Opinion article by Athénaïs Georges, European Environmental Bureau.
In 2022, the Government of the Netherlands convened the ‘Global Commission on the Economics of Water’ (GCEW) facilitated by the OECD to tackle the world’s spiralling water crises. Their recently-published report calls for nature restoration, inclusive water governance and transparency — all commendable goals. But behind the buzzwords lies an ill-advised faith in market economics and private capital, and a worrying co-opting of terms and concepts introduced by water defenders. Athénaïs Georges reports.
The 2024 GCEW’s report “The Economics of water: Valuing the hydrological cycle as a global common good” aims at providing new tools for a global water governance model that reconciles the 3Es (efficiency, social equity and environmental sustainability), underscoring the importance of green water[1].
It outlines five key missions: 1. Revolution in food systems; 2. Conserve and restore natural habitats critical to protect green water; 3. Circular water economy; 4. Clean energy and AI-rich era with lower water intensity, and 5. Ensure that no child dies from unsafe water by 2030.
The analysis of the report has led to both concern and enthusiasm.
The missions address crucial challenges to fix the water crisis, but the instruments promoted to achieve those are falling short. Once again, the neoliberal market-based approach has been favored over the Human Rights approach. In the report, those holding the rights to water are not living beings but water operators, and this is just a foretaste of the hijacking of water justice terminology…
Water sits at the centre of the triple crisis of pollution, biodiversity loss and climate change.
“When the last drop of water is polluted, the last animal hunted and the last tree cut down, the white man will understand that money can’t be eaten …” – Sitting Bull
One of the predominant factors in this triple crisis is intensive industrial agriculture, affecting both “blue” and “green” water.
Over USD 630 billion/year are spent on harmful agricultural subsidies globally, distorting cropping patterns with water-intensive crops in dry regions and deforestation in the tropics. 17-20% of nitrogen pollution from runoff is directly linked to nitrogen fertilizer subsidies. Half of the planet’s habitable land is used for agriculture.
The report advocates for reform in food systems, yet the European Commission is yet to deliver its promised Sustainable Food Systems Law, a key feature of the EU’s Farm to Fork strategy.
Conserve, restore and hold accountable …
With increasingly extreme weather events worldwide (90% of them water-related), conserving and restoring natural habitats is vital. Globally, water storage in surface water in wetlands plummeted by 40% and in groundwater by 70% between 1970 and 2021. Constraints on water supply are projected to affect high-income countries with a GDP decline of 8% while low-income countries would face a drop of 10-15%. For reference, during Covid-19, the world’s GDP fell by around 3.4%.
We welcome the mention of the use of Nature-based Solutions as a priority measure (over grey infrastructure[2]).
Authors mention the need to better assess and integrate negative externalities, such as pollution, by effectively implementing the ‘polluter-pays principle’ . The Extended Producer Responsibility (EPR) included in the revised Urban Wastewater Treatment Directive (UWWTD) is cited as an adequate mechanism for industries to bear the additional costs of water remediation they generated.
Considering the extent of water pollution (PFAS, pesticides, heavy metals, etc.), this mechanism can be fully effective only with a prompt update of the list of priority substances for surface and groundwater pollutants, proposed already two years ago by the Commission, but still awaiting final inter-institutional (‘trilogue’) negotiations. It remains to be seen if the EPR scheme proposed by the Parliament will make it in the final text.
… is only possible with open access to comprehensive data
The lack of data availability, accessibility and transparency is a broad phenomenon that triggers justice and management issues. River Basin Management Plans (RBMPs), the main planning tools under the WFD to assess the chemical and ecological status of water bodies, is listed as a good practice for river basin management in the report. However, many Member States fail to implement these plans effectively, often delaying action or reporting only partially on the real state of our water environment.
Public access to data on water usage is necessary for accountability and sound management. The report acknowledges this need by supporting corporate disclosure of water footprints, as provided for in the EU Corporate Sustainability Reporting Directive (CSRD).
While it promotes ambitious goals, the report fails to frame the issue of water holistically in its environmental, social, economic and ethical dimensions despite the availability of very good quality work[3] [4] [5] undertaken by water defenders around the world for decades.
Fancy a bit more social washing?
While promoting the water cycle as a common good (for its “interconnectedness across countries” rather than simply because water is vital) and emphasizing the need for water justice, through the recognition of the crucial role of Indigenous Peoples, youth, women and water defenders, the report mentions several times the need to shift “profits” from water uses towards innovation.
Not only is this a misappropriation of terminology, but it also seems to be an apologia for techno-solutionism.
The concept of “common good” – a common can’t be anyone’s property, it’s everyone’s (Recital 1 WFD, UN) – is being used to justify the commodification of water under the guise of “proper management” and innovation.
Commodify without saying you commodify – “water as natural capital”
The rightful attempt to warn against privatization and commodification of water fueled by colonial and post-colonial legislations, along with the recommendations for conditionalities in water allocation instruments (contracts, leases, etc.) are contradictory to the idea of developing an “enabling environment” for private finance.
Statements like “(…)scaling-up blended finance, (…) and valuing ecosystem services without commodification” or “Recognising water as an asset should not lead to hoarding and speculative behaviour” are empty, as no proposals or guidelines are presented on how to avoid such commodification. On the contrary, the approaches that risk it the most are promoted[6].
Business as usual
From water markets, debts-for-water swaps (similar to debts-for-nature[7] swaps), water credits (similar to nature credits) and virtual water trade[8], the whole panoply of economic instruments promoted in the report is alarming.
Even though virtual water trade is a matter of fact, promoting it as a sustainable mechanism is risky. Here’s why:
- The uncertainty of climate change impacts on water resources raises the question of whether a region that is currently considered rich in water could rapidly become scarce.
- Virtual water trade will lead to even greater neo-colonial and unjust governance, as arid regions are mainly located in the Global South, where communities already bear the full brunt of climate change and unbalanced power dynamics on the global trade market.
- There’s no challenge of consumption patterns, characterised by an extractivist and productivist system, exacerbating further inequities.
- Nor is there any mention of the impacts of the shift to clean energy and the green transition instigated by Northern countries in the spoliation of water and territories in the South.
Water for life, not for profits – empowering local communities
The report promotes public-private partnerships (PPPs), rebranded as “Just Water Partnerships,” yet these often exacerbate inequities and environmental harm. Many governance initiatives cited in the report (the Canadian Mining Association, the Brazilian water market) illustrate poor governance that exacerbates social inequity and environmental harm.
Speaking about inclusive water governance, it would have been interesting to actually challenge the existing international water governance platforms (World Water Forum, World Water Week, etc.) dominated by private interests fueling the suppression of vital voices of frontline communities and civil society at large.
Water is a global issue that needs local solutions: if we want to fix the broken cycle while ensuring justice, the only way forward is supporting communities and challenging the inordinate power and control wielded by private interests in water. This can be done by ensuring transparent, democratic and adequately financed public management of this common good.
[1] Green water is water in soil available for plants and soil microorganisms.
[2] Grey infrastructure refers to structures such as dams, seawalls, roads, pipes or water treatment plants.
[3] Maude Barlow, The Global Water Crisis and the Commodification of the World’s Water Supply, 2001. https://www.ircwash.org/sites/default/files/Barlow-2001-Blue.pdf
[4] https://www.foodandwaterwatch.org/2021/03/02/stopping-privatization/
[5] Meera Karunananthan, Can the human right to water disrupt neoliberal water policies in the era of corporate policy-making?, 2019.
[6] Pedro Arrojo-Agudo, UNSR on the human right to water and sanitation, Water and economy nexus: managing water for productive uses from a human rights perspective, July 2024. https://documents.un.org/doc/undoc/gen/g24/127/91/pdf/g2412791.pdf
[7] Nicole Hassoun, The Problem of Debt-for-Nature Swaps from a Human Rights Perspective, 2012. https://core.ac.uk/download/pdf/215543083.pdf
[8] The virtual water trade is the hidden flow of water in food or other commodities that are traded from one place to another. (e.g. in Europe, the water contained in the vegetables we import from Spain and that participates to the major water crisis there)
