Remarks by Angel Gurría
13 April 2015
Ministers, Distinguished Guests, Ladies and Gentlemen,
It is a great pleasure to share some of the key messages, from the Policy Statement endorsed by members of the High-Level Panel on the Global Dialogue on Water Security and Sustainable Growth.
This Policy Statement comes at an absolutely vital moment. Across the world today, water insecurity acts as a drag on global economic growth, with an estimated annual cost of USD 500 billion.
The yearly cost of flooding alone is believed to reach in excess of USD 10 billion in each of the US, China, and India, while flood-related urban property damage is estimated to cost in the region of USD 120 billion globally, each year. However, the greatest economic losses are felt in developing countries as a result of inadequate water supply and sanitation. In some African countries, these losses can amount to as much as 10% of GDP!
These are not just numbers: this is a human and environmental tragedy of catastrophic proportions!
Over the last few years the Task Force on Water Security and Sustainable Growth has spelt out with increasing force the deep and binding interlinkages between water risks, investment, and sustainable development. If we are to ensure that water acts as a driver of economic growth, social equity, and environmental sustainability, we need a new set of priorities.
So what are these priorities? In three words: investment, investment, investment.
Let me elaborate on what each means in practice.
First, investing in water security means thinking long-term, to improve the resilience of economies to water variability. This means integrating investments into long-run planning, and matching financial resources with realistic policy objectives. For instance, investing in economic diversification can reduce dependence on agriculture and vulnerability to risks of water scarcity. It will also be essential to identify and use new and more innovative sources of financing to complement the known “traditional” flows.
Here the High-Level Panel on Financing for a Water Secure World can provide useful guidance. It is a partnership between the OECD and the UN Water Council, and it actually met earlier today. We discussed how to tap into new finance sources, such as climate bonds, long-term investors and other specialised institutions looking for long-term investment opportunities.
But we can also do better at operating and maintaining already existing assets to minimise new investment needs, and reduce additional water demand with smarter water management and greater coherence across policy areas. This calls for renewed efforts to explore water tariff structures and pollution charges that contribute to water resources management.
Secondly, we need much larger investments in order to address both present and future water risks. The Task Force has demonstrated that a tolerable level of water risk can be achieved by integrating economic and development plans, and sequencing investments in infrastructure, institutions, and information along a coherent pathway. For instance, protection against water pollution is best achieved through a combination of investments in treatment capacities, in zoning, and in monitoring.
Decisions around the planning, operation and financing of water infrastructure also need to be informed by a range of future scenarios in order to reduce liabilities down the line and to better understand the benefits of investment. In many countries, investments have often had a distorted cost-benefit because they have failed to adequately account for future costs and benefits. The Task Force report shows, for example, how developments in the Colorado (US), the Murray Darling (Australia) and the Yellow River (China) basins have neglected downstream needs or water quality standards.
Finally, investment in knowledge, people and partnerships will be key to water security and sustainable growth. Investing in knowledge - by developing new databases and new approaches to analysing existing data - will help us to better understand and act upon the risks, costs and benefits of water management.
Investing in partnerships will be vital to supporting water management across commercial sectors and administrative boundaries. We should also not forget the importance of investing in people. Water management has a crucial impact on people’s lives; steps need to be taken to engage with local communities in order to fairly share the risks and opportunities associated with water.
Ladies and Gentlemen, today, the signatories of the policy statement have committed to promote policies and practical initiatives that contribute to water security. We now call upon civil society, the private sector, local and national authorities, and the global community to adopt, promote and implement these recommendations.
The OECD is ready to move this agenda forward, to assist in monitoring progress, and to promote better policies for a water secure world.