The Value of Water

OUR BLUE PLANET, A MISLEADING VIEW

When seen from space, our planet is predominantly blue, seemingly abundant with water, the only such planet in our galaxy. Yet only 1% of its surface area is actually freshwater. Of that one percent, just 0.3% is available in rivers, lakes and wetlands. The rest of our freshwater is captured underground and in glaciers and polar ice caps helping keep our climate system in check. Freshwater is precious, yet not so abundant.

As surface freshwater dwindles, groundwater extraction is being pumped at unprecedented rates for irrigation, industry, and urban development. The IUCN toolkit 'SPRING' looks at how to manage groundwater more sustainably. IUCN Mesoamerica launched its Spanish translation 'ACUÍFEROS' on the occasion of World Water Day 2021. More *here*.

As surface freshwater dwindles, groundwater extraction is being pumped at unprecedented rates for irrigation, industry, and urban development. The IUCN toolkit 'SPRING' looks at how to manage groundwater more sustainably. IUCN Mesoamerica launched its Spanish translation 'ACUÍFEROS' on the occasion of World Water Day 2021. More *here*.

The UN projects over 40% of the world’s population will live in severely water-stressed river basins by 2050. This is the result of increasing demand for water, reduction of water resources, and increasing pollution of water, driven by dramatic population and economic growth.

Read: Valuing Nature's Water Infrastructure (The Economist Insights)

Our planet is so profoundly dependent on water that when scientists search for the possibility of life on other planets, they search first for evidence of water

^{©Shutterstock/Valentina Shilkina}

WATER: PRICE-LESS OR PRICELESS

Adam Smith, the father of modern economics, famously coined the 'Paradox of Value' which he described by comparing the high value of a diamond, which is unessential to human life, to the low value of water, without which all life would die.

^{The Value of Water, different points of view. HSBC advertising campaign © HSBC}

^{The Value of Water, different points of view. HSBC advertising campaign © HSBC}

Water is the lifeblood of our planet. We rely on it for our health, food, manufacturing, energy, agriculture, transportation, and more.

Water also has a tremendous environmental value. Water allows plants, mangroves and peatlands to filter water, purify air, store carbon, reduce soil erosion, nurture biodiversity and offer protection from storms and droughts. People and companies use and rely on these natural services, "for free".

*^{©Shutterstock/Vietnam Stock Images}*

*^{©Shutterstock/Vietnam Stock Images}*

The value of water becomes even more difficult to price when it comes to non-use value, this is the value that comes from knowing an environmental feature will continue to exist in the future. Non-use values link water to culture, religion and spirituality.

On 28 July 2010, the United Nations General Assembly recognized the human right to water and sanitation and acknowledged that clean drinking water and sanitation are essential to the realization of all human rights (read more).

^{The Human Right to Water © United Nations (}^PDF⁾

^{The Human Right to Water © United Nations (}^PDF⁾

Still too often we take water for granted. As a result, we waste it, pollute it, or ignore its destructive power. The opposite of taking water for granted is to value it, in all its dimensions. Valuing water requires recognizing the full range of direct and indirect benefits and risks associated with water, which may be cultural, spiritual, emotional, economic, environmental, political or social.

^{Globally over 80% of wastewater generated by cities, industries and agriculture, flows back into nature untreated. This in turn causes severe environmental pollution, disease, and can bring risks to providing safe food and drinking water ©Shutterstock/Toa55}

^{Globally over 80% of wastewater generated by cities, industries and agriculture, flows back into nature untreated. This in turn causes severe environmental pollution, disease, and can bring risks to providing safe food and drinking water ©Shutterstock/Toa55}

Read: El Valor del Agua by IUCN South America

Fisheries are valued at over US$38 billion, while recreational fishing generates US$100 billion

_{Forgotten Fish Report (}_PDF_{), WWF ©Shutterstock/Bigone}

VALUING VERSUS PRICING

In July 2018, the UN’s High-Level Political Forum concluded that the world was off-track to meet the sustainable development goal on water and sanitation (SDG6). Current systems of water use, water allocation, water service allocation and water risk distribution were recognized as unsustainable.

^{High Level Panel on Water - Video '}^{Water’s Promise: Making Every Drop Count}^'

In response, the High-Level Panel on Water (HLPW) highlighted the need to understand, value, and manage water better. It defined five principles to value water better and triggered the establishment of the Valuing Water Initiative to demonstrate how to put these into practice and motivate others to join.

*^{The five principles to better value water as adopted by the High Level Panel on Water in 2017 ©Valuing Water Initiative}*

*^{The five principles to better value water as adopted by the High Level Panel on Water in 2017 ©Valuing Water Initiative}*

"Bottom line is this: not valuing water comes at a cost", said Dutch Prime Minister Mark Rutte (see blog). What we do not pay as water users, we will pay exponentially over time due to the consequences of a badly managed resource. If it does not yet affect our quality of life, it will affect the future of our children and grandchildren.

'Value: Counting ecosystems as water infrastructure' is an IUCN toolkit explaining the important techniques for the economic valuation of ecosystem services, and how their results are best incorporated in policy and decision-making. It explains, step by step, how to generate persuasive arguments for more sustainable and equitable development decisions in water resources management. It shows that investments in nature can be investments that pay back (*PDF*) *©IUCN*

'Value: Counting ecosystems as water infrastructure' is an IUCN toolkit explaining the important techniques for the economic valuation of ecosystem services, and how their results are best incorporated in policy and decision-making. It explains, step by step, how to generate persuasive arguments for more sustainable and equitable development decisions in water resources management. It shows that investments in nature can be investments that pay back (*PDF*) *©IUCN*

Already the consequences of badly managed water resources are becoming clear. A recent report by 16 conservation organizations warned one-third of freshwater fish face extinction. Habitat destruction, dams and infrastructure, over-abstraction of water, and agricultural and industrial pollution are causing freshwater biodiversity to decline at twice the rate of that of terrestrial or marine species (see article).

*^{©Camilo Díaz/WWF Colombia}*

*^{©Camilo Díaz/WWF Colombia}*

Read: Deal imminent for East Africa's model transboundary water basin (press article for World Water Day 2021, The East African)

The value of water is not just about market prices, it is a fundamental question of sustainability. We need to choose to value water not only for us today but also for those who don’t have a voice: plants, animals and future generations.

James Dalton, Director IUCN Global Water Programme

^{©Shutterstock/AboutLife}

The value of water is about values

For World Water Day 2021 (WWD), UN Water placed the 'value of water' front and centre for the focus day. The annual World Water Development Report, launched on WWD2021, assesses the current status of, and challenges to, the valuation of water across different sectors and perspectives, and identifies ways in which valuation can be promoted as a tool to help achieve sustainability.

^{Valuing Water: preview of the UN World Water Development Report 2021 ©UNESCO WWAP}

A global campaign for World Water Day allows people around the world to actively share what water means to them, its true value and how we can collectively protect this vital resource better.

Website: www.worldwaterday.org

Social Media: #WorldWaterDay #Water2me #ValueWater

Key Publication: World Water Development Report 2021 PDF

How we value water determines how water is managed and shared.

Valuing water sources, natural water resources and ecosystems _{All water is generated by ecosystems and all the water we abstract for human use eventually returns to the environment, along with any contaminants we have added.

The water cycle is our most important ‘ecosystem service’.}_{Higher value must be given to protecting the environment to ensure good quality water supply and build resilience to shocks such as floods and droughts.}
Valuing water infrastructure, storage, treatment and supply_{Water infrastructure stores and moves water to where it is needed, and helps clean and return it to nature after human use. Where this infrastructure is inadequate, socio-economic development is undermined and ecosystems altered.}_{Typical valuations of water infrastructure tend to underestimate or not include costs, particularly social and environmental costs, and often fail to incorporate natural infrastructure solutions.}
Valuing water services, drinking water, sanitation and health services _{The role of water in households, schools, workplaces and health care facilities is critical. WASH – water, sanitation and
hygiene services add value in the form of greater health and protection from disease, particularly in the context of the COVID-19 pandemic.}_{Greater human health is proven to lead to greater economic productivity and improved education. Without good quality water, our health systems fail.}
Valuing water as an input to production and socio-economic activity, food and agriculture, energy and industry, business and employment _{Agriculture places the biggest demand on global freshwater resources and is a major contributor to environmental degradation.

Despite being fundamental to food security, water in food production is generally given a low value when assessed purely through the economic lens of value produced in relation to water used.}_{Far more can be done that recognizes the value of water and therefore the need to protect and restore water resources for the sustainable production of food, energy and industrial needs.}
Valuing socio-cultural aspects of water – recreational, cultural and spiritual attributes _{Water connects us with notions of creation, religion and community. And water in natural spaces can help us feel at peace and brings health benefits. Water is an intrinsic part of every culture but the values we attribute to these functions are difficult to quantify or articulate.}_{Economics often considers water to be a resource for practical human usage and doesn't pay enough attention to its socio-cultural or environmental value.}

^{From the World Water Day Toolkit 2021}^:^{www.worldwaterday.org/learn}

^{Wetlands protect us from extreme weather, reduce flood impacts, absorb pollutants, improve water quality and provide a safe habitat for many species. Gambia Mangroves ©Shutterstock/Curioso.Photography}

^{In modern treatment plants, physical, chemical and biological processes are used to remove contaminants from wastewater and produce treated water that is safe enough for release into the environment ©Shuttertock/Dmitri Ma}

^{Today just one-third of the world's longest rivers remain free-flowing. Free-flowing rivers are important as water, silt, and other natural materials can move along unobstructed. Species such as migratory fish can swim up and downstream at will. The river can swell and shrink naturally, flow at an organic volume and rate, and help replenish groundwater sources. Bhumibol Dam, Thailand ©Shutterstock/APS}

^{Agriculture is the largest water user worldwide, accounting for approximately 70% of total freshwater withdrawals ©Shutterstock/pmphoto}

^{The Ganges river has a high spiritual significance yet is heavily polluted. Worshipped by a billion Hindus and a water source for 400 million, the Indian government is battling to save “Mother Ganga”. Varanasi, India ©Shutterstock/ Kurkul}

Water is a unique and non-substitutable resource of limited availability. As the foundation of life, water carries multiple values and benefits. But unlike most other valuable resources, it has proven very challenging to determine its true ‘value’

^{Woman watering vegetables on the banks of the Mekong © Shutterstock/Craig Schuler}

Banking on water

Pictet established the first specialized water investment fund in 2000. This fund invests in companies operating in the water sector, particularly in the area of water quality. Since then, “blue” investment funds have multiplied and with them, the specialised water stock market indices.

*^{©Shutterstock/Watchara Ritjan}*

*^{©Shutterstock/Watchara Ritjan}*

At the same level as oil or gold, scarcity has made water enter the Wall Street markets. Since 7 December 2020, water is traded on the US stock exchange.

In California for example, the price of each cubic metre of water has doubled in the past year. It is likely that climate change, population growth, drought and pollution will further increase water stress in the region.

The global water crisis is at an inflection point. How do we price our most valuable resource, while also ensuring access to it as a human right? World's Water Crisis, Explained Series ©Netflix

Water - often underpriced and consequently overused - could benefit from a market-based approach. Incentives for private sector involvement would discourage wasteful water use, especially in agriculture which consumes 70% of water worldwide.

The private sector is paying attention too. In 2007 the CEO Water Mandate was set up, an initiative led by business leaders worldwide with the aim to improve water stewardship and in doing so, understand and manage their own water risks. Locally many initiatives exist which link business practices to improved water and ecosystem management such as the Brazilian Cerrado Waters Consortium.

Read: Water management and stewardship: taking stock of corporate water behaviour

"When the well is dry, we know the worth of water"

^{Benjamin Franklin, 1746}

The intrinsic value of Water

When looking at water, we need to look at the entire ecosystem. One cannot be disconnected from the other. In 2017, New Zealand granted legal personhood to the Whanganui River. With this, New Zealand recognized in law what Maoris claimed for centuries: the river is a living being. Since then, other nations have followed suit in an effort to protect the environment.

Elsewhere legal rights for nature have been established, including India’s sacred Ganges and Yamuna Rivers, and Lake Erie in the US. In the wake of these initiatives, the question will be whether such legislation will prove to be valid in court.

*^{Baptism is a Christian tradition and ritual which is also sometimes called Christening. It is a rite of admission into the Christian Church through the use of water ©Shutterstock/ChameleonsEye}*

*^{Baptism is a Christian tradition and ritual which is also sometimes called Christening. It is a rite of admission into the Christian Church through the use of water ©Shutterstock/ChameleonsEye}*

While a price can be calculated based on water scarcity or water footprint, it is harder to put a monetary value on water in relation to traditional knowledge, ritual bathing, recreation, and the health of future generations.

'Lake Titikaka: a collection of stories, myths and legends' was produced by IUCN South America to improve the understanding and protection of the lake and highlight its strong culture heritage. Throughout generations, a sacred significance was attached to the lake and inspired mythical stories. More *here* *©IUCN*

'Lake Titikaka: a collection of stories, myths and legends' was produced by IUCN South America to improve the understanding and protection of the lake and highlight its strong culture heritage. Throughout generations, a sacred significance was attached to the lake and inspired mythical stories. More *here* *©IUCN*

A further key aspect in valuing water is gender equity, enabling more girls to go to school by making water and sanitation available and the safety of women in accessing and collecting water. Read: Gender-based violence and environment linkages: The violence of inequality

“The great River flows from the mountains to the sea. I am the River, the River is me.”

^{The Maori tribes of Whanganui declared their inseverable connection to their ancestral river}

Our ability to value water is limited by our own economic and cultural horizons. Wastewater for example is not ‘waste’ – it is full of nutrients and bacteria that can help improve soil nutrition, identify future vaccines, and power our economies. But to many, wastewater is pollution, and not a key part of the circular economy of water.

Understanding multiple value is therefore key – and not a single sector or subjective value. Key to this is the need to improve communications and awareness on the value of water before we degrade our systems beyond recognition or point of return.

^Twitter:^@IUCN_Water^{- Facebook:}^IUCN.Water^{- LinkedIn:}^iucnwater

^{www.iucn.org/water}^{- water@iucn.org}

^{International Union for Conservation of Nature (IUCN) • #ValueWater #WorldWaterDay2021 • 'The Value of Water - Precious Public Good or Profitable Private Asset' • Editor: Claire Warmenbol, IUCN Global Water Programme • 2021}

_{^{IUCN is a membership Union composed of both government and civil society organisations. It harnesses the experience, resources and reach of its more than 1,300 Member organisations and the input of more than 15,000 experts. IUCN is the global authority on the status of the natural world and the measures needed to safeguard it.}}

_{^{References: 1) Water Crisis Report. United Nations University, Canada 2) OECD Environmental Outlook 3) FAO: Towards 2030/2050 4) UN Water 5) World Water Development Reports 6) Valuing Water Initiative 7) Water Footprint Network 8) International Water Management Institute 9) 'Securing Water, Sustaining Growth', Global Water Partnership 10) GRIPP: Groundwater Solutions Initiative 11) IUCN Library 12) WHO/UNICEF Joint Monitoring Programme 13) CEO Water Mandate 14) Pacific Water Institute 15) WWF}}