Water: an Under-Delivered Promise


Keynote Speech by Angel Gurría, OECD Secretary-General, delivered at the Conference of Montreal - Economic Forum of the Americas, session on Sustainable Development and Natural Resource Management


Montreal, Canada, 10 June 2008

C’est un honneur pour moi d’être invité à m’adresser à vous aujourd’hui sur le thème du développement durable et de la gestion des ressources naturelles.

Nos conditions de vie et nos économies dependent des écosystèmes et des ressources naturelles pour nous fournir des aliments et du bois, des métaux et des minéraux, ou encore des ressources génétiques essentielles aux produits pharmaceutiques. Dans les pays en développement, les ressources naturelles sont à la base d’un quart environ de la richesse nationale.

Mais aujourd’hui, c’est de l’eau que je souhaiterais vous parler. L’eau est gérée en dépit du bon sens et son utilisation n’est pas viable. Qui plus est, la communauté internationale n’a pas tenu sa promesse d’assurer l’accès à l’eau pour tous. Nous savons parfaitement ce qui doit être fait. Le défi consiste à présent à passer à l’action.

I. A vital resource

Water is the key prerequisite for sustainable development. The three dimensions of sustainable development--economic, social and environmental—must all be addressed for effective water management.

  • Water is essential for economic activities-- for agriculture, energy production, manufacturing, and consumption.
  • Clean water is necessary for human development. Access to safe water reduces child mortality and contributes to universal primary education and gender equality because girls can stay in school instead of spending hours fetching water.
  • Water sustains ecosystems that provide what is known as “ecological services”-- marshlands to purify water, mangroves to protect against floods, forests to absorb carbon, and habitats for the animals and plants on which human life and economic activity depend.

II. Solutions to the water challenge

Properly addressing these dimensions of water is a complex challenge. By 2030, the world economy is projected to double and the world population to increase by one-third – another two billion people. To feed them, crop production will need to increase by 50%. Growing pressures from agriculture, energy production and industries are imperilling our water resources. We see pollution, misallocation among different competing uses of water, and too many people without safe drinking water.

En résumé, nous devons mieux économiser et protéger l’eau et veiller à ce qu’elle soit accessible et abordable. Plusieurs conditions doivent être remplies pour y parvenir :

  • une tarification appropriée qui reflète pleinement la valeur de cette ressource essentielle et des services connexes,
  • une prise en compte des préoccupations d’environnement dans les politiques agricoles, puisque l’agriculture est de loin le premier utilisateur et le principal responsable de la pollution de l’eau,
  • une information, une sensibilisation et une éducation améliorées, pour favoriser l’adoption de pratiques et de technologies économes en eau par les consommateurs et les agriculteurs,
  • une augmentation des financements consacrés à l’investissement dans les infrastructures de l’eau et de l’assainissement, et
  • une meilleure gouvernance – puisqu’en définitive, la gestion de la ressource et l’accès à l’eau relèvent de la gouvernance, nécessitant une coopération efficace entre différents ministères et différents échelons de l’administration, ainsi qu’avec les autorités de bassin.

Water is under threat. All countries - OECD and developing countries alike – need to introduce policy reforms and scale-up best practices to avoid dire consequences.

III. Managing water resources

The new OECD Environmental Outlook projects that by 2030, 3.9 billion people, or 1 billion more people than today, will be living in areas under severe water stress. The majority of these people will be in emerging economies, particularly in South Asia and China.

“Water stress” means an imbalance between growing - competing - water demands, and increasingly erratic availability of freshwater of sufficient quality. While water stress is a challenge facing many parts of the world, it cannot be addressed at the global level, it is a local phenomenon.

Worldwide, agricultural irrigation accounts for about 70% of water use, with the rest for power plants, industries and public water supply. Many OECD countries have managed to “decouple” water use from economic growth over the past decade, largely thanks to more rational pricing, better technologies, and consumer awareness and information (e.g. households appliance labelling) to conserve water. 

I congratule Quebec’s new bill to protect surface and groundwater by declaring it a “collective resource part of common heritage of the Quebec nation”. We at the OECD have long been proponents of the “user pays” principle.

Outside the OECD area, Chile (which is a candidate for accession to the OECD) is pioneering water rights trading to promote rational use. But overall, in the developing world, water use is projected to grow significantly in the coming decade, in line with more rapid pace of growths in GDP, agricultural production and population.

The pressure on water resources is exacerbated by the continued deterioration of freshwater quality. Most OECD countries have successfully tackled surface water pollution, mainly by regulating industrial discharges and investing in urban sewage treatment.

But agriculture still remains a challenge. Fertilizers, pesticides and livestock manure continue to pollute our rivers, lakes and aquifers. Nearly 60 million tonnes of nitrogen are expected to reach coastal waters from inland sources by 2030, killing fish and disrupting ecosystems along the way. To address this, we need to reform environmentally-harmful agricultural incentives and policies, and scale-up ecological farming practices.

In some cases, water resource management is a transboundary challenge for shared water basins. Examples include the Great Lakes for Canada and the US, and the Colorado River for the US and Mexico. Good governance, involving effective and well-enforced international agreements, is crucial for transboundary water management.

IV. Ensuring access to water and sanitation services

Permettez-moi à présent d’évoquer les défis à relever pour assurer l’accès de tous à l’eau potable et à des services d’assainissement adéquats. Un milliard de personnes environ n’ont pas accès à l’eau potable, et 2.6 milliards sont privées d’installations sanitaires adéquates, ce qui provoque chaque année la mort de 1.8 million d’enfants. Le manque d’accès à l’eau et l’hygiène défectueuse constituent la deuxième cause de mortalité chez les enfants dans le monde, après la malnutrition.

La communauté internationale adhère pleinement aux Objectifs du Millénaire pour le développement (OMD), qui prévoient de réduire de moitié la part de la population mondiale sans accès à l’eau potable et à l’assainissement de base d’ici à 2015. Pourtant, il ressort d’une évaluation toute récente que dans la grande majorité des pays en développement, ces objectifs ne sont pas en voie de réalisation. En moyenne, chaque dollar investi dans l’approvisionnement en eau et l’assainissement produit des bénéfices d’une valeur de 10 dollars pour la collectivité, qui correspondent par exemple aux coûts sanitaires évités ou à l’amélioration de la santé et de la productivité de la population. Investir dans l’eau et l’assainissement est donc un choix économiquement rationnel.

However, there is a huge financing gap. Filling it will require an additional USD 10 to 30 billion per year. Compared to the amount OECD countries currently spend on subsidies to farmers – almost a billion dollars each and every day - this is affordable. So why are we not delivering?

Most of financing for water and sanitation comes from public budgets, both domestic and ODA, but the private sector and water tariff revenues should also play crucial roles. Sadly, donor financing to the water sector as share of total ODA has been falling since 2000. Donors need stronger political will to deliver on their commitment to the MDGs. Price hikes to meet the full costs of the service can sometimes be politically difficult. Private investors have been pulling out of the water sector and access to credit has been limited, particularly for local water service providers in developing countries. We need to attract them back to the sector, not chase them away. Better governance is needed to strike a balance between economic, social and environmental objectives, and to design a mix of policies according to specific local contexts.
Financing for the water sector is not just a problem for developing countries. OECD countries also need to invest in water . They have  to rehabilitate ageing infrastructure and meet more stringent environment and health regulations.

A recent OECD report estimates that investment in water infrastructure to 2030 will need to be three times that for roads, and five times that for electricity. France and the UK will need to increase their water spending as a share of GDP by about 20% just to maintain their current levels of service. Japan and Korea may have to increase their water spending by more than 40%.

To help meet this challenge, the OECD is examining innovative financing and business models for water infrastructure that can capture, for example, benefits of reduced health costs and higher property prices.

V. Adapting to climate change

And, major expenses are in the horizon as we prepare for climate change, which will worsen water-related problems and increase investment needs. OECD countries have already experienced significant flood damages and droughts in some regions (e.g. Australia, parts of the United States and Southern Europe).
Climate change may not simply increase the magnitude of known problems, but may completely change the nature of the water problems that we face today. A recent OECD study shows that —despite some progress-- both OECD and non-OECD countries have yet to fully integrate climate adaptation into domestic water policy frameworks.

VI. OECD’s Response

I would like to conclude with a few words on the latest OECD work to help countries meet these water challenges.

We are examining trends and practical difficulties with water pricing, both for municipal supply and agriculture. OECD is developing tools to help governments  plan financing for investments in water infrastructure, including engaging private sector investors, so that water services are delivered efficiently and effectively to all. We are working with the World Water Council, the Global Water Partnership, the UNSGAB, with Aqua Fed, and other groups. The governance of the water issue is very diversified and dispersed. We need to forcus on that. I will be reporting the results of our work at the 5th World Water Forum in Istanbul in March 2009.

But all the problems of the water sector will not be solved in Istanbul. We know the obstacles and how to overcome them. The real challenge is implementation.

Governments, businesses and communities need to join forces and share the risks and responsibilities to ensure that water – the public good of water – is available to all.


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