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Rethinking Water Markets  

Rupert Quentin Grafton, James Horne, and Sarah A. Wheeler

Global water extractions from streams, rivers, lakes, and aquifers are continuously increasing, yet some four billion people already face severe water scarcity for at least one month per year. Deteriorating water security will, in the absence in how water is governed, get worse with climate change, as modeling projections indicate that much of the world’s arid and semiarid locations will receive less rainfall into the future. Concomitant with climate change is a growing world population, expected to be about 10 billion by 2050, that will greatly increase the global food demand, but this demand cannot be met without increased food production that depends on an adequate supply of water for agriculture. This poses a global challenge: How to ensure immediate and priority needs (such as safe drinking water) are satisfied without compromising future water security and the long-term sustainability of freshwater ecosystems? An effective and sustainable response must resolve the “who gets what water and when” water allocation problem and promote water justice. Many decision makers, however, act as if gross inequities in water access can be managed by “business as usual” and upgrades in water infrastructure alone. But much more is needed if the world is to achieve its Sustainable Development Goal of “water and sanitation for all” by 2030. Transformational change is required such that the price paid for water by users includes the economic costs of supply and use and the multiple values of water. Water markets in relation to physical volumes of water offer one approach, among others, that can potentially deliver transformational change by: (a) providing economic incentives to promote water conservation and (b) allowing water to be voluntarily transferred among competing users and uses (including non-uses for the environment and uses that support cultural values) to increase the total economic value from water. Realizing the full potential of water markets, however, is a challenge, and formal water markets require adequate regulatory oversight. Such oversight, at a minimum, must ensure: (a) the metering, monitoring, and compliance of water users and catchment-scale water auditing; (b) active compliance to protect both buyers and sellers from market manipulations; and (c) a judiciary system that supports the regulatory rules and punishes noncompliance. In many countries, the institutional and water governance framework is not yet sufficiently developed for water markets. In some countries, such as Australia, China, Spain, and the United States, the conditions do exist for successful water markets, but ongoing improvements are still needed as circumstances change in relation to water users and uses, institutions, and the environment. Importantly, into the future, water markets must be designed and redesigned to promote both water security and water justice. Without a paradigm shift in how water is governed, and that includes rethinking water markets to support efficiency and equitable access, billions of people will face increasing risks to their livelihoods and lives and many fresh-water environments will face the risk of catastrophic decline.


The Street-Level Bureaucracy at the Intersection of Formal and Informal Water Provision  

Marie-Hélène Zérah

Street-level bureaucrats (SLBs) interact directly with users and play a key role in providing services. In the Global South, and specifically in India, the work practices of frontline public workers—technical staff, field engineers, desk officers, and social workers—reflect their understanding of urban water reforms. The introduction of technology-driven solutions and new public management instruments, such as benchmarking, e-governance, and evaluation procedures, has transformed the nature of frontline staff’s responsibilities but has not solved the structural constraints they face. In regard to implementing solutions to improve access in poor neighborhoods, SLBs continue to play a key role in the making of formal and informal provision. Their daily practices are ambivalent. They can be both predatory and benevolent, which explains the contingent impacts on service improvement and the difficulty in generalizing reform experiments. Nevertheless, the discretionary power of SLBs can be a source of flexibility and adaptation to complex social settings.


Global Climate Change and the Reallocation of Water  

Rhett B. Larson

Increased water variability is one of the most pressing challenges presented by global climate change. A warmer atmosphere will hold more water and will result in more frequent and more intense El Niño events. Domestic and international water rights regimes must adapt to the more extreme drought and flood cycles resulting from these phenomena. Laws that allocate rights to water, both at the domestic level between water users and at the international level between nations sharing transboundary water sources, are frequently rigid governance systems ill-suited to adapt to a changing climate. Often, water laws allocate a fixed quantity of water for a certain type of use. At the domestic level, such rights may be considered legally protected private property rights or guaranteed human rights. At the international level, such water allocation regimes may also be dictated by human rights, as well as concerns for national sovereignty. These legal considerations may ossify water governance and inhibit water managers’ abilities to alter water allocations in response to changing water supplies. To respond to water variability arising from climate change, such laws must be reformed or reinterpreted to enhance their adaptive capacity. Such adaptation should consider both intra-generational equity and inter-generational equity. One potential approach to reinterpreting such water rights regimes is a stronger emphasis on the public trust doctrine. In many nations, water is a public trust resource, owned by the state and held in trust for the benefit of all citizens. Rights to water under this doctrine are merely usufructuary—a right to make a limited use of a specified quantity of water subject to governmental approval. The recognition and enforcement of the fiduciary obligation of water governance institutions to equitably manage the resource, and characterization of water rights as usufructuary, could introduce needed adaptive capacity into domestic water allocation laws. The public trust doctrine has been influential even at the international level, and that influence could be enhanced by recognizing a comparable fiduciary obligation for inter-jurisdictional institutions governing international transboundary waters. Legal reforms to facilitate water markets may also introduce greater adaptive capacity into otherwise rigid water allocation regimes. Water markets are frequently inefficient for several reasons, including lack of clarity in water rights, externalities inherent in a resource that ignores political boundaries, high transaction costs arising from differing economic and cultural valuations of water, and limited competition when water utilities are frequently natural monopolies. Legal reforms that clarify property rights in water, specify the minimum quantity, quality, and affordability of water to meet basic human needs and environmental flows, and mandate participatory and transparent water pricing and contracting could allow greater flexibility in water allocations through more efficient and equitable water markets.


Politics of Local Community Engagement in Transboundary Water Negotiations  

Isabela Espindola and Pilar Villar

The sharing of transboundary water resources, whether surface or groundwater, is a significant challenge, both in theory and practice. Countries in situations of sharing these natural resources are predisposed to interact with each other. These interactions, here called transboundary water interactions, are characterized by the coexistence of cooperation and conflict, which can arise at different governance levels. However, negotiations around transboundary water resources primarily occur between diplomats and high government members from riparian countries and river basin organization (RBO) managers. Transboundary water negotiations are usually considered high-level political discussions, given the complexity and scale of the water challenges. Consequently, decision-making processes incorporate only a limited number of participants, who make decisions capable of impacting the entire population that depend on the shared waters. Over the last 20 years, there has been a need for greater transparency and a participatory process in transboundary water negotiations, especially for local community engagement and collaboration in these processes. Many of the negotiation processes around transboundary water resources need the participation of municipalities and local populations, concomitant with the involvement of RBOs, to carry out decisions to manage transboundary waters in an integrated manner. There are several reasons for this demand, including negotiation effectiveness, contestation prevention, data sharing, ensuring continuing participation and collaboration, and promoting public awareness related to water resources. Discussing social participation, particularly in the management of transboundary water resources, requires attention to the historical context and its constraints. Considering the enormous challenge, the experiences of local community engagement in transboundary water negotiations in South America, especially from the Guarani Aquifer and the La Plata Basin, are good examples for improving this discussion around transboundary water interactions and local community engagement. The La Plata Basin is the second-largest transboundary basin in the continent, shared by Argentina, Bolivia, Brazil, Uruguay, and Paraguay, while the Guarani Aquifer is one of the largest reservoirs of freshwater worldwide, shared by Argentina, Brazil, Paraguay, and Uruguay. Even with both having cooperation agreements in place between the riparian states, there are still great difficulties with regard to the participation of local communities in transboundary water negotiations.


IWRM: Ideology or Methodology?  

Larry Swatuk and Adnan Ibne Abdul Qader

Integrated water resources management (IWRM) was introduced as a conceptual solution to solve complicated problems of water management; however, since its inception, practitioners remain divided on its utility. Critics argue that it lacks practicable and working examples and that ongoing support is tantamount to little more than an ideological position. Supporters counsel patience and point to a variety of positive—if partial—outcomes, while aiming to address some of the most meaningful criticisms involving the devolution of decision-making authority, stakeholder participation, and gender mainstreaming. While the notion of “integrated management” resonates positively across the water world, critics and supporters alike are quick to note that in application it will play out differently depending on physical, sociocultural, economic, and political factors. Put differently, while the idea has universal appeal, the means and methods of achieving IWRM will vary. Comparative analysis reveals some common characteristics of performance well known across the development industry. In particular, direct engagement of resource users from project and program conception through to implementation, monitoring, and evaluation increases the likelihood of long-term positive outcomes. In contrast, top-down, elite-driven actions are likely to be resisted. Far from a panacea, IWRM is most usefully regarded as a “sensibility,” offering practitioners a set of signposts to guide actions and loose parameters within which to set policy.


Groundwater Development Paths in the U.S. High Plains  

Renata Rimšaitė and Nicholas Brozović

The High Plains Aquifer is the largest aquifer in the United States and the major source of groundwater withdrawals in the region. Although regionally abundant, groundwater availability for agriculture and other uses is not uniform across the area. Three separate states comprising the most significant portion of the aquifer have distinct climate and hydrologic characteristics, water law systems, and institutional groundwater governance leading to different concerns about water policy issues across the area. The northern, largest, and most saturated part of the High Plains Aquifer is located under Nebraska. The state has the largest irrigated area in the United States, most of which is groundwater irrigated. Nebraska is the home of the largest companies in the center pivot irrigation industry. Center pivot technology has had a fundamental role in expanding groundwater-fed irrigation. Nebraska is not free from groundwater depletion issues, but these issues are more important in central and south-central parts of the aquifer underlying large, primarily agricultural, lands of Kansas and Texas. The natural aquifer recharge is much lower in the south-central parts of the region, which has caused large groundwater extractions to have more significant water declines than in Nebraska. In the United States, the greatest portion of water quantity management regulatory oversight is left to individual states and local government agencies. Each of the three states has a unique legal system, which highly influences the framework of groundwater management locally. In Nebraska, groundwater is governed following two doctrines: correlative and reasonable use, which, in times of water shortage, lead to a proportional reduction of everyone’s allocation. Kansas uses the prior appropriation doctrine to manage groundwater, which applies the seniority principle when there is scarcity in water availability, making junior water rights holders bear the greatest risk. The absolute ownership doctrine is used to govern groundwater in Texas, which allows landowners to drill wells on their property and extract as much water as needed. Institutional groundwater governance in Nebraska is performed by the system of 23 locally elected Natural Resources Districts having full regulatory power to manage the state’s groundwater. The local governments use a variety of regulatory and incentive-based groundwater management tools to achieve local groundwater management goals. In Kansas, the Chief Engineer in the Kansas Department of Agriculture is in charge of water administration for the state. The Kansas legislature established five Groundwater Management Districts to address groundwater depletion issues, which can make policy recommendations but do not have the power to regulate. Groundwater Conservation Districts were created in Texas to provide protection from uncontrolled water mining in the state. The districts gained more power to regulate and enforce rules over time; however, significant groundwater depletion issues remain. Multiple lessons have been learned across the region since the beginning of groundwater development. Some of these could be applied in other areas seeking to address negative consequences of groundwater use. Forward-looking perspectives about groundwater management in the region vary from strong government-led solutions in Nebraska to various producer-initiated innovative approaches in Kansas and Texas.


Water User Associations and Collective Action in Irrigation and Drainage  

Bryan Bruns

If there is too little or too much water, farmers may be able to work together to control water and grow more food. Even before the rise of cities and states, people living in ancient settlements cooperated to create better growing conditions for useful plants and animals by diverting, retaining, or draining water. Local collective action by farmers continued to play a major role in managing water for agriculture, including in later times and places when rulers sometimes also organized construction of dams, dikes, and canals. Comparative research on long-lasting irrigation communities and local governance of natural resources has found immense diversity in management rules tailored to the variety of local conditions. Within this diversity, Elinor Ostrom identified shared principles of institutional design: clear social and physical boundaries; fit between rules and local conditions, including proportionality in sharing costs and benefits; user participation in modifying rules; monitoring by users or those accountable to them; graduated sanctions to enforce rules; low-cost conflict resolution; government tolerance or support for self-governance; and nested organizations. During the 19th and 20th centuries, centralized bureaucracies constructed many large irrigation schemes. Farmers were typically expected to handle local operation and maintenance and comply with centralized management. Postcolonial international development finance for irrigation and drainage systems usually flowed through national bureaucracies, strengthening top-down control of infrastructure and water management. Pilot projects in the 1970s in the Philippines and Sri Lanka inspired internationally funded efforts to promote participatory irrigation management in many countries. More ambitious reforms for transfer of irrigation management to water user associations (WUAs) drew on examples in Colombia, Mexico, Turkey, and elsewhere. These reforms have shown the feasibility in some cases of changing policies and practices to involve irrigators more closely in decisions about design, construction, and some aspects of operation and maintenance, including cooperation in scheme-level co-management. However, WUAs and associated institutional reforms are clearly not panaceas and have diverse results depending on context and on contingencies of implementation. Areas of mixed or limited impact and for potential improvement include performance in delivering water; maintaining infrastructure; mobilizing local resources; sustaining organizations after project interventions; and enhancing social inclusion and equity in terms of multiple uses of water, gender, age, ethnicity, poverty, land tenure, and other social differences. Cooperation in managing water for agriculture can contribute to coping with present and future challenges, including growing more food to meet rising demand; competition for water between agriculture, industry, cities, and the environment; increasing drought, flood, and temperatures due to climate change; social and economic shifts in rural areas, including outmigration and diversification of livelihoods; and the pursuit of environmental sustainability.


Water Governance in the Netherlands  

M.L. (Marie Louise) Blankesteijn and W.D. (Wieke) Pot

Dutch water governance is world famous. It to a large extent determines the global public image of the Netherlands, with its windmills, polders, dikes and dams, and the eternal fight against the water, symbolized by the engineering marvel of the Delta Works. Dutch water governance has a history that dates back to the 11th century. Since the last 200 years, water governance has, however, undergone significant changes. Important historical events setting in motion longer-term developments for Dutch water governance were the Napoleonic rule, land reclamation projects, the Big Flood of 1953, the Afsluitdijk, the impoldering of the former Southern Sea, the ecological turn in water management, and the more integrated approach of “living with water.” In the current anthropocentric age, climate change presents a key challenge for Dutch water governance, as a country that for a large part is situated below sea level and is prone to flooding. The existing Dutch water governance system is multilevel, publicly financed, and, compared to many other countries, still relatively decentralized. The responsibilities for water management are shared among the national government and Directorate-General for Public Works and Water Management, provinces, regional water authorities, and municipalities. Besides these governmental layers, the Delta Commissioner is specifically designed to stimulate a forward-looking view when it comes to water management and climate change. With the Delta Commissioner and Delta Program, the Netherlands aims to become a climate-resilient and water-robust country in 2050. Robustness, adaptation, coordination, integration, and democratization are key ingredients of a future-proof water governance arrangement that can support a climate-resilient Dutch delta. In recent years, the Netherlands already has been confronted with many climate extremes and will need to transform its water management system to better cope with floods but even more so to deal with droughts and sea-levels rising. The latest reports of the Intergovernmental Panel for Climate Change show that more adaptive measures are needed. Such measures also require a stronger coordination between governmental levels, sectors, policies, and infrastructure investments. Furthermore, preparing for the future also requires engagement and integration with other challenges, such as the energy transition, nature conservation, and circular economy. To contribute to sustainability goals related to the energy transition and circular economy, barriers for technical innovation and changes to institutionalized responsibilities will need to be further analyzed and lifted. To govern for the longer term, current democratic institutions may not always be up to the task. Experiments with deliberative forms of democracy and novel ideas to safeguard the interests of future generations are to be further tested and researched to discover their potential for securing a more long-term oriented and integrated approach in water governance.