed power plant's hydraulic capacity.

Reservoir will be maintained as close to top of conservation pool as possible for at-site recreation.

Maximum possible energy will be generated.

Dam Classifications

Source: Larry Mays, Water Resource Engineering (2005) 3.7 Dam Types - Purcell


Earth Dam14 PLAN – EARTH GRAVITY DAM

Made of compacted earth, has gentle slopes and hence large volume and foundation area. These rely on a large mass of cheap materials such as rock, gravels, earth or clay to hold back the water. Their shape usually reflects the natural settling angle of the material used to make them. Concrete, bitumen or clay are used to

prevent water seeping through the dam. The dam was waterproofed using a thin layer of concrete on the upstream face. Model of dam - Example - Reece Dam Tasmania

14 Hydro-Tasmania, Hands on Energy Discovery centre http://www.hydro.com.au/handson/students/hydenviro.htm; Herschy and Fairbridge, Encyclopedia of Hydrology and Water Resoruces (1995)



Engineering, cost , impact and developing country aspects Earth-cored rockfill dam15

Impermeable earth core supported by outer zones of compacted broken rock. Steeper slopes than an earth dam. A similar effect may be achieved by an impermeable membrane of concrete, bitumen, steel or or other materials at core near the upstream face. These differ from concrete-faced dams in their method of waterproofing. Instead of using thin concrete or bitumen faces they have a

central core of clay or other fine-grained material. The water penetrates the upstream side of the dam but is prevented from flowing through the clay core. Model of dam - Example - Rowallan Dam Tasmania




Engineering, cost , impact and developing country aspects Concrete gravity dam16 PLAN – CONCRETE GRAVITY DAM

Water held back by the weight of the structure hence the name. Concrete dams come in a variety of types and rely on the weight of concrete and/or their shape to hold back the water. Concrete is a relatively expensive material and the construction of concrete dams is usually more labour-intensive than the

construction of embankment dams. Construction material (concrete) also easier for engineers to control than earth and rock Basic concrete gravity dam Model of dam - Example - Liapootah dam Tasmania

Engineering, cost , impact and developing country aspects Concrete Buttress Dam17 Near vertical concrete slab supported by a number of triangular concrete buttresses. Much of the reservoir force is transmitted to the buttress foundations Model of dam - Example - Meadowbank dam Tasmania 16 Hydro-Tasmania, Hands on Energy Discovery centre http://www.hydro.com.au/handson/students/hydenviro.htm; Herschy and Fairbridge, Encyclopedia of Hydrology and Water Resoruces (1995) 17 Hydro-Tasmania, Hands on Energy Discovery centre http://www.hydro.com.au/handson/students/hydenviro.htm; Herschy and Fairbridge, Encyclopedia of Hydrology and Water Resoruces (1995)




PLAN – CONCRETE BUTTRESS DAM

oncrete arch dams pe to withstand the pressure of the water built up

ylindrical arch dam pstream convex curve. Shape of dam is

CThese rely on their shabehind them. The arch curves back upstream and the force exerted by the water is transferred through the dam into the valley walls and floor. They are normally constructed in deep gorges and the geological foundations need to be particularly sound. CConcrete arch with ugeometrically part of the surface of a cylinder. Part of reservoir force transmitted laterally into the valley sides ((abutments). Am or complicated version is the double curvature arch dam18 with a horizontal and vertical curvature. Shape of dam is part of the surface of an ellipsoid. Reservoir forces ARE transmitted by double arch action foundations and abutments




Model of dam - Example - Gordon dam Tasmania

LAN – CYLINDRICAL ARCH DAM

P

LAN – DOUBLE CURVATURE ARCH DAM P


Multiple arch dam This is a variation of the arch dam and is often used where the length to be dammed is quite extensive. Model of dam - Example - Mienna dam Tasmania



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CASE STUDY 2 - COMMUNTITY BASED WATER RESOURCES PLANNING Community based water management may be construed as the idea that communities should operate and maintain their own water and wastewater supplies. The privatisation of water services, especially in developing country contexts, has often resulted in the value, access, use and control of water resources being taken away from resident peoples to external structures. This alienation can cause a loss in traditional way of life, and it can mean that those people who are making decisions regarding water planning and management are often distanced from the ramifications of the decisions which they make (Johnston, 2003, p. 82). Therefore, community based approaches to water planning have come about through a declining/decreasing belief in the ability of central governments to supply water services for their populations, and partly from the belief that communities have the skill, ability and motivation to meet their own needs (Moriarty, 2003, p. 1). A community based planning approach may have different objectives; some may focus on community mobilisation, others may focus on improving participation in local government or regional planning exercises as part of BSWRM (Goldman, 2004, pp. 1-2). The skill set involved in a community based planning approach differs strongly from a technical based approach with the main emphasis being on the understanding of the social ecological system, ensuring planning and resource allocation more responsive to people’s needs. A community based planning approach is underpinned by the social science disciplines as highlighted in Table One. Anthropology Understanding of the socio-cultural

context Sociology Societal issues Geography Social mapping, land and resource

use, spatial knowledge (including GIS –See Ross et al).

History Historical Background Law and Politics Legal and political background Community Development Experts

Establishing confidence in the planning process

Facilitators Helping groups to reach consensus Table One Main disciplines involved in a community based planning approach

The social science disciplines involved in a community based planning approach, generally, are less demarcated than those of engineering disciplines. In a community based approach to water resource management it is likely that if professional assistance was required, one professional person may be responsible for the collation of


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anthropological, sociological, historical and geographical information, and may even be required to facilitate the planning process. This is in stark contrast to technical approaches which are generally well funded and where scientific roles are rarely integrated (Cammerman, 2009). End uses of and approaches to community-based planning (taken from Goldman, 2004). CBP can be undertaken for the following reasons:

To improve the quality of integrated plans by incorporating perspectives and understanding from local communities.

To improve sectoral plans and so the quality of services, once again by incorporating information generated by and with local communities.

To promote community action, sometimes as a means of releasing latent energy of communities or to reduce the demands on government by shifting responsibilities to communities (e.g. for maintaining infrastructure in countries where government is seeking to reduce its responsibilities).

To promote community control over development, either in improving local influence over decisions, or in managing development directly.

To comply with policy or legislative directives for public participation in different types of plans and planning processes.

Planning Approaches Within a community based approach, heavy emphasis is placed on establishing broad confidence and consensus in the planning process. It differs from a technical based approach to planning as it seeks to facilitate a process where the community provides the data for the plan, rather than seeking to identify all the data from the outset. The most appropriate planning approaches within a community based planning exercise are those of disjoint incrementalism and adaptive management (EMPOWERS 5, 2005). These approaches seek to ‘get things done’, whilst retaining an ability to alter the management of the system as more of the systems behaviour is learned, as data becomes available and as the community resolves conflict and the consensus building process is progressed (EMPOWERS 5, 2005). An example of a community based planning framework, developed by EMPOWERS, can be seen in Figure One. The structure of this planning process has strong similarities with the structure given by Turjoman, as seen in Chapter Two. ‘Visioning’ is similar to the determination of objectives, ‘assessing’ corresponds with the obtaining of data, and

‘strategising’ with the formulation of alternatives from which the plan is chosen, implemented and monitored. The one noticeable difference between the EMPOWERS framework and that of Turjoman’s is the emphasis placed on cyclic and continuous improvement, a key tenet of the adaptive management and disjoint incrementalism planning approaches The analysis of information in step two, assessing, is done within what EMPOWERS terms, the RIDA framework (Figure Two). RIDA- Resources, Infrastructure, Demand and Access, asks questions regarding the amount of water resources available, how it is supplied, who has access and what is the demand. Its intent is to provide the community the necessary information from which they can discuss and plan their water resources (EMPOWERS 5, 2005). Even though the overall planning approach is that of adaptive management and disjoint incrementalism, within the RIDA framework there are likely to be components of rational planning including requirements based, cost benefit and market based planning approaches used by the community.


Figure One – EMPOWERS - Framework for a community based approach to water resources planning (EMPOWERS 4, 2005)

Figure Two– EMPOWERS – RIDA - Framework for a community based approach to water resources planning (EMPOWERS 5, 2005)

RIDA is based on the understanding that water resources are linked to users by supply (and disposal) infrastructure, and that each of these three system elements (resources, infrastructure, users) has its own set of institutions, boundaries and other characteristics. In other words, there may be three sets of largely independent physical/institutional boundaries that need to be considered systematically when looking at water resource development and management problems. (EMPOWERS 5, 2005). Questions asked to populate the RIDA framework may include: For users: Access: Who has access to water? Who is using water – and what are they using it for? How much are they using, of what quality and with what reliability? Who controls access? Demand: What is users’ current and future demand for water? How much, what quality and with what reliability? For infrastructure: What are the supply norms for which infrastructure is designed? How much can it potentially supply? To which users? How much water actually does the infrastructure supply currently? How much is unaccounted for transmission losses? What are the opportunities to upgrade/increase supply? What are the bottlenecks/problems? What are the main institutions responsible for managing supply services? How effective are they?


For water resources: What is the sustainable water resource available to the water supply infrastructure? What are current or potential future conflicting claims on this resource? What are the institutions dealing with water resource management (as opposed to service provision)? How do they interact, make decisions, etc……..? These key questions are being used in EMPOWERS to structure the outline of summary fact sheets that help to capture the water situation in villages and districts/governorates, and are then used as a basis for discussion and planning between stakeholders (EMPOWERS 5, 2005). Another example of a community based planning approach offered relates to an urban sanitation and wastewater setting. The Asian Development Bank (ABD) along with WEDC has prepared a framework to encourage governments to stimulate community participation in the planning of water related projects. Once a request for assistance by the borrowing government is made, it is assessed to determine whether the request is based on governmental rather than community aspirations and is then followed by a stakeholder consultation. The remainder of the planning process, figure four, contains similar steps as highlighted in the generic framework put forward by Turjoman in Chapter Two.

Figure Three – ADB – Planning process in Urban Sanitation and Wastewater Management (ADB, 2006)

The planning approach is similar to that of the EMPOWERS process and, in essence, it is a community driven process and therefore an adaptive and incremental approach is most appropriate. However, given that sanitation and water supply services usually attract a high capital investment, a high degree of rationality achieved requirements based, cost benefit based and market based planning is likely be required throughout the overall planning process. Advantages: The advantages of a community based plan is that attempts to address complex problems such as vulnerability by involving local people not only in the collection of information, but also in the decision making process. Through this it raises accountability and, dependent on the type of planning exercise, helps to sensitise bureaucrats to local knowledge and, in a BSWRM context, how to link local knowledge into a more formal, regional planning process encouraging active bargaining processes (Goldman, 2004).



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Through the application of a disjoint incrementalist and adaptive planning approach, the process is responsive to potential problems, and is able to identify important considerations and the delegation of decision and evaluation responsibilities. Any community plan which is agreed upon by all stakeholders is generally thought to be a good plan, or best practice, because the various stakeholders, parties and individuals have had to communicate, understand and negotiate any necessary outcomes in order for the plan to be supported, be that at a local political level or otherwise. In a political context, this is seen superior in some ways to the more formal technically based planning and decision-making processes (Lund, 2002). Limitations: One of the major limitations with a community based planning approach to water resources is that it generally requires time, funding and it also requires stakeholders to be actively involved, which in turn, might require some degree of capacity building. Another limitation may be the unwillingness of higher level authorities to accept decisions made at a community level, especially if this might require additional funding or could potentially cause controversy. Stakeholders may also perceive an interest, be that political, economic or otherwise, in limiting the range of alternatives to be considered within a planning exercise (Lund, 2002). A stakeholder led problem-centred approach to water resource development based on misunderstanding or myth, may also lead to the establishment of sanctioned discourses, where information that does support current thinking is discarded. This may be mitigated by providing a shared and reliable source of information (EMPOWERS 5, 2005).

Empowers (2005) - (briefing note 3)



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REFERENCES ADB. (2006). Planning Process in Urban Sanitation and Wastewater Management.

Cammerman, N. (2008). Technical and Communal Approaches to Water Planning. MIWM WATR 7300 Assignment EMPOWERS 3, B. C. (2005). The EMPOWERS Participatory Planning Cycle for Integrated Water Resource Management. EMPOWERS 5, B. C. (2005). Using Water Resources Assessments within the Empowers IWRM Planning Cycle.

Goldman, I. ,. (2004). Overview: Decentralisation and Community Planning.

Johnston, B. (2003). The Political Ecology of Water.

Lund, J. (2002). Approaches to Water Resources Planning.

Moriarty, P. S. (2003). Community Water, Community Management.

Mwfodo, K. (2008). Water Governance - Conceptual Underpinnings.

Turjoman, A. H. (1988). A Descriptive Structure For Water Resource Planning. Water Resource Bulletin , 289-295.

Allan, J. (2003). Integrated Water Resource Management is more of a Political than a Technical Challenge. Water Resources Perspectives: Evaluation, Management and Policy , 9-23.

Brooks, D. F. (2007). Water Demand Management: Definitions, Criteria and Notions of Social Innovation and Political Economy. WaDImena.

Cullen, P. (2006). Water Planning. International River Symposium, (pp. 1-7).

De Groot, H. D. (1999). The Economics of Water. International Journal of Development Planning Literature , 1-20.

Hajkowicz, S. C. (2006). A Review or Multiple Criteria Analysis of Water Resource Planning and Management. Water Resource Management , 1553 - 1566.


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Heinz, I. P.-V. (2007). Hydro-economic Modelling in River Basin Management Implications for the Water European Framework Directive. Water Resource Management , 1103-1125.

Hooper, B. (2005). Integrated River Basin Governance.


Mays, L. (2001). Water Resource Engineering.

Meffe, H. a. (1996). Command and Control and teh Pathology of Natural Resource Management. Conservation Biology , 328 -337.


Mwfodo, K. (2008). Economics and Water Topic Notes. Brisbane: IWC.

Mwfodo, K. (2008). Water Governance - Conceptual Underpinnings.

Prakash, A. (2004). Water Resources Engineering. American Society of Civil Engineers.

Resiner, M. (1987). Cadillac Desert.

Ross, H. P. (2007). Conceptual Framework for catchement-scale integrated water resource maangement.



Allan, J. (2003). Integrated Water Resource Management is more of a Political than a Technical Challenge. Water Resources Perspectives: Evaluation, Management and Policy , 9-23.

Brooks, D. F. (2007). Water Demand Management: Definitions, Criteria and Notions of Social Innovation and Political Economy. WaDImena.

Cammerman, N. (2008). Technical and Communal Approaches to Water Planning. MIWM WATR 7300 Assignment Cullen, P. (2006). Water Planning. International River Symposium, (pp. 1-7).


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De Groot, H. D. (1999). The Economics of Water. International Journal of Development Planning Literature , 1-20.

Delli Priscoli, J. (1990), "From Hot-Tub to War: Alternative Dispute Resolution in the U.S. Army Corps of Engineers," in W. Viessman and E.T. Smerdon (eds.), Managing Water-Related Conflicts: The Engineers Role, ASCE, N.Y., pp. 70-93. Hajkowicz, S. C. (2006). A Review or Multiple Criteria Analysis of Water Resource Planning and Management. Water Resource Management , 1553 - 1566.

Heinz, I. P.-V. (2007). Hydro-economic Modelling in River Basin Management Implications for the Water European Framework Directive. Water Resource Management , 1103-1125.

Hooper, B. (2005). Integrated River Basin Governance.


Mays, L. (2001). Water Resource Engineering.

Meffe, H. a. (1996). Command and Control and teh Pathology of Natural Resource Management. Conservation Biology , 328 -337.


Mfodwo, K. (2008). Economics and Water Topic Notes. Brisbane: IWC.

Mfodwo, K. (2008). Water Governance - Conceptual Underpinnings.

Prakash, A. (2004). Water Resources Engineering. American Society of Civil Engineers.

Resiner, M. (1987). Cadillac Desert.

Ross, H. P. (2007). Conceptual Framework for catchement-scale integrated water resource maangement.




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Viessman, Warren and Ernest T. Smerton (eds.) (1990), Managing Water-Related Conflicts: The Engineer's Role, ASCE, New York, 293 pp. Walters, C. (1997), “Challenges in adaptive management of riparian and coastal ecosystems,” Conservation Ecology, Vol. 1, No. 2, p.1; http:www.consecol.org.vol1/iss2/art1

ECONOMIC CONCEPTS AND TOOLS

Chapter ?

10 IN WATER GOVERNANCE

INTRODUCTORY ASPECTS1

INTRODUCTION TO THE CHAPTER ?

This Chapter ? provides a basic introduction to concepts central to the conventional economics of water resource management. The focus is on the basic concepts of economics as applied to: water for agriculture; water for nature; domestic water; water for recreation and water for industry.

1 Material for this Chapter ? is drawn from a variety of sources including: Economic Development Institute of the World Bank and OECD, Appraisal of Environmental Projects and Policies – A Practical Guide (1995); Turner, R. K., D. Pearce and I. Bateman (1993) Environmental Economics. An Elementary Introduction. Baltimore, Maryland, John Hopkins University Press; Joseph E. Stiglitz Economics, second edition (New York: W. W. Norton, 1997); The MIT Dictionary of Modern Economics, fourth edition (Cambridge, Mass.: MIT Press, 1992); Richard Cornes and Todd Sandler The Theory of Externalities, Public Goods and Club Goods, second edition (New York: Cambridge University Press, 1996); The Business education site - http://www.bized.ac.uk/; The Basic Principles of Economics site of Professor Waldron - http://www.usd.edu/~rwaldron/index.html; Global Public Goods - http://www.undp.org/globalpublicgoods/; Daly, H. E. and Cobb, J. B. (1989) For the Common Good: Redirecting the Economy Toward Community, the Environment and a Sustainable Future. Beacon Press, Boston, MA; Constanza, R. and J. Cumberland and H. Daly and R. Goodland and R. Norgaard (1997) An Introduction to Ecological Economics. St. Lucie Press, Boca Raton, FL; C. H. Green “The economic issues raised by valuing environmental goods” Chapter ? 3 in A. Coker and C Richards (ed) Valuing the Environment: Economic Approaches to Environmental Evaluation (1990).

http://www.bized.ac.uk/

http://www.usd.edu/%7Erwaldron/index.html

http://www.undp.org/globalpublicgoods/

Issues of market economics such as the complex economics of trading in water rights are not discussed. The discussion also provides an overview of some of the insights and interpretational skills required to understand the specialized language of conventional or neo-classical economics as applied to natural resources and the environment. The Chapter ? thus provides an introduction to Chapter ? ? which discusses valuation and monetization methodologies in more detail. It also on from the preliminary discussion of issues of natural capital and ecological economics as discussed earlier in Chapters ?? of the monograph. It also provides an idea the kinds of concepts that will need to be understood by a wider circle of water resource managers as water resource management comes to rely more widely on the use of economic instruments.

Water quantityWater quality

Seasonality of flowRegulation

Water for agriculture

Domestic water

Water for industry

Water for nature

Water for recreation

OBJECTIVES OF CHAPTER ?

As far as concepts are concerned this Chapter ? seeks to do the following:

explain basic concepts in the micro-economics of market behaviour (for instance markets, price, opportunity cost, utility, value)

help students understand the basic principles of the models used by conventional economics to explore issues in the use of natural and ecological resources

help students understand the basic conceptual framework underlying conventional economic approaches to pollution control

help students understand the basic conceptual framework underlying conventional economic approaches to valuing ecological resources

help students appreciate the dominance of the neo-classical approach in environmental decision-making

help students understasnd how approaches to value and valuation in conventional economics differ from those taken in other disciplines and conceptual frameworks

help students recognise the limitations of a purely economic approach to environmental issues.

As far as practical skills are concerned this Chapter ? seeks to leave the reader with the ability to:

identify and read a typical demand curve as used in water resource management analysis

identify and read a typical supply curve as used in water resource management analysis

identify and read a typical cost curve as used in water resource management analysis identify and read a typical benefit curve as used in water resource management

analysis explain in a very basic way how the above-mentioned analytical devices are used to

model and explore issues in the management of water resources.

ECONOMICS: SOME INTRODUCTORY REMARKS

The first point to note is that economics has many schools and sub-schools – for example the neo-classical school, the ecological economics school the institutional school, the Austrian school, the Marxist school, the property-rights school, the monetarist school etc2. Each school of economics has its own way of thinking – logics and basic assumptions are often different as are the questions that are viewed as fundamental. This shapes how discussion is conducted. Despite this diversity however, all schools of economics are concerned with analysing the production, distribution and consumption of goods and services and the institutional arrangements within which these activities take place.

The dominant school of economics is neo-classical economics (referred to from now on as conventional economics). Conventional economics has many branches and sub-branches. In this Unit the two schools which concern us most are: (1) environmental economics and natural resource economics as sub-branches of mainstream neo-classical economics; (2) ecological economics – a recently evolved approach which has rapidly acquired credibility due to: (a) its more realistic assumptions (see Chapter ? 1); (b) its greater ability to draw from and integrate insights and information from range of other disciplines, including the natural sciences.

Although the general philosophical approach in this book supports the criticisms of conventional economics made by ecological economists (refer to Chapter ? ?) it remains true that conventional economics and by extension, conventional environmental economics and natural resource economics dominates analysis of issues in water resource management. It is thus important that students acquire a sound basic grasp of the concepts of conventional economics as well as an ability to critique those concepts.

It is also important to bear in mind that there are different investigative and presentational approaches in economics. Different schools and different writers emphasize different approaches. Fashions also come and go. One approach used in a lot of textbooks is the deductive approach. The analyst establishes a few simple premises based upon general observation – the technical name is axioms - and then proceeds to make a range of broad generalizations from these premises. The second approach is more historical in character and seeks to understand existing institutions by tracing their evolution from their origins in the past and makes projections into the future. The historical approach more easily integrates insights and information from other disciplines. The third approach is driven principally by statistical induction. It endevaours through analysis of numerical data and the resolution of equations to develop quantitative knowledge of economic phenomena – this approach has given birth to an elaborate field called econometrics. Conventional economics tends to focus on the first and third approaches, whilst other schools, especially those schools

2For more information students may usefully consult, Eatwell, Milgate and Newman, The New Palgrave: A Dictionary of Economics (2002).

Figure ? Some Examples of how Economics fit in with Water Governance

Alexander A. McPhail, The “five percent rule” for improved water service: Can households afford more?World Development, Volume 21, Issue 6, June 1993, Pages 963-973 Mir Anjum Altaf, Household demand for improved water and sanitation in a large secondary city : Findings from a study in Gujranwala, Pakistan Habitat International, Volume 18, Issue 1, 1994, Pages 45-55 E. Jane Luzar and Kelli J. Cosse, Willingness to pay or intention to pay: The attitude-behavior relationship in contingent valuation Journal of Socio-Economics, Volume 27, Issue 3, 1998, Pages 427-444 A Stenger and M Willinger, Preservation value for groundwater quality in a large aquifer: a contingent-valuation study of the Alsatian aquifer Journal of Environmental Management, Volume 53, Issue 2, June 1998, Pages 177-193 Robert P. Berrens, Alok K. Bohara, Hank Jenkins-Smith, Carol L. Silva, Philip Ganderton and David Brookshire, A joint investigation of public support and public values: case of instream flows in New Mexico Ecological Economics, Volume 27, Issue 2, November 1998, Pages 189-203 D. V. Raje, P. S. Dhobe and A. W. Deshpande, Consumer's willingness to pay more for municipal supplied water: a case study Ecological Economics, Volume 42, Issue 3, September 2002, Pages 391-400 Amer Zahi Salman and Emad Al-Karablieh, Measuring the willingness of farmers to pay for groundwater in the highland areas of Jordan Agricultural Water Management, Volume 68, Issue 1, 15 July 2004, Pages 61-76 Patricia Koss and M. Sami Khawaja, The value of water supply reliability in California: : a contingent valuation study Water Policy, Volume 3, Issue 2, June 2001, Pages 165-174 Clive L. Spash, Kevin Urama, Rob Burton, Wendy Kenyon, Peter Shannon and Gary Hill, Motives behind willingness to pay for improving biodiversity in a water ecosystem: Economics, ethics and social psychology Ecological Economics, 30 October 2006 James F. Casey, James R. Kahn and Alexandre Rivas, Willingness to pay for improved water service in Manaus, Amazonas, Brazil Ecological Economics, Volume 58, Issue 2, 15 June 2006, Pages 365-372

E.K. Johnson, D. Moran and A.J.A. Vinten, Ability and willingness to pay for water supply service in the Gaza Strip Building and Environment, Volume 40, Issue 8, August 2005, Pages 1093-1102 Yusuf Al-Ghuraiz and Adnan Enshassi Stephen Merrett, Deconstructing households’ willingness-to-pay for water in low-income countries Water Policy, Volume 4, Issue 2, 2002, Pages 157-172 George Van Houtven, John Powers and Subhrendu K. Pattanayak, Valuing water quality improvements in the United States using meta-analysis: Is the glass half-full or half-empty for national policy analysis? Resource and Energy Economics, Volume 29, Issue 3, September 2007, Pages 206-228 Monica Ilija Ojeda, Alex S. Mayer and Barry D. Solomon, Economic valuation of environmental services sustained by water flows in the Yaqui River Delta Ecological Economics, 5 July 2007 Anna Hurlimann and Jennifer McKay, Urban Australians using recycled water for domestic non-potable use—An evaluation of the attributes price, saltiness, colour and odour using conjoint analysis Journal of Environmental Management, Volume 83, Issue 1, April 2007, Pages 93-104 Esther W. Dungumaro, Socioeconomic differentials and availability of domestic water in South Africa Physics and Chemistry of the Earth, Parts A/B/C, Volume 32, Issues 15-18, 2007, Pages 1141-1147 Jennifer Davis, Assessing Community Preferences for Development Projects: Are Willingness-to-Pay Studies Robust to Mode Effects? World Development, Volume 32, Issue 4, April 2004, Pages 655-672 Jennifer Davis, Alice Kang, Jeffrey Vincent and Dale Whittington, How Important is Improved Water Infrastructure to Microenterprises? Evidence from Uganda World Development, Volume 29, Issue 10, October 2001, Pages 1753-1767 Michael Goldblatt, Assessing the effective demand for improved water supplies in informal settlements: a willingness to pay survey in Vlakfontein and Finetown, Johannesburg Geoforum, Volume 30, Issue 1, February 1999, Pages 27-41 Ralph C. d'Arge and Jason F. Shogren, Okoboji experiment: Comparing non-market valuation techniques in an unusually well-defined market for water quality Ecological Economics, Volume 1, Issue 3, October 1989, Pages 251-259

CONVENTIONAL ECONOMICS AND WATER RESOURCES – SOME BASIC CONCEPTS

1

interested in analyzing institutions, use the historical and comparative approach much more. In some versions of econometrics, mathematics and the use of highly restrictive assumptions which will not interfere with the mathematical analysis has completely taken over the field raising the question of the extent to which the real world has an influence on the analysis and results presented by analysts and academics working in these domains.

Conventional/Neo-classical economics

Neo-classical economics can be defined broadly as a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services. In its theoretical form it is a discipline devoted to the study of small marginal effects and uses a branch of mathematics called calculus3 to undertake this analysis. The term calculus as applied in mathematics is concerned with the measuring of limits and changes, particularly calculation of very small changes.

From the leading mainstream textbook – Samuelson, we get the definition

Economics is the study of how men and society end up choosing, with or without the use of money, to employ scarce productive resources that would have alternative uses, to produce various commodities and distribute them for consumption, now or in the future, among various people and groups in society. It analyzes the costs and benefits of improving patterns of resource allocation. (PA Samuelson & WD Nordhaus, Economics, 16th edition, Irwin McGraw-Hill, 1998, 1.)

Key assumptions in Conventional Economics4

Economists make the assumption that individuals act rationally and that they aim to be rational in the decision-making and choices that they make. When economists use the term “rational” they are not referring to whether or not the person is endowed with reason or is intelligent or can think. Rather they mean that the person is consistent with respect to choices and preferences dependent on context. A better word perhaps would be reliability rather than rationality. In particular, economics expects that individuals will behave reliably/rationally with respect to price signals, buying more when prices are low and less when prices are high; producing less of an environmentally damaging product when taxes are imposed on the firm or product and using the environment carelessly when no economic costs attach to use of the environment carelessly. As C. H. Green citing another author5 puts it:

3 In ancient Rome, carriages were used as taxis to transport people. Each time the wheel of the carriage turned, a pebble, a calculus, dropped from a container into another. At the end of the ride, the driver counted how many pebbles had dropped, and that determined the price of the transportation. This is how the words calculus and calculate got their present mathematical meaning - http://web.math.fsu.edu/~seppala/Calculus/FAQ/calculus_in_Rome.htm. 4C. H. Green, “The economic issues raised by valuing environmental goods” Chapter ? 3 in A. Coker and C Richards (ed) Valuing the Environment: Economic Approaches to Environmental Evaluation (1990), 30. 5Simon,H. A. Rationality in Psychology and Economics in Hogarth, R. M. and Reder, M. W. (eds) Rational Choice: The Contrast between Economics and Psychology (1986)


2

In economics, rationality is viewed in terms of the choices it produces; in the other social sciences it is viewed in terms of the processes it employs

Rationality with respect to price does imply that consumers and firms given relevant information should weigh up the costs and benefits of a decision before going ahead. For example buying a fish from the supermarket is cheaper than going fishing. However it may be more enjoyable to go fishing and catch a fish and grill it later. Rational choice involves making the choice that gives the greatest benefit relative to cost.

Another way of illustrating the differences between economics and other social sciences in focusing on rationality is offered below. Assume that the issue being investigated is the decision by A to go to University in a situation where all A’s closest relatives (father, mother, brother, sister etc.) have all been to University. The discipline of sociology might focus on whether or not the decision to go to University is an expected pathway for A, involving considerations such as taking his/her proper place in society, living up to his/her parent’s expectations, etc. – sociology studies the individual and society. Economics would tend to focus on the cost-benefit calculations involved. How much income would A have to give up by studying instead of working for the relevant period (3 years for some degrees; 4 years for others and 6 for double degrees. How much are the direct costs of tuition etc? And what are the monetary benefits? Economics would assist with fairly precise answers with these questions and indeed might be used as an argument by A to justify not going to school or by A’s parents to justify A’s going to University in a context where A has doubts about going to University. At the centre of the economic analysis would be the concepts of opportunity cost – what has to be given up by A to go to University and also what might be gained by A in the future in terms of income based on the investment constituted by going to University.

Other assumptions in conventional economics are that6:

All values (that which is held or thought to be important) are determined and exist in the mind of the individual only;

Goods exist in measurable quantities and are not wholly unique; Individuals exist to consume; Society exists only as an aggregate of individuals; Economics is concerned with economic efficiency – the maximization of

the value of consumption against the resources required to provide that consumption

Economics cannot draw conclusions about the fairness of the distribution of wealth or the social justice of a situation

Issues of morality and social justice are outside the domain of economics; Economics is a descriptive science – it cannot prescribe what should be

done – it can only model possibilities given particular co-relations of behaviour, goods, services and prices;

6C. H. Green “The economic issues raised by valuing environmental goods” Chapter ? 3 in A. Coker and C Richards (ed) Valuing the Environment: Economic Approaches to Environmental Evaluation (1990), 30


3

Economics does not in general conduct experiments to test the reliability or otherwise of its predictions;

All goods and services can be substituted for each other given a significant price incentive or reason for doing so.

Micro vs Macro economics An often encountered division in conventional economics is between macro and micro-economics. The concepts discussed in this Chapter ? and in Chapter ? fall more within the domain of micro than macro-economics. Macro-economics deals with the big picture or aggregates of economic behaviour and economic information. In contrast, the term micro suggests an infinitesimally minute quantity. Micro-economics deals with the smallest economic units. It is concerned with the behaviour of individual consumers, individual households or individual business firms dividinc the world generally into producers and consumers of goods and services. Within these parameters, micro-economics studies the behaviour of consumers and producers with a particular focus on how they tend to optimise on their transactions, or improve their utility. Optimization means both maximization and minimization undertaken simultaneously. Thus conventional economics views consumers as attempting to maximize their utility or satisfaction even as they also seek to minimize their expenditure given the finite and limited character of their resources and the need to allocate those scarce resources amongst competing uses. Producers attempt to maximize profits whilst minimizing the cost of production.

It is clear from the above that there are competing or perhaps even conflicting imperatives here. Part of what conventional economics seeks to investigate and measure is where, how and to what extent these competing objectives and actors manage to achieve an equilibrium. The principal analytical tool of micro-economics, the graph with intersecting curves to demonstrate relationships between joined but contrasting elements, shows this conflict very well.

The key graphs that are used in analysis of the use of natural resources (supply and demand graphs; cost and benefit graphs) can and should be read from this perspective – they show conventional economics seeking to understand how opposing tendencies are balanced or come into equilibrium.


4

Example - Demand and Supply Graph

(D- Demand; S- Supply; Q^ - quantity at equilibrium; P^ - price at equilibrium)

Example - Benefit and Cost Graph

(MPC – Marginal Private Cost; MSC –Marginal Social Cost; MPB-Marginal Private Benefit; MSB- Marginal Social Benefit)

Microeconomics is also sometimes described as being a static rather than dynamic analysis because it concentrates on individual behaviour as such behaviour takes place over shorter rather than longer periods of time and avoids taking account of the longer term and larger scale external issues affecting such behaviour. Since economic life is highly complex and interdependent, such a simple or parsimonious7 approach requires

7 Parsimonius means concentrating on bare essentials.


5

the help of many assumptions with one of the strongest being the ceteris paribus assumption. The ceteris paribus assumption means that the analysis operates under the assumption that “other things are equal or constant or remain unchanged”. In reality of course the other factors that are left out of the analysis do affect the situation being studied. Factors typically held constant, ignored or which are assumed away in the basic models and analysis of conventional economics include as appropriate: the income of individuals, number of members of a family, price of substitutes, the tastes of a consumer, the technical conditions of production, the supply of labor, land, capital and other resources, fiscal and monetary policies of the government, the moral and political views of the people under study etc. The more complex the analysis, the more factors are included in the analysis. However conventional economics often views the results achieved from complex analysis as not being particularly elegant and many analysts prefer to work with a limited rather than complex set of assumptions. In fact it is possible in conventional economics to construct a model which assumes away virtually everything that the analyst wishes to ignore. Whilst the results of this kind of approach are sometimes ridiculous, they can also on occasion provide significant insights since they may reveal the hidden factors at work in a particular situation because the assumptions left out or included end up modeling what is happening in the real world very closely. Finally, microeconomics is essentially a price level analysis with much of its focus on the effect of small variations in prices on individual behaviour. It avoids the problem of long-term shifts in total economic conditions, such as in the levels of real national income. As a result of this, microeconomics is what is described as a partial equilibrium analysis rather than a complete or general equilibrium analysis.

For our purposes the distinction between macro and micro-economics can be established as follows:

Macro-economics Micro-economics Determinants of the total output of the offshore oil and gas industry in Australia Overall unemployment rate in Australia Overall price level in the Australian economy

Determinants of the production of oil and gas by company X in the year 2002 Determinants of hiring rates by company X I the year 2002 Supply and demand for key inputs of company X during the course of the year 2002

Models Another important feature of all schools of economics is the use of models. Models can be defined as abstract representations of reality. Essentially, models are simplifications which at least in principle allows the user to capture the key or crucial elements of complex realities. Economics relies a great deal on models given the highly complex realities it has to deal with. Models also involve the use of assumptions and conventions (accepted ways of presenting information) so that others can understand the models being used and test to see whether they do in fact succeed in the analytical tasks they are charged with. The main purpose of a model in many cases is to facilitate the discarding of: (1) irrelevant information; (2) relevant information which can nevertheless be safely discarded without damaging the attempt


6

to understand a particular problem. The fact that models abstract from reality of course opens up the issue of whether in fact the models of much of economics (especially highly mathematicized economics or econometrics) corresponds in any meaningful way to reality.

Explaining Assumptions, Models and Results

Typically in explaining their models and the results that flow from these models, conventional economics uses three forms of explanation to a greater or lesser degree: an explanation in words; a graph or graphical representation and a mathematical model. In that specialized field of economics called econometrics, the use of mathematical models tends to dominate. As mentioned earlier, a key issue with models in economics is that an analyst can choose any set of assumptions and constraints within which to construct a model. Thus it is important when interpreting an economic model to ask what assumptions underlie the model – what was left out and what was put in; what was held constant or unchanged and what was not, since these issues all affect the validity of the conclusions generated.

MARKETS, MARKET PRICES AND SHADOW PRICES

The Concept of a Market

A market is any place where the sellers of a particular good or service can meet with possible buyers of those goods and service and where there is a potential for a transaction to take place. It does not have to be a physical place. Thus E-bay on the Internet is an actively functioning market although there is no one physical space called E-bay. Central to analysis of any market is the concept of supply, demand and market goods. Other concepts are the market equilibrium concept and the concept of the price mechanism. Prices act as a signal to firms and consumers as to what to offer in the market place. Information – both publicly available and privately held information is also central to the concept of a market and its smooth functioning. Market goods are goods for which there is a traded price and transactions occur between producers and consumers at those prices. Non-market goods are not traded and must be given a shadow price.

The Market Concept and Water Resource Management

Water markets are a mix of priced and unpriced transactions. Fisheries and offshore oil and gas are two sectors – extractive sectors to be precise- where the principal transactions relate to and involve the production of goods and services which have established market prices. At the same time there are people who highly value the


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marine resources and attributes that are impacted upon negatively by fisheries and offshore oil and gas activity. The price they are prepared to pay for these goods and services is high since their utility levels with respect to these goods and services is high. The only problem is the absence of a market and price mechanisms for these goods and services.

In theory given the right framework – or assuming that a market could be established - these stakeholders could (1) pay fishers not to go to sea; (2) pay offshore oil and gas companies not to drill for oil thereby purchasing the utility they desire. One possible way of creating a market between these contrasting sets of users – extractive users and non-extractive users would be to adopt the following legal and policy framework which would simulate a market:

1. Any person, group or company can apply to use an area of the marine zone for any purpose – let’s call this person A

2. Any other person, group or company can apply to pull back all or part of the area applied for within a certain period after the initial application is made – let’s call this person B

3. B becomes the applicant for the area pulled back – they must then satisfy all the requirements that A must satisfy to use the area - but they may use the area for any other purpose including not using the area – leaving it unused

4. B is also allowed to pay A not to use the area in the way that A wishes once they have filed their pull-back application

This approach set out here has not yet been tried anywhere but would certainly reveal who has the highest use preferences for a particular area and whether they are prepared to pay for that particular use. Currently, markets for extractive activity in the marine zone are much more firmly established than markets for non-extractive activities. Another way to reveal the extent of the market for ecologically sound fishing or petroleum production is to label ecologically sound fisheries so that those who value ecologically sound fisheries can pay more – a market premium – for fish products produced in an ecologically sound way. Economic theory suggest that a significant number of producers will then shift towards ecologically sound fisheries if other types of market imperfections and governmental policy failures do not prevent them from doing so.

Market Equilibrium - Supply and Demand

A market is said to be in equilibrium where the quantity supplied is equal to the quantity demanded. Typically demand is measured by a downward curve of the type marked D below. Supply is charted by upward sloping curves of the type S below. Any change in either supply or demand will alter the equilibrium level of price or output. For example, an increase in supply will shift the supply curve to the right which will increase the equilibrium level of output and reduce the price.


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A Demand and Supply Curve

In the chart above, market equilibrium is shown by where Q^ intersects with P^ -this is the equilibrium price where supply and demand are identical – this is also sometimes called the market clearing price.

Perfect Competition and the Concept of Equilibrium

Perfect competition is one of the most important concepts in conventional economics. It is supposed to represent a situation in which all the resources of society are put to their best possible use, producers make profits and the needs of consumers are met. The chart above is based on the concept of perfect competition. The alleged unique attribute of a perfectly competitive industry is that the market price equals the marginal cost of production, as a consequence of the competitive profit maximising behaviour of myriad non-collusive small firms. Individual self-interest and social welfare are reconciled, because the profit-maximising behaviour of individual firms leads to the socially optimum outcome: that the marginal benefit of output to society equals the marginal cost of production.

Although in reality, perfect competition is a myth, it provides a benchmark for measuring the kinds of market structures that an industry sector or economy should have. The more an industry’s structure moves away from perfect competition, the more of a reason there is for governments to intervene. Perfect competition represents a situation of market perfection – any deviation from perfect competition is a situation of market failure. By definition then the entire economy of all countries demonstrate market failure – some forms of market failure are however more tolerable than others – more extreme cases of market failure require intervention by government. This at least is the perspective of conventional economics.


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Equilibrium concept

Closely related to the concept of perfect competition is the concept of equilibrium. When the market is in equilibrium it means that a clearing price has been achieved in which there is no pressure on price to change, and the quantities offered by sellers match those desired by demanders at that price. In a competitive market without externalities or other types of market failure, the equilibrium also implies that all mutually beneficial trades are conducted and that no further trading opportunities are available, and that total surplus (consumer plus producer) is maximized. The objective of good economic policy is to aim for equilibrium so that the welfare of all market participants is maximised and social welfare as a whole is also maximised. In reality the concept of equilibrium is seldom achieved in practice. In any case whenever it is achieved, it does not last very long since some other changes occur which move the market away from equilibrium. The concept is useful however in measuring how much change is required in a particular set of market structures to move that market towards efficiency.

MARKET FAILURE AND MARKET STRUCTURES

Conventional economics has identified four principal types of threats to achievement of perfect market outcomes. They are:

Externalities or spill-over effects Inefficiencies in resource use associated with public goods and common

property resources Incomplete information and information imbalances Non-competitive markets and misuse of market power

Externalities

Externalities occur where the actions of firms and individuals have an effect on people other than themselves. Externalities can be both positive and negative. Positive externalities are benefits and can be defined as the spill-over advantages of production or consumption for which no money is paid by the beneficiary e.g. the sight of a well kept garden. In the case of positive externalities the external effects are benefits flowing to other people. There may be external benefits from both production and consumption. If these are added to the private benefits of the person generating we get the total social benefits. It is however, negative externalities which are the more important concern in public policy analysis with pollution being the principal example of a negative externality. Externalities, market failure and water resource management are discussed in more detail further below.


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Public Goods and Market Failure Defining a public good can best be answered by looking at the principal counterpart to a public good – a private good and more closely defining two concepts which together help define public goods - non-excludability and non-rivalness. To say that something is non-excludable is to say that the benefits or attributes of the good once available to one consumer means that they are available to all people. Nobody can be excluded from benefiting from the good or service. In contrast benefits are excludable if they can be withheld by the owner or provider. Firework displays, pollution control devices, and street lighting are good examples of non-excludable benefits because once they are provided, it is difficult if not impossible to exclude all other people from enjoying their benefits. Goods and services are said to be non-rival when their consumption by one person does not detract from the consumption opportunities available to others. The satisfaction gained from viewing sunsets are by definition non-rival goods. Private goods are typically traded in markets. Buyers and sellers meet through the price mechanism. If they agree on a price, the ownership or use of the good (or service) can be transferred. Thus private goods tend to be excludable. They have clearly identified owners and they tend to be rival. For example, others cannot consume such goods once they are consumed. Public goods have just the opposite qualities. They are non-excludable and non-rival in consumption. An example is a street sign. It will not wear out even if large numbers of people are looking at it; and it would be extremely difficult, costly and highly inefficient to limit its use to only one or a few persons and try to prevent others from looking at it, too. A traffic light or clean air is a further example. This poses immediately the question of who, then, provides public goods. Once they exist, they are there for all to enjoy. So it is often the most rational strategy for private actors to let others go first and seek to enjoy the good without contributing to its production. This is a dilemma – the free-rider problem - that public goods face. Without some sort of collective-action mechanism, they risk being under-provided. Conversely, without collective action, public bads - such as pollution, noise and so on - would be over-provided.

Global Public Goods and National Public Goods Global public goods are “public goods with benefits that are strongly universal in terms of countries, peoples, and generations”. Today most public goods are provided by national governments, such as a legal justice system, national defense


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and social security. There is a however a global dimension to public good. Global public goods are public goods whose benefits reach across borders, generations and population groups. They form part of the broader group of international public goods, which include as another sub-group, regional public goods. To make the notion of a global public good more concrete, consider, for example, the eradication of small pox. Once accomplished, the whole of humanity benefits - people in all parts of the globe, present as well as future generations, rich and poor.. Averting the risk of global climate change would secure inter-generational as well as geographically widespread benefits, although people in various parts of the world might benefit in different ways. Similarly, international regimes such as those for civil aviation, postal services, and telecommunications, or those recognising a document such as a passport, all have significant properties of “global publicness”. The recovery and continuing good health of the global oceans is increasingly being seen as a global public good.

Property Rights and Public Goods Conventional economics posits that market failure associated with public goods problems can be solved by clearly defining property rights to the appropriate economic resource – these need not be individual property rights. Cleaning up a polluted lake, for instance, involves a free-rider problem if no one owns the lake. The benefits of a clean lake are enjoyed by many people, and no one can be charged for these benefits. Once there is an owner, however, that person can charge higher prices to fishermen, boaters, recreational users, and others who benefit from the lake. Conventional economics also argues that contractual arrangements can be used innovatively used to overcome other public goods and externalities problems. For example a shared contract can help manage situation in which the research and development activities of one firm benefit other firms in the same industry, ( a positive externality for the recipients but a negative externality for the generator of the R & D). Firms can manage the externality problem by pooling their resources and agreeing to a joint project. Each firm pays part of the cost, and the contributing firms share the benefits. In this context economists say that the externalities are “internalized.” – the negative externality for the producing firm and the positive externality for the relatively passive firms. Contractual arrangements may however also fail to solve public goods and externalities problems. For example, the costs of bargaining and striking an agreement may be very high. Some parties to the agreement may seek to hold out for a better deal, and the agreement may collapse. In other cases it is simply too costly to contact and deal with all the potential beneficiaries of an agreement. A factory, for instance, might find it impossible to negotiate directly with each affected citizen to decrease pollution.

Incomplete and Asymmetric Information


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Well-functioning, competitive market structures are based on well informed or fully informed buyers and sellers. When some, many or all market participants do not have the information they need to make a fully informed, optimal choice, market failure and the misallocation of resources occurs. Information may also be “asymmetric” in the sense that some market participants know more than others. Pollution control is a good example of the asymmetric information problem. In many pollution control situations, the polluting firm has much more relevant information than the regulator. The task of the regulator is to design a legal and policy framework which will allow the regulator to capture the relevant private information from the polluter, thus allowing the regulator to establish a more effective and targeted regulatory scheme. There is more discussion further below in this Chapter ? of how regulators attempt to capture information in the discussion on abatement costs and abatement cost curves.

Market Structure and Market Power

The concept of market structure and market power addresses a range of issues including (1) number of and relationships between buyers and sellers in a market,; (2) whether market actors make identical or differentiated products; (3) whether firms can readily enter or exit the market. The model against which market structure, behaviour and power are tested is that of the perfectly competitive market with the assumption being that markets served by a monopolist will function very differently from a market with many competing firms. Economists address market structure and market power in order to determine how markets will function and whether there will be an efficient outcome or market failure and have defined the following paradigm or benchmark categories to help with this analysis.

Perfectly Competitive Markets

In perfectly competitive markets, there are many sellers with identical products. There are no barriers to entry or exit. To be truly perfectly competitive, there should be no transactions costs and all market participants should have complete information for making optimal choices. In perfect competition, the supply curve for the individual firm is its marginal cost curve (above the average variable cost curve), and the market supply curve is the sum of those of individual firms. In perfect competition, price is driven to the marginal cost of production as the market finds an equilibrium along the market supply curve. One important implication of marginal cost pricing is the efficient outcome that results: a competitive market in equilibrium achieves allocative efficiency and thus maximizes total surplus.

Monopoly


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Monopoly is at the other end of the spectrum and implies a single seller in the market, protected by barriers to entry. These barriers can stem from different sources – for example a government authority to exclude others, a patent or some other legal impediment to entry. Monopoly power may also accrue to a firm because it controls a critical input in the production process. Monopoly power may also accrue due to economies of scale – the so-called “natural monopoly,” situation. In a situation of natural monopoly it is economically inefficient to have more than one firm since each firm will be producing at less than the efficient scale. Natural monopolies are typically either owned by the government, or are owned privately but regulated by the government. Public utilities (electricity companies, water companies are good examples). The unregulated monopolist has market power - the ability to mark price up above marginal cost. While this represents a way to create profits to the firm, it also represents a source of welfare loss, to society as a whole since the price paid by consumers is above marginal cost and there are no competitors to cause changes in the market. Natural monopolies used to be common in Australia and New Zealand but have now been significantly broken up by privatization and corporatisation.

Oligopoly

An oligopoly is an industry with only a few firms with the incumbent firms. Oligopoly is a very common feature of the Australian and New Zealand economies with many industries characterized by (1) barriers to entry keeping competitors out and enabling incumbent firms to earn economic profits; (2) strategic interaction among firms within the industry. The barriers to entry may include very large economies of scale that make it economically impossible to sustain a number of competitors each producing at or near minimum efficient scale. Strategic interaction suggests that each of the “players” on the seller side of the market know who their rivals are, and act anticipating actions and reactions within the group.

Monopolistic competition

Monopolistic competition combines elements of both perfect competition and monopoly. Specifically, monopolistic competition is similar to perfect competition in that there are many buyers and sellers, and free entry and exit. The key difference, however, is that firms in monopolistic competition produce differentiated goods, giving each producer a small degree of power over price, or market power.

Products can be differentiated in many ways. For example producers of processed fish sell similar but somewhat differentiated products Providers of petroleum and other services to recreational users of the marine zone sell fairly homogeneous physical products but differentiate themselves on the basis of location and service as well as the


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convenience of their products. Indeed throughout the economy, most retail products, are differentiated, and most retail businesses would be best described as monopolistically competitive (compare Woolworths-Safeway with Coles-Myer) Although monopolistic competition results in some welfare loss to society (since price is set above marginal cost) it also provides variety and choice – tolerating monopolistic competition may be viewed as a second best outcome by conventional economists seeking the “holy grail” of perfect competition – for most consumers it is a satisfactory situation since it allows for diversity of products and relative efficiency in production.

Market Structures, Market Power and Water Resource Management

In the real world, there are many variations on the market structures described above. Water resource managers may well find that their decision making is improved by periodic reviews and provision of information on market structures and arrangements which affect their activity. This type of information will in fact become more and more important if management is based more on the use of economic instruments than direct policy instruments.

APPLYING CONVENTIONAL ECONOMIC ANALYSIS

Opportunity Cost

The concept of opportunity cost is central to conventional economics. With respect to a particular activity, the opportunity cost of that activity is defined as that which is given up to undertake that activity. Given a finite set of resources and the option of doing X or Y, the true cost of doing Y is regarded as not doing X – one of the questions that conventional economics then tries to answer is whether the choice to do Y rather than X represents an efficient use of resources, with the concept of efficiency having different meanings. Conventional economics believes that using the opportunity cost concept allows more information to be captured about a situation than is revealed by merely relying market prices to assess a situation.

The cost of an item may be expressed in financial terms - e.g. “the total financial cost over a year of training to become an Olympic swimmer is a $20,000 fee paid to a world-class trainer”. However, the cost of becoming an excellent Olympic swimmer is approached by conventional economics in terms not only of the financial cost but more fundamentally by assessing what is given up or foregone to become an Olympic swimmer. To express the real economic cost of X (becoming an Olympic swimmer) conventional economics considers the next best alternative to the object or activity, e.g., the next best alternative to spending 20 hours per week practising various swimming drills may be to spend 20 hours per week watching television or going to


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the beach. Thus the opportunity cost of 20 hours swimming practice is the benefit gained from 20 hours watching television. For a person determined to become an Olympic swimmer, the full economic cost would be significantly more than the $20,000 fee paid to the world class trainer. It should be obvious that opportunity costs for different people will not be the same. The precise definition of opportunity cost is: the cost of any activity measured in terms of the benefit from the best alternative forgone – again a highly subjective measure.

Opportunity Cost – A Classic Diagram

The diagram above is one of the most widely used explanatory diagrams in conventional economics. Reading down the curve to the right shows that (assuming that only 30 units of production are possible) the distribution can be 30 units of guns and 0 butter; 20 units of guns and 10 units of butter; 10 units of guns and 20 units of butter or 30 units of butter and 0 units of guns. The opportunity cost of guns is measured in butter and vice-versa. Guns can also be substituted for butter – an allocation of scarce resources between different uses.

Opportunity Cost and Water Resources Management

The opportunity cost theme is constantly present in water resource management . Two examples will illustrate the point. Suppose, for example, that a farmer pays $10 for aunit of water and uses it to produce $10 worth of tomatoes. If that water could have been used for a different purpose valued at $100 the opportunity cost of using it for tomatoes is $100 even though the out-of-pocket cost paid by the farmer is $10. Opportunity cost in thiis sense ha not been addressed fully in alloating the water to the farmer. Opportunity cost may also have a spatial aspect where allocation of rights occurs with respect to resource uses that are not compatible. A decision to use an area to build a dam is a decision that excludes many other uses of that area. If it is a multi-purpose dam then many more purposes may be met after construction and opportunities foregone may be less. A single purpose dam closes off even more opportunities. Conventional economics would be interested in assessing which of the uses (proposed, current, foregone) would provide the greater benefits from the same


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area so that the decision-maker knows what the full opportunity costs are. Another application of the opportunity cost principle would be situations where a highly subsidized form of agriculture would not exist without the subsidy – for example a low cost for the water used in irrigating the particular crop. This for example is the situation with certain types of agriculture like rice farming in parts of Australia. The opportunity cost of supplying water to the rice industry at a low price relative to other more valuable uses would be viewed as a situation of economic inefficiency by neo-classical economics.

Utility

The word utility has a variety of meanings all of which embody the concept of practical usefulness or satisfying a range of needs and wants. Thus we refer to a company such as an electricity or water company as a utility because it provides a public service. In computer science for instance the term utility is reserved for a programme which provides general support for the processes of a computer.

Economics uses the term utility in a technical sense as referring to the satisfaction gained by an economic actor from consuming or producing a good or service or with respect to a particular situation. Further attempts to define the concept refer to time utility, (useful because of the time) place utility, possession utility, form utility and so on. Total utility refers to the amount of satisfaction obtained by consuming units of a good. Marginal utility is the satisfaction gained from the consumption of one extra unit of a good. Utility drops the more of a good you consume – the law of diminishing marginal utility.

Economics uses money and prices (including shadow prices) to measure utility because utility interpreted as satisfaction is a subjective or personal experience. Because it is difficult to measure this subjective experience, economics seeks to measure utility by (1) observing choices; (2) measuring those choices in the same unit – money; (3) comparing the choices made. Economics does this because it assumes that preferences are revealed though choices. If you choose A over B, then by definition, the utility of A is greater than the utility of B. The concept of opportunity cost is closely related to utility as choice since the rational actor (somebody who behaves consistently) will be expected to choose the option which most maximizes their utility.

Conventional economics posits that economic actors will always maximize utility, all things being equal. This principle or axiom is a central feature of economics - the so-called utility maximizing assumption. Conventional economics in trying to measure utility in monetary terms relies in the first instance on observing what people do with respect to the money price of goods and services. Where it is not possible to assess preferences in this way, economics asks people how much they are prepared to pay for a good, service or situation or how much compensation they are prepared to accept for the loss of a good service or situation which provides them with utility – how much they are prepared to accept to tolerate a disutility. The assumption is that the more the situation is valued the more people will be “willing to pay” for that situation,


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good or service, all other things being equal, since rational people (people who behave in a consistent way) will seek to maximize their satisfaction and will prefer that which provides the greatest utility.. Money and responses to money are viewed as probably the best way to measure utility. This is the basic principle behind the valuation methodologies studied in Chapter ? ?.

The Concept of Utility in Water Resources Management

The concept of utility has a very fertile application in water resource management especially through the widespread use of the “willing to pay” concept as a way of measuring how highly valued water resources are.

Demand-Supply Analysis in Conventional Economics

A key tool for understanding how a particular market works or for establishing whether a market is even possible is to use demand and supply analysis. Demand and supply analysis can be empirical or can be completely theoretical. In the empirical approach, actual data on prices, costs and other factors is collected and demand and supply curves are constructed to reveal information about a market place. In its more theoretical forms graphs and equations are used to model market situations.

Whether undertaken in an empirical or theoretical way, the demand and supply analysis approach is a highly artificial analysis which seeks to model a range of basic and arguably essential relationships. To be able to do this, a large number of factors are ignored or held to be unchanged (held constant) in simple models. Factors held constant when modelling supply include costs and the objectives of the firm. With demand income and tastes are held constant. There are more complicated models which can take more factors into account. Key concepts in demand-supply analysis are those of demand; effective demand; supply; and effective supply.

Demand Conventional economics operates on the presumption that at any one price, there is some quantity of a product which an individual consumer is willing and able to purchase over a given period of time. If the price changes, the quantity purchased will change too. Economists call the relationship between the price of a commodity and the quantity purchased during some specified period of time (month, day, year, decade) the demand for that commodity. When a consumer is willing and able to purchase some quantity of a commodity at the existing market price, he is said to have an effective demand for that good. This means that the buyer has (1) desire to make a purchase; (2) the willingness to pay the price; (3) the ability to pay the price.

The Demand Curve


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Conventional economics uses the concept of the demand curve to model the relationship between the price of a good/service and the quantity demanded of the good/service over a given period of time. In terms of real life application, demand curves can be constructed for goods and services consumed by a range of methods including: (1) collecting current data on market prices; (2) conducting surveys in which members of the community are asked for their willingness to pay with respect to non-marketed goods and services; (3) converting historical or statistical data on prices. There are technical procedures for constructing ‘real-life” demand curves which need not concern us here. It is enough that the concept of the demand curve is understood.

There are some basic procedures for understanding or interpreting demand curves. Firstly, in general, an increase in the overall demand for a product will shift the demand curve right and a decrease in demand will shift the curve to the left. A range of factors can cause a change in demand.

Insert water aspects of demand here


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The chart below shows these two attributes of demand curves. Another aspect of the demand curve as a representation of reality is that from the point of view of the demand curve for an individual or household, the quantities demanded increase as price decreases – a downward movement along the curve:

Demand Curves

A Demand and Supply Curve

When it is necessary to build up a large scale picture of demand, the resulting demand curve is called an aggregate demand curve. For instance, using the demand for water in different parts of a city ports it would be possible to construct an aggregate demand curve for water in that particular city. Note that whilst the curve of interest to micro-economics refers to quantity on the X axis, the one of interest to macro-economics typically refers to output.


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An Aggregate Demand Curve

Finally, it should be noted that demand curves slope downwards in the same way as benefit curves. Benefit curves are discussed later on in the Chapter ?.

The Concept of Demand in Water Resource Management Demand for both priced and unpriced goods and services are a key concern of water resource managers. A particular concern is estimating long-term demand for particular goods and services. For instance one of the new trends in demand for near shore stocks of fish in many countries is from recreational fisheries rather than commercial fisheries. With larger populations living near the coast and more and more recreational sailing and angling, recreational fishers often take up more of the total allowable catch of certain kinds of fish than the commercial fleet. In situations where the commercial fleet is subsidised or has marginal returns sound economic arguments can be made that commercial fishers should be phased out from particular areas, provided of course that recreational fishers are not subisidised. Typically it is a sound economic analysis based on total economic value which would reveal the most economically appropriate user of the resources.


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Supply

In conventional economics supply is the quantity of a commodity available for a particular price. This is the meaning that is used in modelling. It is often portrayed as a smooth curve or continuous function. This is a generalization because in the real world, many types of supply situations are not particularly smooth and shows significant fluctuations. Beyond quantity and price, supply has at least three other aspects: (1) the commodity, i.e. what is being supplied – in our context it would often be ecological goods and service; (2) the place or spatial location; (3) timing, or temporal location, and duration – in our context, a short term period or longer term period. Supply is the complement to demand in determining another key concept in conventional economics – the economic equilibrium. In the real world there are usually time lags between what are considered demand and supply so that equilibrium is usually not achieved even though equilibrium conditions may appear to have been achieved.

Supply curve

Supply curves show the relationship between the price of a good and the quantity of the good supplied by producers (firms). In general, supply curves slope upward since increases in price provide an incentive for firms to seek to supply more of a good or service. A supply curve can be applied to analyse the individual firm, groups of firms, a market or markets. A decrease in supply shifts the demand curve to the left and an increase shifts it to the right.

Basic supply curve Multiple supply curves


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Supply in Water Resource Management

Supply of goods and services in marine resource management has two aspects. Supply by nature as well as supply through human agency. Supply by nature can be influenced by marine managers but cannot be controlled in the same way that demand can. Supply from nature as we have established is typically un-priced. However in some circumstances as for example with mariculture or aquaculture supply has more elements of cultivation and human agency.


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The Concepts of Consumer Surplus and Producer Surplus

The concepts of consumer and producer surplus are important to conventional economics since they allow the analyst to measure welfare in the market. The notion of consumer surplus tries to capture the overall (hidden) value implicit in a particular situation. It is measured as the difference between the consumer's valuation for a good (willingness to pay as given along the demand curve), and the price actually paid. Similarly, producer surplus measures how well off sellers are due to a market's existence. Specifically, producer surplus is revenue earned over and above the cost of production.

Demand and Supply Curves, Consumer Surplus and Willingness to Pay

Consumer surplus is the benefit consumers gain from being willing to pay more than the equilibrium market price. This occurs when people are able to buy a good for less than they would be willing to pay. They enjoy more utility than they had to pay for. Consumer surplus is shown by the area between the equilibrium price and the demand curve. A rise in price will reduce consumer surplus and increase producer surplus. The concept has been adapted to measure TEV and shows willingness to pay (WTP)

Consumer Surplus


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Producer surplus

Producer surplus is the benefit gained by firms from being able to sell a good at a price higher than the marginal cost of producing it. This is the difference between what the producer would be willing to sell for and what they actually receive. The producer surplus is shown by the area between the equilibrium price and the marginal cost (supply) curve or the gap between the supply curve and the equilibrium price. Firms will be aiming to maximise the level of producer surplus. The concept has been adapted for use in the TEV context as a way for measuring wllingness to accept or WTA

Producer Surplus


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Market Failure and Water Resource Management

Conventional economics considers that the price mechanism is essential to social well-being since in theory prices will tend to reflect the value that society places on particular activities. In a perfectly competitive market prices will go up in response to scarcity. Suppliers will produce more of a good/service to attempt to capture the returns from higher prices. In response, consumers will buy less of a good and eventually a new price level is established. In addition in a fully competitive market, all costs are reflected in the price of goods and services – external impacts on others are reflected in prices of goods and services. Where goods and services are not fully priced, conventional economics holds that the true value of these goods to society is not tested since there are no accurate price signals for consumers and producers to respond to – the market has failed.

Non-priced goods and services are a good example of the concept of market failure, with the possible result that too much or too little of goods is consumed because they lack a means for their value to be translated into a market price. Applying the price mechanism concept to water resources, the argument goes that if too much water is being consumed this is a sign that the market is failing to signal the growing scarcity of water. There is a shortage of these resources but this is not being signalled. From the supply point of view, society is not investing in the water sector and its multipes uses, including the most highly valued uses because there are no price signals to indicate the value of these investments.

The neo-classical view is that the absence of markets or the failure of markets to fully show the social costs and benefits of taking care of the environment lies at the root of the current crisis. Most goods and services of an ecological character are taken from nature at little or no cost, including the opportunity cost of using up these resources. In some cases, resources are unpriced because they are public goods and charging for their use is difficult or impossible because public goods by definition are goods that are available to everyone and which cannot be denied to anyone. As a consequence it is impossible to charge for their use. It is therefore unprofitable for a private party to invest in its protection or enhancement as it is impossible to recover the costs of protection or enhancement from users (free riders). There is also no incentive for a user to abstain from consumption as another user would replace him/her. Public goods in this sense can be regarded as non-exclusive.

Another aspect of market failure in the context of ecological goods and services is the pervasive presence of ignorance and uncertainty. One of the key functions of markets is to signal emerging scarcities, such as shortages of environmental resources. However since ecological resources are not well understood and many ecological processes take place far away from human gaze or cannot be properly interpreted environmental change is not translated into prices smoothly or effectively. Thus a situation of abundance can easily hide an impending catastrophic decline. This


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happens for example when the decline is caused by a small or marginal change in the ecological situation but the change which causes the problem is so small that it is impossible to either predict or evaluate when it has occurred.

Conventional economics also considers that absence of clear property rights causes or accelerates market failure and environmental degradation. Property rights does not necessarily mean full-scale exclusive private ownership. It merely means clear rules which can be upheld as to who makes decisions to invest in and nurture resources with clear, predictable and enforceable rules to ensure that those who invest in and are closest to the resource receive enough returns (monetary, psychological, cultural and other) to justify their continuing to invest in and protect the resource. Conventional economics holds that so long as property rights in their general sense are clear, exclusive, secure, enforceable and transferable then their owners have strong incentives to safeguard the relevant resources. If some or all of these aspects are absent then the incentive to invest in resource management is diminished.

Market failure may also occur because the planning horizon of owners and users of the resources is short-term (5-7 years) when the resource needs to be husbanded over a longer period (say 80-100 years). In the absence of a person or institution being prepared to take the longer term approach, resources can be depleted, destroyed or reduced below critical threshold levels. Thus projects or investments which offer returns in the short term are likely to be preferred to those which offer benefits over the long term. Part of the function of conventional economic analysis is to reveal short or long-term aspects so choice can be made between a short term or long term approach.

Conventional economics also points out that government action can be a source of environmental problems especially through programmes which provide low prices or subsidies which in turn encourage over-use of resources. This is known as policy failure. Good examples of policy failures are subsidies for the electricity which is used to pump up groundwater, low prices for use of water thereby encouraging salinity, subsidies for the use of pesticides and herbicides and subsidised prices for the growing of crops which consume a lot of water. All such policies have significant impacts on water resources.

Finally, from the ecological point of view, markets fail where projects, developments or ongoing activities lead to irreversible situations. Actions which destroy a resource or change its use completely may appear justifiable unless the options that are foregone by taking these actions are seriously considered. A good example is the construction of a dam which floods an attractive landscape or covers an area of significant bio-diversity. The options of preserving the particular habitat are then lost forever. Increasingly attention is being paid to assessing options that are given up when irreversible actions are taken so that the decision when taken fully recognises the options that are being given up. Typically many people would expect some substitute to be provided for what is being given up, with the substitute at least equal in value to what is being given up.


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THE CONCEPT OF EXTERNALITIES – THE CASE OF

POLLUTION AND ITS CONTROL

In terms of its models the most commonly used concepts of conventional economics to explain and analyse environmental problems are those of marginal private costs and social costs; marginal private benefits and social benefits; externalities, private information and the revelation of private information on abatement costs.

The concept of externality is central to the analysis with analysts historically paying more analytical attention to negative externalities than positive externalities. Negative externalities can be viewed from the point of view of costs as well as benefits

Negative Externalities – a Costs Perspective

From this perspective, there are two types of costs which taken together generate an externality:

Private Cost Social Cost

The disadvantages of an economic activity to an individual.

The total costs of an economic activity on both the individual and the spillover effects on third parties. Social costs are the total of private costs and any external costs.

With pollution, although this is a cost to the producer, the cost is not borne by the producer fully. The only private costs borne by the producer are non-pollution costs whilst they capture the benefits from the activity in question. Market failure is said to have occurred since in practice the price of the goods or services do not reflect the externalities associated with producing them. The objective in conventional economics is to privatise the negative externality and add it to the structure of private cost for the polluting party – without measures to internalise the externality it remains a social cost. As the diagram below demonstrates the task is to shift the marginal private curve to the left so that it matches the marginal social cost. To achieve this objective of matching private costs and social costs fully and effectively the regulator must (1) be able to apply sanctions and/or incentives; (2) must know all relevant private information held by the party, including for example the real economic costs for the polluter of addressing the pollution problem – the abatement costs; (3) be able to design a progamme to shift the costs without impairing the economic productivity of the firm.


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Marginal Social Costs and Marginal Private Costs

As the diagram below shows, the optimum equilibrium for society would be where the marginal social cost is equal to the marginal social benefit (Q!). However, a free market left to itself will produce where the marginal private cost is equal to the marginal private benefit (Q^). If there are negative externalities in production, a private market will therefore tend to over-produce the items in question – in this case, pollution.

Welfare Loss and Negative Externalities

Another way of looking at the negative externality is to view it as a situation of welfare loss. Welfare loss occurs in a situation where marginal social benefit is not equal to marginal social cost and society does not achieve maximum utility. Negative externalities in production cause welfare loss and are an instance of market failure. The extent of welfare loss is shown by the triangle marked negative externality in production. It also represents the damage caused by the externality.

Negative Externalities – A Benefits Perspective


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From this angle, the basic proposition is that firms which produce pollutants without bearing the cost of cleaning up these pollutants gain a private benefit from not cleaning up these pollutants. The private benefit curve (see below) shows how much private benefits accrues from pollution – it can be viewed as a private benefit gained by consuming the goods and services offered by nature, in this case the sink function provided by nature or the ability to absorb and assimilate pollutants, whilst imposing costs on others (including nature as per the most expansive approach of ecological economics). The task is to shift the cost curve to the left so that the amount of private benefit from consuming ecological goods and services decreases until the private cost curve (MPC) matches the social cost curve (MSC). The triangle between MPC and MSC represents the benefit gained privately from consuming ecological goods and services without paying for them – it also shows the welfare loss and the extent of damage to society.

To generate these private benefits the firm incurs costs which can be shown on the first cost curve to the right, the marginal private cost curve(MPC). On the other hand the true cost to society of production including the externality is MSC, the curve on the left.

Marginal Social Costs and Marginal Private Costs

Regulators seek to increase costs and shift movement upwards along the MPB curve until MSC and MPC are matched thereby removing the triangle tagged negative externality in production.


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Pollution Control

A range of measures including a tax, permits, changes in technology can all be applied to ensure that the negative externality in production shown in the shaded area above is removed.

Environmental tax

To use a tax in this way to force a match between private costs and social costs the regulator must (1) know all relevant private information held by the party, including for example the real economic costs for the polluter of addressing the pollution problem; (2) be able to design a tax which does not impair the economic productivity of the firm or the sector. With many environmental taxes the information requirements are extremely high which is why they are not in widespread use. Economic policy would regard its prescriptions as being successful in situations where the area of welfare loss is removed but production is also increased – making everybody better off without making anybody worse off.

Abatement Cost Curves and Revelation of Private Information


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Regulators need to know how much it will actually cost the firm to supply the requisite amount of abatement in an economically efficient way. For that reason, regulators need to know the abatement cost profile for the firm - abatement cost curves provide this information since they try to plot the economic costs: for any given level of reduction or abatement of emissions. Abatement cost curves are of two types – the total abatement cost curve and the marginal abatement cost curve. For our purposes as an introductory course it is enough that the two types of curves are introduced without entering into extra technical detail. In practical terms, abatement cost curves can be produced by (1) asking firms what their costs of abatement might be for different levels of reduction; (2) using process engineering analysis to draw up such a curve; (3) using econometric/mathematical estimates of a cost curve based on observations of production technology and costs. A typical total abatement cost curve would look like this with a sharp upward slope after an initial gradual rise.

Total Abatement Cost Curve

The fairly steep rise in the slope is because total costs rise fairly sharply as the level of abatement rises. This reflects the fact that it is usually fairly easy to make a small reduction in emissions - e.g. turn down thermostats, perhaps switch from burning oil to burning gas; but as it becomes necessary to make deeper cuts in emissions it becomes increasingly expensive to do so requiring a range of measures: (1) buying new equipment; (2) installing treatment plants; (3)

redesigning products; (4) establishing environmental management systems etc.

Total abatement costs

Abatement levels t

Regulators are also interested in the marginal abatement cost curve as this provides information on how much it will cost the firm to reduce pollution to bring it within the required control range. It also provides information on when the costs of imposing pollution control on the firm become economically impossible for the firm to absorb.


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Marginal Abatement Cost

Abatement levels

In the ideal case a firm will be jointly supplying society with (1) a high level of abatement control; (2) normal commercial goods and services in a situation where:

All the possible technological devices to control pollution caused by its goods and services

+ All possible human managerial systems (eg. Environmental Management Systems and Quality

Management Systems) to control firm specific pollution are properly integrated into the production processes of the firm.

In this ideal situation the firm’s day to day production of goods/services (which entails what for the firm will now be normal or fully internalised costs) will simultaneously be supplying pollution abatement to society together with the targeted commercial goods/services. That is why at least in principle the cost curve for the firm also shows how much abatement the firm is supplying.


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MONETARY VALUATION OF ECOLOGICAL GOODS AND

SERVICES IN CONVENTIONAL ECONOMICS8

Instream uses, such as recreation, hydropower, navigation, waste transport, fish and wildlife maintenance and preservation of river ecosystems, compete for water use with uses requiring offstream diversions. In many cases, the value of instream flow may be higher than the agricultural value of river water. With river flows central to fishing, boating, ecosystem stability or habitat provision, conflicts exist between those looking to preserve rivers and river flows for environmental and recreational benefits and those looking to use rivers for extractive purposes. Establishing the economic value attached to these competing uses is an important component of working to solve these conflicts as it provides decision makers with important information about what is being gained or lost when choices between competing options are made.9

The Concept of Value in Conventional Economics Conventional economics works with a theory and concept of monetary value. Thus when conventional economics refers to valuation it is referring to assigning monetary value to component elements or the totality of a particular situation and making choices based on that monetary information following particular protocols and

8This section of the Chapter ? brings together insights from: Turner, R. K., D. Pearce and I. Bateman (1993) Environmental Economics. An Elementary Introduction. Baltimore, Maryland, John Hopkins University Press; Daly, H. E. and Cobb, J. B. (1989) For the Common Good: Redirecting the Economy Toward Community, the Environment and a Sustainable Future. Beacon Press, Boston, MA; Constanza, R. and J. Cumberland and H. Daly and R. Goodland and R. Norgaard (1997) An Introduction to Ecological Economics. St. Lucie Press, Boca Raton, FL; C. H. Green “The economic issues raised by valuing environmental goods” Chapter ? 3 in A. Coker and C Richards (ed) Valuing the Environment: Economic Approaches to Environmental Evaluation (1990)

9 Hatch, L. U. and T. R. Hanson. 2001. "Change and conflict in land and water use: Resource valuation in conflict resolution among competing users." Journal of Agricultural and Applied Economics 33(2): 297-306; Duffield, J. W., T. C. Brown and S. D. Allen. 1994. "Economic value of instream flow in Montana's Big Hole and Bitterroot Rivers." USDA Forest Service Research Paper RM-317; Sanders, L. D., R. G. Walsh and J. B. Loomis. 1990. "Toward empirical estimation of the total value of protecting rivers." Water Resources Research 26(7): 1345-1357; Loomis, J. B. 1987. "The economic value of instream flow: methodology and benefit." Journal of Environmental Management 24: 169-179; Narayanan, R. 1986. "Evaluation of recreation benefits of instream flows." Journal of Leisure Research 18(2): 116-128.


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assumptions. If there are market prices, these are used to provide a monetary value of the situation or scenario with appropriate adjustments, since market prices can be distorted (for example by subsidies, hidden taxation elements etc.). If there are no market prices, shadow or surrogate prices are derived using the range of monetisation methods described in Chapter ? 6.

Conventional economics also has a resolutely anthropocentric perspective on the concept of value. The focus as C. H. Green10 points out is on the subjective, the relative and the sacrificial (identifying what can, is, or should be sacrificed when choices have to be made). The reference point is always human beings, principally the individual and his or her preferences. It is assumed that preferences will be arrived at by a coherent process (economics is not interested in how preferences are arrived at but assumes that monetary considerations will generally be paramount in shaping those preferences) and that people will be consistent in (1) using money to express their preferences; (2) responding to money incentives.

Economics does not expect that humans will hold an absolute concept of what is of value to them. All that economics expects is that people will (1) consistently choose that which they value most (because this in the view of economics is rational behaviour); (2) be prepared to pay more money for that which is valued highly as opposed to that which is valued less highly (again because this is rational behaviour) It is important that these constituent elements or better still assumptions of conventional economics are properly understood. Students will then have less difficulty in understanding the advantages and limitations of the concepts and methodologies of conventional economics as explained in this Unit.

Before entering into further explanation, it is important to note also that there is much criticism made of conventional economics in this regard since it seems strange that the discipline ignores the more complex and subtle understandings of the concept of value and valuation to be found in for example, political science, psychology or philosophy. This indeed is one of the principal criticisms made of conventional economics by ecological economics – that it remains closed to many of the subtle insights on ecological issues generated by other disciplines, preferring to focus principally on the role and place of monetary calculations, monetary incentives and price signals. Insights from other disciplines where taken into account are not allowed to challenge the fundamental paradigms or axioms of the discipline.

The response of conventional economics is to insist that despite the diversity of perspectives available on notions of value and valuation it is legitimate for economists to concentrate principally or exclusively on what is of value to humans (an anthropocentric viewpoint ) and within that framework identify, investigate and measure that which is valued or has value, striving as much as possible to undertake

10 C. H. Green “The economic issues raised by valuing environmental goods” Chapter ? 3 in A. Coker and C Richards (ed) Valuing the Environment: Economic Approaches to Environmental Evaluation (1990) explains this very well.


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the key parts of this assessment process in monetary terms, since this is in fact what humans do.

This does not mean that conventional economics believes that monetary measures are the only important consideration in decision-making on environmental issues. Rather, the focus on monetary valuation reflects the view of conventional economics that money and units of money provide the most uniform way of being able to establish preferences and also compare the choices that people make. Conventional economics argues that the choices that are made with respect to how money is spent more or less reflects people’s preferences. Thus assessing what people would be prepared to pay with respect to ecological goods and services or what they would be prepared to accept as compensation with respect to losses of ecological goods and services provides a good indicator of the value of these goods and services to the individuals or groups concerned. Money as a common measuring rod (numeraire to use the technical term) also allows a range of different assets and matters to be measured in one common unit. Benefits and costs can thus be properly assessed in a common unit, a vital methodological issue if evaluations of costs and benefits are to be scientifically valid.

In philosophical terms, conventional economics proceeds on the basis that there is a clear distinction between object and subject in its approach to establishing what is of value. Thus there is on the one hand the object subject to valuation – say X and the subject – the valuer – A. A makes a subjective assessment of the value of X. This is typically a statement by A of preference of X over another state of affairs. Looking at how much A is willing to pay (WTP) for X (a situation, scenario, object etc.) provides information about A’s preference and the value of X to A. This approach prioritizes human preferences and also those of individuals. It is also obvious that B and C may value X differently from A. A might thus return a monetary value of 1 million dollars, B –$700 and C $0. To arrive at an aggregate assessment, the monetary preferences of individuals are aggregated. It is in this sense that Green says that conventional economics has a subjective approach to value and valuation and is also interested principally in the sacrifices that people make on the basis of what they value.

Economists use the monetary values they calculate (whether individual or aggregate WTPs) and the comparisons generated (A prefers X over M because they will pay $1 million dollars for X but only $50 for M) as a way of supporting decision-making processes on the environment. Typically if a low monetary value is put on preserving an ecological good or service then conventional economics would argue that the resource may not be as worth protecting as a resource which receives a higher monetary valuation. It is again in this sense that Green11. refers to conventional economics as interested principally in the sacrifices that people make on the basis of what they value.

11 C. H. Green “The economic issues raised by valuing environmental goods” Chapter ? 3 in A. Coker and C Richards (ed) Valuing the Environment: Economic Approaches to Environmental Evaluation (1990), 32.


The Principal Concepts for Measuring Value in Conventional Economics Three concepts are central to monetary valuation under conventional economics: the concept of total economic value; the concept of consumer surplus and the concept of producer surplus. The concept of total economic value (TEV) draws significantly from the language of ecology, ecological economics and the environmental movement and is based on observation of what people actually do, think and feel with respect to the environment. TEV has two aspects to it: (1) the conceptual identification of what comprises TEV – this has more or less been done by prominent environmental economists and ecological economists though there are still some areas of residual disagreement; (2) the practical measurement in each specific situation of the monetary value of all or some of the components of TEV as found in that specific situation. It is in the second part of the process that the concept of consumer surplus (WTP) or producer surplus (WTA) becomes important.

Total Economic Value – Concept and Constituent Elements12 There is general agreement as to what constitutes the components of TEV in broad terms, although there is no clear consensus on what constitutes option value and existence value. Drawing from various authoritative sources, this Unit takes the position that TEV consists of the following elements:

Use value Option Value Existence Value Ecosystem function value

Total Economic Value

12 See generally Turner, R. K., D. Pearce and I. Bateman (1993) Environmental Economics. An Elementary Introduction. Baltimore, Maryland, John Hopkins University Press; Daly, H. E. and Cobb, J. B. (1989) For the Common Good: Redirecting the Economy Toward Community, the Environment and a Sustainable Future. Beacon Press, Boston, MA; Constanza, R. and J. Cumberland and H. Daly and R. Goodland and R. Norgaard (1997) An Introduction to Ecological Economics. St. Lucie Press, Boca Raton, FL; C. H. Green “The economic issues raised by valuing environmental goods” Chapter ? 3 in A. Coker and C Richards (ed) Valuing the Environment: Economic Approaches to Environmental Evaluation (1990).

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Some economists express TEV in equation form as follows:

TEV = Actual value + option value + existence value + ecosystem value

whilst others would prefer

TEV = Actual value + option value + existence value The discussion below explains the different sub-components in more detail and explains briefly whether monetary measurement of the type of value is possible, and if so, through which of the methodologies discussed in Chapter ? ?

Use Value Use value refers to the utility both direct and indirect of ecological goods and services. It implies that resources are actually used in some way to support human activity and needs. An example of direct use is commercial fisheries production or mining minerals at sea – utilising the ecosystem as a source of goods. Indirect use is exemplified by the use of the offshore waters to absorb land-based pollutants and render them relatively harmless– using the ecosystem as a sink based on its assimilative and transformative capacities.

Measuring use value in monetary terms Willingness to pay for use value whether direct or indirect can be measured through market analysis based on properly adjusted market prices. It can also be measured by using any of the monetisation methodologies in Chapter ? ?, namely the travel cost method, hedonic pricing, contingent valuation or any of the replacement or preventive expenditure methods.


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Option Value Option value is a concept which seeks to capture the fact that society and individuals observably value the environment as a potential benefit separate from any direct or indirect use of it. Thus when a choice is made to preserve a particular area, habitat or region fully or partially, part of the reason it is being preserved is so that society will have the option to be able to use it at a later date – arguably a form of insurance poli cy. Antarctica is a good example of an area which is partly preserved for option value reasons but also for existence value reasons. The distinction between option value and existence value is often difficult to determine as the Antarctica example shows. Bio-diversity (now that we understand its scientific importance) has a high option value as we do not know what component of nature may have a future use value. In the language of supply and demand, we do not know what specific demand we will have for the goods and services flowing from bio-diversity as a resource – we do know in general however, that bio-diversity does provide useful goods and services. We therefore want to preserve a bio-diversity dimension to the environment to hedge against the possibility that we may need the supply of goods and services from nature’s bio-diversity at some point in the future – again a form of insurance policy and an application of the precautionary principle.

Measurement of option value in monetary terms Willingness to pay for option value can be measured in monetary terms using contingent valuation. None of the methods that are based on measuring observed behaviour can in theory measure option value as well as contingent valuation given that contingent valuation measures what people think about the future much better than the other methods. Chapter ? 6 explains this further.

Existence value Existence value refers to the existence of an aspect of nature for its own sake, now and in the future, independent of any use or recreational benefit which society or individuals will gain from the existence of that aspect of nature. It is in other words a form of intrinsic value despite the fact that it is humans who are making a value judgment and putting a monetary price on that value. To the extent that the concept of existence value is anthropocentric it appears to be saying that an aspect of nature exists and humans are enriched by its existence. To destroy that aspect of nature is to diminish our own standing as humans.

There are debates about whether existence value is driven by bequest/gift motives (the desire to bequeath or leave something to future generations); sympathy motives


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(concern for other beings and nature itself; stewardship motives (the notion that we should be stewards of nature and care for or guard nature).

Measurement of existence value in monetary terms Willingness to pay for existence value can be measured in monetary terms using contingent valuation. None of the methods that are based on measuring observed behaviour can in theory measure existence value as well as contingent valuation given that contingent valuation measures what people think about the future much better than the other methods. Chapter ? 6 explains this further.

Ecosystem values This is the value derived from the maintenance of overall ecological integrity through the proper functioning of the ecosystem. It is based on those aspects of nature which ecological economists call critical natural capital or what ecological scientists call keystone processes.

Measurement of ecosystem value in monetary terms There is significant debate about how to measure ecosystem values in monetary terms. Indeed this is one of the principal debates in ecological economics. The principal problem is that human assessment of the true monetary value of these aspects of nature is likely to be wrong since not enough is known about the keystone ecological processes and the role that they actually play.

What is TEV used for? TEV tries to capture in monetary terms, the total economic values associated with an aspect of nature. It can thus be used to measure the benefits or losses that might be derived from change. It can also be used to assess what is derived from an aspect of nature even when change is not in issue. TEV provides a good basis for undertaking cost-benefit assessments since the TEV from undertaking a project can measured both in terms of TEV viewed as benefits and TEV as losses. The information no benefits and losses from undertaking the project can then be compared with the TEV associated with not undertaking the project. There are technical procedures for doing this as described in Chapter ? ?.

SUMMARY


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This Chapter ? has provided an introduction to some of the most important basic concepts and elements of conventional or neo-classical economics. The concepts are explained in a general sense and as relevant a brief description of applicability in the water resource management is provided. An explanation is also provided of some of the basic assumptions underlying neo-classical economics. Practical skills in understanding the specialized language of conventional economics is also provided. The application of some of these concepts to water resources management is explained. A description is also provided of how conventional economics approaches valuation of ecological resources as an input into decision-making on resource allocation and project choice. It is hoped that at the end of the Chapter ?, students will understand the role and place of conventional economics in water resource management as well as be able to recognise the limitations of a purely economic approach to water issues. Chapter ? ? on valuation methodologies builds on the insights provided in this Chapter ?.


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REFERENCES

Botzler, R. G. and S. J. Armstrong (1998) Environmental Ethics - Divergence and Convergence. New York, McGraw-Hill. Constanza, R. and J. Cumberland and H. Daly and R. Goodland and R. Norgaard (1997) An Introduction to Ecological Economics. St. Lucie Press, Boca Raton, FL. Cornes and Sandler The Theory of Externalities, Public Goods and Club Goods, second edition (New York: Cambridge University Press, 1996) Daly, H. E. and Cobb, J. B. (1989) For the Common Good: Redirecting the Economy Toward Community, the Environment and a Sustainable Future. Beacon Press, Boston, MA. Economic Development Institute of the World Bank and OECD, The Economic Appraisal of Environmental Projects and Policies – A Practical Guide (1995) Ecoystem Valuation - http://www.ecosystemvaluation.org/1-03.htm Edwards-Jones, G., B. Davies and S. Hussain (2000) Ecological Economics. An introduction. Blackwell Science, Oxford. Global Public Goods - http://www.undp.org/globalpublicgoods/ Green, C. H. “The economic issues raised by valuing environmental goods” Chapter ? 3 in A. Coker and C Richards (ed) Valuing the Environment: Economic Approaches to Environmental Evaluation (1990) Pearce, D. W. and R. K. Turner (1990) Economics of Natural resources and the Environment. Harvester, Wheatsheaf, Hemel Hemstead. Stiglitz, J. E. Economics, second edition (New York: W. W. Norton, 1997) Tietenberg, Environmental and Natural Resource Economics (1996) The MIT Dictionary of Modern Economics, fourth edition (Cambridge, Mass.: MIT Press, 1992) The Business education site - http://www.bized.ac.uk/ The Basic Principles of Economics site of Professor Waldron - http://www.usd.edu/~rwaldron/index.html Turner, R. K.,, D. Pearce and I. Bateman (1993) Environmental Economics. An Elementary Introduction. Baltimore, Maryland, John Hopkins University Press.

http://www.ecosystemvaluation.org/1-03.htm

http://www.undp.org/globalpublicgoods/

http://www.bized.ac.uk/

http://www.usd.edu/%7Erwaldron/index.html

VALUATION METHODOLOGIES AND TECHNIQUES

1

VALUATION, DEMAND & IMPACT ASCERTAINMENT

CHAPTER

10 METHODOLOGIES

INTRODUCTION TO THE CHAPTER1

Economic evaluation in the water governance context consists of an array of techniques developed to assist decision making when choices have to be made between several courses of action. Such choice is an inevitable feature of managing the conflicting uses of water. Thus the decision maker may be faced with a choice between a water protected area, say further extensions to the Great Barrier Reef Water Park or allowing the mining of oil and gas or hard rock minerals in the same region. The issue is how to choose between a number of uses in some absolute sense or how to establish a balanced relationship between particular uses. The economic costs and benefits of particular options are arguably important components to be considered in the decision although they need not be the only basis on which the decision is made. The methodologies discussed in this Chapter also have a relationship with aspects of the concept of Sustainable Development, specifically the “principle of improved valuation, pricing and incentive mechanisms:” as well as the concept of IWRM, namely

In both the SD as well as IWRM contexts, the valuation, pricing and incentive approaches have highly technical elements as well as the more controversial elements of whether the nature and in this case, a substance as vital to life as water should even be subject to the price mechanism as well as valuation in the technical sense. The latter issue of whether

1This Chapter draws from material publicly available on the following Website http://www.ecosystemvaluation.org/1-03.htm. The author of these materials, Dr Dennis King, University of Maryland, has given permission for the use of these materials in this Unit. Readers are encouraged to access and read the materials on this website. The Chapter also draws significantly from Department of the Environment, Transport and the Regions: Review of Technical Guidance on Environmental Appraisal A Report by EFTEC (Economics for the Environment Consultancy) 1999.



2

economic methodologies are appropriate is an important philosophical issue in it own right which is however not directly dealt with in this Chapter2.

Rather, the Chapter proceeds on the assumption that there are substantial benefits to using the tools of economics to value ecological services and goods especially where such valuation can show the economic impacts or aspects of ecological change. Additionally environmental harm is also due in most parts to economic policies. As a matter of logic then, it can be argued that a focused examination of the economic factors at play can assist with finding the right kind of solution.

The discussion covers the principal methodologies as well as a number of non-economic procedures which (1) provide information for the economic methodologies: (2) can be used to supplement the neo-classical analysis so its assumptions relate more closely to the real world. The objective of the Chapter is not however to make students seasoned practitioners of the methodologies discussed. Rather, the discussion is to provide students with a basic conceptual as well as comparative understanding of the various methodologies. This understanding is important since water resource managers have to be able to advise on which methodologies may be appropriate given particular circumstances. They also have to be able to evaluate the results provided by the various methodologies. The methodologies discussed in varying levels of detail as appropriate are:

Neo-classical Economics Methodologies Non-Economic Methodologies

Contingent valuation Cost-benefit analysis Cost-effectiveness analysis Travel cost assessments Hedonic pricing assessments Assessment of defensive

expenditures - damage cost evaluations

Assessment of defensive expenditures - replacement cost evaluations

Assessment of defensive expenditures - substitute cost evaluations

Sensitivity analysis

Risk assessment Comparative risk assessment Multi-criteria or multi-attribute

analysis Environmental appraisal Environmental assessment Environmental impact assessment Strategic environmental assessment Life cycle analysis

After a preliminary discussion of the role of valuation methodologies and ways of classifying such methodologies, the rest of the Chapter addresses: (1) the basic features of each methodology; (2) simple steps with respect to undertaking or using the methodologies; (3) the advantages and disadvantages of each methodology; (4) general

2 See however publications like Botzler, R. G. and S. J. Armstrong (1998) Environmental Ethics - Divergence and Convergence. New York, McGraw-Hill.


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recommendations from the expert literature on when a particular methodology is suitable for use. The Glossary Chapter needs to be read very closely with this Chapter.

Finally it should be borne in mind however that these methods are often a challenge to apply. In some cases it is because the methods themselves are complex. In virtually every case however, the challenge posed comes from the quality of information available since proper analysis often requires detailed information on the particular ecosystems goods and services that are to be affected by the proposed commercial intervention or set of management measures.

OBJECTIVES OF CHAPTER After completing this Chapter, the reader should be able to:

Describe the full range of economic and non-economic methodologies

Explain the rationales for their use as part of sustainable management of water resourcese

Understand the basic steps and procedures for conducting a simple form of each valuation methodology

Explain the advantages, disadvantages and complexities of each methodology as appropriate

Provide well-structured advice on applicable methodology or methodologies as appropriate


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ECONOMIC VALUATION AND WATER RESOURCE MANAGEMENT

The Role of Economic Valuation As made clear by previous Chapters, within the framework of NCE but specifically with respect to public goods, valuation refers to the estimation of individuals’ preferences for the conservation or improvement in quality of a resource, as well as individuals’ loss of welfare owing to resource depletion or quality decline. Individuals’ preferences are measured in terms of how much they are willing to pay, which is also referred to as the economic value or benefit.. willingness to pay and economic value can be discussed in terms of the demand curve for a good or service.3

Economic valuation methodologies as applied in water resource management seek to acquire and provide information on a range of issues with respect to the provision of environmental services and goods from water resourcs. Different but overlapping contributions of economic valuation methodologies can be distinguished:

1. Economic valuation helps to provide information on the price or

monetary values to be attached to those aspects of ecological goods and services derived from water which do not have clear and identifiable prices attached to them – for example, water quality – this price information then supports an entire range of actions, including those listed immediately below

2. Economic valuation helps to guide choices that agencies make in terms of where they will spend their money and which programmes or specific projects (public sector’private sector) they will approve or implement – appraisal of projects or programmes to reach a judgment whether a proposed activity will be economically beneficial to society

3. Economic valuation helps to evaluate whether money spent has been money well spent – post project or post-programme evaluation to reach a judgment whether a realized activity was economically beneficial to society

4. Given that greening of the national accounts and GNP/GDP process is regarded as an important part of nation-State commitments to sustainable development, economic valuation can help provide information on economic aspects of ecosystem with the result that depletion of natural resources stocks and

3 Kerry Turner, Stavros Georgiou, Rebecca Clark, Roy Brouwer and Jacob Burke, (2004 Economic valuation of water resources in agriculture - From the sectoral to a functional perspective of natural resource FAO Water Reports 27 http://www.fao.org/docrep/007/y5582e/y5582e00.htm#Contents


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changes in environmental quality can be factored in when compiling the system of national accounts

5. Economic valuations provide information to support the design of economic policy instruments such as environmental charges and taxes. Economic valuation can give guidance about proper pricing of ecosystem services, i.e. what charge or tax level should be set.

Economic Valuation and Conflicts over Water Resources and their Use

As we established in earlier Chapters water and water associated ecosystems are an arena in which different groups contend fwith respect to the use of various goods and services provided by nature. The goods and services provided can be, for example, highly tangible resources such as fish for commercial or recreational fisheries, or intangibles such as fish recruitment opportunities provided by water habitats, or environmental amenities such as recreational opportunites and attractive areas for housing. Some of these goods and services are subject to increasing scarcity, leading to conflicts between users. Open-access conditions as well as common pool resource aspects together with the public goods wetlands, protected areas etc

Resolving conflicts usually involves some trade-off between different interests. Trade-offs involve economic costs and benefits and this is where economic valuation methods come in to assist with decision-making and ensure to some degree that economic costs are factored into the decision. Where market prices are available for all the component aspects of the scenario, then economic valuation is relatively easy. Where market values or prices are not available then economic valuation becomes more difficult. Additionally there is the issue of what might guide decision-making as to what are reasonable trade-offs or sets of choices to be preferred. Today such a guideline or set of criteria might be whether what is eventually selected improves sustainability or sustainable development . Sustainable development it is accepted has an economic element.

Clearly, focusing on the example above, economic valuation of proposed changes to address situations of conflict to do with salmon stocks, water quality and levels of catch would probably need a valuation of the economic aspects of possible management measures especially if such management measures are going to be comprehensive and long-term.


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The total economic value of water resources

Re-write this segment to make it your own4

Non-use values are derived from the knowledge that a resource is maintained. By definition, they are not associated with use of the resource or tangible benefits that can be derived from it (though resource users may derive non-use values). Non-use values are linked to ethical concerns and altruistic preferences, although it can be argued that these ultimately stem from self-interest. They can be divided into three types of value (which can overlap): existence value, bequest value and philanthropic value. Existence value is the satisfaction derived from knowledge that a feature of a water resource continues to exist, regardless of whether or not it might be of benefit to others. Bequest value is derived from the knowledge that a feature of a water resource will be passed on to future generations so that they will have the opportunity to enjoy it. Philanthropic value is the satisfaction gained from ensuring that resources are available to contemporaries in the current generation. There are two further types of value that are not categorized as either use or non-use values. These are option value and quasi-option value:

Option value is the satisfaction that an individual derives from the ensuring that a resource is available for the future given that the future availability of the resource is uncertain. It can be regarded as insurance for possible future demand for the resource.

Quasi-option value is derived from the potential benefits of waiting for improved information prior to giving up the option to preserve a resource for the future. This is based on a desire to take advantage of the prospect of improved information in the future and act on subsequent revision of preferences. It is the value placed on retaining flexibility, and on avoiding irreversible damage that might prove to be undesirable in the light of future information. An example is the value placed on conservation of a wetland until further information is available on the value of the species that are found within it.

TEV is determined as the sum of the components in Figure ? In practical terms, this is limited to those components that it is feasible to quantify. Use of TEV in the analysis of alternative allocations ensures that the full social benefit of goods and services provided by water is taken into account.

4 Kerry Turner, Stavros Georgiou, Rebecca Clark, Roy Brouwer and Jacob Burke, (2004 Economic valuation of water resources in agriculture - From the sectoral to a functional perspective of natural resource FAO Water Reports 27 http://www.fao.org/docrep/007/y5582e/y5582e00.htm#Contents


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1

CLASSIFIYING THE METHODOLOGIES

Having a working classification is useful since it helps reveal the different assumptions behind particular methodologies and also alerts the water resource manager to the different concepts that are embedded in particular technologies. This is important since it also alerts the water resource manager to the kinds of “knowledges” that need to be employed to better understand or implement approaches. There is also a legal dimension since particular methodologies can be specifically required under legislation or legislation may leave the choice to use such methodologies to the discretion of the decision-maker, for example by requiring the decision-maker to use “appropriate” or “best-practice” methodologies. The choice of methodology can also be challenged in court suggesting that the more contentious the context in which decision-making has to be undertaken, the more robust and defensible the procedures for choice of methodology have to be.

Economic versus Non-economic methodologies One possible classification is to group the methodologies into (1) those in which the assumptions and calculative procedures of neo-classical economics are paramount; (2) those which rely less or very little on non-economic assumptions or techniques. Although discussed in much less detail in this book, it should be remembered that the non-economic methodologies have value in their own right. However, in the context of economic valuation their role is (1) to provide information inputs into the economic valuations process; (2) supplement the economic valuation methodologies that they are most compatible with. Supplementation is often required since economic valuation methodologies typically neglect or cannot deal with issues which cannot be reduced to markets or prices. Additionally there are many sectors of society which are suspicious of a purely “economistic” approach to decision-making.

Neo-classical Economics Methodologies Non-Economic Methodologies



Assessment of defensive expenditures - replacement cost

Risk assessment Comparative risk assessment Multi-criteria or multi-attribute

analysis Environmental appraisal Environmental assessment Environmental impact assessment Strategic environmental

assessment Life cycle analysis


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evaluations Assessment of defensive

expenditures - substitute cost evaluations

Sensitivity analysis

Synthesized Impact Analysis vs Non-Synthesized Impact Analysis Synthesized impact analysis refers to the fact that the analysis tries at the end of the day to make a synthesized statement with respect to the impacts that have been investigated and suggests that a particular option is the best approach to take. By contrast, non-synthesized approaches tend to present the decision-maker with a large amount of relatively undigested information leaving the policy-maker to assess the importance of the various consequences identified. Synthesized impact analysis will generally provide the basis for a decision using a monetary measure or a numerical benchmark or weighting of some sort. In the economic methodologies synthesis and summation is likely to be through a dollar figure or an assessment based on ratios. On the other hand non-synthesized approaches does not attempt to provide an optimal set of outcomes. In general the non-economic methodologies tend not to have synthesis built into them from the beginning. The economic methodologies are usually structured from the start to lead to a synthesized or highly summarised outcome. From the policy point of view non-synthesized impacts often require further work but more clearly show the process by which the analyst has arrived at their assessments. Synthesized outcomes are easy to act upon but more readily hide their assumptions and biases.

Synthesized impact analysis Non-Synthesized Impact Analysis



Assessment of defensive expenditures - replacement cost evaluations

Assessment of defensive expenditures - substitute cost

Risk assessment Multi-criteria or multi-attribute

analysis Environmental appraisal Environmental assessment Environmental impact assessment Strategic environmental

assessment Life cycle analysis


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evaluations Sensitivity analysis Comparative risk assessment Risk assessment

Yet another classification would focus more on the actual role played by a particular methodology or cluster of methodologies. It is this categorization that is adopted in this Chapter. The result in this case would be four categories: Price attribution or marketisation methodologies; choice and decision-making methodologies; non-economic decision support methodologies. In more detail this results in the following groups:

Methodology Cluster

Meaning Example

Market Valuation of Physical Effects

Marketisation methodologies

Techniques to provide a monetary value or a “price” for non-market or non-marketised goods and services

Contingent valuation, Hedonic pricing; Travel cost

assessments; Assessments of

defensive expenditures Choice and decision-making methodologies

Valuation procedures used to help make choices between options – e. g. cost-effectiveness analysis; cost-benefit analysis; multi-criteria-analysis

Cost-benefit analysis Cost-effectiveness

analysis Choice experiments Sensitivity analysis Multi-criteria or multi-

attribute analysis Non-economic decision support methodologies

Methodologies which provide information for 1 and 2 above

Assessment of dose-response relationships

life-cycle analysis; environmental impact assessment;

strategic environmental assessment;

risk assessment comparative risk

assessment

CONSUMER SURPLUS, WILLINGNESS TO PAY & WILLINGNESS TO ACCEPT COMPENSATION

As mentioned in Chapter ? , there are basically two types of information that are being sought by the various methodologies. These are willingness


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to pay (WTP) and willingness to accept (WTA). Both can be further subdivided into

WTP to secure a benefit WTA to forego a benefit WTP to prevent a loss WTA to tolerate a loss

As a rule, analysts prefer to concentrate on WTP rather than WTA. The concept of consumer surplus both at an individual and group level is integrally related to both WTP and WTA.

Consumer Surplus and Willingness to Pay As already explained in Chapter ? from the point of view of WTP, the concept of surplus helps to capture the difference between what is actually paid and what the consumer is willing to pay. Where what is paid/payable is less than the consumer is willing to pay, the difference between the two represents the consumer surplus. The difference can be captured graphically as follows, with this difference representing also the willingness to pay (WTP).

Consumer surplus and WTP

In the example below if the equilibrium price is assumed to be $100 we can calculate both the individual consumer surplus as well as the total consumer surplus. The individuals concerned (1-7) have been ranked according to their WTP as revealed by a marketisation methodology with Individual 1 being prepared to pay $140 when the equilibrium price is $100:


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Consumer surplus water quality

140 130 120 110 100 90 80

0

50

100

150

Individual consumer water quality

Pri

ce W

TP

Series2 140 130 120 110 100 90 80

1 2 3 4 5 6 7

Individual consumer surplus

This can be derived for each individual by subtracting the price actually paid or payable ($100 - the equilibrium price) from their actual WTP as revealed by the price revelation procedure (Contingent valuation; Hedonic price; travel cost etc.).

Individual Surplus 1 140-100=40 2 130-100=30 3 120-100=20 4 110-100=10 5 100-100=0 – equilibrium price – no surplus 6 Below the equilibrium price 7 Below the equilibrium price


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Total Consumer Surplus/Total Willingness to Pay This value is arrived at by adding up the individual surpluses as follows:

Individual Surplus 1 40 2 30 3 20 4 10 Total consumer surplus 100

The total consumer surplus is viewed as being equivalent to the total willingness to pay for an increase in the quality of a natural resource.

Consumer Surplus and WTA Willingness to accept compensation can also be captured by the consumer surplus concept. In this case, the focus is on how much people are prepared to accept as compensation for a reduction in environmental quality. Individual 5 will be prepared to accept $90 as compensation for poor quality water.

MARKET VALUATION OF PHYSICAL EFFECTS5 This approach values environmental change by putting a monetary value on observable physical changes in the environment. Thus an observable loss or benefit derived from ecological goods and services can be given a monetary value by (1) establishing the extent of the physical change in the environment; (2) applying existing or adjusted prices to this quantifiable physical change. Typical steps might be:

Estimate the physical effect of the environmental change on the receptor - establish the dose of harm applied to the receptor or the dose of benefit accruing to the receptor – this requires a baseline and an estimation of the extent of change, typically the function of environmental and other non-economic assessments – eg. discharge of land-based pollutants into a defined segment of the Great Barrier Reef region is proceeding at average annual rates of X units of substance 1; Y units of substance 2; Z units of substance 3 over a 5 year period – this is the dose entering the receptor

5 See Economic Development Institute of the World Bank and OECD, The Economic Appraisal of Environmental Projects and Policies – A Practical Guide (1995), Chapter 5; The Market Price Method - http://www.ecosystemvaluation.org/market_price.htm - accessed May 2003.

http://www.ecosystemvaluation.org/market_price.htm


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Estimate what difference this dose will make to output or costs associated with the receptor. For instance, the ecological service provided is the supply of fish. Discharge of land-based pollutants is a cost with respect to the output of fish – estimate a figure for this, in the simplest example a physical drop in output – over the last 5 years, an average of 0.25 tonne of fish has been lost due to the dose of pollution

Estimate the value of this change/loss in output or costs by using market prices for fish and market values for loss in income to the fishers – use of a damage function to convert physical ecological quantification into market prices/economic values

Various composite methods which combine (1) techniques of economics; (2) techniques of scientific-technical assessment (micro-biology, environmental science, bio-chemistry,geography etc) to achieve the market valuation of physical effects are as follows:

Market Valuation of Physical Effects

Methods Explanation Dose-response This method estimates the physical impact of an

environmental change on a receptor – for eg the amount of nutrient entering the Great Barrier Reef and the impact of this on corals within a specified area

Damage/Benefit functions

Dose-response data (see above) is converted into economic values using the market prices of the units of output – usually the measurement is of harm or damage

Measurement may however be of benefits – for example a change in the ecology may benefit marketable output directly or indirectly as where reducing the discharge of sewage to a coastal area increases returns from fishing and tourism

The production function approach (input-output measurement)

This method relates changes in output to different levels of input

In a non-environmental context, this method tracks how much of a change in output is associated with an increase or decrease of the conventional factors of production (land, labour, capital, raw materials).

In the environmental context pollution is specifically classified as an input provided the impact of pollution is measurable and can be shown to be causally related – for example, measurable quantities of herbicide or pesticides entering a defined area of a river are viewed as an input into the total productivity of that segment of the water system – an example is efforts to establish the impact of land-based pollution on the murray River system

The human capital method

This method estimates the cost of bad health derived from pollution or other environmental change.

Costs to human health are estimated based on epidemiological data, control group experiments or expert views about the likely effect of environmental quality on human health.


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The economic aspect is then to estimate the cost of bad health on the productivity of an average worker

People are not actually asked about (1) their subjective views on health impacts; (2) their willingness to pay to avoid health damage; (3) their willingness to accept compensation to endure health damage

It is also possible (but expensive) to use controlled experiments in which the effect being studied is deliberately induced; statistical regression to isolate the variables of interest from an entire assembly of variables; modelling of relationships using information drawn from real life studies which are transferable.

Evaluation: MVPE6

Advantages Disadvantages MPVE reflects an individual's

willingness to pay for costs and benefits of goods that are bought and sold in markets, such as fish - people’s values are likely to be well-defined.

Price, quantity and cost data are relatively easy to obtain for established markets.

MPVE uses observed data of actual consumer preferences.

MPVE uses standard, accepted economic techniques.

Market data may only be available for a limited number of goods and services provided by an ecological resource and may not reflect the value of all productive uses of a resource.

The true economic value of goods or services may not be fully reflected in market transactions, due to market imperfections and/or policy failures.

Seasonal variations and other effects on price must be considered.

MPVE cannot be easily used to measure the value of larger scale changes that are likely to affect the supply of or demand for a good or service.

MPVE does not reflect the true cost of other resources used to bring ecosystem products to market, and thus may overstate benefits.

Context for Use This method is recommended for all situations in which price, quantity and cost data are easily available.

GENERATING SHADOW PRICES7 There are three basic approaches:

1. “revealed” preference approaches which look at decisions people make regarding activities that utilise or are affected by an ecological good or service – their activities “reveal” their preferences and the utility they attach to those preferences;

6Sourced with from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003; 7

http://www.ecosystemvaluation.org/1-03.htm%20-%20accessed%20May%202003


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2. “stated” preference approaches in which preferences are elicited directly from individuals through application of survey instruments.

3. “imputed willingness to pay” approaches in which market values are arrived at by assessing defensive expenditures or replacement expenditures, namely estimating what people are willing to pay, or the cost of actions they are willing to take, to avoid the adverse effects that would occur if specified ecosystem goods or services were lost.

REVEALED PREFERENCE METHODOLOGIES (RPM)8 Revealed preference analysis looks at “surrogate markets”, investigates behaviour with respect to priced goods in these markets and uses these as a proxy for behaviour with respect to associated non-priced elements (air quality, noise quality, water quality etc.). Put another way, tracking behaviour in these “priced” markets is also tracking the value of non-priced elements for participants in these markets. There are two main RPM: hedonic pricing assessments (hedonic purchase or investment decisions and hedonic wages); travel cost assessments. In this Chapter we look at both hedonic pricing and travel cost assessments.

The Hedonic Pricing Method9 The hedonic pricing method is used to estimate economic values for ecosystem or environmental services that directly affect market prices and is most frequently used to value environmental amenities that affect the price of residential properties. It is based on a theory of consumer behaviour which argues that people value a good because they value the characteristics of the good rather than the good itself. In this theory, each good is seen as a “bundle” of characteristics or attributes and these attributes contribute to the price of the good – say a house or a car. Among the attributes might be peace and quiet or the absence/presence of air pollution. With a car, the price might reflect the characteristics of that car—transportation, comfort, style, luxury, fuel economy, etc. By statistically analysing the relationship between the price of the house and other relevant attributes a “hedonic price coefficient” can be found between the value of the house and for example, air pollution or water quality.

8Review of Technical Guidance Section, Chapter 2. 9


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Hedonic Pricing - Case Study 1 Air Pollution and House Prices in Gigamont

Gigamont One housing estate was built by the government in the 1960s and is in the northern part of Gigamont City. Since it is a government housing estate, it has no attractive facilities, such as parks. Equally there are no noxious facilities such as slaughterhouses. Everyone works in his or her own home. Under these conditions all the houses all have identical prices (NB: the application of the ceteris peribus principle here) and generally are also identical as they are government houses An industrial estate is built at the northern end of the City, even further north of the City centre than Gigamont One. It creates smog which extends over the housing estate. People therefore start moving from Gigamont One to the southern part of the City. Prices fall in Gigamont One and rise in the southern part of the City in the corresponding southern government housing estate known as Gigamont Two. There will always be upward pressure on prices in Gigamont Two so long as people prefer to live in the south rather than in the north. According to economic theory (the equilibrium principle) price movement will cease when the price differential is large enough to make people indifferent between living in the “clean” south and the “dirty” north. Since in our model, the only difference between the two areas is the higher air pollution in the east, the price differential reveals people’s willingness to pay to avoid air pollution. The value or disamenity associated with air pollution is capitalised in the low prices in Gigamont One whilst it is capitalised positively in the high prices in Gigamont Two. A Hedonic Pricing analysis can reveal the WTP by looking at changes in house prices. WTA can also be assessed by looking at the gap between the house prices in the two areas. Those who stay would be demonstrating WTA, whilst those who leave would be demonstrating WTP.

Application of the Hedonic Pricing Method10 Objective: To use the Hedonic Pricing Method to assess prices for “open space” in a coastal housing estate

Step 1: Compilation of Data The first step is to collect data on residential property sales in the region for a specific time period (usually one year). The required data include:

10 Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003



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selling prices and locations of residential properties property characteristics that affect selling prices, such as lot size,

number and size of rooms neighborhood characteristics that affect selling prices, such as

property taxes, crime rates, and quality of schools accessibility characteristics that affect prices, such as distances to

work and shopping centres, and availability of public transportation environmental characteristics that affect prices

In this case, the environmental characteristic of concern is the proximity to open space. The researcher might collect data on the amount and type of open space within a given radius of each property, and might also note whether a property is directly adjacent to open space. Often, this type of data may be obtained from computer-based GIS (geographical information systems) maps. Data on housing prices and characteristics are available from municipal offices, multiple listing services, and other sources.

Step 2: Analysis of Data Once the data are collected and compiled, the next step is to statistically estimate a function that relates property values to the property characteristics, including the distance to open space. The resulting function measures the portion of the property price that is attributable to each characteristic. Thus, the researcher can estimate the value of preserving open space by looking at how the value of the average home changes when the amount of open space nearby changes. Use of the Results The results can be used to evaluate the extent to which the resource management agency needs to make investments in open space preservation. For example, specific parcels of land may be under consideration for protection. The hedonic value function can be used to determine the benefits of preserving each parcel, which can then be compared to the cost.


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Evaluation: Hedonic Pricing11

Advantages Disadvantages Can be used to estimate values

based on actual choices. Property markets are relatively

efficient in responding to information, so can begood indications of value.

Property records are typically very reliable.

Data on property sales and characteristics are readily available through many sources, and can be related to other secondary data sources to obtain descriptive variables for the analysis.

The method is versatile, and can be adapted to consider several possible interactions between market goods and environmental quality.

Scope of measurable environmental benefits limited to ecological goods and services related to housing prices.

HPM only capture’s people’s willingness to pay for perceived differences in environmental attributes, and their direct consequences.

Cannot capture situations where knowledge of linkage between environmental attribute and benefits is absent

The method assumes that people have the opportunity to select the combination of features they prefer, given their income and may ignore other factors like taxes, interest rates,etc.

Relatively complex to implement and interpret, requiring a high degree of statistical expertise.

The results depend heavily on model specification.

Large amounts of data must be gathered and manipulated.

The time and expense to carry out an application depends on the availability and accessibility of data.

Context for Use: Hedonic Pricing Expert opinion recommends use of hedonic pricing assessments principally for valuing:

environmental quality, including air pollution, water pollution, or noise

environmental amenities, such as aesthetic views or proximity to recreational sites

11Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003; Review of Technical Guidance Section, 20.



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Hedonic Pricing Case Study 2 Economic Values - Provision of Open Space

Southold, Long Island, New York The Situation The town of Southold, Long Island, New York has coastlines on both the Peconic Bay and Long Island Sound. Compared to the rest of Long Island, it is a relatively rural area, with a large amount of farmland. However, population and housing density are rapidly increasing in the town, resulting in development pressures on farmland and other types of open space. The Challenge The Peconic Estuary Program is considering various management actions for the Estuary and surrounding land areas. In order to assess some of the values that may result from these management actions, a hedonic valuation study was conducted, using 1996 housing transactions. The Analysis The study found that the following variables that are relevant for local environmental management had significant effects on property values in Southold: # Open Space: Properties adjacent to open space had, on average, 12.8% higher per-acre value than similar properties located elsewhere. # Farmland: Properties located adjacent to farmland had, on average, 13.3% lower per-acre value. Property values increased very slightly with greater distance from farmland. # Major Roads: Properties located within 20 meters of a major road had, on average, 16.2% lower per-acre value. # Zoning: Properties located within an area with two- or three-acre zoning had, on average, 16.7% higher per-acre value. #Wetlands: For every percentage point increase in the percent of a parcel classified as a wetland, the average per-acre value increased by .3%. The Results Based on the results of this study, managers could, for example, calculate the value of preserving a parcel of open space, by calculating the effects on property values adjacent to the parcel. For a hypothetical simple case, the value of preserving a 10 acre parcel of


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open space, surrounded by 15 “average” properties, was calculated as $410,907. Source: Opaluch, James J., Thomas Grigalunas, Jerry Diamantides, Marisa Mazzotta, and Robert Johnston. 1999. Recreational and Resource Economic Values for the Peconic Estuary System. Report prepared for the Peconic Estuary Program, Suffolk County Department of Health Services, Riverhead, NY by Economic Analysis, Inc. cited at http://www.ecosystemvaluation.org/hedonic_pricing.htm - accessed May 2003

The Travel Cost Methodology12 TCM is another well known method. It is however relatively limited in its application to generating shadow prices in tourism and recreational demand contexts. Within its limits it can provide a good picture of whether the area/site should be used solely or partially for recreation or tourism or be dedicated to some other use. The basic premise of the travel cost method is that the value of a recreational site can be measured by the travel costs of users – travel costs are are interpreted as the willingness to pay. Thus peoples’ willingness to pay to visit the site can be estimated based on the number of trips that they make at different travel costs. This is analogous to estimating peoples’ willingness to pay for a marketed good based on the quantity demanded at different prices13. The procedure can be highly complex or fairly simple. In its simplest form it proceeds as follows14:

The Simple Form of TCM- Zonal Travel Cost Method The zonal travel cost method is the simplest and least expensive approach. It estimates a value for recreational services of the site as a whole without making too many fine distinctions. The zonal travel cost method is applied by collecting information on the number of visits to the site from different broad areas or zones. Because the travel and time costs will increase with distance, this information allows the researcher to calculate the number of visits “purchased” at different “prices.” - the primary differentiator is distance. This information is used to construct the demand function for the site, and estimate the consumer surplus , or economic value of the recreational services of the site. Its basic steps are:

12 Department of the Environment, Transport and the Regions: Review of Technical Guidance Section, 21. 13 Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003 14 See Tietenberg, Environmental and Natural Resource Economics (1996), 70.

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1. Identify the site 2. Divide the surrounding area into zones, usually concentric circles

to support estimation – zoning may be based on area codes for example – zones can also follow irregular contours on some other parameter depending on circumstances, including actual geography

3. Visitors at the site are sampled to establish their zone of origin 4. Visitor rates defined as visitor days per capita are calculated for

each zone of origin 5. A travel cost measure is constructed to indicate the cost of travel

to and return with respect to the recreation site 6. Using regression analysis, visitation rates are cross-related with

travel costs or socio-economic variables such as average income, median educational attainment and other criteria

7. The observed total visitation for the site from all travel cost zones can be calculated as one point on the demand curve for the service provided by the site

8. The observed demand can then be compared with the true economic demand (the willingness to pay) as revealed either within the specific study or revealed by some other method , for example a contingent evaluation study

The Individual Travel Cost Approach

The individual travel cost approach is similar to the zonal approach, but uses survey data from individual visitors as the core inputs into the statistical analysis. This method thus requires more data collection and slightly more complicated analysis, but gives more precise results. Thus with a recreational fishing site for instance, rather than managers collecting information on number of visitors and their area codes, the focus is on a survey of visitors. The survey might thus ask for the following information:

location of the visitor’s home – how far they travelled to the site how many times they visited the site in the past year or season the length of the trip the amount of time spent at the site travel expenses the person’s income or other information on the value of their time other socioeconomic characteristics of the visitor other locations visited during the same trip, and amount of time

spent at each


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other reasons for the trip (is the trip only to visit the site, or for several purposes)

fishing success at the site (how many fish caught on each trip) perceptions of environmental quality or quality of fishing at the site substitute sites that the person might visit instead of this site

It can be seen that there are elements of a basic contingent valuation study in this set of survey questions.

Evaluation: Travel Cost Method15

Advantages Disadvantages TCM is very close to

conventional empirical techniques to estimate economic values based on market prices.

TCM is based on actual behavior——rather than stated willingness to pay

TCM is relatively inexpensive to apply.

On-site surveys provide opportunities for large sample sizes, as visitors tend to be interested in participating.

TCM results are relatively easy to interpret and explain.

TCM assumes that people perceive and respond to changes in travel costs the same way that they would respond to changes in admission price.

The simpler the method the less it addresses subtle motivational factors which may be vital for long-term decision-making

Interviewing visitors on site can introduce sampling biases to the analysis.

Measuring recreational quality and relating recreational quality to environmental quality can be difficult.

Standard TCM travel cost provides information about current conditions, but not about gains or losses from anticipated changes in resource conditions.

TCM is limited in its scope of application due to its dependence on user participation.

TCM cannot be used to assign values to on-site environmental features and functions that users of the site do not find valuable.

TCM cannot be used to value off-site values supported by the site.

TCM cannot be used to measure non-use values - sites that have unique qualities that are valued by non-users will be undervalued.

15 Adapted from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003



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Context for Use: Travel Cost Method16

TCM is potentially useful in the following situations or sectors in developed countries:

management of water-based tourism and recreation generally (nature reserves, wetlands, protected areas etc.);

estimating the economic benefits or costs resulting from changes at a recreational site (nature reserve, water park etc.);

estimating the economic benefits or costs resulting from elimination of an existing recreational site (nature reserve, wetlands, protected areasetc.);

estimating the economic benefits or costs resulting from addition of a new recreational site (nature reserve, wetlands, protected areas etc.);

estimating the economic benefits or costs resulting from changes in environmental quality at a recreational site (nature reserve, wetlands, protected areas etc.)

TCM is thus very valuable in the water resource management context. Given that there is a trend of increased demand in the use of multiple-use protected areas and parks TCM use is thus likely to increase considerably. Additionally benefits transfer (see below) works reasonably well with this method.

STATED PREFERENCE METHODOLOGIES (SPM)17 Stated preference techniques use surveys and other forms of questioning to elicit preferences in contexts where there may be no surrogate market. There are two main types of stated preference methodologies: contingent valuation (CV) and contingent choice experiments. CV asks directly what people are “willing to pay” (WTP) or asks if they are WTP “X” where X is some starting point sum. Contingent ranking (or conjoint analysis) ranks alternatives and anchors one of the alternatives to a money price. Individuals” WTP is then inferred rather than derived directly from answers about WTP. It is important to remember that analysing the data generated by SPM surveys is a complex statistical task, and will require professional advice from econometricians. For our purposes it is enough that the general logic of SPM approaches are understood. This Chapter describes CV as representative of the SPM approach.

16 Sourced with kind permission http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003 17



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Contingent Valuation Methodology18 Contingent valuation is a survey technique that reveals preferences by direct questioning of individuals or households on how much they value ecological goods or services. The study sample are asked about their WTP or WTA with respect to specific scenarios – WTP to gain a new situation or avoid a loss; WTA to tolerate a change or WTA to forego a change. The survey sets out adequate and appropriate descriptions of what is to be valued and the institutional context in which it will be provided or changed and the way the change would be financed. Contingent valuation is enormously flexible in that it can be used to estimate the economic value of most things. However, it is best able to estimate values for goods and services that are easily identified and understood by users and that are consumed in discrete units (e.g., user days of recreation). CV is the most widely accepted method for estimating total economic value , including all types of non-use, or “passive use,” values. CV can estimate use values , as well as existence values , option values , and bequest values and is thus ideally suited for capturing values associated with unique natural habitats or wilderness areas. There is also a growing body of evidence which suggests that a well conducted CV procedure can yield results equal in quality to those achieved by other methods. The growth in computing capability and other related developments in techniques also allows for more accurate surveys to be undertaken together with a more rapid implementation. CV is particularly useful for establishing a monetary value for biological resources and natural spaces. It is rapidly emerging as a key instrument for assessing the extent to which society is prepared to invest monetarily in the protection and preservation of rare and endangered species, habitats and landscapes. CV can also be combined with other methods or can be used to validate other methods. The key questions to be addressed in any CV procedure are: What change in the quality of ecological goods and services

respondents should be asked to value? How the change(s) to the environment should be described to

respondents? The type of interview format to be used (face-to-face interviews,

telephone, email, mail etc.)

18


19

The types of questions to be asked The exact mode for communicating information about monetary or

valuation issues Measures to guard against bias

The National Office for Oceans and Atmospheric Administration (NOAA) has published a guide which is regarded as a best-practice benchmark for CV projects. The NOAA Guidelines19 were developed in the wake of extensive debate in the United States over the methodologies to be used to calculate compensation claims after the Exxon Valdez disaster in Alaska.

Deriving Demand for Improved Water Quality From Contingent Valuation Data – A Basic Example The two examples below show how CV data can be used to derive a demand curve showing willingness to pay (WTP) for different levels of water quality within a sampled group. The CV surveys were applied to both direct users as non-users of the water body.

WTP – Different Water Quality Scenarios

Water quality scenario

Average WTP of whole sample

Average WTP of direct user group

Average WTP of non-users group

Maintain boatable quality - 1

24.50 45.30 14.20

Improve water from boatable quality to fishable quality - 2

17.60 31.30 10.80

Improve water from fishable to swimmable quality- 3

12.40 20.20 8.50

The demand curve showing WTP for the various types of water quality can be plotted as shown below:

19 Report of the NOAA Panel on Contingent Valuation January 11, 1993 http://www.darp.noaa.gov/pdf/cvblue.pdf - accessed June 2003.

http://www.darp.noaa.gov/pdf/cvblue.pdf


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Demand Curve – Water Quality

demand curve for water quality

24.5

17.6

12.4

0

10

20

30

water quality scenario

pri

ce W

TP

Series2 24.5 17.6 12.4

1 2 3

1 - Boatable quality; 2 – Fishable quality; 3 - Swimmable quality

Different types of water quality are shown on the X axis by the figures 1-3. It can be seen that the willingness to pay for investment to improve water quality to swimmable level is not particularly high.

Evaluation: CVM20 CV is highly controversial. The following extract sets out only some of the criticisms and cautions expressed about the use of CV21:

People have practice making choices with market goods, so their purchasing decisions in markets are likely to reflect their true willingness to pay. CV assumes that people understand the good in question and will reveal their preferences in the contingent market just as they would in a real market. However, most people are unfamiliar with placing dollar values on environmental goods and services. Therefore, they may not have an adequate basis for stating their true value.

The expressed answers to a willingness to pay question in a contingent valuation format may be biased because the respondent is actually answering a different question from what the surveyor intended.

Rather than expressing value for the good, the respondent might actually be expressing their feelings about the scenario or the valuation exercise itself. For example, respondents may express a positive willingness to pay because they feel good about the act of giving for a social good (referred to as the “warm glow” effect), although they believe that the good itself is unimportant.

Respondents may state a positive willingness to pay in order to signal that they place importance on improved environmental quality in general.

Alternatively, some respondents may value the good, but state that they are not willing to pay for it, because they are protesting some aspect of the scenario, such as increased taxes or the means of providing the good.

Non-response bias is a concern when sampling respondents, since individuals who do not respond are likely to have, on average, different values from those individuals who do respond.

20Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003 21 Sourced from http://www.ecosystemvaluation.org/contingent_valuation.htm#issues - accessed May 2003


http://www.ecosystemvaluation.org/contingent_valuation.htm#issues


21

Estimates of non-use values are difficult to validate externally. When conducted to the exacting standards of the profession, contingent

valuation methods can be very expensive and time-consuming, because of the extensive pre-testing and survey work. Many people, including jurists policy-makers, economists, and others, do not believe the results of CV.

Context for Use22 This approach is widely used in the following contexts: Air and water quality issues Recreation of all types Conservation of rare, unique or endangered species and habitats Options and existence values Water management issues

IMPUTED WILLINGNESS TO PAY METHODS23 The third approach is to look at a particular situation and impute or infer from that a willingness to pay to avoid a similar situation. The methods typically used are:

Damage Cost Avoided – find the cost of avoiding damages

associated with a specified set of lost ecosystem services and impute to the situation under investigation

Replacement Cost – find the cost of replacing ecosystem X and impute that to the situation under investigation

Substitute Cost – find the cost of providing substitute service X and impute that to the situation under investigation

All three approaches provide an estimated value for ecosystem services based on costs of various surrogates for these services. These methods thus do not provide measures of economic value based on observed or stated willingness to pay for these products or services. Instead, they assume that the costs of avoiding damages or replacing ecosystems or their services provide useful estimates of the value of these ecosystems or services. This is based on the assumption that, if people incur costs to avoid damages caused by lost ecosystem services, or to replace the services of ecosystems, then those services must be worth at least what people paid to replace them. Thus, the methods are most appropriately applied in cases where damage avoidance or replacement expenditures have actually been, or will actually be, made. Alternatively the focus can be on the cost of 22 Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003 - 23 Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003




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replacing the lost services. For example, wetlands often provide protection from floodwaters. The amount that people pay to avoid flood damage in areas similar to those protected by the wetlands can be used to estimate willingness to pay for the flood protection services of the wetland24.

Application of Imputed Willingness to Pay Methods - A Wetlands Example25 Objective: to estimate the economic value of flood protection aspects of wetland ecological goods and services so as to assess whether wetlands should be restored Step 1: Ecological Assessment The first step is to conduct an ecological assessment of the flood protection services provided by the wetlands. This assessment would determine the current level of flood protection, and the expected level of protection if the wetlands are fully restored.

Step 2: Calculate Values for Substitute or Replacement Supplier of Ecosystem Services This step depends on the specific method chosen. The Damage Cost Avoided method might be applied using two different approaches. One approach is to use the information on flood protection obtained in the first step to estimate potential damages to property if flooding were to occur. In this case, the researcher would estimate, in dollars, the probable damages to property if the wetlands are not restored. A second approach would be to determine whether nearby property owners have spent money to protect their property from the possibility of flood damage, for example by purchasing additional insurance or by reinforcing their basements. These avoidance expenditures would be summed over all affected properties to provide an estimate of the benefits from increased flood protection. However, the two approaches are unlikely to produce the same estimate. The replacement cost method is applied by estimating the costs of replacing the affected ecosystem services. In this case, flood protection services cannot be directly replaced, so this method would not be useful. The substitute cost method is applied by estimating the costs of providing a substitute for the affected services. For example, in this case a retaining wall or a levee might be built to protect nearby properties from flooding. The researcher would thus estimate the cost of building and maintaining such a wall or levee. The researcher must also determine whether

24Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003 25 Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003




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people would be willing to accept the wall or levee in place of a restored wetland.

How Can the Results be Used26? The dollar values of the property damages avoided, or of providing substitute flood protection services provide an estimate of the flood protection benefits of restoring the wetlands, and can be compared to the restoration costs to determine whether it is worthwhile to restore the flood protection services of the wetlands.

Evaluation: Damage Cost Avoided, Replacement Cost, and Substitute Cost Methods27

Advantages Disadvantages May provide a rough indicator of

economic value, subject to data constraints and the degree of similarity or substitutability between related goods.

Easier to measure costs of producing substitutes for non-marketed benefits rather than the benefits themselves l

less data- and resource-intensive and thus useful when resource limitations rule out other valuation methods

Substitutes costs for benefits when this is not really accurate

The cost of a protective action may exceed the benefits to society.

Does not capture innovation or new information since cost of actions already taken to protect an ecological resource may often underestimate the benefits of a new action to improve or protect the resource.

Replacement cost method requires information on the degree of substitution

between the market good and the natural resource whereas few environmental resources have clear direct or indirect substitutes.

Substitute goods are unlikely to provide the same types of benefits as the natural resource

Context for Use28 This approach is widely used in the following contexts: Valuing improved water quality by measuring the cost of

controlling effluent emissions Valuing erosion protection services of a forest or wetland by

measuring the cost of removing eroded sediment from downstream areas

Valuing the water purification services of a wetland by measuring the cost of filtering and chemically treating water

Valuing storm protection services of coastal wetlands by measuring the cost of building retaining walls

Valuing fish habitat and nursery services by measuring the cost of fish breeding and stocking programs

26Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003 27Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003; Review of Technical Guidance Section, 24. 28 Sourced from http://www.ecosystemvaluation.org/1-03.htm - accessed May 2003





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CHOICE & DECISION-MAKING METHODOLOGIES Choice or decision-making methodologies can be distinguished from the marketisation methodologies to the extent that they are used to support decision-making choices as opposed to merely revealing information about the market or market-like transactions.

Cost Analysis & Cost –Effectiveness Analysis29 The simplest type of economic analysis is a basic cost analysis, which calculates the economic costs of a particular project policy. A simple approach to cost analysis is an accounting approach in which the focus is on expenditure. From the point of view of economics, this is not a “true” cost analysis since it does not address what is foregone by the expenditures being focused on. A “true” cost analysis focuses on two elements: the direct costs incurred with respect to the project (implementation costs) and the opportunity costs of foregone alternatives. A project that converts a part of the water zone to large scale oil and gas drilling consumes valuable inputs (labor, energy, materials, land) but may also sacrifice other uses of the area (recreational fishing, use for ocean thermal energy, commercial fishing, indigenous customs and traditions etc.). When the sacrifices involve trading recreation, aesthetics, or cultural tradition, the process of estimation is especially challenging.

Cost-effectiveness analysis (CEA) is the next type of evaluation and is more arguably “true” evaluation since it is choosing between alternatives – it is asking which is the most cost-effective way of achieving the objective. One form of cost-effectiveness would concentrate on financial expenses only. The other more “economic” analysis would consider opportunity cost as well. “True” CEA is essentially a process of collecting and comparing cost information (economic information not just financial information) on various alternatives and choosing the least costly. CEA is called for when a clear objective has been identified and the issue is working out which is the least costly method of achieving that objective. CEA is also useful at regional level or broad-scale level to prioritize projects within the regional space.

There are two general types of CEA. In Type 1, the problem is to select a cost-effective set/bundle/cluster of actions or projects from a larger set – all projects within this set will be implemented usually in

29 Review of Technical Guidance Sections 3. 7 and 3. 8.


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incremental order. In Type 2, the problem is to select only one cost-effective action from many.

For example, in Type 1, a number of programmes or projects that achieve progress towards an objective (say a broad objective in a water management plan) are available, but not all actions need be or can be implemented within a specific period – say 12 months with budget constraint and funding for only 9 programmes or projects. There are 40 on offer. CEA will seek to select the 9 projects which are most cost-effective given the objective, implementation costs and opportunity costs. A plan which is less expensive (implementation costs) but which does not allow for multiple use of the particular water zone may be viewed as less cost-effective than one which is more expensive but provides more flexibility to manage multiple use of space. (Recall that a fundamental objective of all proper regional water plans is to maximize multiple use of the water zone). Both projects might well make it into the list with the more financially expensive entering at number 8 rather than number 9.

In the Type 2 cost-effectiveness situation, decision-makers must select just one action, because selecting one action precludes any other from being selected. This type of problem occurs when a unique resource can only be used for one purpose. If it is dedicated to one use, it cannot be used for any other. For example, a number of competing technologies are being selected to use a particular water site to produce ocean thermal energy. All would produce about the same energy output. In this case, cost-effectiveness is used to determine which project will provide the most units of energy per dollar, taking into account both implementation costs and opportunity costs (the extent to which multiple use of the area might have to be foregone for instance). A simple CEA would select the plan with the lowest unit cost.

CEA may be ex ante or ex post. In the former case, estimates of effectiveness and cost are compared. In the latter past expenditures and achievements are compared as a check on consistency of policy. Ex post CEA is one of the most effective checks on policy consistency.

Evaluation: Cost effectiveness analysis30

Advantages Disadvantages Secures “value for money” from a

given budget. Essential requirement for any

rational policy.

Does not say whether a given option is intrinsically worthwhile, merely whether the option is better than some other option.

30Review of Technical Guidance Section 3.8


26

Cost effectiveness analysis: Context for Use31 CEA is appropriate for alternative actions that 1) produce the same or similar type of output; 2) have costs and output that can be measured or reasonably estimated, and 3) have costs large enough to justify the additional analysis. Probably recommended as a basic measure for all significant programmes which have these elements.

Cost-Benefit Analysis (CBA) A cost-benefit analysis is a procedure for valuing gains (benefits) and losses (costs) in monetary terms based on individuals” willingness to pay to secure the benefit or avoid the cost. CBA is applicable to policies, projects and programmes. There is often confusion between cost-benefit as defined here and the many methodologies of economic evaluation in general. For instance, undertaking a hedonic price assessment is not strictly speaking undertaking CBA. However, the prices it generates in terms of how much people are “willing to pay” for recreation can then be fed into a formal CBA which may compare providing using a reserve with a wetland to provide recreational facilities as opposed to closing it off completely to serve as a pristine representative natural area or wildlife refugium. The US based National Centre for Decision-Making Research describes CBA as follows:

A decision support tool which provides a format for (1) enumerating the range of benefits and costs surrounding a decision; (2) aggregating the affects over time using an approach called discounting; (3) arriving at a dollar-denominated "present value" See - http://www.ncedr.org/tools/othertools/costbenefit/lead.htm -

The NCDMR further observes:

In simple terms, cost-benefit analysis imposes an accounting framework that prescribes classes of benefits and costs to consider, means to measure them, and approaches for aggregating them. Key parameters, like the rate at which to discount, are highlighted, and ways to recognize inherent uncertainties are supplied, as are ways to deal with uncertainties. Even though the approach originated as an analogy to private studies of investment, and thus to calculate a "go-no-go" decision, the technique is flexible and can be used to choose among a range of alternatives, to make comparable projects of differing lengths, and to identify instances where costs and benefits place identifiable groups at special advantage or disadvantage.See - http://www.ncedr.org/tools/othertools/costbenefit/lead.htm

The literature and methodology on cost-benefit assessments is vast and the technique has always been controversial. The discussion in this

31 Review of Technical Guidance Section 3. 8 & 3.9

http://www.ncedr.org/tools/othertools/costbenefit/lead.htm

http://www.ncedr.org/tools/othertools/costbenefit/lead.htm


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Chapter looks at CBA form the point of view of: (1) efficiency oriented CBAs; distributionally weighted CBAs; CBA approaches which incorporate stakeholder analysis; weighting and scoring CBAs. While CBA may have monetisation of impacts as its general aim, this is often not possible for all impacts. Hybrid approaches to CBA attempt to deal with the likelihood that some benefits and costs will not have monetary values. One hybrid approach is to take monetisation as far as is credible and to leave the remaining impacts in non-monetary terms. The non-monetary impacts may or may not be then subjected to weighting and scoring techniques.

Efficiency-oriented CBA32 In its purest form and as originally conceptualised by neo-classical economists, CBA seeks to compare the monetary value of benefits with the monetary value of costs. A benefit is defined as anything that increases human well-being, and a cost as anything that decreases human well-being. In turn, human well-being is determined by what people prefer. Preferences are either revealed through choices and market behaviour or are identified by the various marketisation methodologies. Measurement of a preference is obtained by finding out individual or group willingness to:

pay for a benefit; pay to avoid a cost accept compensation for tolerating a cost accept compensation for foregoing a benefit.

Where market prices are available, these are used. Marketisation methodologies are used to provide information on non-market prices or typically non-market aspects are ignored altogether. WTP and WTA concepts provide estimates of what is known as consumers’ surplus. The aim of maximising benefits minus costs, or of requiring benefits to exceed costs, is fundamental to the concept of economic efficiency which has the overall goal of maximising the sum of human well-being in a given economy.

Distributionally weighted CBA33 Efficiency oriented CBA is indifferent to who secures the costs and benefits. Indeed, it may contain a bias against the less rich because WTP is constrained by income, ie by ability to pay. This is not itself a

32 Review of Technical Guidance Section 3. 9. 1 33 Review of Technical Guidance Section 3. 9. 2


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criticism of CBA since CBA “mimics” the market place where WTP is also constrained by income. Opinion differs about the ways in which CBA can incorporate inequities and uneven distributions of wealth as well as access to resources. One approach is to use scoring approaches which obtain weights from a chosen group of experts, or, as the allocation of weights is nearly always controversial, a cross-section of interested parties, possibly with differing viewpoints. These may include environmental, consumer and business groups who reflect the relevant scientific and social opinions, as well as the general public. In all cases, numerical weights are applied to each impact and the weighted impacts are then added.

CBA and the interests of Stakeholders34 While most CBAs do not discriminate between who secures benefits and costs there are strong reasons for presenting a CBA so that it fully reveals who benefits and who loses. Ways of doing this include dividing up the costs and benefits according to whether they accrue to households, firms, and the government. Any other stakeholder analysis could in principle also be carried out. The rationale for stakeholder analysis is that, overall, policy benefits may exceed policy costs, but that costs and benefits to individual clusters of stakeholders may be very different. In particular, partitioning CBA in this way enables the policy maker to see who will gain most from the policy and who will lose. CBAs addressing stakeholder interests explicitly may use sections in which monetised as well non-monetised costs and benefits are displayed according to beneficiary or loser . CBA can also be combined with procedures in which participants who differ sharply from a consensus may be invited to reconsider their valuations in light of the collective stakeholder “consensus” valuation(s)35.

Basic Steps in a Simple CBA36 1. Determine Scope of CBA and the Relevant Stakeholders This aspect of a CBA procedure establishes whose benefits and whose costs count and the physical area that is to be included in the analysis. It links in with public consultation and also an assessment of the scope of what is being proposed. An Environmental Impact Assessment is often useful to help decide the scope both physically and also in terms

34 Review of Technical Guidance Section 3. 9. 4 35 Review of Technical Guidance Section 3. 9. 4. 36 See National Centre for Decision-Making Analysis – Guidelines on CBA - http://www.ncedr.org/tools/othertools/costbenefit/lead.htm - accessed April-May 2003.

http://www.ncedr.org/tools/othertools/costbenefit/lead.htm%20-%20accessed%20April-May%202003


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of stakeholders. Where the CBA is for a clearly defined client, this client is probably the most important reference point. The geographic scope of the project is also important in determining whose benefits and costs are being assessed since the benefits and costs may be distributed amongst a number of regions. Therefore, the specific regions included may affect the findings of the analysis. For example, looking at the issue from the point of view of the whole country may end up with a result which yield benefits greater than the costs for society as a whole, while a regional frame of reference could yield costs greater than benefits for the displaced people. The choice of accounting stance also affects the inclusion or exclusion of secondary benefits (i.e. the economic activity which results from or is induced by the primary activity). Benefit cost analyses compare the economy of the region with the project and without the project, to ensure that the defined region does in fact have a net benefit from the project and that the benefits are not just transfers from a neighboring region. This aspect of the process is extremely political and can easily be controversial. Depending on rights granted under legislation or the previous practice of the organisation, or the practice of similar organisations, interests left out may have a cause of action in a court of law or some other form of dispute settlement. 2. Select a range of alternative policy/technological/institutional options to address the issue The range of alternative responses is often quite large. Reducing the number of alternatives to a reasonable number requires an implicit benefit cost analysis or it can be made relatively explicit. 3. Qualify the impacts – Identification in terms of types of impacts Sometimes the impacts of a proposal are obvious. Other times, the impacts are subject to scientific and political controversy. In the water resources context, impacts are clearly ecological and economic and also cultural and social. It is at this stage that non-economic valuation methodologies such as EIA and LCA (see discussion immediately below) are important inputs into a CBA.

Benefits Costs Identify marketed goods and

services likely to be affected Identify non-marketed directly used

goods and services Identify non-marketed passively

used goods and services Identify goods and services for

which monetary values cannot be measured

Identify costs in terms of marketed input goods and services

Identify costs for r non-marketed directly used goods and services that must be given up – opportunity cost

Identify costs for non-marketed passively used goods and services that must be given up – opportunity cost


30

Identify costs for which monetary values cannot be measured – monetised by marketisation methodologies

4. Quantify the impacts. Analysts then have to quantify the qualitative impacts over the lifetime of the project. This is where economic valuation methodologies come in most strongly.

Benefits Costs Quantify marketed goods and

services Quantify non-marketed directly

used goods and services Quantify non-marketed passively

used goods and services Identify and if possible “quantify:

goods and services for which monetary values cannot be measured – quantified /monetised by marketisation methodologies

Quantify costs in terms of marketed input goods and services

Quantify costs for r non-marketed directly used goods and services that must be given up – opportunity cost

Quantify costs for non-marketed passively used goods and services that must be given up – opportunity cost

Quantify costs for which monetary values cannot be measured – monetised by marketisation methodologies

5. Monetize the impacts. CBA requires the assignment of dollar values to impacts. This task is accomplished through market and non-market valuation techniques. This is one of the more difficult components of CBA given the need to monetize a range of impacts.

Benefits Costs monetary values for marketed

goods and services monetary values for non-marketed

directly used goods and services monetary values for non-marketed

passively used goods and services goods and services for which

monetary values cannot be measured - monetised by marketisation methodologies

monetary values for marketed input goods and services

monetary values for non-marketed directly used goods and services that must be given up – opportunity cost

monetary values for non-marketed passively used goods and services that must be given up – opportunity cost

costs for which monetary values cannot be measured – monetised by marketisation methodologies

6. Discount the future monetary impacts. Discounting recognizes that a transaction that occurs in the future is worth less today than the same transaction today. Most calculators


31

currently have a function which allows the user to undertake a discounting analysis. Dedicated computer programmes also exist whilst Excel can also undertake fairly complicated discounting tasks. 7. Add up the benefits and costs. Once the benefits and costs are monetised they must be compared. There are several decision rules that can be applied to a CBA to find the net social benefit (NB). One approach is to use a subtraction approach in which costs are subtracted from benefits. The other is to use a ratio evaluation.

Subtraction approach Ratio approach 1. Net social benefits (NB) are the

sum of benefits (B) minus costs (C).

2. If NB = B – C > 0 then the project is a good one (efficient)

3. If NB < 0 then the project is inefficient.

1. Benefits divided by costs (B/C) 2. If B/C > 1 then the project is a

good one 3. If B/C < 1 then the project is a

bad one

In comparing projects it should be noted that these two methods will not always give the same recommendation. The social net benefit rule will always allow you to recommend the alternative with the greatest difference between benefits and costs. 8. Sensitivity Analysis To cross-check a range of factors especially the the most uncertain or controversial elements of the analysis it is always useful to perform a sensitivity analysis. Any benefit cost analysis contains a considerable amount of uncertainty. A sensitivity analysis requires the relaxation of assumptions and a recalculation of the benefits and costs. The process of sensitivity analysis should be limited to the most uncertain, difficult or controversial aspects. Sensitivity analysis is described further below. 9. Recommendation. Finally, the analyst should recommend the preferred alternative. The preferred alternative is the one with the largest net social benefits. The analyst is not the social decision maker and must recommend the alternative that maximizes efficiency, not the alternative that the analyst prefers.


32

Cost-Benefit Analysis and Economic Efficiency37 Earlier Chapters introduced the concept of Pareto efficiency and the Kaldor-Hicks qualification to Pareto efficiency. The Kaldor-Hicks criterion is generally used as the key principle for judging whether a CBA outcome is efficient or not38. Pareto Optimality Kaldor Hicks Qualification to Pareto Criteria A situation in which everyone is made better off without making anybody else worse off – a situation which seldom applies

A policy or project is said to constitute a potential Pareto improvement if those who benefit as a result of the project or policy:

1. gain by more than the losses of those who were made worse off as a result of the project or policy;

2. the extent of their gain is such that they could still compensate losers for their losses and still be better off after such compensation;

3. they need not actually compensate losers – it is enough that they have enough surplus to be able to compensate the losers if they wished;

4. the State could thus tax the winners and redistribute the gains to the losers but stull leave the winners better off than before the change

Evaluation: Cost Benefit Analysis39

Advantages Disadvantages Permits determination of

“absolute” desirability of a policy in economic efficiency terms.

Consistent underlying theoretical foundations.

Forces consideration of cost as an indicator of foregone benefits (opportunity cost).

Consistent with individuals” preferences (democratic base).

Explicit treatment of risk and uncertainty via sensitivity analysis, risk-equivalence models, decision – theory etc.

Deals with economic efficiency only, or possibly with efficiency and distribution only. Tends not to accommodate other policy goals.

Problem of choice of discount rate (but this is common to all policy guidance). Potential for discrimination against sustainability concerns.

Data may not permits all benefits and costs to be monetised.

Some public acceptability issues: some pressure groups continue to see it as “unethical”.

Cost Benefit Analysis: Context for Use

Sensitivity Analysis

37 Review of Technical Guidance Section 3. 9. 1. 38 See National Centre for Decision-Making Analysis – Guidelines on CBA - http://www.ncedr.org/tools/othertools/costbenefit/overview.htm#3 - accessed April 2003 39 Review of Technical Guidance Section Section 3. 9. 1 – 3. 9. 5.

http://www.ncedr.org/tools/othertools/costbenefit/overview.htm#3


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Sensitivity analysis measures the impact on project outcomes of changing one or more key input values about which there is uncertainty. It allows analysis to be made of a number of scenarios, for example comparing a highly pessimistic situation with what is expected as well as a very optimistic situation. Sensitivity analysis shows just how sensitive the cost-benefit or other analysis is to uncertain values with respect to a critical input, such as the discount rate or the project maintenance costs expected to be incurred over the project's study period. In terms of money, sensitivity analysis reveals how the extent of monetary “shock” that might occur if a particular parameter turns out to be seriously wrong and allows for “worst scenario” planning. The modeler must pick the parameters he expects to have most influence on the final outcomes or the ones that he is most uncertain about, and focus on these in the sensitivity analysis.

NON-ECONOMIC VALUATION INSTRUMENTS

The successful application of economic evaluations depends upon existing scientific understanding of the underlying processes. The non-economic evaluations help us to understand what is technically feasible, economics helps us to understand the market implications of choosing among the feasible alternatives. When the science is deficient, an economic assessment cannot fill in the gaps. But economics can help decision-makers move toward reasonable decisions by assessing the costs of alternative projects and assessing the benefits of prospective outcomes. The rest of the discussion briefly discusses various assessment methodologies which provide support for economic evaluations.

Environmental impact assessments40

Environmental impact assessment can be defined as “an assessment of the impact of a planned activity on the environment” In essence, it is a systematic process whereby information about the environmental effects of an action is collected and evaluated, with the conclusions being used as a tool in decision-making. The EIA process may involve several stages

project screening: narrows the application of EIA to projects that may have significant environmental impacts. This may be partly determined by legislation.

scoping: identifies the potential environmental impacts to ensure the assessment focuses on the key issues for decision-making.

identification: of key environmental impacts. 40 Review of Technical Guidance, Section 3. 2.


34

consideration of alternatives: in terms of sites, designs, processes. prediction of impacts: predicts the magnitude of key impacts. evaluation of significance: assessment of significance of the key

impacts. mitigation: proposal of measures to prevent, reduce or rectify the

impacts. documentation: presentation of EIA results for clear

communication. review: systematic appraisal of the quality of the environmental

statement. post-decision monitoring: to assess the ex post effect of the

project on the environment. post-project audit: comparison of actual outcomes with predicted

outcomes to assess the quality of predictions and effectiveness of mitigation.

These are the main elements of a “typical” EIA process, although this may vary according to context and the type of project under consideration. The order of the steps in the process may vary.

In summary, the aim of an EIA is to give a systematic and objective account of the significant environmental effects to which an action is likely to give rise. As such, EIA is a useful input to the decision-making process, providing decision-makers with better information about the environmental consequences of their actions. However, EIA alone does not provide a procedure for aggregating the impacts, so as to obtain some overall measure of the total environmental effects of a given action. Nor is there a formal “decision rule” to determine whether or not a given action is acceptable. This may not be required if it is accepted that its main purpose is to “screen” impacts so that policy or project may be redesigned. The term “EIA” is usually understood to refer to individual project-based assessments. Although early discussions of EIA suggested that it should be applied to decision-making at the policy level, this approach is now generally referred to as strategic environmental assessment (SEA).

Evaluation: environmental impact assessments41

Advantages Disadvantages Forces systematic consideration of

environmental consequences of actions, as input to decision-making process.

Points way to measures needed to mitigate serious negative impacts.

Water resources environmental impact assessments are not as well developed as land based EIA

Does not provide decision rule or procedure for aggregating environmental impacts.

41 Review of technical guidance, Section 3. 2.


35

Environmental impact assessments: Context for Use This methodology can be used in all circumstances of significant change to the water ecosystems.

Life cycle analysis42 Life cycle analysis (LCA) is a process used both to evaluate the environmental burdens associated with a product, process or activity and to consider opportunities to effect environmental improvements. LCA examines every stage of the life cycle of a product, from the production of raw materials through manufacture to disposal. For each stage, the inputs (in terms of materials and energy) and outputs (in terms of emissions to air, water and solid waste) are calculated and these are then aggregated over the life cycle. In principle, the same approach applies to policies, i.e. all effects of policies can be traced through linkages back to raw material and energy supply effects and forward to any waste disposal and emissions. The process can be divided into four stages:

1. goal definition and scoping, 2. life cycle inventory analysis, 3. impact assessment, and 4. valuation

Goal definition and scoping: At this stage, the LCA is planned such that the purpose and intended application f the LCA can be met. The “functional unit” is chosen, which is the basis for the analysis and the results of the study are related to it. For example in a comparison of landfill versus recycling, the functional unit could be “one unit of household waste”. The systems to be studied are identified and defined and system boundaries are defined.

Life cycle inventory analysis: The inventory quantifies the material and energy inputs and emissions to air, land and water. The result is essentially a list of physical emissions resulting from all of the processes considered.

Impact assessment: This stage facilitates the interpretation and aggregation of inventory data into forms more manageable and meaningful to the decision-maker. The UNEP/SETAC (Society of Environmental Toxicology and Chemistry)43 problem-oriented approach is the most widely accepted method within the LCA community. It involves (a) classification, which groups the data into impact categories,

42 Review of technical guidance, Section 3. 3. 43 See http://www.uneptie.org/pc/sustain/lcinitiative/ - accessed May 2003

http://www.uneptie.org/pc/sustain/lcinitiative/


36

e.g. global warming, acidification, (b) characterisation, which assesses the relative contribution of burdens in each impact category, and (c) valuation, which evaluates the relative importance of the impacts categories by assigning weights to them. These approaches, notably the economic valuation methodology, may omit either or both of the steps of classification and characterisation.

Conventional LCA does not prescribe which form of weighting should be used. Instead, it offers a list of options, including single factor dominance, equal weighting, expert judgement, social preference, ranking according to nuisance and economic valuation. These issues are taken up in the next section.

Evaluation: Life Cycle Analysis44

Advantages Disadvantages Thorough procedure for evaluating

environmental effects of a product, process or activity.

Reliability of results highly dependent on weighting procedure used to aggregate impacts. Tends to ignore disamenity impacts.

Life-Cycle Analysis: Context for Use LCA is likely to be of most use with respect to water mining projects and proposals. (find example from Young)

Weighting of Impacts- a Problem for LCA and EIA The principal advantage of the economic methodologies is that they are structured to lead to scoring and weighting which assists the decision-maker make a choice between alternatives. A major barrier to the use of either EIA or LCA for the assessment of alternative environmental options is the problem of weighting the impacts they identify. In any decision-making process to do with the use of public resources, unless the choice that needs to be made is obvious, weights probably need to be attributed to the impacts according to their relative importance. This is a highly controversial process.

Scoring or weighting of impacts can use views from a chosen group of experts or a panel representing a cross-section of interested parties, possibly with differing viewpoints. These may include environmental, consumer and business groups who reflect the relevant scientific and social opinions, as well as the general public. In all cases, numerical

44 Review of Technical Guidance Section 3. 3.


37

weights need to be applied to each impact with the weighted impacts then added to provide a score.

In the LCA approach, two forms of scoring are often required: first, to rank the extent to which more or less of a pollutant is important, i.e. linear relationship or thresholds; and second to rank emissions relative to other pollutants and impacts, e.g. NOx versus CO2 or particulate matter. The potential comprehensiveness of this method is high, because as many different categories as are necessary can be included. However, the practicability of the technique decreases the more thorough it is - the more that is included in the study, the more difficult it becomes to conduct.

Important considerations when using judgements of experts or stakeholder panels are the units used and the way in which questions are asked. Decision theory techniques, such as the Delphi technique45, can be used to make the value judgements more explicit, but most experiments have shown that the results are non-repeatable. There is also the problem that the use of experts in the panel means that those making the decision have a high level of knowledge but they may not represent societal interests, while a socially representative group may lack the required level of knowledge of the problems under debate.

Evaluation EIA/LCA + Supplementary Scoring46

Advantages Disadvantages Potential comprehensiveness high as

any given impact can be included. Easy to use.

Results sensitive to question design and are non-repeatable.

Experts are knowledgeable but may be unrepresentative.

More socially representative group may lack necessary knowledge

May be very expensive to implement

EIA/LCA + Supplementary Scoring: Context for Use Can be very useful to supplement a CBA process and make the investigation more socially responsive.

45 Delphi Technique - A technique to arrive at a group position regarding an issue under investigation, the Delphi method consists of a series of repeated interrogations, usually by means of questionnaires, of a group of individuals whose opinions or judgments are of interest. After the initial interrogation of each individual, each subsequent interrogation is accompanied by information regarding the preceding round of replies, usually presented anonymously. The individual is thus encouraged to reconsider and, if appropriate, to change his previous reply in light of the replies of other members of the group. After two or three rounds, the group position is determined by averaging. – International Social Science Dictionary (1985) 46 Review of technical guidance 3. 4.


38

Strategic environmental assessments Strategic environmental assessment (SEA) is usually described as the application of EIA at the level of policies, plans and programmes (PPPs). To date, EIA has been used primarily in the evaluation of projects. However, it is argued that this in itself cannot lead to comprehensive consideration of environmental concerns for several reasons. First, cumulative impacts of several projects may not be adequately considered. Examples include synergistic impacts, where the total effect of several projects is greater than the sum of the individual impacts, or indirect impacts, where a project stimulates secondary developments and infrastructure.

More importantly, however, is the fact that EIA is a reactive approach, which cannot steer developments to the most appropriate locations from a national perspective. Because evaluation is undertaken only at the project level, alternatives are considered only in a very limited manner.

SEA represents an attempt to address these concerns by taking them into account at an earlier stage in the decision-making process. The methodology is broadly similar to that for preparing project EIAs but includes preliminary steps such as: determination of need, establishment of the area and data to be analysed, and identification of alternatives. In doing so, it has the potential to allow a more proactive approach to be taken. SEA has also been proposed as a method of addressing sustainability issues. However, there is no consensus on an official methodology for SEA which can be universally applied. This is partly due to the fact that factors for consideration vary enormously between, for example, different sectors and different levels of policy-making.

Evaluation: Strategic environmental assessments47

Advantages Disadvantages

Has potential to address environmental concerns at early stages of decision-making.

Forces thorough consideration of cumulative impacts of several projects or policies.

Forces wider consideration of alternatives. Proactive approach, with potential to steer

developments to most appropriate locations from a national perspective.

No consensus on an official methodology.

Has been considered more at theoretical than practical level.

Difficult to define methodology which is suitable and consistent across all sectors and levels of policy.

.

47 Review of technical guidance Section3.5.


39

Context for Use This approach can be usefully applied to assess the impacts of particular sectors over the long to medium term or the relationships between different sectors over a longer time horizon. It can also be used to assess the effectiveness of agency policies, especially the robustness of agency policies.

Risk assessment48 Risk assessment (RA) involves the estimation of the probability and severity of hazards to human health, safety and ecosystem functioning or “health”. Any hazardous substance has the potential to cause these forms of harm, but the chances that it will do so depend on the circumstances of its introduction to the environment, ie on the exposure of humans and the natural environment to the hazard. This risk assessment needs to assess the potential hazard, the likelihood of that hazard being realised, and the severity of the impact for any given level of exposure. The most comprehensive evaluation of risk assessment procedures is the set of volumes published by the US Environmental Protection Agency, and arising from a programme of work focused mainly between 1987 and 199149.

Evaluation: risk assessment50

Advantages Disadvantages Requires identification of

probability and scale of adverse effect.

May not give full indication of adverse effect, merely exceedance over some no-effect or “acceptable risk” level.

No explicit requirement to consider cost of reducing risk.

Risk assessment: Context for Use It is very useful for many problems in water resource management especially involving the use of chemicals and other hazardous substances. It is also used in fisheries research and fisheries science.

Comparative risk assessment51

48 Review of technical guidance Section 3. 6. 49 See http://www.epa.gov/superfund/programs/risk/tooleco.htm - accessed May 2003 50 Review of technical guidance Section 3. 6. 51 Review of technical guidance Section 3. 6. 1.

http://www.epa.gov/superfund/programs/risk/tooleco.htm


40

Comparative risk assessment (CRA) involves doing risk assessment for two or more risks at the same time to illuminate whether or not resources are sensibly allocated to reducing one set of risks rather than another. For example, suppose $1 million is spent reducing risks from chemical A and $1 million is also spent reducing risks from chemical B, but that the control measures on A reduce risks of lives lost by 50 and those on B by 20. The “cost-risk ratio” for A is $20,000 and for B, $50,000. In other words, it costs two and half times as much to save a “life” from spending money on B than on A. If some of the money spent on B was re-allocated to A, then more lives in total would be saved. CRA has value in comparing overall policy strategies. CRA may assess health risks alone (health risk assessment) or to ecosystem risks alone (ecosystem risk assessment).

Evaluation: Comparative risk assessment

Advantages Disadvantages Requires identification of probability and

scale of adverse effect. Forces consideration of cost and the

“productivity” of resources in terms of risk reductions in different areas/or ensures that tolerable risk levels are set according to what is revealed to be tolerated elsewhere.

May focus on one form of risk only, eg health risks, when other forms of risk, eg to ecosystems, may be just as relevant

While CRA indicates which risk it is more efficient to reduce, used in isolation it does not identify whether any risk at all should be reduced.

Comparative risk assessment: Context for Use It is very useful for many problems in water resource management especially involving the use of chemicals and other hazardous substances. It is also used in fisheries research and fisheries science.

Multi-criteria Analysis Multicriteria analysis (MCA, also known as multi-attribute analysis, multi-goal analysis and multi criteria decision making) is a two stage decision procedure. The first stage identifies a set of goals or objectives and then seeks to identify the trade-offs between those objectives for different policies or for different ways of achieving a given policy. The second stage seeks to identify the “best” policy by attaching weights (scores) to the various objectives. MCA is especially widely used in the Netherlands. It has also attracted attention more widely in the waste management field. In stage 1 there is no precise guidance on how to choose objectives. They may be “given” by the policy maker or they may be the outcome of some debate among those giving advice. However, there are no set rules for selection. Typical objectives might be:


41

economic efficiency - either in the technological sense (minimum cost for a given objective) or the allocative sense (cost is allocated to where the benefit is highest);

distributional impact - incidence of costs and benefits by socio-economic group, stakeholder, or spatially;

employment public acceptability sustainability competitiveness.

Even this list indicates one risk with MCA, namely the temptation to multiply objectives so that they are overlapping. For example, employment and socio-economic incidence may well be correlated, as might economic efficiency and sustainability. MCA assumes that it is possible to identify the extent to which any policy measure achieves the stated objective, ie number of jobs created, change in some index of competitiveness, proportion of cost borne by low income groups etc. If no direct measure is possible, some judgmental scaling of achievement of the objective is required.

The advantages of MCA are:

that it permits the inclusion of qualitative as well as quantitative data;

that it enables impacts that range far wider than usual risk assessment impacts and those used in CBA to be included.

that it is probably cheaper than a CBA; that it is more comprehensive than a risk assessment.

Evaluation: multi-criteria analysis52

Advantages Disadvantages Enables quantitative and qualitative data to

be combined. Range of impacts wider (multiple goals). Probably cheaper than CBA. More comprehensive than RA.

No clear criteria for selecting impacts. Risk of double counting impact categories. Potential for arbitrariness in ordinal scoring

of qualitative impacts. Potential for arbitrariness in weighting

overall impacts for relative importance.

Multi-criteria analysis: Context for Use This approach can be applied to virtually all water resource management problems.

52 Review of Technical Guidance Section, 3.7.


42

BENEFITS TRANSFER

Benefits transfer involves transferring economic values found to be present is situation A to situation B. What is transferred or borrowed may be a value which is adjusted to suit situation B or it may be the original value as found or expressed in situation A. Benefits transfer is of increasing importance since full scale studies are expensive and it is impractical for a new study to be carried out every time valuation is required. Benefits transfer also saves time and expense. The principal problem with benefits transfer and an objection raised to it by the deep green sectors of the NGO movement is that it is not reliable and it downgrades the unique character of many environmental assets. There are a range of procedures for ensuring that there is a reasonable degree of fidelity in the process of transfer. Whilst the values transferred need not be the same, they must be similar or fairly close for the new valuation to have validity in both an economic sense and also a politically legitimate sense. One approach to testing for validity is to undertake a sample of studies (a meta-analysis)and find the average WTP associated with these studies. This WTP can then be applied in the new situation. Yet another approach is to use a panel of experts to assess both the original study/site and the new area of study to establish differences and similarities between the two contexts to guide the process of benefits transfer. Databases are also gradually being built up in the US and Europe which record a large number of studies of WTP and WTA so that these can be used to provide estimates in broadly similar circumstances. The legal aspects of benefits transfer do need to be borne in mind however, since there may be grounds for challenging a valuation on the grounds that the transferred date was not appropriate or the process of screening and adjusting the data was not robust or defensible.


43

LIMITS TO THE USEFULNESS OF ECONOMIC VALUATION IN WATER RESOURCE MANAGEMENT Although much money, time and sophistication accompanies the methodologies described in this Chapter, it is also important to be aware of the limitations of economic valuation as a contribution to water resource management. The rather artificial assumptions of neo-classical economics have already been described and the fact that the assumptions of neo-classical economics are seriously contested has already been stated. In the real world, and with respect to specific projects, plans or programmes at agency level, mainstream economic analysis may be of limited usefulness or have limited impact for a number of reasons. Policy analysis may often have to explicitly consider whether these limitations exist and where they do, it may well be that only the most rudimentary economic analysis is required, or that analysis will be undertaken in the knowledge that it may eventually not be particularly useful in shaping a specific decision process. Its usefulness may only be obvious much later down the track.

The first area of limitation may be that prior property rights distributions or political circumstances will block the use of economic analysis which clearly demonstrates costs and benefits. Put another way, the presence of entrenched interests may mean that economic analysis which demonstrates a need for change may not be particularly welcome.

Secondly water resource management together with all other areas of management of the environment generally confronts the issue of fundamental stakeholder differences in conception of nature and humankind’s role in nature. The existence of such divergent ethical views complicates (1) the application of economic analysis to water resource management problems; (2) the communication of economic analysis to the public and decision makers. In particular, deep green ethical views challenge the relevance of neo-classical economic analysis and it’s peculiarly anthropocentric stance, given that in the deep green view, human concerns are no more important that those of other species. Many deep greens would thus consider the economists’ focus on human preferences and economic values ( a constant theme in this Chapter with its focus on consumer surplus and willingness to pay and to accept) as misguided, pointless and certainly for some, immoral. Economic analysis however well done (technically, with social sensitivity and excellent communication) will thus not necessarily win the day.

Thirdly quantitative economic assessments of the type discussed above often suffer from perceptions of inaccuracy or unreliability especially when the analytical techniques used are either excessively technical or are insufficiently developed to inspire wide support. In particular, the currently


44

dominant method for estimating passive non-use values – CVM– uses survey techniques and statistical models that are not fully accepted even in the economics profession. Hence, the influence of such information may well be blunted by controversy.

To complicate matters, the scientific information (risk assessments, dose-response functions, life-cycle analysis etc. ) supporting the economic assessments may also be equally inadequate or controversial.

Finally, even when economic issues are (1) clearly significant; (2) sufficient data is available; (3) procedures encourage consideration of economic trade-offs, it may well be that the economic analysis still fails to make a clear statement about the kinds of issues and problems (usually pressing political issues) that are of real interest to the final decision-maker.


45

CHAPTER SUMMARY

Many of the goods and services provided by water and water-associated ecosystems have no market in the usual sense. Thus a day at the beach has both “bought” and “free” elements. The bought elements might comprise purchase of a ticket to allow access to a site or petrol to get to the site whilst the actual pleasure of being at the beach and fishing is “free” in the sense that no direct payments are made for it. In terms of the demand and supply analysis introduced in Chapter 6 the demand for the service – a composite service – is demonstrated by the consumer making the choice to go to the beach and go fishing - involving an expenditure of time and money. Opportunity cost is demonstrated by giving up something else to go to the beach. All things being equal (ceteris peribus) the decision to go to the beach rather than do something else, suggests that the trip to the beach has more utility than the competing options. However only some of the components of the trip to the beach are monetised. The task is to work out how to apply a monetary measure to the non-monetised elements as part of decision-making. Chapter 6 provided an introduction to some of the basic economic concepts that are central to the monetisation analysis. In this Chapter, the applied techniques which use these concepts have been discussed in more detail with a particular emphasis on those methodologies that are used to measure the monetary value of goods without a price. From the public policy point of view, these methodologies can all be viewed as subsets of an over-arching requirement to consider the gains and losses from a policy measure. They differ in their focus however, in how gains and losses are defined, in terms of whose judgment of gains and losses are considered, and in the extent to which they permit aggregation of gains and losses. They can also be inter-mingled with each other and can be wrongly described.

It has been demonstrated for instance that cost-benefit analysis defines gains and losses in terms of a specific measure of change in human wellbeing and it rests on the value judgement that individuals who gain and lose, whoever they are, should determine those gains and losses. In contrast, multi-criteria analysis adopts a broader view of what constitutes a gain or loss. Thus, meeting some international obligation might appear as a goal in multi-criteria approaches, as might the protection of some vulnerable social group and so on. Such mattes might more easily be excluded form a conventional CBA. Risk assessment focuses on sub-sets of losses, either risks to people”s health or to ecosystems, and sometimes both. However, risk assessment is unlikely to aggregate the risks, whereas cost-benefit analysis would attempt to do so. Risk assessments might not adopt the viewpoint of those at risk, but might prefer to adopt expert assessments, and so on. There is therefore no one “right” technique. Those who think individuals matter, “right or wrong”, will tend towards a cost-benefit style approach. Those who see government as an institution


46

acting on behalf of people will tend to opt for more politically-oriented approaches whereby politicians decide what counts, with experts backing up and informing those assessments. There is also a difference of view on the issue of process. Many would argue that what matters most is how decisions are made. It may be that a procedure using public participation is regarded as more important than one based on some balancing of costs and benefits. In some cases, the two may be combined, as with modern approaches to economic evaluation through the adoption of questionnaire-based approaches. Process is also important at the political level: consultation with parties who are, or represent in some way, the stakeholders, offers some guarantee that the relevant inter-linkages which are central to water resource management will be properly captured by the water resource manager.

It has also been pointed out that with respect to specific projects, plans or programmes mainstream economic analysis may be of limited usefulness or have limited impact for a number of reasons including fundamental conflicts of values. In real life situations it will be important that agency decision-makers be clear about each of these circumstances, because it is unwise to spend substantial amounts on economic analysis when unnecessary and it is equally unwise to ignore economic consequences for lack of understanding or ability to communicate these ideas.


47

REFERENCES

Botzler, R. G. and S. J. Armstrong (1998) Environmental Ethics - Divergence and Convergence. New York, McGraw-Hill. Constanza, R. and J. Cumberland and H. Daly and R. Goodland and R. Norgaard (1997) An Introduction to Ecological Economics. St. Lucie Press, Boca Raton, FL. Daly, H. E. and Cobb, J. B. (1989) For the Common Good: Redirecting the Economy Toward Community, the Environment and a Sustainable Future. Beacon Press, Boston, MA. Department of the Environment, Transport and the Regions (UK), Review of Technical Guidance on Environmental Appraisal. A Report by EFTEC (Economics for the Environment Consultancy) 1999. Economic Development Institute of the World Bank and OECD, The Economic Appraisal of Environmental Projects and Policies – A Practical Guide (1995), Ecoystem Valuation - http://www.ecosystemvaluation.org/1-03.htm Edwards-Jones, G., B. Davies and S. Hussain (2000) Ecological Economics. An introduction. Blackwell Science, Oxford. Pearce, D. W. and R. K. Turner (1990) Economics of Natural resources and the Environment. Harvester, Wheatsheaf, Hemel Hemstead. Tietenberg, Environmental and Natural Resource Economics (1996), 70. Turner, R. K., D. Pearce and I. Bateman (1993) Environmental Economics. An Elementary Introduction. Baltimore, Maryland, John Hopkins University Press.



1

FRONTIER ISSUES – CLIMATE CHANGE

AND ENVIRONMENTAL WATER

CHAPTER

12 INTRODUCTION TO THE CHAPTER

(IN PROGRESS CAMMERMAN)


2

REFERENCES

Extended Glossary 1

ITEM EXPLANATION Absolute Poverty A person living in absolute poverty is not able to satisfy his or her

minimum requirements for food, clothing or shelter. The dollar a day poverty line is accepted internationally as an absolute poverty line. In contrast, relative poverty lines are set with respect to the standard of living and social norms in particular countries

Access Access refers to the rights or entitlements of an individual or a group to obtain or make use of water resources or the services that provide water for different uses.

Access To Improved Drinking Water Supply And Sanitation

An improved water source is any form of water collection or piping used to make water regularly available and reasonably protected from contamination. Quantitatively, WHO and UNESCO define an improved source in rural areas as a source that provides 20 litres per capita per day at a distance no greater than 1000 metres. In urban areas, access to piped water or a public standpipe should be within 200 meters of a dwelling or housing unit. Whether water quality is satisfactory will depend on its intended use (e.g. for drinking, bathing, irrigation, industrial use). Urban areas with access to sanitation services are defined as urban populations served by connections to public sewers or household systems such as pit privies, pour-flush latrines, septic tanks, communal toilets, and other such facilities. Rural populations with access are defined as those with adequate disposal such as pit privies, pour-flush latrines, etc. Application of these definitions may vary, and comparisons can therefore be misleading.

Access To Safe Water

Measured by the number of people who have a reasonable means of getting an adequate amount of clean water, expressed as a percentage of the total population. In urban areas 'reasonable' access means there is a public fountain or water spigot located within 200 metres of the household. In rural areas, it implies that members of the household do not have to spend excessive time each day fetching water. Water is safe or unsafe depending on the amount of bacteria in it. An adequate amount of water is enough to satisfy metabolic, hygienic, and domestic requirements, is about 25-50 litres per person per day.

Access To Sanitation

Refers to the share of the population with at least adequate excreta disposal facilities, effectively preventing human, animal, and insect contact with excreta. Suitable facilities range from simple but protected pit latrines, to flush toilets with sewerage. To be effective, all facilities must be correctly constructed and maintained. Sanitation is an important public health measure which is essential for the prevention of disease.

Accountability A responsibility to account for and/or explain actions undertaken. 'Public accountability' is where an agency has to account to the electorate or the wider public for a decision e.g. on policy or involving the expenditure of public funds. Accountability is often used synonymously with such concepts as answerability, responsibility, blameworthiness, liability and other terms associated with the expectation of account-giving. In representative democracies accountability is an important factor in securing good governance and, thus, the legitimacy of public power. Accountability differs from transparency in that it only enables negative feedback after a decision or action, while transparency also enables negative feedback before or during a decision or action. In principle, accountability constrains the extent to which elected representatives and other office-holders can willfully deviate from their theoretical responsibilities, thus reducing corruption.

Extended Glossary 2

Active (or live) storage

Volume or cubic capacity of a lake or reservoir between the maximum and minimum operating levels.

Adaptation A set of responses to actual and potential impacts of climate change to moderate the harm or take advantage of the opportunity that climate change may bring. It’s about managing climate risks today and into the future because we cannot be completely certain about what climate variability and change will mean for different groups within society and economy. An important component of climate change adaptation is reducing the vulnerability of poor people to climate-related shocks (e.g. flooding) and stresses (e.g. reduced access to safe drinking water) Where there is a lack of adaptive capacity to deal with climate variability and climate change a useful starting point can be tackling the adaptation deficit before embarking on new adaptation activities.

Adaptation Deficit Lack of adaptive capacity to deal with climate variability and climate change. A useful starting point can be tackling the adaptation deficit before embarking on new adaptation activities.

Adaptive Capacity Inherent capacity of a system or population to cope with climate impacts or climate change. Elements of adaptive capacity include financial, technological, knowledge and institutional resources. Poor people typically have lower adaptive capacities.

Adaptive Management

Adaptive management is a type of management in which actions, strategies and plans are continually adjusted in the light of new information. Adapative management is felt by many theorists to be central to sustainable development and management of water resources

Advanced Water Treatment

A level of water treatment that requires an 85-percent reduction in pollutant concentration. Also known as tertiary treatment.

Advanced Wastewater Treatment

Any treatment of sewage water that includes the removal of nutrients such as phosphorus and nitrogen and a high percentage of suspended solids.

Adversely affected people

Populations who suffer negative effects during water and energy development interventions. In the case of dam projects, this includes people whose economic, social and cultural lives are negatively affected by construction works, impoundment, alteration of river flows and any ecological consequences. The term includes displaced people, host communities, and downstream and upstream populations. It may also include groups affected by the construction of transmission lines or the development of irrigation schemes, water transfer canals, sanctuaries, and so on.

Advocacy Representing an organization through articulating the mission and supporting and defending the organization’s message

Agricultural Advisory Services

The provision of advice on agricultural production and marketing. Delivery can be traditional, integrative or farmer-led. Advise on the use of water is integral to this type of service and generally involves advice on demand mangement

Agrobiodiversity That component of biodiversity that contributes to food and agricultural production. The term agro-biodiversity encompasses within-species, species and ecosystem diversity

Agro-Ecosystems A dynamic association of crops, pastures, livestock, other flora and fauna, atmosphere, soils, and water. Agro-ecosystems are contained within larger landscapes that include uncultivated land, drainage networks, rural communities, and wildlife. Irrigation networks are a paradigm example of this type of ecosystem

Algal Bloom Abnormally increased biomass of algae in a lake or river. Algal blooms

Extended Glossary 3

occur naturally in spring and early summer, when the rate of reproduction of the algae outstrips that of their consumers. However, the most serious algal blooms are associated with human activities. Phosphates and nitrates carried into waterways in sewage, agricultural fertilisers and detergents, provide the nutrients that cause explosive growth in the algae population.

Alluvium A general term for clay, silt, sand, gravel or similar unconsolidated material deposited during comparatively recent geologic time by a stream or other body of running water.

Audit A review of the transactions and activities of an organization Aquifer A geological formation (water-bearing layer of permeable rock, sand or

gravel) that has sufficient water-transmitting capacity to yield a exploitable quantities of water via wells and springs. Aquifers have two fundamental characteristics: a capacity for groundwater storage and an ability to support groundwater flow

Aridity Permanent dryness caused by low average rainfall, often (but not always) in combination with high temperatures. The deserts of the world are permanently arid, with rainfall amounts of less than 100 mm per year, and evapotranspiration rates well in excess of that amount.

Arsenic A highly toxic element which exists in three forms – grey, black and yellow arsenic. It occurs naturally in the environment, being released from arsenic-bearing rocks through weathering. Arsenic accumulates in the environment so that small doses, relatively harmless individually, may eventually kill organisms - including people.

Assimilation The ability of water to purify itself of pollutants. Assimilative Capacity

The capacity of natural water to receive wastewaters or toxic materials without negative effects and without damage to aquatic life or humans who consume the water.

Awareness Raising Awareness raising is the process by which individuals or organisations have their knowledge increased especially in matters that are of particular relevance. Awareness raising is often an important component of targeted programmes of capacity development.

Bacterial Water Contamination

The introduction of unwanted bacteria into a water body.

Barrage (gate-structure dam)

A structure built across a river consisting of a series of gates that when fully open allow the flood to pass without appreciably increasing the water level upstream of the barrage, and that when closed raise water levels upstream to facilitate diversion of water to a canal for irrigation or to a powerhouse for the generation of electricity.

Baseline assessment

The collection and analysis of data that describe prevailing social and environmental conditions and are used in the design of project activities and as a benchmark for future monitoring studies.

Basic Needs Usually defined as items of private consumption (adequate food, shelter, clothing, household equipment and furniture) together with essential community services (safe drinking water, sanitation, public transport and health, education and cultural facilities). The term was largely originated by the International Labour Organisation. The concept of meeting “basic needs” was developed in the 1970s and internationally adopted to supplement economic growth as the primary target of development co-operation. The meeting of basic needs for food, water, shelter, health care and education thus became the driving force of the second and third UN Development Decades (1970s and 1980s).

Basic Services Basic services refers to the minimum amount of public services that a society would like to provide to everyone. The concept of “basic

Extended Glossary 4

services” was developed as a strategy for meeting basic needs, initially in health care and water supply; later in sanitation, household food security and education. The concept of basic services therefore also conveys the idea of facilitation via support to community mechanisms (low-cost, appropriate technology approaches; recruitment and training).

Benefit sharing Transfer of a share of the benefits generated by a project, such as a dam, to local communities or authorities. Mechanisms for benefit sharing include preferential rates (for example, of electricity generated), revenue sharing or royalties, and equity sharing (through which local populations or authorities own all or part of the project).

Bioaccumulation The increase in concentration of a substance in living organisms, as they take in contaminated air, water, or food, due to slow metabolization and excretion.

Biochemical Oxygen Demand (BOD)

The amount of dissolved oxygen consumed in five days by bacteria that perform biological degradation of organic matter or the amount of oxygen (measured in mg/L) that is required for the decomposition of organic matter by single-cell organisms, under test conditions. It is used to measure the amount of organic pollution in wastewater.

Biocide A chemical that is toxic to microrganisms. Biocides are often used to eliminate bacteria and other single-cell organisms from water.

Biodegradable Pollutants

Pollutants that are capable of decomposing under natural conditions.

Biodiversity The relative abundance and variety of plant and animal species and ecosystems within particular habitats

Biological Contaminants

Living organisms such as viruses, bacteria, fungi, and mammal and bird antigens that can cause harmful health effects to humans.

Biomonitoring The use of living organisms to test the suitability of effluents for discharge into receiving waters and to test the quality of such waters downstream from the discharge.

Bioremediation The biological treatment of wastewater and sludge, by inducing the breakdown of organics and hydrocarbons to carbon dioxide and water.

Blackwater Water that contains waste of humans, animals or food. Blue Water Surface and groundwater that is available for irrigation, urban and

industrial use and environmental flows Board Development A process of building effective boards and educating board members

about their governance role Board Member A person sharing the responsibility and liability for the organization with

the rest of the members of the board Board Member Agreement

A verbal or written commitment outlining expectations of a board member

Board Member Profile Grid

A tool helping identify desired characteristics and gaps on a board

Board Of Directors Governing body of a nonprofit or for-profit corporation; the board has specific legal and ethical responsibilities to the organization. Water boards are a key instrument for achieveing IWRM

Bureaucratic Fragmentation

Occurs when different departments manage resources without reference to other departments generating a “silo effect”. IWRM seeks to overcome this silo effect.

Brackish Water Water that is neither falls in the category of salt water, nor in the category of fresh water. It holds the middle between either one of the categories.

Capacity Building Interventions designed to develop the ability of groups, individuals and

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organizations to carry out specified activities. Capacity building may include imparting the knowledge, skills, technologies and institutions needed to conduct assessments, monitoring and evaluation, planning and implementation. Capacity building is a central pillar of the concepts of both adaptive management and IWRM.

Capacity Development

Capacity development is a process by which individuals or institutions develop and/or improve their knowledge, skills, competencies and abilities in areas that are important to them. Capacity development can also include activities aimed at creating a favourable enabling environment. Capacity development is invariably a long-term continuing process that requires both planning and support.

Capital In the sustainable livelihoods framework it is best understood with reference to the following five categories: human capital , natural capital, financial capital, social capital, and physical capital. These are also known as livelihood assets. Outside the sustainable livelihoods framework the term, capital, is used in a variety of ways. In economics it is commonly defined as being one of three factors of production, the other two being labour and land.

Catch Basin A sedimentation area designed to remove pollutants from runoff before being discharged into a stream or pond.

Catchment A drainage basin, or the area drained by a particular river system. Adjacent drainage basins are separated by watersheds. In relation to a dam, the area upstream from the dam from which the reservoir receives water. Catchments are a highly preferred zone in which to attempt IWRM

Catchment Area Drainage area of a stream, river or lake (also termed "river basin" or "watershed")

Charter The legal organizational document for a nonprofit organization/NGO also known as the articles of incorporation or articles of organization

Chemical Oxygen Demand (COD)

The amount of oxygen (measured in mg/L) that is consumed in the oxidation of organic and oxidasable inorganic matter, under test conditions. It is used to measure the total amount of organic and inorganic pollution in wastewater. Contrary to BOD, with COD practically all compounds are fully oxidized.

Chemical Pollution Introduction of chemical contaminants into a water body. Cholera A bacterial disease caused by drinking water contaminated by sewage

or eating food that has not been washed or is inadequately cooked. It is common in areas where the growth in population has outstripped the development of facilities for providing clean water or disposing of sewage. The problem is most severe in warm climates where high temperatures encourage the growth of the cholera bacteria.

Chronic Conflict An acute crisis of political authority and governance where ‘fragile states’ are either unable or unwilling to fulfil core functions leading to a breakdown in the contract between the state and its citizens.

Civil Society Civil society refers to the un-coerced collective action of individuals and groups around shared interests, purposes and values. In theory, its institutional forms are distinct from those of the state, family and market, though in practice, the boundaries between state, civil society, family and market are often complex, blurred and negotiated. Civil society is viewed as being expressed through organizations like trade unions, business associations, environmental and development organizations, women’s and youth groups, cooperatives, religious groups having an interest in public policy issues and decisions.


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Civil Society Organisations

These consist of a variety of different formal and informal organisations that represent the interests of various members of society. They may include, for example, community-based organisations, producer associations, unions, and NGOs.

Civil Works Civil works refers to the infrastructure that is created or constructed for the benefit or use of the general public (e.g. water supply systems).

Climate Change Climate change refers to statistically significant variation in the Earth's global climate or in regional climates over time. This can be cause by processes internal to the Earth or human activity effecting the global atmosphere. Climate change is officially defined by the UN as ‘changes in climate attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural variability observed over comparable time periods”

Climate Variability Variations around the mean state (such as standard deviations, the occurrences of extremes etc) of the climate on all temporal and spatial scales beyond that of individual weather events. Variability may be due to natural internal processes within the climate system or to variations in natural or human-induced external forcing.

Coastal Zone Lands and waters near the coast, whose uses and ecology are affected by the sea.

Coliform Bacteria Bacteria that serve as indicators of pollution and pathogens when found in water. These are usually found in the intestinal tract of humans and other warm-blooded animals.

Coliform Index A rating of the purity of water based on a count of coliform bacteria. Collector Sewers Pipes to collect and carry wastewater from individual sources to an

interceptor sewer that will carry it to a treatment facility. Combined Sewer A sewer system that carries both sewage and rain water runoff. Commission on Sustainable Development (CSD)

Created in December 1992 to ensure effective follow-up of the United Nations "Earth Summit". Monitors and reports on implementation of the Summit agreements at the local, national, regional and international levels. Is a functional commission of the UN Economic and Social Council

Commodity Chains A network of production, trade and service activities, that is functionally integrated, and value creating. It often involves the transformation of a raw material from its extraction, through manufacturing stages, to a specific end product. Water use is central to all commodity chains

Common Good See also Public Good

Common Pool Resource

A natural or man-made resource from which it is difficult, but not impossible, to exclude potential beneficiaries obtaining benefits from its use. Common pool resources are subject to problems of overuse, because they are subtractable unlike pure public goods.

Common Pool Resource Regime

An institutional arrangement which is in place to manage the preservation, maintenance and consumption of a common-pool resource

Compensation measures

Alternative resources (land, property or money) provided to displaced people or others adversely affected by a project as mitigation for losses suffered. A core principle of neo-classical economics – the Kaldor Hicks principle states that a policy change is efficient if it leads to a situation in which those who are made better off by the change are made better off enough to be able to compensate the losers should they want to do so. They do not actually have to provide this compensation – it is enough that they should have the resources to be able to provide compensation if they so wished. Compensation measures are often central to the

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success of policy or governance initiatives in the water sector. Concerted Action Concerted action is an action or activity that has been planned, adjusted

and agreed upon through stakeholder dialogue. This action or activity is then carried out by stakeholders or under the supervision of stakeholders with the aim of achieving a common vision.

Condensation Condensation in the environment is most frequently associated with the change of water vapour into liquid water in the atmospheric environment. It is generally brought about by cooling, which reduces the ability of the atmosphere to absorb and retain water vapour. If a parcel of air containing a specific volume of water vapour is progressively cooled, it will reach a temperature at which it is completely saturated - the dewpoint temperature of that parcel of air. Any additional cooling beyond the dewpoint will cause the condensation of some of the vapour.

Conjunctive water use

The co-ordinated use of surface water and groundwater resources.

Conservation (Nature)

Protection against irreversible destruction and other undesirable changes, including the management of human use of organisms or ecosystems to ensure such use is sustainable.

Consultant An expert providing professional advice or services Consumptive Water Use

Water removed from available supplies without return to a water resources system; water used in manufacturing, agriculture, and food preparation.

Contact Time The length of time a substance is in contact with a liquid, before it is removed by filtration or the occurrence of a chemical change.

Contaminant Any foreign component in a substance, for example in water. Convention on Biological Diversity (CBD)

Key agreement adopted at 1992 Earth Summit, commits governments to maintaining the world's ecological sustainability through conservation of biological diversity, sustainable use of its components, and the fair and equitable sharing of the benefits from the use of genetic resources.

Convention On Biological Diversity Ecosystem

A dynamic complex of plant, animal and micro-organism communities and their non-living environment interacting as a functional unit.

Conventional Sewer Systems

Systems that were traditionally used to collect municipal wastewater in gravity sewers and convey it to a central primary or secondary treatment plant, before discharge on receiving surface waters.

Conveyance Loss Water loss in pipes and channels by leakage or evaporation. Core Principles Of Livelihood Analysis

The Core Principles of Livelihood Analysis are as follows: Effort should be devoted to identifying and understanding the

livelihood circumstances of marginalised and excluded groups. Analysis should take into account important social divides that make

a difference to people's livelihoods. For example, it is often appropriate to consider men, women, different age groups, etc. separately. It is not sufficient to take the household as the sole unit of analysis.

The SL approach seeks to build upon people's strengths and resourcefulness. When conducting analysis it is important to avoid thinking only about need.

The SL approach embraces the idea of dynamism. Avoid taking one-off snap shots and instead think about change over time, including concerns about sustainability.

There will never be a set recipe for which method to use under which circumstances. Flexibility is key. Equally, it is not necessary to produce one definitive 'map' of livelihoods. Different 'maps' may be appropriately used for different purposes.The Core Principles of Livelihood Analysis should not be confused with the core principles of the sustainable livelihoods approach which are much broader.

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Core Principles Of The Sustainable Livelihoods Approach

These are that poverty-focused development activity should be: People-centred: sustainable poverty elimination will be achieved

only if external support focuses on what matters to people, understands the differences between groups of people and works with them in a way that fits in with their current livelihood strategies, social environment and ability to adapt.

Responsive and participatory: poor people must be key actors in identifying and addressing livelihood priorities. Outsiders need processes that enable them to listen and respond to the poor.

Multi-level: poverty elimination is an enormous challenge that will only be overcome by working at multiple levels, ensuring that local-level activity informs the development of policy and an effective enabling environment, and that higher-level policies and institutions support people to build upon their own strengths.

Conducted in partnership: with both the public and the private sector.

Sustainable: there are four key dimensions to sustainability - economic, institutional, social and environmental sustainability. All are important - a balance must be found between them.

Dynamic: external support must recognise the dynamic nature of livelihood strategies, respond flexibly to changes in people's situation, and develop longer-term commitments. The Core Principles of the Sustainable Livelihoods Approach should not be confused with the core principles of livelihood analysis which relate more specifically to the activities involved in investigating livelihoods.

Cropping Intensity The extent of land use in a year, which reflects the degree of multiple cropping. It is the ratio of the total area cropped per year to the irrigation command area.

Cultural Heritage The cultural practices and resources of current populations (religions; languages; ideas; social; political and economic organisations) and their material expressions in the forms of sacred elements of natural sites or artefacts and buildings; landscapes resulting from cultural practices over historical and prehistoric times; and archaeological resources; including artefacts, plant and animal remains associated with human activities, burial sites and architectural elements.

Cultural Services The non-material benefits people obtain from ecosystems through spiritual enrichment, cognitive development, reflection, recreation, and aesthetic experience, including, e.g., knowledge systems, social relations, and aesthetic values.

Dams Structures designed to restrict the flow of surface runoff, usually to control flooding or to provide water for irrigation or the production of hydroelectricity. They range from relatively small earth-fill features, pounding back thousands of cubic metres of water, to massive reinforced concrete structures which create reservoirs containing several billion cubic metres of water. All dams, large or small, have an environmental impact on the area in which they are built. The obvious change is in the hydrological cycle, but environmental interrelationships ensure that the effects are felt in the local climatology and in the flora and fauna of the region.

Dead storage Storage below the lowest outlet that cannot be released under normal conditions.

Decentralisation The dispersion or distribution of government functions and powers, specifically the delegation of power from a central authority to regional and local authorities.

Decommissioning Removing a dam from service and, where appropriate, physically

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dismantling it. Delta A depositional landform created when a river or stream flows into a body

of standing water, such as a lake or sea. The sudden reduction in the velocity of the stream which results causes it to deposit the sediment it is carrying.

Demand In economic terms, demand is an expression of willingness to pay for goods or services. Non-economists often understand it as being the same as needs or requirements. In the WATER GOVERNANCE context it is used somewhere between these two extremes – an expression of need but based on an understanding and acceptance of the costs (monetary and other) that a given level of service entails.

Demand Management

The use of price, quantitative restrictions, and other devices to manage demand for water

Demand Responsive Approach (DRA)

This approach requires that consumers be involved in selecting, financing, implementing and managing water and sanitation services that meet their demands and be willing to pay. Community members make informed choices on: whether to participate in a project; technology and service level options based on willingness to pay; when and how their services are delivered; how funds are managed and accounted for; and how their services are operated and maintained. Government plays a facilitative role, sets clear national policies and strategies, encourages broad stakeholder consultation, and facilitates capacity building and learning. An enabling environment is created for the participation of a wide range of providers of goods, services and technical assistance to communities. An adequate flow of information is provided to the community, and procedures are adopted for facilitating decisions on collective action within the community.

Demand-side management

Reducing use of water or electricity by improving the efficiency of use by the transmission system or the consumer, whether in the residential, industrial, commercial, agricultural or government sector.

Demineralisation Processes to remove minerals from water, usually the term is restricted to ion exchange processes.

Demiwater Demineralised Water

Water that is treated to be contaminant-, mineral- and salt free.

Demographics Demographics are the physical characteristics of a population such as age, sex, marital status, family size, education, geographic location and occupation. Therefore demographic analysis can involve analysing the trends of these characteristics.

Denitrification Removal of nitrate and nitrate product from water to produce a quality that answers common water standards.

Depression Storage The storage of water in low areas, such as ponds, and wetlands. Desalination The removal of dissolved salts from sea water or saline groundwater to

provide fresh water for domestic, industrial or agricultural use. Developer An organisation (private or public sector) responsible for promoting and

implementing a project, as distinct from the contractor who constructs the project.

Development A process of economic and social transformation that defies simple definition. Though often viewed as a strictly economic process involving growth and diversification of a country's economy, development is a qualitative concept that entails complex social, cultural, and environmental changes. There are many models of what 'development' should look like and many different standards of what constitutes 'success'. Development in many contexts merely means industrialisation

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Development Assistance

Development assistance is designed to alleviate poverty and promote economic growth. This is in contrast to Relief which is essentially designed to save lives in the face of temporary threats to livelihoods. Development assistance is central to the water sector.

Direct Budget Support

Financial assistance to the government of a developing country paid directly to its annual recurrent budget. It allows the partner country to increase public spending in general and is often given as support to the partner's national poverty reduction strategy. Direct budgetary support is hardly ever provided in the case of water.

Direct Run-Off Water that flows from the ground surface directly into streams, rivers, and lakes.

Disaster A disaster is a function of the risk process. It results from the combination of hazards, conditions of vulnerability and insufficient capacity or measures to reduce the potential negative consequences of risk. Floods are the principal type of disaster associated with water.

Disaster Risk Reduction

The systematic development and application of policies, strategies and practices to minimise vulnerabilities, hazards and the unfolding of disaster impacts throughout a society, in the broad context of sustainable development. Flood control measures are a form of disaster risk reduction.

Discharge Flow of surface water in a stream or canal. Discounting The process of applying a rate of interest to cost and benefit flows that

is used to find the equivalent value today of sums receivable or payable in the future. Discounting is used in water infrastructure projects to help decide whether a project should be funded.

Displaced people Communities required (often involuntarily) to abandon their settlements (homes, agricultural land, commons, forests and so on) or suffering loss of livelihood due to construction of a dam, submergence of the reservoir area, downstream impacts, building of dam-related infrastructure such as roads, and so on.

Distillation A process in which a liquid is vapourised and the vapour subsequently condensed to produce a purified form of the liquid or one of its constituents. Distillation is a natural part of the hydrological cycle. Energy supplied by the sun causes the water to evaporate. The vapour is carried up into the atmosphere until it is cool enough to condense as water droplets. These droplets are pure water, although the original source may have been salty or polluted. Distillation is the principal method of purifying liquids. It is the most common process used in desalination, and has been used increasingly by domestic consumers to provide fresh drinking-water.

Donor Funds Funds given to an entity in which the donor retains some control over how the funds are spent.

Dredging Cleaning, deepening, or widening of a waterway, using a machine (dredge) that removes materials by means of a scoop or a suction device.

Drought Term applied to periods of less than average precipitation over a certain period of time.

Dublin Principles The Dublin Principles were set out in an International Conference in 1992 and concisely stated the main issues of water management namely that: Freshwater is a finite and vulnerable resource, essential to sustain

life, development and the environment Water development and management should be based on a


participatory approach, involving users, planners and policy-makers at all levels;

Women play a central part in the provision, management, and safeguarding of water

Water has an economic value in all its competing uses, and should be recognised as an economic good

Dystrophic Lakes Acidic bodies of water that contain many plants but few fish, due to the presence of great amounts of organic matter.

Ecological Balance Stability in an ecosystem achieved through the development of equilibrium among its various components. This does not imply that the community is static. It is subject to natural variations associated with ecological succession and other influences such as fire, disease and climate change, but the system is normally sufficiently elastic to make the necessary adjustments without major displacement of the balance. Human intervention that includes the introduction or removal of plants and animals, pollution of the environment and destruction of habitat is now a main cause of imbalance in many ecosystems.

Economic Appraisal/Analysis

Economic analysis is an essential tool in project and programme appraisal. It involves the techniques of cost-benefit analysis which compares the total costs of the project/programme to the total stream of benefits flowing to society. It assesses whether the returns are sufficient to justify investing funds. It may also include financial appraisal which assesses the financial viability of the project/programme from the perspective of specific participants (e.g. whether the returns for individuals and businesses are sufficient incentive for their participation). Macro-economic analysis provides insights into the impact of current macro policy on the livelihoods of different groups and the possible effects of proposed policy changes.

Economic Growth An increase in a country's total output. It may be measured by the annual rate of increase in a country's Gross National Product (GNP) or Gross Domestic Product (GDP) as adjusted for price changes. The increase in GNP, at constant prices per head of the population, indicates changes in the average level of living in that country but says nothing about the distribution of the levels for different social groups around that average. Also see pro-poor growth

Economic Sustainability

It is usually associated with the ability to maintain a given level of income and expenditure over time. It can be defined in relation to expenditure by individuals, households, projects, programmes, government departments, countries etc. Maintaining a given level of expenditure, necessarily requires that the income/revenue which supports that expenditure should also be sustainable over time. In the context of the livelihoods of the poor, economic sustainability is achieved if a minimum level of economic welfare can be achieved and sustained. Economic sustainability is one of a number of dimensions of sustainability that also include environmental sustainability, institutional sustainability and social sustainability.

Ecosan Ecological sanitation can be viewed as a three-step process consisting of containment, sanitization and recycling of human excreta. The objective is to protect human health and the environment while reducing the use of water in sanitation systems and to recycle nutrients to help reduce the need for artificial fertilizers in agriculture.

Ecosystem An interacting system formed by living organisms and their abiotic environment regulating itself to a certain degree and explicitly includes the human social system.

Ecosystem In relation to water, the ecosystem approach is concerned with


Approach conservation, sustainable use and integrated management of ecosystems such as wetlands, forests and soils that capture, filter, store and distribute water. Its specific aims are to: (1) maintain ecosystem functions and services; (2) support livelihoods; (3) ensure equitable sharing of benefits amongst stakeholders; (4) promote adaptive management to enable people to make informed choices; (5) decentralize management, to empower people to manage their own resources; and (6) foster intersectoral cooperation, to achieve greater effectiveness through partnerships.

Ecosystem Diversity The variety of ecosystems that occurs within a larger landscape, ranging from biome (the largest ecological unit) to microhabitat

Ecosystem Services The conditions and processes through which natural ecosystems, and the species that make them up, sustain and fulfil human life. Examples include provision of clean water, maintenance of liveable climates (carbon sequestration), pollination of crops and native vegetation, and fulfillment of people's cultural, spiritual, intellectual needs

Effectiveness Extent to which actual performance compares with targeted performance

Efficiency The ratio of the effective or useful output to the total input in any system. Often expressed as a percentage, efficiency is usually defined so that it can be measurable

Effluent The outlet or outflow of any system that deals with water flows, for an oxidation pond for biological water purification. It is the product water of the given system.

Embedded Services Embedded services are services which are integrated within a commercial transaction such as advice on fertiliser and seed use by input stockists.

Empowerment Occurs where people take greater control over the decisions, assets and policy, institutions and processes that affect their livelihoods. This may be achieved through: increasing the incomes and assets of the poor; interventions that aim to enhance confidence and self-respect; by developing collective organisation and decision-making and by reforming political institutions to make them more inclusive.

Enabling Environment

An enabling environment comprises the international, national, district and local policies and legislation that constitutes the “rules of the game” and enables (or otherwise) stakeholders to be participate in water management.

Endangered Species Species of plants or animals threatened with extinction because their numbers have declined to a critical level as a result of overharvesting or because their habitat has drastically changed. That critical level is the minimum viable population (MVP), and represents the smallest number of breeding pairs required to maintain the viability of the species. Water infrastructure projects often affect endangered species. Endangered species are also often unique and support tourism and leisure activities which may in turn be water/water associated ecosystem based activities.

End-of-Pipe Techniques

Techniques for water purification that seek the reduction of pollutants after contamination has already occurred.

ENSO El Nino Southern Oscillation Of El Nino

This oceanic event is associated with a fluctuation of the inter-tropical surface pressure pattern and circulation in the Indian and Pacific Ocean called the Southern Oscillation. During an El Nino event, prevailing trade winds weaken and the equatorial countercurrent strengthens, causing warm surface waters in the Indonesian area to flow eastward to overlie the cold waters of the Peru current. This event has great impact on the


wind, sea surface temperatures and precipitation patterns in the tropical Pacific. It has climatic effects throughout the Pacific region and in many other parts of the world, including Africa. EL Nino recurs at irregular intervals ranging from two years to a decade, and no two events are exactly alike. El Nino is often associated with climate extremes such as droughts and floods. The opposite of El Nino is La Nina.

Environmental Checklists

Environmental checklists contain recommended issues and factors to ask about to gain a better understanding of the relationship between the livelihoods of the poor and their environment.

Environmental Diseases

Environmental diseases are diseases caused by environmental risks. According WHO, children’s health is endangered by six groups of risks: household water scarcity, hygiene and sanitation, air pollution, disease vectors, chemical hazards, and unintentional injuries (accidents). Diarrhoea, caused by unsafe water, is the second biggest child-killer in the world. Vector- borne diseases include malaria (with over a million deaths a year, mainly of children under five), lymphatic filariasis, schistosomiasis, dengue fever and others.

Environmental Flows The specific release of water from a dam to ensure the maintenance of downstream aquatic ecosystems and key species. The flows may include seasonal or annual flows and/or regular or irregular pulses to meet ecosystem needs. They may also be linked to livelihood needs of downstream affected people.

Environmental Impact Assessment

Commonly abbreviated to EIA, this is the process of assessing and managing the environmental impacts arising from a new or substantially modified development throughout the project cycle. A full EIA is usually carried out for major infrastructure and development projects, projects requiring a major change of land use and projects located in particularly sensitive areas. A key determining factor in deciding whether an EIA is required is the extent to which the environmental impacts of a project can be readily identified, assessed and mitigated. An EIA is a standard procedure for all bilateral and multilateral donors.

Environmental management system

The processes by which an organisation identifies and assesses environmental problems, sets goals to address the problems, and measures and verifies progress in solving the problems.

Environmental Sanitation/ Ecological Sanitation

Environmental sanitation (ES) involves interventions to reduce peoples exposure to disease by creating a hygienic environment. This usually includes disposal of or hygienic management of excreta, refuse, wastewater and storm water, the control of disease vectors, and the provision of facilities for personal and domestic hygiene. Ecological sanitation technologies take the principle of environmental sanitation a step further, as it is structured on recycling principles and aims to maintain a closed eco-cycle. It is also a low-energy approach that uses natural processes.

Environmental Services/eco-regulatory services

Environmental services are generated by natural assets (sun, soil, water, plants, other living organisms and the atmosphere) and their interaction, providing humankind with economic, ecological and socio-cultural benefits. They include: Provisioning services: The products obtained from ecosystems, including, for example, genetic resources, food and fibre, and fresh water. Regulating services: The benefits obtained from the regulation of ecosystem processes, including, for example, the regulation of climate, water, and some human diseases.

Environmental Sustainability

Meeting the needs of the present without compromising the ability of future generations to meet their needs. Encompasses, e.g. keeping population densities below the carrying capacity of a region, facilitating the renewal of renewable resources, conserving and establishing


priorities for the use of non-renewable resources, and keeping environmental impact below the level required to allow affected systems to recover and continue to evolve.

Equity 1 The degree to which different individuals or groups within a community or society at large benefit from a good or service. For projects and programmes, taking an equity-based approach typically means paying special attention to the specific needs of the most marginalised members of society who may otherwise be excluded from benefits. In the context of WATER GOVERNANCE equity relates to fairness in terms of access to water for domestic and productive uses and, as such, it does not mean equal access. Determining fair and/or reasonable access to water is a highly political process. 2- Equity can be defined as fairness or the equality of rights. The absence of equity is perceived as a barrier for development and in addition as ethically unacceptable or unjust.

Ethnic minorities Social groups with a social and cultural identity distinct from the dominant society. They have been historically disadvantaged; come from non-dominant sectors of society; have low social, economic and political status; and are determined to preserve, develop and transmit to future generations their ethnic identity as the basis of their continued existence as people.

Eutrophication The occurrence of high nutrient levels in freshwater and marine ecosystems, usually resulting in excessive plant growth and the death of animal and some plant life due to oxygen deprivation.

Evaluation An assessment, as systematic as possible, of an ongoing or completed project, programme or policy, its design, implementation, output, and impact. A wider and more comprehensive activity than impact assessment. Generally multi-disciplinary. The aim is to determine the relevance and fulfilment of objectives, developmental efficiency, effectiveness, impact and sustainability. Project evaluation provides evidence for decision makers, for the purposes of achieving improvements in the implementation of ongoing projects and in the design of new ones and for accountability purposes. The process of evaluation consists of collecting, analysing, interpreting and reporting data both quantitative and qualitative. Lessons from evaluations should be taken into account from the outset of project design.

Evapotranspiration The exchange of water between trees, soil and the atmosphere. Export Credit Agency

A government agency that helps finance the overseas sales of a nation’s goods and services, generally by providing guarantees of working capital loans for exporters, guaranteeing the repayment of loans, or making loans to foreign purchasers of the nation’s goods and services. The agency may also provide credit insurance that protects exporters against the risks of non-payment by foreign buyers for political or commercial reasons.

External Environment

A very general term that refers to the environment outside a person's immediate influence. Within the SL framework trends, shocks, and seasonality are part of the External Environment. Many policies, institutions and processes (PIPs) may also be treated as part of the external environment, although people may have more influence over some of these than over trends, shocks and seasonality.

Externality or External Impact

1- The unintended real (generally non-monetary) side effect of one party’s actions on another party, often ignored in financial assessments


and in decision making by the party causing the effects. 2- An externality is the effect of a transaction between two parties on a third party who is not directly involved in the transaction. Externalities can be either negative when an external cost is generated from a market transaction (e.g. the emission of pollution), or positive, when an external benefit is generated (e.g. vaccinations against a communicable disease). 3- Costs and benefits that are external to the financial aspect of decision-making, and thus do not accrue to project developers and operators

Environmentally-Sound

The maintenance of a healthy environment and the protection of life-sustaining ecological processes. It is based on thorough knowledge and requires or will result in products, manufacturing processes, developments, etc. which are in harmony with essential ecological processes and human health.

Facilitation/ Facilitator

A facilitator is someone who skilfully helps a group of people understand their common objectives and plan to achieve them without personally taking any side of the argument. The facilitator will try to assist the group in achieving a consensus on any disagreements that pre-exist or emerge in the meeting so that it has a strong basis for future action.

Farm/ Non-Farm Linkages

In economics, ‘linkages’ refer to generally positive interactions between different industries or sectors. Farm / non-farm linkages arise for example where growth or efficiency gains in farming lead to higher real incomes for both farmers and (through lower food prices) consumers, and these higher incomes lead to increased demand for and hence employment opportunities in local production of non-farm goods and services. Growth in farming can also lead to increased demand for and employment opportunities in supplying farm inputs and services and in processing agricultural output. Increased non-farm employment and income then leads to further beneficial linkages, with a multiplier effect.

Farmer Field School (FFS) Approach

Farmer Field Schools were first introduced in South East Asia, in the late eighties, as an extension approach to disseminated complex innovations such as Integrated Pest Management (IPM). The FFS approach utilizes participatory methods and experiential learning to help farmers develop their analytical skills, critical thinking, problem-solving and decision-making abilities. Extension agents, who are viewed as facilitators rather than instructors, conduct learning activities in the field on relevant agricultural practices. Participants are encouraged to share their learning amongst other farmers. Farmers’ livestock schools are adaptations of the Farmer Field School approach to livestock keeping. Water use schools are an adaptation of the FFS approach.

Farmer-Led Agricultural Extension

Extension approaches where farmers are connected to agricultural extension systems and take a greater role in deciding research and extension goals. It seeks to bring farmers into the decision-making process and promote their initiative in extension and related program determinations. As other participatory approaches, it is characterised by interactive learning.

Farming The practice of cultivating the land, raising stock, and fishery practices. Farming includes occupations and income-generating activities from cultivation, animal husbandry, arboriculture, fish farming, horticulture and home gardening of vegetables, fruit trees and flowers. There can be no agriculture where there is no water.


Federated Organization

An organizational structure composed of a national umbrella organization and smaller local groups

Fertilizer Subsidies Government intervention to lower the price of fertilizers by subsidising the cost of purchase, either through state controlled manufacture and distribution or by import subsidies on external supplies. The effect on farm decision making is to lower the input:output price ratio, thus encouraging faster, greater, and more widespread uptake of fertilizers than would otherwise have occurred. Fertilizer subsidization can also lead to increased use of water. Increased use of fertilizer also leads to increased contamination of both groundwater and surface water resources. Where both fertilizer and energy use are subsidized as has happened historically in India water use sky-rockets.

Financial Capital Financial Capital is a category of livelihood assets. Within the SL framework, it is defined as the financial resources that people use to achieve their livelihood objectives. These resources include:

Available stocks:Savings are the preferred type of financial capital because they do not have liabilities attached and usually do not entail reliance on others. They can be held in several forms: cash, bank deposits or liquid assets such as livestock and jewellery. Financial resources can also be obtained through credit-providing institutions in which case liabilities are attached.

Regular inflows of money:Excluding earned income, the most common types of inflows are pensions, or other transfers from the state, and remittances. In order to make a positive contribution to financial capital these inflows must be reliable (while complete reliability can never be guaranteed there is a difference between a one-off payment and a regular transfer on the basis of which people can plan investments).

It should be noted that this definition is different from a strict economic definition of financial capital as it includes flows as well as stocks. (Economists would look only at stocks).

Financial Deepening (Rural)

The expansion of financial transactions of all kinds (in rural areas) to reach broader clienteles, provide wider choice of services and to offer additional contract terms and conditions.

Fixed Prices Or Floor Prices

Government or marketing board setting of minimum commodity prices which aim to stabilise markets and permit farmers to plan ahead with confidence. High fixed prices encourage overuse of water.

Fiscal Policy Fiscal policy is the area of policy concerned with ensuring that an appropriate balance is achieved between public sector revenue (for example, from taxation and borrowing) and public sector expenditure

Flood The inundation of normally dry land by water. Flooding causes millions of dollars worth of property damage and takes hundreds of lives each year. It is most common in river valleys or along the coastal areas of lakes, seas and oceans. River floods are caused when a river channel is incapable of carrying the volume of water added to it, and the excess spills over on to the adjacent floodplain. Heavy and prolonged precipitation, snowmelt, channel constrictions, dam failures and alterations to drainage basins may produce or contribute to flooding. Global warming through the increased melting of glaciers and ice sheets, and the subsequent rise in sea level, has the potential to increase the frequency and extent of coastal flooding.

Flood Control In relation to dams, the intention to reduce flood peaks in the river and to minimise the impact of flood events on human activities, including loss of life, social disruption, health impacts, and property and economic


losses. Flood Management A broad concept that focuses on reducing flood hazards through a

combination of policy, institutional, regulatory and project measures (such as replanting catchment areas), while recognising that they can never be fully controlled. This takes into account the beneficial uses of natural floods, which are more difficult to quantify in human and economic terms but which sustain natural systems that also have economic, social, cultural and ecosystem values and functions.

Floodplain The flat or nearly flat land along a river or stream that is covered by water during a flood. Floodplains are generally low and flat, but possess some relief in the form of the levées which border the main channel and the abandoned channels which indicate the former course of the river as it meandered across the floodplain.

Flow The discharge rate of a resource, expressed in volume during a certain period of time.

Flow Augmentation The addition of water to meet flow needs.

Food For Work Programmes

Food for work programmes have been promoted for their capacity to target poor populations by providing food in return for work on public goods so offering a reliable safety net by. Empirical evidence is mixed however.

Food Insecurity The absence of food security Food Security The condition when all people, at all times, have physical and economic

access to sufficient, safe, and nutritious food to meet their dietary needs and food preferences for an active and healthy life. Lack of food security is very closely related to a lack of water security.

Formal Credit Or Finance

Loans obtained from a formal financial intermediary rather than from the non-regulated informal sector.

Formal Sector That part of the economy that is enumerated in national statistics and is counted in the gross national product. See informal sector.

Forward And Backward Linkages

Forward linkages and backward linkages refer to different but related stages of production and marketing for specific products. In agriculture, backward linkages include the production and provision of agricultural inputs (fertiliser, seeds, etc), extension services and credit; forward linkages include transport, processing and marketing. In manufacturing, backward linkages include the production of raw materials and forward linkages can include packaging, transport and marketing.

Fragmentation In Water Management

Fragmentation refers to things being broken up or occurring in pieces or fragments. Fragmented processes are not integrated or managed holistically. In water resources management, fragmentation occurs in many different forms

Free Trade An economic concept referring to the selling of products between countries without tariffs or other trade barriers. Free trade is the absence of artificial (government-imposed) barriers to trade among individuals and firms in different nations. International trade is often constricted by different national taxes, other fees imposed on exported and imported goods, as well as non-tariff regulations on imported goods; theoretically, free trade is against all these restrictions.

Freshwater 1- Naturally occurring water having a low concentration of salts, which is often suitable for abstraction and treatment to produce water for domestic, agricultural and industrial uses. 2-Water containing less than 1 mg/l of dissolved solids of any type.

Gender Gender relates to the different roles played by men and women, boys and girls. A gender based approach means dealing explicitly with these

http://www.passlivelihoods.org.uk/plow/default.asp?id=5&nc=7894#foo


differences. It also often implies an element of empowerment of women. Gender is often bundled with equity (see above) with which it is closely related.

Gender Mainstreaming

Gender mainstreaming ensures that gender inequities are considered in decision-making processes.

Geographical Fragmentation

Occurs when water is used and managed in different places without reference to other parts of a river basin (for example impact of upstream activities on downstream users)

Geographical Information System (GIS)

A computer system for storage, analysis and retrieval of information, in which all the data are spatially referenced by geographic coordinates. GIS tends to store similar data in 'layers' – for instance information on wells in one layer, roads in another, and economic activities in another. Different layers can be coded and superimposed on one another to create visual displays (maps) and analysed in different ways. Many GIS also contain modelling elements – for instance hydrological models that generate stream flows for a rivers layer from layers containing information on soils, topography, and rainfall.

Glacier Large, usually moving mass of ice formed in high mountains or in high latitudes where the rate of snowfall is greater than the melting rate of snow. Glaciers can be divided into four well-defined types — alpine, piedmont, ice cap, and continental — according to the topography and climate of the region in which the glacier was formed.

Global Public Good See also Common Good and Public Good

A global public good is a public good with benefits that are strongly universal in terms of countries (covering more than one group of countries), people (accruing to several, preferably all, population groups), and generations (extending to both current and future generations, or at least meeting the needs of current generations without foreclosing development options for future generations).

Global Water Partnership

The Global Water Partnership (GWP) was initiated in 1996. It includes all those involved in water management: government agencies, public institutions, private companies, professional organisations, multilateral development agencies and others committed to the Dublin-Rio principles. GWP promotes Integrated Water Resources Management (IWRM)(link) which examines a more complete range of solutions to current water management issues.

Good practices Any collection of specific methods that produce results that are in harmony with the values of the proponents of those practices. In agriculture, applies available knowledge to addressing environmental, economic and social sustainability for on-farm production and post-production processes resulting in safe and healthy food and non-food agricultural products

Good Water Governance

Water governance relates to the range of political, social, economic and administrative systems that are in place to develop and manage water resources and the delivery of water services at different levels of society. WATER GOVERNANCE focuses particularly on local and intermediate level water governance – that is governance at levels ranging from the community to district/governorate. As a basic source of life, water resources must be governed within a framework of shared responsibility, involving an obligation on the part of all people and institutions, both individually and collectively, to value and protect them. Good water governance exists when interrelations and division of roles between the state, civil society and the private sector are based upon participation, transparency, non-discrimination, and the effectiveness and reliability of public affairs. Local authorities must lead the movement


for responsible water governance. While water resources are amenable to public, community or private management, they need to be controlled, secured and governed by accountable public authorities, or by recognized indigenous or traditional authorities. In order to promote responsible water governance, governments must support the participation of all stakeholders as partners, with full information, in protecting watershed areas and in determining the water and environmental sanitation services that they receive.

Governance The institutions and processes through which power is exercised, decisions that concern the public are made, citizens are given voice and decision makers are held to account. Key governance concerns include: Is political power exercised fairly? If not, who is disadvantaged? How efficient and accessible are local service providers? Are government organisations honest, efficient, effective and

accessible? Are basic human rights protected and enforced through the rule of

law? Are property rights clear and enforceable? Do all have equal access to the formal justice and legal system? Do informal/traditional justice systems discriminate against certain

groups? Accountability Decentralisation

Green Revolution The Green Revolution was a process that took place from the 1960s with the introduction of high yielding varieties of mainly rice and wheat with fertilisers into irrigated areas. This led to rapid transformations of agriculture and of rural economies in many parts of South, South East and East Asia and providing a foundation for subsequent non-agricultural growth in these areas. It has attracted considerable controversy due to early tendencies for larger farmers to benefit at the expense of small farmers, and due to loss of biodiversity, increased chemical use and in some areas falling ground water tables from overuse of tube well irrigation. More recent studies have shown that small farmers also benefited from adoption of green revolution technologies and that increased production has increased labour demands and with lower food prices real wages for the landless, with positive non-farm linkages. Some of the more negative changes associated with the green revolution were also due more to subsidies promoting mechanisation and cheap electricity than to the green revolution technologies themselves.

Green water That fraction of rainfall that is stored in the soil and available for the growth of plants.

Greenhouse Gases Gases that accumulate in Earth’s atmosphere and trap heat. Some are naturally occurring gases, like carbon dioxide and methane; others are made by humans, such as halocarbons.

Grey water Waste water which does not contain the products of bodily functions, being mainly the product of bathing showering, dishwashing and similar activities. It is generally considered suitable for lawn and garden irrigation, and in areas such as the US south-west where water is scarce, it is seen as a simple way of increasing the efficiency of water use.

Groundwater Groundwater exists in the spaces between soil (pores) and rocks, in cracks and fissures. Unlike soil moisture it is not bound to the soil/rock


and is free to flow under the force of gravity – for instance into a well, but also into rivers, or where forced to the surface to a spring. It originates as precipitation and percolates down into sub-surface aquifers. The upper limit of groundwater saturation is the water table. Groundwater moves under the influence of gravity, although usually only slowly, and may return to the surface naturally - for example, through springs. Increasingly, it is pumped from wells and boreholes for human use. The rate of withdrawal commonly exceeds the rate the rate of recharge, and in many areas the groundwater supply is declining.

Groundwater hydrology

The branch of hydrology that deals with the occurrence, movements, replenishment and depletion, properties and methods of investigation and utilisation of groundwater.

Growth Economic growth is an increase in a country's total output. It may be measured by the annual rate of increase in a country's Gross National Product (GNP) or Gross Domestic Product (GDP) as adjusted for price changes. The increase in GNP, at constant prices per head of the population, indicates changes in the average level of living in that country but says nothing about the distribution of the levels for different social groups around that average.

Hazard A potentially damaging physical event, phenomenon or human activity that may cause the loss of life or injury, property damage, social and economic disruption or environmental degradation. Floods and land subsidence due to groundwater extraction are hazards.

Holding Pond A pond or reservoir, usually made of earth, built to store polluted runoff. Homeowner water system

A water system that supplies piped water to a single residence.

Household-Centred Environmental Sanitation (HCES)

HCES is an approach to planning environmental sanitation services to overcome the shortcomings of conventional services through two components: the household as a focal point, and a Circular System of Resource Management (CSRM). CSRM emphasizes water conservation, recycling, and reuse, as waste is a misplaced resource and using it reduces downstream pollution.

Human Capital Human Capital is a category of livelihood assets. It represents the skills, knowledge, capacity to work, and good health that together enable people to pursue different livelihood strategies and achieve their livelihood outcomes. At a household level human capital is a factor of the amount and quality of labour available. This varies according to household size, skill levels, education, leadership potential, health status, etc. Human capital is necessary to be able to make use of the other four types of livelihood assets.

Human right to water The human right to water is indispensable for leading a healthy life in human dignity. It is a pre-requisite to the realization of all other human rights.” General Comment Nr. 15 of the UN Committee on Economic, Social and Cultural Rights, adopted November 27, 2002. The obligation to fulfil this right requires that States Parties adopt the necessary measures to achieve the full realization of the right to water. “Water is fundamental for life and health.

Hunger A condition in which people lack the basic food intake to provide them with the energy and nutrients for fully productive, active lives, is an outcome of food insecurity. All hungry people are food insecure, but not all food insecure people are hungry.

Hydraulic conductivity

The rate at which water can move through a permeable medium.

Hydraulic gradient In general, the direction of groundwater flow due to changes in the depth of the water table.


Hydroelectric power water use

The use of water in the generation of electricity at plants where the turbine generators are driven by falling water.

Hydrogeology The science of chemistry and movement of groundwater. Hydrograph A chart that measures the amount of water flowing past a point as a

function of time. Hydrological cycle The natural cycle by which water evaporates from the oceans and other

water bodies, accumulates as water vapour in clouds, and returns to oceans and other water bodies as precipitation. Precipitation over land has two components: runoff and moisture from evapotranspiration.

Hydrology The scientific study of water in the earth or atmosphere system. It includes not only surface water, but also water in the atmosphere and in the groundwater system. Physical hydrology focuses on the distribution and circulation of water, while applied hydrology is more concerned with water and human activities, and includes consideration of water quality, irrigation, drainage and erosion and flood control.

Hydrosphere Region that includes all the earth's liquid water, frozen water, floating ice, frozen upper layer of soil, and the small amounts of water vapour in the atmosphere.

Impact Changes attributable to a project, programme or process. Impacts (also referred to as effects) may be planned or unplanned; positive or negative; achieved immediately or only after some time; and sustainable or unsustainable. Impacts may be observable/measurable during implementation, at project completion, or only some time after the project has ended. Different impacts may be experienced by different stakeholders.The recommended approach is not to define 'impact' narrowly, or to draw a distinction between 'effects' and 'impacts', but to encourage the routine definition and consideration (in evaluations, OPRs, etc.) of different types of impact (e.g. Purpose or Goal-level impacts; short-term or long-term (within or outside the project lifetime); positive and negative; planned and unplanned; technical, institutional, economic, social and cultural, and environmental) as experienced by different groups.

Impermeable Not easily penetrated by water. Impoundment Body of water formed by collecting water, as by dam. Impurities Particles or other objects that cause water to be unclear. Indicator 1- A parameter or a value derived from parameters, which points to,

provides information about, describes the state of a phenomenon/environment/area, with a significance extending beyond that directly associated with a parameter value. 2- Any biological entity or process, or community whose characteristics show the presence of specific environmental conditions or pollutants.

Indicator organisms Microrganisms, such as coliforms, whose presence is indicative for pollution or for the presence more harmful microrganisms.

Indicator tests Tests for a specific contaminant, group of contaminants, or constituent which signals the presence of something else.

Indigenous and tribal peoples

At its broadest, the adjective ‘indigenous’ is applied to any person, community or being that has inhabited a particular region or place prior to colonisation. However, the term ‘indigenous peoples’ has gained currency internationally to refer more specifically to long-resident peoples, with strong customary ties to their lands, who are dominated by other elements of the national society and who are in historical terms, recent settlers. The term is used principally for Australia, New Zealand, Latin America, the United States, Norway and Sweden and Canada, It is now being used in the context of the former Soviet bloc and also China,


India and many parts of Asia. The term is little used in the African context as its widespread use would lead to heightened possibilities of the break-up of already fragile nation-States

Indirect discharge Introduction of pollutants from a non-domestic source into a publicly owned wastewater treatment system. Indirect dischargers can be commercial or industrial facilities whose wastes enter local sewers.

Infiltration Penetration of water into a medium, for instance the soil. Influence The longer term impact on an institution/project, its policies and

programmes, achieved as a result of contacts and interventions. Influence is a particular type of impact (attributable change).

Influent The stream of water that enters any system or treatment unit. Informal credit or finance

Financial activities which take place outside the formal financial markets. Often not subject to the same degree of regulation as formal finance.

Informal sector Involves activities outside of the formal economy such as trading by street vendors, selling of home made products, subsistence farming, home craft production, backyard carpentry and metal working, and other activities not enumerate in national statistics and not counted in the gross national product.

Information Data or knowledge that is captured and stored – typically in written form, but also as audio or video recordings, in diagrams and pictures etc. It is sometimes referred to as explicit knowledge. Information can be (relatively) easily transferred from one person to another through a wide variety of means.

Information management

Process of gathering, storing and analysing information needed for a specific purpose, such as planning or making management decisions.

Innovation Aims to make effective use of ideas and technologies in a place or by people where they have not been used before.

Input policies The way that governments try to influence the quantities and combinations of purchased variable inputs. This has three main dimensions: firstly, the price level of input, and s concerns state intervention to influence prices paid by farmers for inputs; second, the delivery system involves state actions to influence the flow of inputs to farmers, and; thirdly the information available to farmers concerning the type, quantity and combination of inputs available to them.

Infrastructure In the context of WATER GOVERNANCE, infrastructure refers to the systems (hardware and software) that are needed to abstracting, treating and conveying water for different purposes and the institutions required to manage these activities.

Institutional Relating to institutions. Institutional level Institutional level refers to the relative position or rank of stakeholder

dialogue and/or decision-making on a scale that runs from the local level to the national and international levels. In the context of WATER GOVERNANCE and in administrative terms, local level is considered to be the level of towns, villages, hamlets and below. Whereas the intermediate level is considered to be the district and governorate level.

Institutional Appraisal

The analysis of institutions, particularly institutions that are influential in any given context: their role, degree of influence, how they function and how they inter-relate. This is important for understanding key influences on local livelihoods, It is often done by and with local people (through participatory methods) to establish their perceptions of institutional roles. This can also be called 'institutional appraisal' or 'institutional


mapping'.The term can also apply to analysis of a single institution: its strengths, weaknesses, leadership, internal structures etc, with a view to institutional strengthening.

Institutional arrangements

The term 'institutional arrangements' relates to a relationship or transaction between two or more parties and encompasses the rules that govern rights and obligations in the relationship. It represents, in other words, the type of the contract that exists between parties to an agreement. For example, a permanent employment contract is one type of institutional arrangement, whereas a casual labour agreement (that ceases when a particular task is complete) is another. Sharecropping is also a type of institutional arrangement. It governs a tenant's access to land, a landlord's access to labour and how the harvest is shared between them. Even the transactions between a market vendor and anonymous customers represent a particular type of institutional arrangement.

Institutional Sustainability

Achieved when institutions, structures and processes have the capacity to continue to perform their functions over the long term. One of a number of dimensions of sustainability that also include economic sustainability, environmental sustainability and social sustainability.

Institutionalise To institutionalise something means to make it part of the fundamental rules or institutions that governs the way things are organised. For example, when participatory processes are 'institutionalised' into policy making they become an integral and permanent (rather than temporary) part of policy making. They gain legitimacy, not from their adoption by an influential leader or from the need to use them in a particular situation, but from the underlying institutions governing the way public policy is made.

Institutions The term 'Institutions' is used in a number of different ways. In terms of water governance it covers two important elements:

(a) organisations or agencies that operate within both the public and private sector;

(b) the mechanisms, rules and customs by which people and organisations interact with each other (i.e. the "rules of the game").

Examples of (a) include: the district department of health; the department of agriculture; the local branch of an NGO; DFID; a religious organisation such as a church or mosque; a workers union; a village committee; an informal organisation based around kinship, such as a clan. Examples of (b) include: the rules for deciding membership of a village committee; the conditions of membership in a co-operative; the norms which shape local customs, lending, cultural events; the contract between a company and its workers; the laws governing the way companies do business with each other; the codes and rules of an organisation or bureaucracy; the allocation of responsibilities in the policymaking process; the rules for enacting legislation; the mechanisms by which legislation is implemented at national and local levels; the procedures for voting in a new governing body for a water organization; the rules governing the financing of a water users association; the mechanisms for facilitating good governance and accountability in the public sector; the chain of command within the government;


religious ceremonies; marriage rules, laws and customs governing land tenure and rights to access for other assets; water markets and trading. In this programme, term 'institutions' is used to mean (b) rather than (a)

Integrated Risk and Disaster Reduction

Integrated risk and disaster reduction, in addition to post disaster relief, primarily involves prevention of natural disasters. Prevention is an important component in both development cooperation and humanitarian aid. It is a long-term activity that demands coordinated cooperation among various actors. Disaster reduction includes all temporary and permanent measures that aim to prevent the threat of damage or minimize the impacts of a damaging event. It is based on risk assessment, evaluating the potential for damage, and measuring existing risk perception and coping mechanisms (including legislation). In a context where sustainable development is the overall aim, disaster reduction is a continuous process in which measures concerned with prevention, intervention, and reconstruction are equally integrated.

Integrated Water Resources Management (IWRM)

IWRM is a process which promotes the co-ordinated development and management of water, land and related resources, in order to maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems.

Integrity pacts Voluntary undertakings related to the procurement of goods and services that are used to reduce corruption, and that are of particular use in situations where regulatory systems and institutional capacity are weak, although they have universal application. The concept was first developed by Transparency International.

International public goods

In economics, a public good is a good that is hard or even impossible to produce for private profit, because the market fails to account for its large beneficial externalities. By definition, a public good possesses two properties: it is ‘non-rivalrous’ - when it has been produced everyone can benefit from it without reducing other’s enjoyment; it is also ‘non-excludable’ - once created it is very difficult to prevent access to the good. An international public good comprises these properties at an international scale.

Irrigation The application of water to land for agriculture or landscaping purposes, through human-made systems, to provide for plant water requirements not met by precipitation. There are three broad classes of irrigation systems: (1) gravity flow distribution; (2) pressurized distribution; and (3) drainage control systems. Gravity flow systems convey and distribute water at the field level by a free surface, overland flow regime. Pressurized systems include sprinkler, trickle, and an array of similar systems in which water is conveyed to and distributed over the farmland through pressurized pipe networks. Drainage control systems (sub-irrigation) are not common but are conceptually interesting. Relatively large volumes of water percolate through the root zone and become drainage or groundwater flow. By controlling the flow at critical points, it is possible to raise the level of the groundwater to within reach of crop roots. These individual irrigation systems have a variety of advantages and particular applications. Familiarity with each system is important in order to best satisfy the needs of irrigation projects during project formulation. Low-cost irrigation are systems (traditional or modern) that have relative low labour and capital costs. Examples include simple drip-irrigation kits, treadle pumps, certain rope and washer pumps and


other technologies currently under development. Lagoon A shallow pond where sunlight, bacterial action, and oxygen work to

purify wastewater. Lake An inland body of water, usually fresh water, formed by glaciers, river

drainage, etc. It is usually larger than a pool or pond. Land Application Discharge of wastewater onto the ground for treatment or reuse. Large Dam A dam with a height of 15m or more from the foundation. If dams are

between 5-15m high and have a reservoir volume of more than 3 million m3, they are also classified as large by the International Commission on Large Dams. In this report, everything else is considered a small dam.

Large Water System A water system that services more than 50,000 customers. Large-scale Irrigation

Large-scale irrigation should be defined not only in terms of size but also by its organisational structure. Characteristics of large-scale irrigation systems are: (1) formal hierarchies of open channels or pipes for delivery of irrigation water and removal of drainage water, (2) formal organisational structures with a legally constituted management institution and (3) central control of operation and management and water allocation and delivery. All formal large-scale irrigation systems have four functional components: (1) water source and water capture, (2) water delivery, (3) water use and (4) water disposal. Users of large-scale irrigation systems may be smallholders, as is the case in Egypt and Sudan, where irrigation schemes are large and managed by the government. Some authors consider these schemes as small-scale rather than large-scale because of the small size of the individual holdings

Liability Any legal responsibility, duty, or obligation Livelihood(s) A livelihood can be described as a combination of the resources used

and the activities undertaken in order to live. The resources might consist of individual skills and abilities (human capital), land, savings and equipment (natural, financial and physical capital, respectively) and formal support groups or informal networks that assist in the activities being undertaken (social capital).

Livelihoods approach

The sustainable livelihood approach is an integrated analytical approach to poverty, used in development projects, research and policy-making. Its primary focus is on the needs and the opportunities of the poor as seen by the poor themselves. The starting point for a nalysis is survival strategies characterized by their diversity, complexity, unpredictability, and dynamics. The aim of the sustainable livelihood approach is to shape measures and policies in a joint process of learning and reflection, including different groups of actors, in order to assist poor people in using their own strengths and potentials while also broadening their options and reducing their exposure to adverse external impacts. Empowerment of the poor is thus a central component of this approach. A further aim is to minimise both the external and internal negative influences of policies, institutions, etc., that threaten the sustainability of poor people’s livelihoods.

Livelihood Assets A key component in the SL framework, they are the assets on which livelihoods are built, and can be divided into five core categories (or types of capital). These are: human capital, natural capital, financial capital, social capital, and physical capital. People's choice of livelihood strategies, as well as the degree of influence they have over policy, institutions and processes, depends partly upon the nature and mix of the assets they have available to them. Some combination of them is required by people to achieve positive livelihood outcomes- that is, to improve their quality of life significantly on a sustainable basis.No single



category of assets on its own is sufficient to achieve this, but not all assets may be required in equal measure. It is important to note that a single asset can generate multiple benefits. For example, if someone has secure access to land (natural capital) they may also be able to get better access to financial capital, as they can use the land both for productive uses and as security for a loan.

Livelihood Outcomes

Livelihood Outcomes are the achievements - the results - of livelihood strategies. Outcome categories can be examined in relation to the following categories:

More income Increased well-being Reduced vulnerability Improved food security More sustainable us of the natural resource base Social relations and status Dignity and (self)respect

Livelihood Strategies

The term used to denote the range and combination of activities and choices that people make in order to achieve their livelihood goals. Livelihood Strategies include: how people combine their income generating activities; the way in which they use their livelihood assets; which assets they chose to invest in; and how they manage to preserve existing assets and income. Strategies may reflect underlying priorities, such as to diversify risk. Livelihood Strategies are diverse at every level. For example, members of a household may live and work in different places, engaging in various activities, either temporarily or permanently. Individuals themselves may rely on a range of different income-generating activities at the same time, and are likely to be pursuing a variety of goals.

Macro Policy Macro Policy is policy which affects the whole country. It is concerned with monetary, fiscal, trade and exchange rate conditions as well as with economic growth, inflation and national employment levels. It is distinct from micro policy which only affects particular sectors, districts, neighbourhoods or groups.

Main-stem The main course of a river, characterised by its middle and lower reaches.

Major dams The World Atlas & Industry Guide of the International Journal on Hydropower & Dams defines a ‘major dam’ as a project meeting one of the following criteria: dam height over 150 meters; dam volume over 15 million cubic meters; reservoir volume over 25 billion cubic meters; installed capacity over 1 000 megawatts.

Management The decision-making process whereby a plan or a course of action is implemented. Planning forms part of this process as does the allocation of resources and the resolutions of conflicts of interest. Effective management is only possible if managers have access to reliable information

Marginalisation Refers to the overt or covert trends within societies whereby those perceived as lacking desirable traits or deviating from the group norms tend to be excluded by wider society. Marginalised social groups tend to poor and have limited access to water for both domestic and productive purposes. They also tend to be excluded from and/or are unable to influence decision-making processes that influence their access to safe water.

Market liberalization See neo liberalism Maximum Contaminant Level

The maximum level of a contaminant allowed in water by law. Based on health effects and currently available treatment methods.


(MCL) Medium-size water system

A water system that serves 3,300 to 50,000 customers.

Micro-Credit / Micro-Insurance

Providing very poor families with very small loans (microcredit) to help them engage in productive activities or grow their tiny businesses. Over time, microfinance has come to include insurance, credit, savings, etc because the poor require access to wide variety of financial products.

Micro Policy Micro Policy is policy which only affects particular sectors, districts, communities, villages, neighbourhoods or groups. It is distinct from macro policy which affects the whole country.You will sometimes find reference to 'meso' level policy which overlaps somewhat with definitions of micro policy. Meso is the level between micro and macro, or between service delivery and policy-making, and is the level that often is needed to link the two. In government terms it could be District, Provincial or Regional authorities and services. Local councils and regional authorities would be included here. Other organisations, such as federated, regional farmers' associations are also at the meso level. It can be difficult to define the cut-off point between micro and meso, and perhaps for this reason meso can get ignored (the 'missing middle' of policies, institutions and processes').

Millennium Development Goals (MDG)

A list of 8 goals (including eradicating extreme poverty and hunger, improving maternal health and ensuring environmental sustainability) adopted by the UN General Assembly (Millennium Summit September 2000) as an international development agenda until 2015. For each of the goals one or more targets have been set, most for 2015, using 1990 as a benchmark. MDG goals arguably all implicate water in some way:

Goal 1: Eradicate extreme poverty and hunger - By 2015, reduce by half the proportion of people living on less than a dollar a day By 2015, reduce by half the proportion of people who suffer from hunger

Goal 2: Achieve universal primary education - By 2015, ensure that all boys and girls complete a full course of primary schooling

Goal 3: Promote gender equality and empower women - Eliminate gender disparity in primary and secondary education preferably by 2005, and at all levels by 2015

Goal 4: Reduce child mortality- By 2015, reduce by two thirds the mortality rate among children under five

Goal 5: Improve maternal health- By 2015, reduce by three quarters the maternal mortality rate

Goal 6: Combat HIV/AIDS, malaria and other diseases- By 2015, halt and begin to reverse the spread of HIV/AIDS

Goal 7: Ensure environmental sustainability- By 2015, integrate the principles of sustainable development into country policies and programmes; reverse loss of environmental resources

Goal 8: Develop a global partnership for development - Develop further an open trading and financial system that is rule-based, predictable and non-discriminatory

Mitigation measures The reduction of potentially significant adverse impacts. Mission The fundamental purpose and reason to exist for an organization Mission statement This describes the needs the organization was created to fill and

answers the basic question of why the organization exists Modelling Modelling refers to computer-based systems that use mathematical

formulas to represent systems and processes. If the model is a acceptable representation of a given system or process, it can be used to answer hypothetical “what if” questions and/or to assess the


sensitivity of a system or process to change. Monitoring Collection and analysis of financial and non-financial information on a

regular basis in order to check a project's performance compared with its stated objectives, budget and work plan. Monitoring is normally seen as an internal project activity, but can also be external (by outsiders). Monitoring is normally concerned with inputs, activities and outputs. Monitoring systems can, however, also generate information on progress at the purpose level

Monitoring and Evaluation

While monitoring and evaluation often become blurred in practice, it is important to understand the distinction between them. Monitoring is the continuous assessment of project (or program) implementation in relation to agreed schedules and the use of inputs, infrastructure and services by beneficiaries. Evaluation, on the other hand, is the periodic assessment of a project's (or program) relevance, performance, efficiency, and impact (both expected and unexpected) relative to its stated objectives.

Multipliers The amount by which equilibrium output of the economy changes when aggregate demand - as caused for example by the expenditure by a development project - increases by one unit. As those receiving the initial round of income generated are likely to consume a portion of the additional income, this subsequent expenditure will lead to additional ripple effects of rounds of income and consumption through the economy. The net effect of these increases in output is the multiplier effect of the initial expenditure, measured as a proportion of the initial expenditure.

Multi-criteria analysis

An analytical process that uses a mix of qualitative and quantitative criteria to assess and compare options, which may be policies, programmes or projects.

Multi-purpose dam A dam that meets two or more objectives (such as irrigation, flood control, water supply, power generation, recreation, navigation or fish and wildlife enhancement).

Municipal discharge Discharge of effluent from wastewater treatment plants, which receive wastewater from households, commercial establishments, and industries in the coastal drainage basin.

Municipal sewage Liquid wastes, originating from a community. They may have been composed of domestic wastewaters or industrial discharges.

Municipal Sludge Semi liquid residue that remains from the treatment of municipal water and wastewater.

Natural Capital Natural Capital is a category of livelihood assets. It is the term used for the natural resource stocks (e.g. trees, land, clean air, coastal resources) upon which people rely. The benefits of these stocks are both direct and indirect. For example, land and trees provide direct benefits by contributing to income and people's sense of well-being. The indirect benefits that they provide include nutrient cycling and protection from erosion and storms.

Natural Hazards Can be classified by origin namely: geological, hydrometeorological or biological. Hazardous events can vary in magnitude or intensity, frequency, duration, area of extent, speed of onset, spatial dispersion and temporal spacing (UNISDR).

Natural resources Natural res ources are natura lly oc curring sub stances con sidered valuable in their na tural f orm; th ey are of ten clas sified into renewable and non-renewable resources.

Neo-classical economics

Refers to a general approach to economics based on the operation of markets, in which supply and demand are brought into equilibrium

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through the adjustment of prices. Underlying the operation of markets is the assumption that individuals make rational choices based on available information, each seeking to maximize their individual profit or utility. Mainstream economics is largely neoclassical in its assumptions.

Neo liberalism A broad shift in thinking worldwide towards market solutions to perceived public sector deficiencies. It encouraged market liberalisation or free-market methods and therefore less government regulation of the supply and consumption of goods and services previously mediated by state control. The water sector has been a prime area for implementation of neo-liberal ideas including water markets and trading; full cost pricing of water; privatization of water services; the primary use of demand management to allocate water resources

Non-Renewable Natural Resources

Non-renewable resources can be extracted but not replaced, such as minerals and petroleum. See Renewable Natural Resources.

Nitrification A biological process, during which nitrifying bacteria convert toxic ammonia to less harmful nitrate. It is commonly used to remove nitrogen substances from wastewater, but in lakes and ponds it occurs naturally.

Non-Renewable Resource

A natural resource that cannot be regenerated, re-made or re-grown on a scale level to its consumption, unlike a renewable resource.

Non-renewable water Water in aquifers and other natural reservoirs that are not recharged by the hydrological cycle or are recharged so slowly that significant withdrawal for human use causes depletion. Fossil aquifers are in this category: They recharge so slowly over centuries that they are, in effect, a non renewable resource.

Nuisance Contaminant

Constituents in water, which are not normally harmful to health but may cause offensive taste, odor, color, corrosion, foaming, or staining.

Nutrients Chemical elements essential to plant and animal nutrition. Nitrogen and phosphorus are the two most common and the major components of fertilisers. In low concentrations they benefit plant and animal growth but in high concentrations they become pollutants.

Nutrient Pollution Contamination of water resources by excessive inputs of nutrients. In surface waters, excess algal production is a major concern.

Oligotrophic lakes Deep clear lakes with few nutrients, little organic matter and a high dissolved-oxygen level.

Open access resource

A resource that is not owned by anyone where competition can arise between users to consume or control the available resource.

Organisations If institutions are the 'rules of the game', organisations are the 'players'. Examples include: the district department of health; the department of agriculture; the local branch of an NGO; DFID; a religious organisation such as a church or mosque; a workers union; a village committee; an informal organisation based around kinship, such as a clan.

Outfall The place where a wastewater treatment plant discharges treated water into the environment.

Overland flows Rainwater that has fallen to the ground but not yet reached a defined surface watercourse, body or ground water source.

Over-allocation Refers to situations where the volume of water taken from a source has reached a level that significant environmental damage occurs and future supplies to users are jeopardised.

Ownership Ownership is the state of either exclusive or shared possession or control over property, which may be an object, land, water, intellectual property or similar. Ownership implies formal or real authority as well as effective self-authorisation to assume management responsibility.

Oxidation pond A man-made body of water in which waste is consumed by bacteria. Parastatals These are organisations such as marketing boards, that are wholly-

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owned by the state , but are legislatively independent in terms of their operating decisions (however, this freedom from political intervention is seldom achieved in practice).

Participation Participation in water governance is an umbrella term including different means for the public to participate in decision-making processes. Participatory processes attempt to actively involve the stakeholders in stakeholder dialogues and decision-making processes to help ensure that the outcomes of decisions match their needs and aspirations

Participatory The quality of an approach to development and/or government in which the underlying principle is that the key stakeholders (and especially the proposed beneficiaries) of a policy or intervention are closely involved in the process of identifying problems and priorities and have considerable control over the related activities of analysis, planning and the implementation of solutions. To facilitate this approach there are a variety of participatory methods or techniques that can be used.

Participatory innovation and technology development

A process of finding new things and ways that work (successful innovations) in interaction between rural people, research and extension service providers. The principle behind the process is that the local, situational, often more intuitive knowledge of villagers and the formal knowledge of scientists are combined to experiment on innovations.

Participatory Methods

These are methods that are used to encourage people's participation in the processes of identifying/analysing livelihood opportunities and problems, setting priorities and planning, implementing solutions, and monitoring and evaluating changes and impacts. They are very important for understanding livelihoods and are designed so as to promote learning and empower people in their dealings with external agencies and institutions.

Participatory Poverty Assessments

Used to understand poverty from the perspective local people. PPAs make flexible use of a wide range of participatory methods.

Participatory Technology Development

Participatory Technology Development is research which involves all relevant parties in actively examining together current action (which they experience as problematic) in order to change and improve it

Particulate loading The mass of particulates per unit volume of water. Partners The individuals and/or organisations that collaborate to achieve mutually

agreed upon objectives Partnership

Partnership in the context of WATER GOVERNANCE can be defined as arrangements between organisations in which there is an agreement to work co-operatively to achieve a public policy objective for which there is: 1) Shared authority and responsibility for achieving results; 2) Joint investment of resources (time, funding, expertise); 3) Shared risk-taking; and 4) Mutual benefit.

Pathogen Agent causing disease. Payment schemes for environmental services (PES)

They are flexible and direct compensation mechanisms by which service providers are paid by service users. PES schemes in watersheds usually involve the implementation of market mechanisms to compensate upstream landowners in order to maintain or modify a particular land use, which is affecting the availability and/or quality of the downstream water resources.

People Centred Approach

An approach that involves a focus on people, i.e. What matters to people; What distinguishes one group of people from another group;

and Working with people in a way that fits in with their current

livelihood strategies, social environment and ability to adapt.One of the core principles of the sustainable livelihoods


approach is that it should be people-centred. Percolating water Water that passes through rocks or soil under the force of gravity. Percolating ground water

Water moving slowly through the soil, not in any underground stream or lake.

Percolation Vertical movement of water downwards through soil or rock in the unsaturated zone immediately beneath the surface.

Performance bonds Bonds supported by financial guarantees to provide a secure way of ensuring compliance with commitments and obligations. The bond is called upon in part, or in full, to meet unfulfilled obligations and commitments or is repaid when commitments are met, either in whole or in part, depending upon the circumstances.

Pesticides Chemical products designed to kill or restrict the development of pests. They include fungicides, herbicides and insecticides. Pesticides range from relatively simple elements such as sulphur (S) to complex chemical compounds such as chlorinated hydrocarbons and may be broad-spectrum or narrow-spectrum agents. Pesticides also vary in their persistence in the environment, and in general, the longer they remain chemically stable the greater is their potential for environmental damage. The use of pesticides has undoubtedly benefited society, by preventing disease and improving the food supply. At the same time, ignorance of the environmental impact of pesticides, the indiscriminate use of certain products and inadequate control of the production and use of pesticides has created problems for wildlife and natural vegetation and has threatened human health.

Photosynthesis The process of conversion of water and carbon dioxide to carbohydrates. It takes place in the presence of chlorophyll and is activated by sunlight. During the process oxygen is released. Only plants and a limited number of microrganisms can perform photosynthesis.

Physical and chemical treatment

Processes generally used in wastewater treatment facilities. Physical processes are for instance filtration. Chemical treatment can be coagulation, chlorination, or ozone treatment.

Physical Capital Physical Capital is a category of livelihood assets. It comprises the basic infrastructure and physical goods that support livelihoods. Infrastructure consists of changes to the physical environment that help people to meet their basic needs and to be more productive. Key components of infrastructure include affordable transport systems, water supply and sanitation (of adequate quantity and quality), energy (that is both clean and affordable), good communications and access to information. Shelter (of adequate quality and durability) is considered by some to be infrastructure, while others would consider it to be a private physical asset and somewhat different from infrastructure.Other components of physical capital include productive capital that enhances income (e.g. bicycles, rickshaws, sewing machines, agricultural equipment), household goods and utensils and personal consumption items such as radios and refrigerators. Most of these are owned by individuals or groups. Some, such as larger agricultural equipment or processing units, can be accessed through rental or by paying a fee for the services used.

Plan A plan is a coherent set of decisions about the use of resources, translated in activities that taken together have the potential to achieve a vision. A plan includes an explicit statement of the methods to be used, costs, responsibilities, schedule of activities and agreed targets. Planning is the process of creating and refining a plan, or integrating it with other plans

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Planning cycles Planning cycles incorporate two important ideas. Firstly, it refers to the concept of a project or programme proceeding through various evolutionary stages from visioning to planning to implementation and evaluation, forming an identifiable and rational cycle of development. Secondly, it recognizes the need for management of such a cycle through all its various stages. Central to planning cycles is the idea of managing a process, rather than managing a one-off event

Pluralistic service delivery systems

The provision of services by a number of different private and public sector actors which allows farmers to make choices between different providers. To create an environment that facilitates private sector provision, public investment is often required to support local government (in its role as facilitator and regulator of services), as well as nurturing businesses through capacity building, coaching etc.

POE-treatment Point-Of-Entry treatment. Total water treatment at the inlet to an entire building or facility.

Point source A stationary location from which pollutants are discharged. It is a single identifiable source of pollution, such as a pipeline or a factory.

Point source pollution

Pollution originating from a particular and identifiable source.

Point Sourced Natural Resources

Resources such as oil and minerals which have a tendency to lead to production and revenue patterns that are concentrated, rather than being diffused through the economy.

Policy A policy is a plan of action to guide decisions and actions. The term may apply to government, private sector organizations and groups, and individuals. The policy process includes the identification of different alternatives, such as programs or spending priorities, and choosing among them on the basis of the impact they will have. Policies in short can be understood as political, management, financial, and administrative mechanisms arranged to reach explicit goals. Policy alignment is the process by which consistency is achieved across a number of policies that have the potential of interfering with each other.

Political Economy The interrelationship between political and economic institutions and processes. That is the relationship between governments and markets and vice versa. Political economists are interested in analysing and explaining the ways in which various sorts of government affect the allocation of scarce resources in society through their laws and policies as well as the ways in which the nature of the economic system and the behaviour of people acting on their economic interests affects the form of government and the kinds of laws and policies that get made.

Political Economy Analysis

Political economy analysis focuses on power and wealth relations and on the processes that create, sustain and transform these relationships over time; it is essentially concerned with understanding the interaction of political and economic processes and associated dynamics of power and powerlessness between different groups and institutions in society. In situations of chronic conflict, political economy is concerned both with political dynamics (such as group-based rebellion against the state) and with economic forces (such as war economies) – both ‘grievance’ and ‘greed’ – which are combined in changing patterns of power and vulnerability, creating both ‘winners’ and ‘losers’

Political fragmentation

Occurs in transboundary river basin settings where jurisdictions separate management along political rather than natural boundaries

Pollutant A contaminant at a concentration high enough to endanger the life of organisms.

Polluter pays 1- The Polluter Pays Principle is based on an economic approach to


principle pollution control, designed to ensure that the polluter bears the cost of pollution damage and/or the costs incurred in controlling pollution – otherwise known as abatement costs. The OECD describes it as “the principle to be used for allocating costs of pollution prevention and control measures to encourage rational use of scarce environmental resources and to avoid distortions in international trade and investment”.

Post-conflict A situation in which a country is emerging from conflict. The use of the term ‘post-conflict’ does not necessarily imply absolute peace. The emergence from conflict involves multiple transitions: in security (from war to peace); a political transition (from authoritarianism to a more participatory form of government); and a socio-economic transition that includes the rebuilding of economic capacities. Transition can involve change in either direction, and spans an undefined period of time.

Potable water Water that is safe for drinking and cooking. PRA tools A range of participatory tools designed to involve stakeholders in the

collection and analysis of information. Precautionary approach/principle

The precautionary principle provides guidance for governance and management systems in response to uncertainty. The most widely accepted and cited version of the precautionary principle in the environmental context is Principle 15 of the Rio Declaration, which states: “In order to protect the environment the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation”. In general terms, the precautionary approach involves a shift of emphasis in governance of environmental risk, from reacting to clearly defined problems as they arise, to recognising uncertainty and ignorance, anticipating harm, preventing problems, taking cautious action, and monitoring potential impacts.

Precipitation Any solid or liquid water particles falling to the earths' surface from the atmosphere. It includes rain, snow, hail and sleet, but 'precipitation' and 'rain' are often treated as synonyms.

Predictability of quantity and enforceability

Users have a reasonable expectation of the volume of water that they can extract from a source, and monitoring and enforcement arrangements are established to protect the right from encroachment

Pressure sewers A system of pipes in which water, wastewater, or other liquid is pumped to a higher elevation.

Pre-treatment Processes used to reduce or eliminate wastewater pollutants from before they are discharged.

Price stabilization This is a type of agricultural policy intervention by which governments seek to stabilise prices for several reasons. On the production side, the aims are to reduce risk, increase marketed supply and stabilise farm incomes. On the consumption side the objectives are to ensure stable wage costs for the non-farm economy and protect the urban poor from malnutrition or starvation.

Primary wastewater treatment

The removal of suspended, floating and precipitated solids from untreated

Private-Sector Participation (PSP)

The participation of the private sector in delivery of water supplies, irrigation and wastewater services has attracted much attention as a solution to systemic problems of service delivery. The basis for advocating PSP is the recognition that private commercial companies tend to operate services with greater efficiency and less waste than


government-run utilities, while managing to recover their costs. The level of development and the suitability of private sector institutions in different settings will strongly influence the form of participation.

Privatisation A process in which the government transfers state-owned industries (e.g. water, electricity) to the private sector. This usually involves an offer for sale of shares in an industry to the general public. Options are wide-ranging, from minimum private sector involvement, which could consist of contracting out the management of certain major installations to full divestiture of responsibility for capital investment, operations, and commercial risk to autonomous water companies. The key issue is how to set up institutional arrangements that allow the commercial sector freedom to introduce marketplace efficiencies while guaranteeing access to services to those communities – by definition the poorest and least able to exercise influence politically or in the marketplace – who are already underserved and most at risk from public health hazards. In private sector participation processes, the state remains the owner of waterresources. It can delegate the distribution and sanitation management of water to private companies, but must retain the responsibility of guaranteeing social equity among the services provided.

Problem focused A problem-focused approach to planning starts by analysis of problems and concludes by matching solutions to these problems. It is the opposite to a “one size fits all” approach to planning which works on the premise that solutions to problems are universally applicable.

Problem tree The problem tree is a visual problem-analysis tool that can be used at many levels to promote stakeholder dialogue and to specify and investigate the causes and effects of a problem and to highlight the relationships between them.

Processes One of the components of Policy, Institutions and Processes (PIPs). "Processes" attempts to capture the dynamic element of policies and institutions and avoid a 'snapshot' approach. It refers to how things are done rather than what is done. It also refers to the ways policies and institutions change and/or interact with broader processes of change. Change may happen as a result of policies or due to other factors such as:

The nature of authority and decision-making structures; The form and quality of government systems (governance); The extent and nature of public participation in policy and other

processes; The effect of this participation; andother factors behind change

(for example, external shocks that form part of the vulnerability context).

Process approach An approach to interventions in which broad objectives for change may be identified and agreed but the exact means by which these objectives will be achieved may, at the outset, be unknown and unknowable. Such interventions are approached in an exploratory mode. Implementation takes place in successive, defined, iterative stages with future activities being planned in the light of results gained as implementation proceeds.

Process documentation

In the context of WATER GOVERNANCE, process documentation focuses on monitoring and documenting the process by which water-related decisions are made.

Process water Water that serves in any level of the manufacturing process of certain products.

Product water Water that has passed through a water treatment plant and is ready to be delivered to consumers.


Proper resource pricing

The pricing of natural resources at levels which reflect their combined economic and environmental values.

Protect The obligation to protect requires that States Parties prevent third parties such as corporations from interfering in any way with the enjoyment of the right to water.

Pro-poor policies

Poverty is multifaceted and cannot be restricted to a lack of income alone (the poverty line in developing countries is generally defined as an income of one U.S. dollar per day per capita) or to inadequate food consumption (e.g. a minimal calorie intake). Poverty has a qualitative as much as a quantitative aspect. Generally speaking, poverty means privation and lack of well-being. Poverty cannot only be defined from the outside, the poor themselves must also be involved, i.e. understanding poverty requires both intimate and external knowledge. Only if all dimensions and perceptions of poverty are considered, will the individual, social and primarily cultural diversity of human lives also be recognized. Focusing activities on the low-income segments of society, which often have inadequate access to water and other resources or services. “Pro-poor” implies that the overall aim is beneficial towards the poor, while “poverty focused” implies a greater degree of targeting.

Public Goods see also Common Good and Global Public Goods

In common usage, “public good” is often incorrectly associated with “common good,” or with such value-based goals as social equity, social justice and environmental sustainability. Its definition in economic theory is narrower, more precise, and contrasted specifically to “private good.” A private good is one whose individual consumption is both excludable (my use of the good is not dependent on others use) and rivalrous (my use of the good could preclude use by another). This characterizes most market-based commercial/ commodity exchanges. A public good is one that is non-excludable (all people have unimpeded access to it and can profit from it) and – in its pure form – non-rivalrous (the individual consumption of the good does not restrict that by another individual). Strictly speaking common pool resources such as water do not qualify as public goods since their use is not non-rivalrous and use by one person does affect the use by others.

Public Trust Doctrine

In the western United States requiring the application of community values during applications for water rights or transfers of water rights.

Public water system A system that provides piped water for human consumption to at least 15 service connections or regularly serves 25 individuals.

PUPs

A public sector company assists in the development of another public sector operation. The use of “twinning” as a mechanism of capacity building provides a prototype for PUPs. The public sector has a key role to play in the sustainable development of the world’s water services for all of its citizens – rich and poor. The general notion of public-public partnerships (PUPs) is a form of international cooperation and action whereby existing, experienced public service agencies partner others to help them build capacity, on the basis of mutual, not for profit, support. Given the difficult conditions for privatisation in most developing countries, capacity building, know-how transfer and financing through co-operation with state-owned enterprises and with state agencies from other countries is a particularly promising alternative.

Public-Private Partnerships (PPP)

An agreement between the public sector and a private sector entity, whereby both parties share risks, responsibilities, and in some cases investments. Inviting the participation of the private sector has recently been recognised as a means of making water supply and sanitation


services more efficient and cost-effective, while raising revenue to improve long-term sustainability and generate investment for new infrastructure. Privatisation of public water companies can release public funds for other development activities and reduce administrative burdens. Developing countries can also benefit from the know-how of commercial companies specialised in public services management. The involvement of the commercial private sector can help to underline the value of the natural resource and – given appropriate incentives – can also encourage measures to protect and conserve freshwater supplies. A balanced partnership between public authorities and the private sector requires that their respective roles be clearly defined within a legal framework. The level of development in the country, including the level of skills and capacities within the commercial sector, and the nature of institutions in water-related sectors, will strongly influence the form of public-private partnerships.

QIS Qualitative Information System (QIS) is a flexible system to monitor, capture and compare qualitative information over time and space, to store and manage this information in computer databases, and to link assessment with action planning during stakeholder meetings

Qualitative water assessment

Analyses of water used to discribe the visible or aestetic charcteristics of water.

Quantitative water assessment

Use of analyses of water properties and concentrations of compounds and contaminants in order to define water quality.

Rain Precipitation in the form of liquid water droplets. Droplets vary in size but exceed 0.5mm in diameter. Smaller droplets are considered to be drizzle.

Ramsar Convention The Convention on Wetlands, an intergovernmental treaty that provides the framework for national action and international cooperation for the conservation and wise use of wetlands and their resources, adopted in the city of Ramsar, Iran, in 1971

Raw sewage Untreated wastewater and its contents. Raw water Intake water before any treatment or use. Receiving waters A river, lake, ocean, stream or other watercourse into which wastewater

or treated effluent is discharged. Recession agriculture

A system of agriculture that depends on the moisture of the soil as the flood recedes. Recession agriculture takes place in the floodplain, which is the area subject to seasonal flooding by the river.

Recharge Area An area where rainwater soaks through the ground to reach an aquifer. Recharge rate The rate at which water enters an aquifer or artesian basin. Recirculation Recycling water after it is used. Often it has to pass a wastewater

purification system before it can be reused. Rehabilitation The physical or social restoration of an ecosystem or a community after

a dam construction project has been completed, or the process of renovating a facility or system that has deteriorated and whose performance is failing to meet the original criteria and needs of the project.

Reliability A probability attached to the volumetric entitlement of some water rights that describes the number of years in every 100 that the volumetric entitlement will be met in full.

Remittances Money that is sent home by family/household members living and working away from home.

Renewable Resource Any natural resource that depletes more slowly than the rate at which it regenerates. In other words, it may be used but not used up. It may be so abundant that it is almost impossible for it to deplete, or it may have a


way of regenerating itself. This is different to a non-renewable resource. Renewable natural resources

A renewable resource is any natural resource that is depleted at a rate slower than the rate at which it regenerates. Renewable natural resources (RNRs) are generally living resources (i.e. fauna and flora) but also soil, water, wind, tides, and solar radiation. See non-renewable natural resources.

Renewable water Freshwater that is continuously replenished by the hydrological cycle for withdrawal within reasonable time limits, such as water in rivers, lakes or reservoirs that fill from precipitation or from runoff. The renewability of a water source depends both on its natural rate of replenishment and the rate at which the water is withdrawn for human use.

Reserve Capacity Extra treatment capacity built into wastewater treatment plants and sewers to be able to catch up with future flow increases due to population growth.

Reservoir A natural or artificial holding area used to store, regulate or control water.

Reservoir drawdown The extent to which the water level in the reservoir changes on a daily or seasonal basis due to release of water from the reservoir for operations (such as irrigation or daily peaking for power generation). Emergency drawdown may be for safety reasons, or in anticipation of a major flood event.

Resettlement Physical relocation of people whose homes, land or common property resources are affected by a development, such as dam building.

Resistance to change

Resistance to change is the action taken by individuals and groups when they perceive that a change that is occurring as a threat to them.

Resource plan Legislation or regulation that describe the allocation of water between uses (including the environment) and how water is to be subsequently re-allocated. Plans might also include conditions on water users to meet a range of environmental and other objectives of water use.

Retention Temporary storage provided by a dam. Even when a reservoir is full, the outflow may be smaller than the inflow as a result of the retention effect.

Return flow Water returned to its original source after its extraction and use. Where they still occur, return flows are from irrigation uses which re-enter the stream via surface run-off or ground water recharge.

RIDA framework The Resources-Infrastructure-Demand/Access(RIDA) framework is a tool for structuring the analysis of complex water delivery systems.

Rights based approaches

A rights based approach focuses on building people's awareness of their rights (such as a legally mandated right to a water supply of a given quantity and quality) and empowering them to effectively demand this right from those who's responsibility it is to provide it.

Right-holders Water right-holders Riparian right The right to take water which results from the ownership or occupation, or legal access, to land adjacent to a river or body of water.

Riparian Lying on or adjacent to a river or lake. Used to denote people, plants or wildlife living along the water’s edge.

Riparian State Any State through which a transboundary river flows or forms part of its boundary, or that includes part of the catchment basin of a transboundary river.

Risk An understanding of the likelihood of events occurring, for example, on the basis of past experience. This concept contrasts with that of uncertainty, in which the likelihood is unknown. An individual or household may assess that the likelihood of a bad event, such as drought, occurring is high enough to alter the mix of species cultivated.


This on-farm diversification of species, which has parallels in off-farm diversification of activities, is known as risk spreading. More broadly, risk refers to the inherent uncertainty in whether or not a strategy and/or plan will achieve an agreed vision. In many cases, risks can be mitigated by carrying out a risk assessment and modifying strategies and/or plans.

River Large stream that serves as the natural drainage channel for a drainage basin. In terms of transboundary rivers, the term relates equally to all types of waters that are or might be affected by dams.

River basin The area from which the river system under consideration naturally receives its drainage water; may encompass a series of tributary rivers and their sub-basins.

Riverine Features or habitats relating to, formed by, or lying within a river; living along the banks of a river.

Rotating savings and credit associations (ROSCAs)

A group of persons who agree to make periodic savings payments into a fund. The fund is allocated to one member of the group each time the savings are collected. The rotation continues until all members of the group have received loans.

Run-Off Water originating as precipitation on land that then runs off the land into rivers, streams, and lakes, eventually reaching the oceans, inland seas, or aquifers, unless it evaporates first. That portion of runoff that can be relied on year after year and easily used by human beings is known as stable runoff.

Run-of-river dams Dams that create an hydraulic head in the river to divert some portion of the river flows. They have no storage reservoir or limited daily pondage. Included in this category are weirs and barrages.

Safe Drinking Water Safe drinking water includes treated surface water and untreated water from protected springs, boreholes, and sanitary wells. WHO’s norms for drinking water quality go back to 1958. An established goal of WHO and its Member States is that: “all people, whatever their stage of development and their social and economic conditions have the right to have access to an adequate supply of safe drinking-water”. In this context, “safe” refers to a water supply with a quality that does not represent a significant health risk, is of sufficient quantity to meet all domestic needs, is available continuously, is available to all the population, and is affordable.

Safety Nets Safety nets is a term used to describe a collection of services provided by the state which prevent individuals from falling below certain levels of poverty.

Safe water Water that does not contain harmful bacteria, toxic materials, or chemicals, and is considered safe for drinking.

Safe yield The annual amount of water that can be taken from a source of supply over a period of years without depleting that source beyond its ability to be naturally refilled.

Sahel A semi-arid to arid area, subject to seasonal and long-term drought, in West Africa south of the Sahara Desert. Named from the Arabic word 'border', since it borders the desert, the Sahel proper consists of six nations - Senegal, Mauretania, Mali, Burkina Faso, Niger and Chad - but the name has come to include adjacent nations that suffer from problems of drought, famine and desertification that are characteristic of the Sahel.

Salinisation The build-up of salts in soil as a result of the capillary flow of saline water towards the surface. Salinisation is a common problem in areas


where agriculture requires irrigation. There, the natural process is exacerbated by the evaporation of irrigation water that not only adds salts directly to the soil, but also encourages sub-surface water to be drawn from deeper levels to the surface where it is evaporated. At best, it can lead to a reduction in crop yields; at worst, it made the land sterile and unsuitable for agriculture.

Salinity The presence of soluble minerals in water. Saturated zone The area below the water table where all open spaces are filled with

water. Scalar fragmentation Occurs when basin management at a macro-scale occurs without

reference to its micro-level impacts, and where local scale initiatives occur without reference to cumulative basin-wide implications.

Scale In the WATER GOVERNANCE context, scale refers to the temporal and spatial boundaries within which decisions are made and/or are relevant. When mapping decision-making processes it is important to recognize that water management objectives and governance issues and challenges are usually scale dependent

Scenarios A scenario is a consistent description of a possible future situation as determined by those factors that are both most important and most uncertain. Scenarios are stories about the way the world might turn out tomorrow. Developing a set of narrative scenarios helps identify possible pathways (strategies) towards a shared vision of the future, based on current trends and knowledge of sources of greatest uncertainty. Narrative scenarios can and should be a mix of qualitative and quantitative information.

Schistosomiasis A tropical or subtropical intestinal disease of humans caused by parasitic flatworms or flukes. Using snails as intermediate hosts, the flukes are spread from person to person through polluted water and insanitary living habits. Deteriorating health and reduced resistance usually cause those infected to die of secondary diseases rather than schistosomiasis itself. Schistosomiasis is prevalent in Africa, South America and tropical Asia, where as many as 200 million people are infected.

Semi-structured interviews

Semi-structured interviews are conducted within a fairly open framework which allow for focused, conversational, two-way communication. They can be used to both give and receive information. Unlike the questionnaire framework, where detailed questions are formulated ahead of time, semi structured interviewing starts with more general questions or issues

Seasonality Seasonality refers to seasonal changes, such as those affecting: assets, activities, prices, production, health, employment opportunities etc. Vulnerability arising from seasonality is often due to seasonal changes in the value and productivity of natural capital and human capital (through sickness, hunger etc). The poor are often more vulnerable to these changes than wealthier groups.

Secondary treatment The removal or reduction of contaminants and BOD of effluent from primary wastewater treatment.

Sector Programmes Programmes that focus on specific sectors such as health, education, agriculture, infrastructure, transport etc. Sector programming is an increasingly popular approach with donors, as a way to help partner governments with their work across a sector, rather than in specific projects. Donors' sector programmes usually include budgetary support for on-going government activities.

Sector-Wide Sector wide approaches - an approach to development assistance that


Approaches (SWAPs)

emphasises theoverall effectiveness of a particular sector, such as agriculture or education, and combines institutional development, policy dialogue and service delivery. The government takes the lead role in sector programmes, while donor support focuses on getting the policy and institutional setting right rather than delivering stand-alone projects.

Seed-fertilizer-water revolution

An approach that recognises the complementarity between inputs in the spread of high yielding varieties, and therefore aligns agricultural policies in order to promote the rapid uptake of new high yielding varieties of rice, wheat and maize.

Self-assessment A process by which a group or organization evaluates its own performance

Semi-confined aquifer

An aquifer partially confined by soil layers of low permeability through which recharge and discharge can still occur.

Semi-formal finance Financial arrangements that fall into the grey area between informal and formal finance. They may be partly regulated or supervised by a government agency, but less regulated than the formal financial institutions that fall under the regulatory framework of central banks and superintendencies of banks.

Semi-permeable A medium that allows water to pass through, but rejects dissolved solids, so that it can be used to separate solids from water.

Sewage Waste fluid in a sewer system. Sewage contamination

The introduction of untreated sewage into a water body.

Sewage sludge Sludge produced in a public sewer. Sewerage The entire system of sewage collection, treatment, and disposal. Shocks Shocks are usually sudden events that have a significant impact

(usually negative) on livelihoods. They are irregular and vary in intensity and include events such as natural disasters, civil conflict, losing one's job, a collapse in crop prices for farmers etc. They can be classified into the following categories:

Human shocks (e.g. illness, accidents); Natural shocks (e.g. floods, earthquakes); Economic shocks (e.g. job losses, sudden price changes); Conflict (e.g. war, violent disputes); and Crop/livestock health shocks.

Shocks and trends may be linked. For example some changes that appear as trends at a national or even regional level (such as increased infection rate for diseases such as AIDS and malaria) can impact upon a household or individual as severe shocks (i.e. death in the family).

Small-scale irrigation

Small-scale irrigation applies water to only a fraction of the soil surface, with water delivered to the plant through a network of pipes via drippers, micro sprinklers or bubblers (controlled orifice) outlets. This is often also referred to as micro-irrigation. These techniques contribute to food security and poverty alleviation by improving the water efficiency of irrigation (more crops and jobs per drop) in water-scarce regions, where rain is insufficient. This enables farmers to sustain and even improve the productivity of irrigated agriculture through the mobilization of their own local resources.

Social Analysis/ Appraisal

Investigation of social structures and relations. In the SL Approach it is used to provide information on the relevant characteristics of poverty,vulnerability and social exclusion. It can help to understand:

The social positioning of individuals or families (distinguished by kinship, age, gender, ethnicity, religion, caste, etc.);

Which social characteristics (e.g. standard of living or extent of poverty, gender, age, ethnicity) are important in defining groups


for more detailed livelihoods analysis; What the dimensions and effects of exclusion of various groups

are (e.g. lack of access to assets, to services, to household or community-level social institutions, or lack of voice);

The existence and cause of conflicts within communities; Power and authority as manifested by traditional authority (e.g.

village chiefs, community leaders) and the authority of the state and its agencies;

Non-market, social institutions such as customary tenure, common property; and

The way policy, institutions and processes affect different social groups.

Social Capital Social Capital is a category of livelihood assets. It relates to the formal and informal social relationships (or social resources) from which various opportunities and benefits can be drawn by people in their pursuit of livelihoods. These social resources are developed through investment in:

Interactions (through work or shared interests) that increase people's ability to work together;

Membership of more formal groups in which relationships are governed by accepted rules and norms; and

Relationships of trust that facilitate co-operation, reduce transactions costs and sometimes help in the development of informal safety nets amongst the poor.

Critical benefits of social capital are access to information, to influence or power, and to claims or obligation for support from others.

Social fragmentation Occurs when resources are managed in a technocratic way by a narrow group of professionals without reference to the knowledge, preferences and material interests of diverse stakeholders

Social protection In recent years there has been a growing interest in social protection among donor agencies. In its broadest sense, social protection can be defined as an approach to thinking about the processes, policies and interventions which respond to the economic, social, political and security risks and constraints poor and vulnerable people face. According to the World Bank, the purpose of social protection is essentially threefold:

to reduce the vulnerability of low-income households with regard to basic consumption and services;

to allow households to shift income efficiently over the life-cycle, thus financing consumption when needed; and

to enhance equity particularly with regard to exposure to, and the effects of adverse shocks. Social protection is concerned with the ways in which individuals’ or households’ resilience to adverse events can be strengthened.

Social Resources See Social Capital Social Sustainability An initiative is socially sustainable if it rests on a particular set of social

relations and institutions, which can be maintained or adapted over time. One of a number of dimensions of sustainability that also include economic sustainability, institutional sustainability and environmental sustainability.

Subsidies A subsidy refers to direct or indirect assistance (financial or in-kind) provided by the government to domestic producers or exporters.

Sub-surface flow Water that moves through the bed of a river or stream. Supporting service Ecosystem services that are necessary for the production

of all other ecosystem services. Some examples include biomass production, production of atmospheric oxygen, soil formation and

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retention, nutrient cycling, water cycling, and provisioning of habitat. These benefits are usually not priced. The hydrological services provided by forests, such as clean and regulated water flow, and reduced sedimentation, for example, are only noticed when natural disasters, flooding, siltation of reservoirs and scarcity of water, occurring as a result of unsustainable land-use exert considerable costs on the user. Land owners/managers typically receive no compensation/payment for such services and consequently do not consider them in making land-use decisions.

Surface water All water naturally open to the atmosphere, concerning rivers, lakes, reservoirs, ponds, streams, impoundments, seas, estuaries and wetlands.

Surplus water Water that is surplus to the needs of fulfilling all current and future water right commitments.

Suspended solids Solid organic or inorganic particles that are held in suspension in a solution.

Sustainable/ Sustainability

Something is sustainable when it can continue into the future, coping with a and recovering from stresses and shocks, while not undermining the resources on which it draws for existence. These resources may be natural, social, economic or institutional, which is why sustainability is often analysed in four dimensions: economic sustainability, environmental sustainability, institutional sustainability and social sustainability. Sustainability does not imply that there is no change, but that there is an ability to adapt over time. Sustainability is one of the core principles of the sustainable livelihoods approach.

Sustainable development

Sustainable development has as many definitions as subscribers. In essence, it refers to economic development that meets the needs of all without leaving future generations with fewer natural resources than those we enjoy today. It is widely accepted that achieving sustainable development requires balance between three dimensions of complementary change: Economic (towards sustainable patterns of production and

consumption) Ecological (towards maintenance and restoration of healthy

ecosystems) Social (towards poverty eradication and sustainable livelihoods)

Sustainable Livelihoods

A livelihood is sustainable when it is capable of continuously maintaining or enhancing the current standard of living without undermining the natural resource base. For this to happen it should be able to overcome and recover from stresses and shocks (e.g. natural disasters or economic upsets).

Stakeholder Individuals or representatives of a group who have an interest in a particular decision. This includes people who influence a decision, or can influence it, as well as those affected by it. In the context of water governance stakeholders are considered to be institutions and individuals that are concerned with or have an interest in water resources and that would be affected by decisions relating to water resource management. Stakeholders include people who may have little knowledge of such effects and lack the means to participate. Stakeholders can be divided into primary stakeholders and secondary stakeholders:

Primary stakeholders are those who are directly affected by an activity, as beneficiaries, losers or implementing agencies or those with a direct influence the activity. It is usually necessary to sub-divide primary stakeholders into several smaller stakeholder groups.

Secondary stakeholders are indirectly affected by an activity. Stakeholder Analysis

Stakeholder analysis involves: 1. Identifying key stakeholders in relation to any initiative: i.e.

groups who have a similar interest (or 'stake'), and which differs

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in some way from others' interest; 2. Analysing the perspective of the key stakeholder groups: their

role, views, needs, etc. and their relationship with other stakeholder groups.

Stakeholder analysis can help to reveal, for example: The capacities of different stakeholders to participate in (and

benefit from) development activity as well as their perspectives on that activity;

The relative political power, access to information and institutional means to command attention (including blocking change) of different groups;

The complexity of organisational relationships; The area and sources of power and patronage; Who depends upon which environmental resources and

services and how they are affected by change; gaps and overlaps in the roles and functions of different stakeholder groups.

Stakeholder dialogue

In the context of water governance stakeholder dialogue refers to mediated interactions and discussions between different stakeholders aimed at resolving competing interests and competing views on the nature and severity of water supply problems and, as a next step, reaching a consensus on how best to tackle these problems in a way that is efficient, equitable and sustainable.

Stakeholder platform In the water governance context, a stakeholder platform provides a mediated forum for stakeholder dialogue, conflict resolution and integrated planning. In a practical sense, a stakeholder platform can take the form of a committee, a workshop, a village meeting or even a telephone call. The key aspect is that mediation using a range of tools and methods is leading to constructive dialogue amongst stakeholders.

Strategy A strategy is a medium to long-term planning framework within which specific activities are described. Over time an effective strategy should lead to achievement of a specified vision.

Strategic planning Strategic planning consists of the process of defining objectives and developing strategies to reach an agreed vision. By labelling a piece of planning "strategic" we expect it to operate on the grand scale and to take in "the big picture" (in contrast to "tactical" planning, which by definition has to focus more on the tactics of individual detailed activities).

Subsidiarity “Responsibilities for water related services and resource management need to be decentralised to the lowest appropriate administrative level according to the concept of subsidiarity.” The intent of this principle is to discourage the perpetuation of centralized command structures in authorities responsible for water resource management. Such structures, seen as disciplined and managerially accountable, tend to inhibit participation by stakeholders in decision-making on service delivery. However, the “lowest appropriate administrative level” should not be a level without the resources, clout or technical expertise to take informed and effective decisions. Subsidiarity must not be allowed to mean abandonment of responsibility; rather it should encourage the mobilisation of resources and inputs at all levels, as well as capacity building to allow greater decentralisation of decision making on a progressive basis.

Summary sheets In the water governance context, summary sheets provide a concise summary of the outputs from dialogue between stakeholders at the same level and, where relevant, between different levels. In general,


they are structured and they used to ensure that the outcomes of stakeholder dialogue are disseminate to all those who might be affected.

Surface water Water on the ground or in a stream, river, lake, sea or ocean; as opposed to groundwater.

Sustainability A development path along which the maximisation of human well-being for today's generations does not lead to declines in future well-being

Sustainable Cost Recovery

Sustainable cost recovery relies on a series of factors that range from tariff design to the design of an appropriate strategy, the application of sound financial management principles, the optimisation of costs and the promotion of willingness to pay. According to ADB, goals of cost recovery include good governance, financial sustainability, distributive justice, economic efficiency, and fair pricing.

Sustainable Development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs

SWOT SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is a simple tool that can be used to promote stakeholder dialogue and identify potential solutions to water-related problems.

Tailwater The water in the natural stream immediately downstream from a dam.Applied irrigation water that runs off the lower end of a field.

Tertiary Treatment Advanced cleaning of wastewater that goes beyond the secondary or biological stage, removing nutrients such as phosphorus, nitrogen and most BOD and suspended solids.

Thermal Pollution Discharge of heated water from industrial processes in receiving surface water, causing death or injury of aquatic organisms.

TDS (Total Dissolved Solids)

The weight per unit volume of water of suspended solids in a filter media after filtration or evaporation. Please use also our information about TDS and conductivity.

TH (Total Hardness) The sum of calcium and magnesium hardness, expressed as a calcium carbonate equivalent.

Total Solids All the solids in wastewater or sewage water, including suspended solids and filterable solids.

Toxic Water Pollutants

Compounds that are not naturally found in water at the given concentrations and that cause death, disease, or birth defects in organisms that ingest or absorb them.

Trade Liberalization The reduction or abolition of tariffs, preferences and other trade barriers in order to reduce artificial or government imposed restrictions to trade among individuals and firms in different nations.

Traditional Agricultural Extension

Traditional, or typical, public sector agricultural extension refers to extension services in developing countries, which are generally (a) government ministry directed, (b) existing separately from research or teaching institutions, (c) operating under a centralised hierarchical administrative structure, (d) carrying out various services other than agricultural knowledge and information transfer, e.g., supply,regulatory and census functions, (e) oriented toward production targets, and (f) subject to strong political control.

Tragedy Of The Commons

The theory of the tragedy of the commons suggests that if property over natural resources is held in common each individual has a rational incentive to overexploit that resource to maximise his gains, and to ignore the costs to the rest of the community (Hardin 1968). In Hardin’s formulation, so long as population growth is contained, this problem does not occur, as the number of users remains under control. When population numbers rise, long term sustainability is undermined and common property results in overuse of the resource.

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Transaction Costs The costs associated with making, monitoring and enforcing agreements/transactions/contracts etc. The agreements may be formal or informal and transaction costs may be incurred before and after an agreement is made. A large proportion of the costs are associated with acquiring information about the nature of an agreement (e.g. the quality of goods or services being transacted) and the reliability of other parties to the agreement. Transaction costs are incurred gaining information or commitments in order to reduce risks of loss in a transaction.

Transboundary Waters

The waters of a number of major rivers are shared between two or more countries in the developing world. There are 261 watersheds which cross the political boundaries of two or more countries. These international basins cover 45 percent of the earth’s land surface, affect about 40 percent of the world’s population, and account for approximately 60 percent of global river flow. In some cases, the geographical basin includes not only more than one single national territory, but several autonomous states within one of the countries. Generalized legal principles for the management of transboundary waters are currently defined by the Convention on the Non-Navigational Uses of International Watercourses, ratified by the UN General Assembly in 1997. Although the idea of the international river basin organisations (RBOs) enjoys the support of international organisations, particularly UN bodies, it has so far met with only modest success. This is not surprising, since a high degree of common purpose is required to reach agreement over the sharing of the waters of large international rivers. However, since this is a potential cause of conflict, notably in the Middle East, efforts to bring the various countries and states together to plan water resources development on a mutually agreed basis clearly need to be emphasised. The International Network of Basin Organisations (INBO) exists to promote such mechanisms, which could become a catalyst for inter-state co-operation.

Transferable right A formally established or legal right to water that can be freely transferred.

Transmission lines Pipelines that transport raw water from its source to a water treatment plant.

Transmissivity The ability of an aquifer to transmit water. Transparency See accountability Transpiration The process by which water vapour is released into the atmosphere

after transpiring of living plants. Treatment plant A structure built to treat wastewater before discharging it into the

environment. Trends Trends involve changes that take place over a longer period of time than

is the case with changes brought about by shocks or seasonality. They can either have a positive or negative effet on livelihoods.

Triangulation Triangulation is a simple method of establishing the accuracy of information by comparing three or more types of independent points of view on information sources (e.g. interviews, observation, and documentation). Akin to corroboration and an essential methodological feature of water resource assessments

Trade-off In economic terms, a trade-off is what must be given up, and what is gained, when an economic decision is made. Although the terms trade-off and externality are often interchanged, the main difference is that a trade-off is an intended loss or negative impact whereas an externality is unintended.

Transparency A system of operation that allows outsiders to see how the organization


operates, makes decisions, and uses resources; an important aspect to ensure the public trust in an organization

Turbidity Turbidity is a measure of water clarity and an indicator of the presence of suspended material, such as silt and clay, in water sources.

TS (Total Solids) The weight of all present solids per unit volume of water. It is usually determined by evaporation. The total weight concerns both dissolved and suspended organic and inorganic matter.

Uncertainty A statistically defined discrepancy between a measured quantity and the true value of that quantity that cannot be corrected by calculation or calibration. Uncertainty is an inevitable part of the assertion of knowledge.

Unsaturated Zone The area above the water table where soil pores are not fully saturated with water.

Universality In the context of water rights, the situation where all the available water resources (as far as practicable) are covered by a system of water rights.

Up-flow An upward flow of water. Up-scaling Up-scaling is the process by which relatively small-scale pilot studies

are scale up to cover larger areas. Up-scaling often involves addressing many issues relating to sustainability, cost and institutional capacity.

Usufructuary right A right to the use of water (Latin: usus) and to the fruits of the water’s use (fructus). With very few exceptions, water rights are usufructuary rights.

Utility A public or private company that supplies a basic service to the general public, such as electricity, gas, or water.

Variability In statistics, variability is a measure of statistical dispersion, indicating how its possible values are spread around the average or expected value. In many cases, higher levels of variability are linked to higher levels of uncertainty and risk.

Valuation Techniques for assessing the value of goods and services not priced and traded in markets. Most applications are to natural resources and environmental assets. Valuation process includes identifying affected benefit/cost categories, quantifying significant physical effects, estimating the values of the effects, quantification/pricing issues

Values statement A written description of the beliefs, principles, and ethical guidelines that direct a nonprofit’s planning and operations

Virtual Water The water used to produce the goods that a country imports. This amount can range for example from 10,000 litres per kg for beef, to 800 litres per kg for milk. Calculating virtual water levels reveals the amount of water the country would require to produce the goods it imports. Egypt for example is a country with high virtual water imports. Trade in virtual water allows countries with water scarcity to import products that consume high levels of water and export products that consume low levels, thus making water available for other purposes. Including virtual water as a policy option requires a thorough understanding of the impact of virtual water trade on the local, social, environmental, economic and cultural situation. The concept is very controversial.

Vision In management terms, a vision is a concise description of a desired future state. Visions provide a picture of how we would like the world (or our water resources and services) to be at some future time. Consensus on this vision is required before a strategy is developed

Vision statement A written description of the ultimate desired objective of the organization Volunteer A person working without compensation Vulnerable groups Groups which would be vulnerable under any circumstances (e.g. where


the adults are unable to provide an adequate livelihood for the household for reasons of disability, illness, age or some other characteristic), and groups whose resource endowment is inadequate to provide sufficient income from any available source

Vulnerability The probability or risk of falling into, or deeper into, poverty. Wastewater Water for which, because of quality, quantity or time of availability,

disposal is more economical than use at the time and point of its occurrence. Waste water to one user may be a desirable supply to the same or another user at a different location.

Wastewater infrastructure

The plan or network for the collection, treatment, and disposal of sewage in a community.

Water Pure water is a colourless, odourless liquid that is a compound of hydrogen and oxygen (H20). Natural water in the environment is never pure, but contains a variety of dissolved substances. Sea water, for example, is a solution of sodium chloride (NaCl - common salt) and other salts; rainwater can be acidic because of the carbon dioxide (CO2) that it contains and the water in rivers may include minerals dissolved from the rocks over and through which it has flowed. Water can exist as a solid (ice), liquid (water), or gas (water vapour) and changes readily from one to the other, either releasing or taking up energy as it does so. Some 97 per cent of the world's water is in the oceans, while a further 2 per cent is in the form of ice and snow, which leaves only 1 per cent available as freshwater for plants and animals. Survival on such small amount is made possible by the natural recycling of the water in the hydrological cycle, which not only replaces the water once is has been used, but also cleans it.

Watershed The definitions of watershed, catchment area or drainage basin vary considerably. The terms are often used synonymously and refer to the various sizes of areas in which water is drained towards a specific point or area. The European Environment Agency, for example, defines the three terms as follows:

Catchment area: an area from which surface runoff is carried away by a single drainage system-; the area of land bounded by watersheds draining into a river, basin or reservoir.

Drainage basin: the area of land that drains water, sediment and dissolved materials to a common outlet at some point along a stream channel.

Watershed: the land area that drains water to a particular stream, river or lake. It is a land feature that can be identified by tracing a line along the highest elevations between two areas on a map, often a ridge. The watershed for a major river may encompass a number of smaller watersheds (micro-watersheds) that ultimately combine at a common point.

Watershed Management

Watershed Management is an iterative process of integrated decision-making regarding uses and modifications of lands and waters within a watershed. This process provides a chance for stakeholders to balance diverse goals and uses for environmental resources, and to consider how their cumulative actions may affect long-term sustainability of these resources. Watershed management requires use of the social, ecological and economic sciences. Common goals for land and water resources must be developed among people of diverse social backgrounds and values. Of principle concern is management of the basin’s water budget, that is the routing of precipitation through pathways of evaporation, infiltration, and overland flow. As a form of ecosystem management, watershed management


encompasses the entire watershed system from uplands and headwaters, to floodplain wetlands and river channels.

Water accounting The method of recording and accounting for water assigned to water users by storage operators.

Water as a Human Right

The right to water is implied in Article 25 of the Universal Declaration of Human Rights: “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family”. The right to water entitles every human being to sufficient, safe, accessible and affordable water. This right must be enjoyed equally and without discrimination by women and men. Human rights chiefly concern the relationship between the individual and the State. Governmental obligations with regard to human rights can broadly be categorized in terms of obligations to respect, protect, and fulfil. Respect. The obligation to respect requires that States Parties (governments ratifying a treaty) refrain from interfering directly or indirectly with the enjoyment of the right to water.

Water balance A water balance is the balance of inflow and outflow of water per unit area or unit volume and unit time taking into account net changes of storage

Water banks An institutional arrangement for depositing and lending water. Water Conflict Water resources have rarely, if ever, been the sole source of violent

conflict or war. But this fact has led some international security “experts” to ignore or be little the complex and real relationships between water and security. Conflicts currently arise in relation to the following:

Control of water resources (state and non-state actors): in this case, water supplies or access to water are at the root of tensions.

Use as a military tool (state actors): water resources, or water systems themselves,are used by a nation or state as a weapon during a military action.

Use as a political tool (state and non-state actors): water resources, or water systems themselves, are used by a nation, state or non-state actor for a political goal.

Terrorism (non-state actors): water resources, or water systems, are either targets or tools of violence or coercion by non-state actors.

Military target (state actors): water resource systems are targets of military actions by nations or states.

Development disputes (state and non-state actors): water resources or water systems are a major source of contention and dispute in the context of economic and social development.

Water Consumption Use of water that results in its evaporation or transpiration (through plants) or that otherwise makes it unavailable for subsequent human use.

Water Course

A system of surface waters and ground waters, constituting a unitary whole by virtue of their physical relationship, and normally flowing into a common end point. The paths water takes through its various states – vapour, liquid, solid – as it moves through oceans, the atmosphere, as groundwater and in streams, by means of precipitation, infiltration, evapotranspiration and condensation, constitute the water cycle.

Water Cycle The paths water takes through its various states - vapour, liquid, solid - as it moves throughout the ocean, atmosphere, groundwater, streams, etc.

Water Distribution The process of distributing water to water right-holders, according to agreed rules or priorities.


Water Footprint The volume of water needed for the production of goods and services consumed by the inhabitants of a country.

Water Governance Water governance refers to the range of political, organisational and administrative processes through which communities articulate their interests, their inputs are absorbed, decisions are made and implemented and decision makers are held accountable in the development and management of water resources and delivery of water services.

Water Management Planned development, distribution and use of water resources, in accordance with predetermined objectives and with respect to both quantity and quality of the water resources

Water Monitoring The process of constant control of a body of water by means of sampling and analyses.

Water Need Also "water requirement". Theoretical concept defined by the necessities and purposes of the activity generating it, and the efficiency of water uses - for a given quantity and quality - in relation with the results. Therefore this need is usually expressed per unit (per capita, irrigated hectares, production unit). Is independent from the supply volume.

Water Ownership It is important to distinguish between ownership of water, and the right to have access to water and use it. Regulation of the resource can only arise out of the recognition, explicit or implicit, that the government has the right to manage the resource for the public good. Most governments expressly own water, and the protection of the resource is therefore a public function to which individual rights are subservient. The right to use water is based either on customary or statutory claims. In order to be regulated, these must be clearly identified. Customary rights may include the right to expropriate, use or trade water; based on these can be built systems of community ownership or use and water charges. While building upon existing systems is often the surest and most acceptable route to implementation, systems based only on customary rights may not be able to assure efficient and equitable allocation of a scarce resource. A system of water law needs not only mechanisms of ensuring access to water (water rights) but also a system of obligations regarding usage and control of the levying of water charges by individuals (restriction of rights).

Water Pollution The presence in water of enough harmful or objectionable material to damage water quality.

Water Quality The chemical, physical, and biological characteristics of water with respect to its suitability for a particular use. The definition of water quality will vary to some extent depending upon the proposed use. Water intended for irrigation or for certain industrial purposes will not have to meet the same quality standards as water intended for drinking, for example. However, there are certain factors that determine water quality whatever the use. They can be classified as physical properties, chemical properties and biological properties.

Water Quality Standards

Acceptable standards for water quality have been developed at both the national and international level. The World Health Organisation (WHO) has published guidelines for drinking-water quality, for example, and the European Commission has produced a directive which applies to the quality of water intended for human consumption. Elsewhere all developed nations have established standards for water quality, and some progress has been made among the developing nations. Published standards typically include maximum allowable


concentrations (MACs) of specific toxic elements - for example, heavy metals - and guide levels (GL) for those considered less harmful - for example, acidity or calcium (Ca).

Water Recycling Using water again for the same or another process step, after a small form of purification is applied.

Water Resources Distinction is made between renewable and non-renewable water resources. Non-renewable water resources, including so-called fossil waters, are not replenished at all by nature, or require a very long time for replenishment. Renewable water resources comprise groundwater aquifers and surface water such as rivers and lakes. They are recharged through the hydrological cycle, but can be overexploited. Freshwater resources can be subdivided into blue and green water. Blue water refers to the water flows in groundwater and surface water (river, lakes). It represents the water that can be withdrawn e.g. for irrigation or is available for in-situ water use like navigation. In areas without enough green water in the soil to achieve satisfactory crop growth, crops can be irrigated with blue water. Green water is defined as the fraction of water that is evapotranspired, i.e. the water supply for all non-irrigated vegetation. Green water can be called either productive with respect to plant production (if transpired by crops or natural vegetation) or non-productive (if evaporated from soil, open water or interception in the canopies of trees and plants).

Water Resources Agency

The government body responsible for water resources policy development. Depending on the jurisdiction, it may be responsible for planning (regulating the allocation of water), administration, and monitoring and enforcement.

Water Resource Assessments

Water assessments, under various different names (e.g. water accounting and water resource audit), are being promoted increasingly as a key component of programmes of integrated water resource management. The concept of water auditing is based on the argument that knowledge of the current status of water resources and trends in demand and use is a precondition for successful water management. In general, water audits involve collating, quality controlling and analysing secondary information from a wide range of different sources. The design of a water audit, in terms of complexity, duration and outputs should be determined of a needs assessment that involves all primary stakeholders.

Water Right A formally established or legal authority to take water from a water body and to retain the benefits of its use. Rights may be attenuated in a number of ways and are referred to in different jurisdictions as licences, concessions, permits, access entitlements or allocations.

Water Scarcity According to a growing consensus among hydrologists, a country faces water scarcity when its annual supply of renewable freshwater is less than 1,000 cubic meters per person. Such countries can expect to experience chronic and widespread shortages of water that hinder their development. An area is experiencing water scarcity when annual water supplies drop below 1,000 m3 per person. Water scarcity is grouped into three categories: physical water scarcity, economic water scarcity, and little or no water scarcity. If the primary water supply (PWS) of a country exceeds 60 percent of its potentially utilizable water resources (PUWR), it faces physical water scarcity. Even with the highest efficiency and productivity, the country will not be able to meet the demands of its domestic, industrial and agricultural sectors, nor satisfy


its environmental needs. Water will be diverted from agriculture to other sectors and food will have to be imported, while costly investments will have to be made in desalinisation plants. Countries facing economic scarcity have sufficient PUWR to meet the additional PWS, but have to increase their PWS through storage and supply systems by more than 25 percent. Most of these countries will face serious problems, both financially and in terms of capacity, in increasing their PWS by these levels. They need to put considerable efforts into improving the efficiency of their water use by applying a policy of sustainable management of water resources.

Water Service Delivery

Water service delivery is a user or customer oriented activity. Water service delivery activities are carried out by organizations and are oriented towards meeting users or customer needs and expectations. In the context of EMPOWERS, water services encompass all potential water users (e.g. domestic, agricultural, industrial, commercial and municipal users, the environment)

Water Sharing The act of determining the amount of water to be shared between competing users and uses, through the use of planning, administrative and market based arrangements.

Water Solubility The maximum possible concentration of a chemical compound dissolved in water.

Water Storage Pond An impound for liquid wastes designed to accomplish some degree of biochemical treatment. Water stress: A country faces water stress when its annual supply of renewable freshwater is between 1,000 and 1,700 cubic meters per person. Such countries can expect to experience temporary or limited water shortages.

Water Stress When annual water supplies drop below 1,700 cubic metres per person Water Supply System

The collection, treatment, storage, and distribution of water from source to consumer.

Water System A river and all its branches. Water Table The upper level of the saturated or groundwater zone in the rocks

beneath the earth's surface. In the general, the shape of the water table follows that of the surface, but in places it may reach the surface, creating ponds or natural springs. The depth of the water table in any one area varies with such factors as input from precipitation, loss through sub-surface flow and pumping of groundwater from wells.

Water Transfer Water transfer is the act or process whereby water is brought into an area or region which would not naturally receive it. Typically, it refers to the artificial transport of water through aqueducts, canals, or pipelines from one water basin, drainage area, or hydrographic area to another, which affects natural surface and groundwater drainage and flow patterns in both the water exporting and importing areas. In terms of a Water Banking or Water Marketing concept, actions to move water from areas of low use to areas of high use place a more realistic monetary value on water as a scarce economic commodity and result in enhanced economic efficiency. However, considerable public concern and controversy surround this practice. Concerns focus primarily on issues relating to altering the natural flows of surface and ground waters, adverse environmental and habitat impacts on water exporting areas, limitations placed on the long-term growth and development of the water exporting region or hydrographic area, the potentially adverse hydrologic effects on groundwater (water table and aquifer) conditions in the exporting area. and the dependency of water-importing areas on continued diversions and water importations.


Water Use Three types are distinguished: withdrawal, where water is taken from a river, or surface or underground reservoir, and after use returned to a natural water body; consumptive, which starts with withdrawal but without any return (e.g. irrigation) and is no longer available directly for subsequent uses; non-withdrawal, the in-situ use of a water body for, e.g. navigation, fishing, recreation, effluent disposal and power generation.

Water Users In the context of water governance water users encompass domestic, agricultural, industrial, commercial and municipal users and the environment.

Water Use And Demand

Water use can be distinguished into three different types. Withdrawals or abstractions where water is taken from a surface or groundwater source, and after use returned to a natural water body, Consumptive water use or water consumption that starts with a withdrawal or an abstraction but in this case without any return flow. Non-consumptive water use where there is in situ use of a water body (e.g for navigation, fish, recreation, effluent disposal and hydroelectric power generation). Water demand is defined as the volume of water requested by users to satisfy their needs.

Water Users Association (WUA)

Water Users Associations normally comprise a formal, usually legally bound group of water users, often located around a particular canal or borehole, with responsibility for managing and maintaining the part of the system that serves them. These Associations exist as a result of government determination, often with donor support, to devolve some of the responsibility for the management and maintenance of irrigation or domestic water and wastewater services from central governments onto users. Motivated by the search for efficiency and cost savings, Water Users Associations can be seen as a form of privatisation, with the government agency adopting the role of service provider rather than operator. Water Users Associations are also a means of community participation and community ownership of management and operation. In principle, their creation should lead to greater user commitment and reduced government intervention.

Water Use Categories

Water for People refers to the drinking water sector and to sanitation services; Water for Food refers to the farming sector including livestock and fisheries and rainfed or irrigated cultivation of food, feed or fibre crops; Water for Nature refers to the source of water as well as to the availability of water for nature and for the preservation of ecosystems (wetlands, coastal, marine and terrestrial ecosystems); Water for Other Uses refers mainly to the use of water for industry, energy and transportation. IWRM considers the water use of all the different categories together as well as the effects of each category on the others.

Water User Rights The following types of rights can be identified in an analytical sense (the summary is not exhaustive):

Absolute water ownership right. Water belongs to the property on which it is found and is part of the real estate. The owner of the property also owns the water. He may use it for any purpose whatsoever (ius utendi et abutendi).

Absolute user right. Water is owned by somebody else or another institution, often by the state as part of the public domain. The right to use, however, in its purest sense is absolute. It is not attached to land or dependent on a specific extraction point; it can be leased, sold, inherited or mortgaged,


and is not restricted to any type of effective and beneficial use. The owner can hold it as an object of speculation. Only very few legal systems, e.g. in the Western United States and in Chile, have a water right concept close to these absolute user rights.

A relative user right may have some of the restrictions mentioned above. Often, it is attached to land and specific extraction points; it cannot be sold or transferred, mortgaged or inherited. It is restricted to a certain type of beneficial and effective use: agriculture, cattle watering, drinking water supply. Non-use can constitute loss of use rights, either temporary or indefinite. This is a very common type of right and found all over the world.

A water permit (concession, licence) is acquired through administrative allocation or authorisation. It may have time limitations on use and it may be subjected to charges or fees, either for use or as a contribution to the water management services.

The legal status of a right can have far-reaching consequences in terms of ability to trade, transfer or inherit a right, or to use it for collateral or as a secure investment. It is more difficult to attach conditions (time, charges, suspension) to ownership and absolute user rights than to relative user rights, permits and concessions. More often than not, the Constitution of a nation protects ownership rights and absolute rights to the extent that compensation is required in case of expropriation. A water right may be expressed in volumetric terms (m3/s or l/s), as a share of the stream or canal flow, or as a share of the water available in a reservoir, a lake or an aquifer. A water right may also be expressed in terms of shifts or hours of water availability from a certain intake. It is also possible to express a water right as a percentage of storage capacity. A water right may be applied by simple diversion, or by extraction through mobile or fixed pumping installations.

Water-use plan Sets out how water is to be managed, defines operating boundaries, recognizes environmental, social and economic values, and sets basis for compliance

Water vapour Water in its gaseous state, produced from liquid water by evaporation or by respiration from animals and transpiration from plants. Its presence in the atmosphere contributes to humidity and through subsequent condensation to precipitation. Water vapour is also a greenhouse gas.

Water withdrawal Removal of freshwater for human use from any natural source or reservoir, such as a lake, river or aquifer. If not consumed, the water may return to the environment and can be used again.

Water-based diseases

Diseases caused by parasites which spend part of their life cycle in organisms living in water, for example drancunculiasis (guinea worm) and schistosomiasis (bilharzia).

Water-Borne Diseases

The term water-borne disease is often used loosely, to describe all diseases carried and transmitted by water. Strictly speaking, water-borne diseases are those in which the infectious agent is itself carried by water: diarrhoeal diseases including typhoid, cholera and dysentery; and infectious hepatitis. Other diseases are water-washed: skin diseases and eye diseases; or water-related, in which case the disease is spread via an organism living in water, such as schistosomiasis (via snails) and guinea-worm. These may be insect related, in which case they are spread by an insect that breeds in water or inflicts bites near it, as in the case of sleeping sickness (tsetse fly), malaria and yellow fever (mosquito), or river blindness (black fly). Other diseases are spread by


poor sanitation; pathogens in human excreta remain exposed or are washed into waterways. These include all diarrhoeal diseases and parasites such as hookworm and roundworm. Lack of hygiene plays an enormous role in the incidence of these diseases, with the exception of water-related diseases.

Water-related diseases

Diseases caused by insects that feed or breed in water, for example malaria and onchocerciasis (river blindness).

Water-washed diseases

Diseases spread from one person to another due to inadequate supplies of water for personal hygiene. These include infections of the skin and eyes (e.g. trachoma) and infections carried by lice, e.g. louse-borne epidemic typhus.

WCD Forum A body with some 68 members affiliated to the broad range of stakeholders and interest groups involved in the dams debate. The Forum is partly composed of members of the Reference Group from the 1997 meeting in Gland that recommended the establishment of WCD. It also has new members subsequently invited to participate by WCD. The Forum is a consultative body.

WCD Global Review An assessment of the performance and impacts of large dams and of alternatives for water resources and energy development, based on the WCD Knowledge Base.

WCD Knowledge Base

Materials commissioned, organised or accepted by the WCD to inform its work: in-depth Case Studies of eight large dams on four continents, together with two country review studies; a Cross-Check Survey of large dams located in 52 countries across the globe; 17 Thematic Reviews grouped along five dimensions of the debate; four regional consultations; and 947 submissions from interested individuals, groups and institutions. These materials are available at www.dams.org.

Weir A structure built across an open channel to raise the upstream water level or to measure the flow of water. Weirs tend to be smaller than barrages and are not generally gated.

Well A deep hole with the purpose to reach underground water supplies. Wetland/s Swamps, marshes, fens, tidal marshes, peatlands and other

ecosystems which are dominated by water. The presence of water may be permanent, temporary or seasonal and it may by fresh or salt, but the plant and animal organisms in wetlands have adapted to that situation to create unique communities that reflect the conditions at a specific site. Wetlands provide habitat for fish and wildlife, act as staging areas for migrating wildfowl, filter sediments and control flooding in stream systems and protect the shore from erosion in coastal areas.

WHO (World Health Organisation)

A UN agency created in 1948 to deal with global health issues and to achieve as high a level of physical, mental and social well-being as possible for peoples of the world. It is involved in a variety of environmental studies, including the impact of climate change and ozone depletion on health, in conjunction with other agencies such as the World Meteorological Organisation (WMO) and the United Nations Environment Program (UNEP).

World Water Forum Sponsored by the World Water Council, provides a platform where the water community and policy and decision makers from all regions of the world can network, debate and attempt to find solutions to achieve water security.

Zero discharge water The principle of “zero discharge” is recycling of all industrial wastewater. This means that wastewater will be treated and used again in the process. Because of the water reuse wastewater will not be released on the sewer system or surface water.

http://www.dams.org/


Zone of saturation The space in the soil below the water table in which all the pores are filled with water. The water in the zone of saturation is groundwater.

Sources:

http://162.23.39.120/dezaweb/ressources/resource_en_157986.pdf Lenntech Water Glossary http://www.lenntech.com/Water-Glossary.htm People and planet – water

http://www.peopleandplanet.net/section.php?section=14&topic=8 PASS Livelihoods glossary Global education http://www.globaleducation.edna.edu.au/globaled/go/cache/offonce/pid/187 UNDP Waterwiki

http://europeandcis.undp.org/WaterWiki/index.php/Concepts_/Definitions/Glossary Water governance glossary Draft Guidelines for Improved Local Water Governance

http://www.empowers.info/content/download/3045/20655/file/Draft%20Guidelines%20for%20Improved%20Local%20Water%20Governance,%20Glossary.pdf

Flow, the essentials of environmental flows, (IUCN 2003). FAO-Netherlands International Conference on Water for Food and Ecosystems The Hague, The Netherlands, from 31

January to 4 February 2005.http://www.fao.org/ag/wfe2005/glossary_en.htm World Commission on Dams, Dams and development: A new framework for decision making (2000)

http://www.dams.org//docs/report/wcdannexii.pdf

http://162.23.39.120/dezaweb/ressources/resource_en_157986.pdf

http://www.lenntech.com/Water-Glossary.htm

http://www.peopleandplanet.net/section.php?section=14&topic=8

http://www.globaleducation.edna.edu.au/globaled/go/cache/offonce/pid/187

http://europeandcis.undp.org/WaterWiki/index.php/Concepts_/Definitions/Glossary



http://www.fao.org/ag/wfe2005/glossary_en.htm

http://www.dams.org/docs/report/wcdannexii.pdf

WATER GOVERNANCE IN DEVELOPING COUNTRIES - A POLICY & INTERDISCIPLINARY INTRODUCTION

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