Public governance


A Framework for Financing Water Resources Management

A lack of finance for water resources management is a primary concern for most OECD countries. This is exacerbated in the current fiscal environment of tight budgets and strong fiscal consolidation, as public funding provides the lion’s share of financial resources for water management. The report provides a framework for policy discussions around financing water resources management that are taking place at local, basin, national, or transboundary levels. The report goes beyond the traditional focus on financing water supply and sanitation to examine the full range of water management tasks that governments have to fulfill; when appropriate, a distinction is made on distinctive water issues. The report identifies four principles (Polluter Pays, Beneficiary Pays, Equity, Policy Coherence), which have to be combined. In addition, it identifies five empirical issues, which have to be addressed on a case-by-case basis. Finally, it sketches a staged approach that governments might wish to consider, to assess the financial status of their water policies and to design robust financial strategies for water management. Case studies provide illustrations of selected instruments and how they can be used to finance water resources management.    

Published on August 21, 2012

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Executive Summary
Why is financing water resources management an issue?
Four principles for WRM financing
The value added of economic instruments
Issues related to the implementation of the four principles
Annex A. Cost-recovery strategies in selected OECD and BRICS countries 
Annex B. An OECD survey on investment needs for water supply and sanitation
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