The desire of policymakers and public finance institutions to understand the contribution of water infrastructure to the wider economy, rather than the value of project-level outputs in isolation, has spawned a multidisciplinary branch of water resource planning that integrates traditional biophysical modeling of water resource systems with economy-wide models, including computable general equilibrium models. Economy-wide models include several distinct approaches, including input–output models, macro-econometric models, hybrid input–output macro-econometric models, and general equilibrium models—the term “economy-wide” usually refers to a national level analysis, but could also apply to a sub-national region, multi-nation regions, or the world. A key common characteristic of these models is that they disaggregate the overall economy of a country or region into a number of smaller units, or optimizing agents, who in turn interact with other agents in the economy in determining the use of inputs for production, and the outcomes of markets for goods. These economic agents include industries, service providers, households, governments, and many more. Such a holistic general equilibrium modeling approach is particularly useful for understanding and measuring social costs, a key aim in most cost–benefit analyses (CBAs) of water infrastructure investments when the project or program will have non-marginal impacts and current market prices will be impacted and an appropriately detailed social accounting matrix is available. This article draws on examples from recent work on low- and middle-income countries (LMICs) and provides an outline of available resources that are necessary to conduct an economy-wide modeling analysis. LMICs are the focus of larger water resource investment potential in the 21st century, including large-scale hydropower, irrigation, and drinking water supply. A step-by-step approach is illustrated and supports the conclusion that conditions exist to apply these models much more broadly in LMICs to enhance CBAs.
Article
Moving to General Equilibrium: The Role of CGEs for Economic Analysis of Water Infrastructure Projects
Kenneth M. Strzepek and James E. Neumann
Article
Puzzles of Commitment, Compliance, and Defection in Water Resource Management
John Waterbury
Collective action problems (CAPs) are ubiquitous in human undertakings including in the development and management of shared water resources. Various rational-actor models have been applied to understand their dynamics. These analyses tend to come to pessimistic conclusions based on the assumption of “free-riding” whereby any participant in a collective action (CA) will be motivated to benefit from the action without contributing to its costs. If all participants follow this logic, there will be no CA and hence no net benefit to the participants.
This view assumes the logic of individual rationality. It does not adequately account for observed behavior, which may be driven by collective or group rationality. CA in water management and other domains has been initiated and sustained despite the temptation of free-riding. To understand why, it is necessary to analyze the dynamics of commitment, i.e., the initial collective undertaking; compliance, i.e., sustaining the initial commitment; and defection, when compliance breaks down. None of these variables is static. With respect to water, the technological means of its management constantly change so that the dynamics of compliance change as well. Technological change must be anticipated in the commitment phase. Just as important, cost/benefit analysis must encompass assessing payoffs in domains not related to water itself. These payoffs may not be part of the formal terms of commitment but must inform the compliance process. When the process unravels, “water wars” may result although that has been a rare outcome.
Article
Policy Analysis and Investment Appraisal in the Water Sector
Edoardo Borgomeo
Since the earliest forms of human settlement, water resources have shaped societies and have been integral to their proper functioning. In developing—and maintaining—their relationship with water, societies have relied on myriad approaches to appraise options to manage water, that is, identifying expectations and objectives related to water and choosing the course of action to achieve them. This article describes some methodological issues of conventional approaches for policy analysis and investment appraisal in the water sector and then charts a way forward to further strengthen them to achieve water security in the Anthropocene.
Despite their clear benefits to society, demonstrated by extensive application to address water-related challenges around the world, conventional approaches to appraising policy options and investments suffer from some limitations. First, appraisal typically focuses on inputs and outputs, not paying enough attention to the outcomes and services that societies expect to obtain from water-related development. Second, appraisal methods still largely consider water as a plentiful resource, paying little attention to its opportunity cost and its multiple values to different users, including ecosystems. Third, most appraisals still ignore behavioural responses and societal dynamics arising from water-related policies and investments. A fourth limitation relates to the deterministic nature of appraisal that fails to properly account for uncertainties and interdependencies. Finally, appraisal still largely focuses on individual projects rather than portfolios of options, largely privileging technological fixes to respond to narrowly defined water-related challenges.
Methodological advances in the appraisal of policy options and investments provide a significant opportunity to overcome these limitations and build a more robust and inclusive platform to plan for water security. While further refinements are required, particularly to achieve deeper and more formal integration across disciplines, attention needs to focus on application and uptake of these methodological advances to address urgent water security challenges.
Article
Water and Spatial Planning in the Netherlands: The Latent Potential of Spatial Planning for Flood Resilience
Nikki Brand and Wil Zonneveld
In February 1953, an extremely powerful northwest storm surge combined with spring tide led to serious floods in a number of countries around the North Sea. No country was hit as badly as the Netherlands. In the southwest of the country, dozens of dikes were breached, leading to over 1,800 casualties. At the time of the 1953 disaster, a government-appointed committee was working on an advisory report about the desired future spatial development of the most urbanized western part of the country, a region largely below sea level. Responding to the 1953 disaster, the committee discussed whether urban development in deep polders should be avoided. The conclusion was that what is best in terms of the desired urban morphology should prevail. This is indeed what happened when the government had to make a choice about where to develop new towns (1960s–1980s) and, in the next stage, where to locate new housing estates in and around cities (1990s–2000s). Near floods along the main rivers of the country in 1992 and 1995 opened a window of opportunity for a series of major changes in flood risk management and in spatial planning and design, respectively. A massive program called Room for the River was carried out, which included more than 30 projects designed by multidisciplinary teams of civil engineers, planners, and spatial designers. Parallel and follow-up programs were carried out in which spatial design again played a role. The concept of risk was redefined in law, leading to more stringent protection norms for densely populated areas—again, a spatial turn in flood risk management. When flood risk management started to take a decisive spatial turn in the 1990s, spatial planning began to change as well, becoming more sensitive to issues related to water management and flood risks. One of these changes involved the mandatory use of a water test in (local) plan making. The continuation of the trend to give greater weight to flood risks became interrupted as the multilevel arrangement of planning in the Netherlands started to change from 2010 onward. This was largely the result of the neoliberal ambition to decentralize and deregulate planning. One main effect was that the government no longer took a leading role in locational choices regarding where to build new housing estates outside cities and towns. By the end of 2021, the government-appointed Delta commissioner issued a stark warning that over 80% of the houses that will be built by 2030 are situated in less desirable locations. This and other effects of the downscaling of planning competencies made the government decide to start a trajectory to partly recentralize planning. There are two contradictory objectives, however, claimed by different government departments: the production of new homes as quickly as possible and the ambition to make water and soil leading in future choices. Bringing flood risk management and spatial planning together means that locational choices and the spatial design of localities have to move in tandem.
Article
The Allocation of Groundwater: From Superstition to Science
Burke W. Griggs
Groundwater is a critical natural resource, but the law has always struggled with it. During the 19th and early 20th centuries, the common law developed several doctrines to allocate groundwater among competing users. The groundwater revolution of the mid-20th century produced an explosive growth in pumping worldwide—and quickly exposed the flaws of these doctrines. Legal rules predicated on land and on surface waters could not meet the challenges posed by the common-pool groundwater resource: those of understanding groundwater dynamics, quantifying the impacts of pumping on other water rights, and devising satisfactory remedies. Unfettered by received property restraints, pumping on an industrial, aquifer-wide scale depleted and contaminated aquifers, regardless of doctrine.
The groundwater revolution motivated significant legal developments. Starting in the 1970s, the Supreme Court of the United States adapted its methods for resolving interstate water disputes to include the effects of groundwater pumping. This jurisprudence has fundamentally influenced international groundwater law, including the negotiation of trans-boundary aquifer agreements. Advances in hydrogeology and computer groundwater modeling have enabled states and parties to evaluate the effects of basin-wide pumping. Nonetheless, difficult legal and governance problems remain. Which level of government—local, state, or national—should exercise jurisdiction over groundwater? What level of pumping qualifies as “safe yield,” especially when the aquifer is overdrawn? How do the demands of modern environmental law and the public trust doctrine affect groundwater rights? How can governments satisfy long-neglected claims to water justice made by Indigenous and minority communities? Innovations in groundwater management provide promising answers. The conjunctive management of surface and groundwater can stabilize water supplies, improve water quality, and protect ecosystems. Integrated water resources management seeks to holistically manage groundwater to achieve social and economic equity. Water markets can reward water conservation, attract new market participants, and encourage the migration of groundwater allocations to more valuable uses, including environmental uses.
The modern law of groundwater allocation combines older property doctrines with 21st-century regulatory ideals, but the mixture can be unstable. In nations with long-established water codes such as the United States, common-law Anglophone nations, and various European nations, groundwater law has evolved, if haltingly, to incorporate permitting systems, environmental regulation, and water markets. Elsewhere, the challenges are extreme. Long-standing calls for groundwater reform in India remain unheeded as tens of millions of unregulated tube wells pump away. In China, chronic groundwater mismanagement and aquifer contamination belie the roseate claims of national water law. Sub-Saharan nations have enacted progressive groundwater laws, but poverty, racism, and corruption have maintained grim groundwater realities. Across the field, experts have long identified the central problems and reached a rough consensus about the most effective solutions; there is also a common commitment to secure environmental justice and protect groundwater-dependent ecosystems. The most pressing legal work thus requires building practical pathways to reach these solutions and, most importantly, to connect the public with the groundwater on which it increasingly depends.
Article
Water Risks and Rural Development in Coastal Bangladesh
Sonia Hoque and Mohammad Shamsudduha
Rural populations in river deltas experience multiple water risks, emerging from intersecting anthropogenic and hydroclimatic drivers of change. For more than 20 million inhabitants of coastal Bangladesh—living on the lower reaches of the Ganges–Brahmaputra–Meghna mega-delta—these water risks relate to access to safe drinking water, management of water resources for farm-based livelihoods, and protection from water-related hazards. To address these risks, water policies in the 20th century emphasized infrastructure development, ranging from embankments for flood protection to handpumps for rural water supply. However, interventions designed to promote aggregate economic growth often resulted in sociospatial inequalities in risk distribution, particularly when policy-makers and practitioners failed to recognize the complex dynamics of human–environment interactions in the world’s most hydromorphologically active delta.
In Bangladesh’s southwestern region, construction of the polder system (embanked islands interlaced with tidal rivers) since the late 1960s has augmented agricultural production by protecting low-lying land from diurnal tidal action and frequent storm surges. However, anthropogenic modification of the natural hydrology, emulating the Dutch dyke system, has altered the sedimentation patterns and resulted in severe waterlogging since the 1980s. Contrary to their intended purpose of keeping saline water out, the polders also facilitated growth of export-oriented brackish water shrimp aquaculture, resulting in widespread environmental degradation and social inequalities from shifting power dynamics between large and small landholding farmers.
Throughout the 1990s, there were several incidences of violent conflicts between the local communities and government authorities, as well as between different farmer groups. Waterlogged communities demanded to revert to indigenous practices of controlled flooding. Despite being formally adopted as a policy response, the implementation of tidal river management by the government has only been partially successful owing to bureaucratic delays, unfair compensation, and design flaws. Similarly, antishrimp movements gained momentum in several polders to ban the deliberate flooding of cropland with saline water. These narratives of conflict and cooperation demonstrate the complexities of policy outcomes, the unequal distribution of water risks, and the need to integrate local knowledge in decision-making.
Social and spatial inequalities are also prevalent in access to safe drinking water owing to heterogeneity in groundwater salinity and infrastructure investments. Public investments are skewed toward low-salinity areas where tubewells are feasible, while high-salinity areas are often served by uncoordinated donor investments in alternative technologies, such as small piped schemes, reverse osmosis plants, and pond sand filters, and household self-supply through shallow tubewells and rainwater harvesting. These struggles to meet daily water needs from multiple sources pose uncertain and unequal water quality and affordability risks to coastal populations.
The path-dependent sequences of infrastructure and institutional interventions that shaped the development trajectory of coastal Bangladesh exemplify the complexities of managing water risks and varied responses by public and private actors. While structural solutions still dominate the global water policy discourse, there is increased recognition of the nonlinearity of risks and responses, as well as the need to incorporate adaptive decision-making processes with room for social learning and uncertainties.
Article
Ecosystem Services into Water Resource Planning and Management
Phoebe Koundouri, Angelos Alamanos, Kostas Dellis, Conrad Landis, and Artemis Stratopoulou
The broad economic notion of ecosystem services (ES) refers to the benefits that humans derive, directly or indirectly, from ecosystem functions. Provisioning ES refer to human-centered benefits that can be extracted from nature (e.g., food, drinking water, timber, wood fuel, natural gas, oils, etc.), whereas regulating ES include ecosystem processes that moderate natural phenomena (pollination, decomposition, flood control, carbon storage, climate regulation, etc.). Cultural ES entail nonmaterial benefits accruing to the cultural advancement of people, such as the role of ecosystems in national and supranational cultures, recreation, and the spur of knowledge and creativity (music, art, architecture). Finally, supporting ES refer to the main natural cycles that nature needs to function, such as photosynthesis, nutrient cycling, the creation of soils, and the water cycle. Most ES either depend on or provide freshwater services, so they are linked to water resources management (WRM). The concept of ES initially had a pedagogical purpose to raise awareness on the importance of reasonable WRM; later, however, it started being measured with economic methods, and having policy implications.
The valuation of ES is an important methodology aimed at achieving environmental, economic and sustainability goals. The total economic value of ecosystems includes market values (priced) as well as nonmarket values (not explicit in any market) of different services for humanity’s benefit. The valuation of ES inherently reflects human preferences and perceptions regarding the contribution of ecosystems and their functions to the economy and society. The ES concept and associated policies have been criticized on the technical weaknesses of the valuation methods, interdisciplinary conflicts (e.g., ecological vs. economic perception of value), and ethical aspects on the limits of economics, nature’s commodification, and its policy implications.
Since valuation affects the incentives and policies aimed at conserving key ES, e.g., through payment schemes, it is important to understand the way that humans decide and develop preferences under uncertainty. Behavioral economics attempts to understand human behavior and psychology and can help to identify appropriate institutions and policies under uncertainty that enhance ecosystem services that are key to WRM.
Article
Hedging and Financial Tools for Water Management
C. Dionisio Pérez-Blanco
The management of risky water episodes entails a comprehensive set of instruments that can be broadly divided into two groups: damage prevention and damage management. Damage prevention instruments aim at negating or minimizing the economic damage of water scarcity and water extremes, and they include hard and soft engineering, information and awareness campaigns, and regulations and economic incentives. Damage management instruments aim at compensating damages and facilitating recovery, and they include tort law and hedging and financial tools. The growing interconnections and cascading uncertainties across coupled human and water systems make it increasingly challenging to comprehensively predict and anticipate expected damages from water scarcity and extremes, which is giving higher prominence to the management of damages, notably through hedging and financial tools. Hedging and financial tools are a risk transfer mechanism by which a potential future damage is transferred from one party to another, typically in exchange of a pecuniary compensation (risk premium), albeit they can be also freely provided (e.g., state aid). Hedging and financial instruments are varied and include futures, options, insurance, self-capitalization, reinsurance, private actions such as charities or nongovernmental organizations, state aid, and solidarity funds.
The first section of this document discusses the political context for disaster risk reduction efforts at an international level and provides key definitions. The second section presents a taxonomy for hedging and financial instruments; assesses their strengths and weaknesses, performance, and market penetration levels; and critically reviews reform propositions in the literature toward increasing their performance and adoption. The third section discusses the interconnections between hedging and financial tools and damage prevention tools, as well as how their design can enhance each other’s performance. The last section discusses barriers and enablers for the adoption of hedging and financial tools.
Article
Machine Learning Tools for Water Resources Modeling and Management
Giorgio Guariso and Matteo Sangiorgio
The pervasive diffusion of information and communication technologies that has characterized the end of the 20th and the beginning of the 21st centuries has profoundly impacted the way water management issues are studied. The possibility of collecting and storing large data sets has allowed the development of new classes of models that try to infer the relationships between the variables of interest directly from data rather than fit the classical physical and chemical laws to them. This approach, known as “data-driven,” belongs to the broader area of machine learning (ML) methods and can be applied to many water management problems.
In hydrological modeling, ML tools can process diverse data sets, including satellite imagery, meteorological data, and historical records, to enhance predictions of streamflow, groundwater levels, and water availability and thus support water allocation, infrastructure planning, and operational decision-making.
In water demand management, ML models can analyze historical water consumption patterns, weather data, and socioeconomic factors to predict future water demands. These models can support water utilities and policymakers in optimizing water allocation, planning infrastructure, and implementing effective conservation strategies.
In reservoir management, advanced ML tools may be used to determine the operating rule of water structures by directly searching for the management policy or by mimicking a set of decisions with some desired properties. They may also be used to develop surrogate models that can be rapidly executed to determine the optimal course of action as a component of a decision-support system.
ML methods have revolutionized water management studies by showing the power of data-driven insights. Thanks to their ability to make accurate forecasts, enhanced monitoring, and optimized resource allocation, adopting these tools is predicted to expand and consistently modify water management practices. Continued advancements in ML tools, data availability, and interdisciplinary collaborations will further propel the use of ML methods to address global water challenges and pave the way for a more resilient and sustainable water future.
Article
A Review of Alternative Water Supply Systems in ASEAN
Cecilia Tortajada, Kris Hartley, Corinne Ong, and Ojasvee Arora
Climate change, water scarcity and pollution, and growing water demand across all sectors are stressing existing water supply systems, highlighting the need for alternative water supply (AWS) systems. AWS systems are those that have not typically existed in the traditional supply portfolio of a given service area but may be used to reduce the pressure on traditional water resources and potentially improve the system’s resilience. AWS systems have been used for decades, often where traditional systems are unable to maintain sufficient quantity and quality of water supply. Simpler forms of AWS systems, like rainwater harvesting, have been used for centuries. As human population and water demand have increased, AWS systems now play a larger role in the broader supply portfolio, but these systems alone are not able to fully resolve the increasingly complex mix of problems contributing to water stress. Entrenched challenges that go beyond technical issues include low institutional capacity for developing, operating, and maintaining AWS systems; monitoring water quality; more efficiently using available resources; and establishing clear responsibilities among governments, service providers, and property owners. Like traditional water supply systems, AWS systems should be developed within a sustainability-focused framework that incorporates scenario planning to account for evolving natural and institutional conditions. In ASEAN, the adoption of AWS systems varies among countries and provides context-specific lessons for water management around the world. This article provides an overview of AWS systems in the region, including rainwater harvesting, graywater recycling, wastewater reclamation, desalination, and stormwater harvesting.
