Content of the WRM Course

RDV Core Training Program FY98 Activity 2.2

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Part One: Water Resources of the World: Pressures, Challenges and Management Approach

I. Pressures

During the latter half of this century, the pressure on natural water resources in many regions of the world has been increasing dramatically. Currently humans are extracting about half the 12,500 cubic kilometers that are readily available. Demand is now growing at twice the rate of population increase and accelerating. This can be attributed to the rapid growth in urban sprawl, the increased pace of industrialization, agriculture and irrigation development and pollution. In 1995 water availability was estimated to be 7,500 cubic meters per person per year, while as recently as 1970 it was 12,900 cubic meters.

Click for required readings of this session: Introduction and A, B, C, D of Chapter 1 of Comprehensive assessment of the freshwater resources of the world.

II. Challenges

By the year 2025 water demand will be determined by four major driving forces; population, technology, trade and the environment. As the global population will have increased by 3 billion by this date it will be the predominant influence, especially in the semi-arid and arid developing countries where demographic growth will be greatest. Development aspirations of the burgeoning global population will drive the need for technologies for improving water-use efficiency, as water becomes a limiting factor in the process of increasing food production and industrialization and maintaining the environment. For example this technology will enable some countries to use scarce resources to produce high-value products which can be traded for food grown by more water endowed countries, thereby enabling them to move away from the policy of food self-sufficiency to one of food security. Waste water treatment technology to reduce agricultural and industrial pollution will also play a major role in shaping the future supply of freshwater as pollution saps the potential for growth by damaging human and environmental health.

Click for required readings of this session: Chapter 2 of Comprehensive assessment of the freshwater resources of the world.

III. Management Approach

To address these challenges a new approach has been conceived which has at its core the adoption of a comprehensive policy framework and the treatment of water as an economic good, combined with decentralized management and delivery structures, greater reliance on pricing, environmental protection and fuller participation by stakeholders. The adoption of the comprehensive framework facilitates the consideration of relationships between the ecosystem and socio-economic activities in river basins. Analysis should take account of social, environmental, and economic objectives; evaluate the status of water resources within each basin; assess the level and composition of projected demand; and take into consideration the views of all stakeholders. The advantages of such an approach are:

Part Two: New Thinking on Water Resources

I. The Hydrological Cycle

Rain and snowfall bring to earth freshwater which is harvested for numerous activities. This water runs on the ground, flows in the rivers and lakes and oceans, infiltrates the soil, then evaporates to create clouds which condense to form rain and snowfall again. These processes are interlinked in a complex, continuously evolving global system called the hydrological cycle. All socio-economic and environmental activities on this planet are entirely dependent on this system, which distributes freshwater independent of human will. The system sustains life but also imposes the threats of drought and flood. It is humankind's indispensable "partner-for-life", in a partnership in which humankind is not dominant. Human activities such as industry, agriculture, irrigation, rural and urban settlements are therefore naturally dependent sub-systems. These sub-systems have a heavy impact on the system, often with negative consequences on, the quantity and quality of available water, climate change, environment and biodiversity.

Source: Office of the Colorado Engineer

II. Self Organizing System

The hydrological cycle is the natural global system which distributes water around the planet independent of the will of humankind.  Essentially it is a self organizing system. It is very difficult, costly and time consuming to predict the behavior of systems which are self organizing, and it is only worth the effort if the economic and financial benefits derived from the monitoring process are considered to be worth while.  In the case of the hydrological cycle the market has already made its choice, witnessed by the incredible amount of money which is spent on hydrometeorological information networks for, civil and military aviation, management of multi-purpose dam reservoirs, the El Nino phenomenon, drought management and agricultural futures markets; and the huge amount of television prime time which is dedicated to weather reports.

The well endowed nations obviously have the better systems and benefit from them socially, economically and environmentally.  It follows therefore that economies countries with lesser developed information infrastructures are more vulnerable to the natural disaster risks which this self organizing system regularly creates, which in extreme cases tends to neutralize development initiatives.  At present there are countries which cannot afford water resource information systems and others, that use information as a currency of exchange for trading in power and status, which do not want them.

The challenge to the development community is to assist all countries to equip themselves for effective hydrometeorological risk management and to form information sharing partnerships to improve the global capability to try and predict hydrometeorological events for the benefit of national, regional and global markets.

III. Water as an Economic Good

What is the value of freshwater? In spite of the vital life-support service which water renders to the planet, historically water was seldom considered to have economic value. Even Plato mentions this fact in Euthydemus, "For it is the rare thing, Euthydemus, which is the precious one, and water is cheapest, even though, as Pindar said, it is the best". More relevant to modern economic theory perhaps are the words of Adam Smith in Wealth of Nations when he describes the difference between "value in use" and "value in exchange". "Nothing is more useful than water: but it will purchase scarce any thing; scarce anything can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it". Both were referring to the relative abundance of water resources which were available to supply the socio-economic demands of their times, a situation which caused water to be a non-tradeable commodity and therefore a free good.

The UN Water Resource Conference at Mar del Plata in 1977 attempted to alert the international community to the trend towards relative water resource scarcity, (in other words Adam Smith's reference to water was becoming invalid in some regions of the world). Although it did not have the desired impact, it was the beginning of an awareness process which culminated at the Water and Environment Conference in Dublin in 1992, and the Dublin Water Principle which stated that, " Water has an economic value in all its uses, and should be recognized as an economic good". Although still not well understood or well defined, the concept was already manifest in many regions of the world in the form of privatization of water supplies, the emergence of water markets, and the proliferation of bottled drinking water. This marked the end of the era of water as a free good.

Since 1992 water economists have made great contributions to the understanding of the value of water for many activities. However there is a long way to go and research and the awareness campaigns are continuing. The World Bank's response to Dublin was the publication in 1993 of a Water Resources Management policy. This policy treats water as an economic good.

Readings for this session (click and then select "open it" -- just to view the file, or "save it to disk". To open the file, you need the Microsoft Word 6.0):

  1. Water as an Economic Good: The Idea and What it Means in Practice. By John Briscoe, Senior Water Advisor of the World Bank. A paper presented at the World Congress of the International Commission on Irrigation and Drainage, Cairo, September 1996.
  2. Managing Water as an Economic Good: Rules for Reformers. By John Briscoe, Senior Water Advisor of the World Bank. A keynote paper to the International Committee on Irrigation and Drainage Conference on Water as an Economic Good. Oxford, September 1997.
  3. Water as a Social and Economic Good: How to Put the Principle into Practice. By Peter Rogers, Gordon McKay Professor of Environmental Engineering, Harvard University; Ramesh Bhatia, President of the Resources and Environment Group, India; and Annette Huber, PhD Candidate at the Division of Engineering and Applied Sciences, Harvard University.
IV. Water Resources Information Systems

To be able to decide on riparian rights, water markets and social and environmental responsibilities, it is necessary to accurately monitor the behavior of the hydrological cycle so that decision makers can appreciate the hydrological context of their economies from both the national and international perspectives. This is particularly important for those which share river basins and aquifers. It is important that decision makers understand that when the limits of water resources are being reached it is necessary to begin thinking in terms of "what can we do with what we have", rather than " what would we like to do". This is where the concept of the "economic value" of water becomes a key issue.

Planning authorities need to know when they are reaching the limits of water resource supply so that they can begin planning inter-basin water transfers, or implementing new financial and economic incentives to encourage industry to recycle water, and agriculture to use water more efficiently. To be able to make all these decisions, those responsible for economic and financial analysis must be provided with scientifically accurate hydrological information whenever it is required. Therefore hydrological services and water management agencies must have the technical means and institutional capacity to monitor and assess water resources quantitatively and qualitatively in function of this new demand for market information, upon which billions of dollars of decision making will rest. This is the challenge for the hydrologic and water resources management profession and the justification for developing the art of applied hydrology for water resources management, or put another way, hydrology with economics in mind, as per the Dublin Statement.

However management of water is a very complex operation requiring new approaches to information exchange between sectors for risk analysis. The objective of this information exchange would be to ensure that all socio-economic activities within a river basin can maximize their capacity to produce wealth without detriment to the environment and without reducing their capacity to attract investment and service debt.

The questions therefore are:

It is suggested that the answer to these questions is the technical and institutional application of a information technology, and information and knowledge management. The technical implementation of information infrastructure consists simply of creating networks of automatic data collection and transmission systems throughout river basins, linking decision makers, water users groups and stakeholders to each other and the socio-economic and environment activities. The institutional implementation is not simple. Institutional issues regarding the processing and dissemination of water information are highly sensitive in any part of the world and can only be resolved by governing authorities through the traditional formal and informal cultural decision making processes of their country. Therefore no solution will be prescribed here, but rather a suggestion for a process designed to facilitate an evolutionary process of institutional, cultural and economic cooperation.

The first step is to create a non-threatening information exchange environment in which all interested parties can discuss the water allocation and risk management issues informally. An example of this is the World Bank/World Meteorological Organization (WMO) partnership for setting up the World Hydrological Cycle Observing System (WHYCOS). The aim is to:

WHYCOS is being developed in the form of regional components called HYCOS's within the framework of common guidelines and standards, but designed to meet regional priorities expressed by the participating countries. For further details, please visit the WWW site at

With this system in place decision makers are then encouraged to communicate with each other to discuss water allocation and risk management informally on the basis of information about the behavior of the hydrological cycle, the limits to total demand, and the environmental demand to protect the natural resource capital base. These discussions will hopefully produce informal intersectoral partnerships which can evolve into formal partnerships for information exchange if the need for collaboration and institutional cooperation to reduce risk and create wealth is identified and mutually agreed. Decision aiding systems which employ river basin models and digital mapping for the visual simulation of development scenarios for policy makers will be indispensable tools for "bridging the communication gap" between sectors and their stakeholders.

V. Relationships between hydrological cycle, river basin, water demands and investment

Lecture  Explanations of Relationships by G. Matthews

The relationships between water resources, the ecosystem, and socio-economic activities can be envisioned via the following diagrams. They represent surface water flow in a river basin in terms of Quantity against Time. Ground water can be treated in the same manner. The upper curve is the Total Water Resource Availability which is available for socio-economic sectors and the environment. Another way of looking at this curve is to consider it the boundary of a hydrological envelope within which we live.

Diagram A shows total water resource availability for a typical river basin. The environmental demand curve is shown following the upper total water resource curve. The amount of water below the environmental curve is the quantity which is available for the development of all socio-economic activities. In this case the socio-economic demand curve is shown climbing up towards the environmental demand curve which indicates a river basin which still has potential for further development and investment in wealth creation from the water resource perspective without having to be unduly concerned with allocation.

Diagram B shows a river basin which has developed all available water resources for satisfying socio-economic demand. Allocation now becomes the number one economic issue for sustainability. Note that in order to continue creating wealth and protecting investment it is important that water for socio-economic activities not be taken from the water supply for the environment. If it does it will deprive the natural resources of the water they need to maintain their production capacity. An extreme case would be when all the water is used for socio-economic activities which would result in the river basin becoming a desert. The impact on the economy and investors would be devastating. Under normal river flow conditions decision makers should have little problem in maintaining the socio-economic demand curve below the environmental demand. However when a river basin is developed to its maximum, there are two cases when monitoring for water allocation decision making becomes vital for the survival of the economy.

The first is pollution, which makes water unusable for irrigation and its treatment very expensive for industry and drinking water. Diagram C illustrates the effect of pollution on the socio-economic demand curve. This curve is obliged to descend because sufficient water must be left in the river to dilute the pollution in an attempt to minimize the damage to the environment and the aquatic life and to prevent overloading of the water treatment plants which supply industry and domestic drinking water. This diluting water would probably come from the irrigation allocation so as to protect the soil. This demonstrates how pollution reduces productivity in all sectors and threatens the health of the natural resource capital, and how important it is to have the monitoring capacity to detect pollution disasters at an early stage and before it begins to disrupt production and reduce investment and reimbursement potential and oblige the authorities to spend money on cleaning it up. Money which has been hard earned and probably needed for new investments.

The second case is drought. Its effect is illustrated by Diagram D. Again the first priority is to protect the environment and the natural resources capital so as not to exacerbate the desertification effect due to the lack of water. For this particular case a monitoring system with simulation capacity for forecasting, or predicting drought probability would be a very useful tool for decision makers.


Part Three: Policy Framework of the Water Resources Management

I. Four Guiding Principles of the Dublin Statement (1992)

The International Conference on Water and the Environment (ICWE) was held in Dublin, Ireland, in January 1992 was the most significant global conference on water since the United Nations Water Conference held in Mar del Plata, Argentina, in 1977. The Dublin Statement on Water and Sustainable Development is the most important document for water policy-making and implementation.

The four guiding principles of the Dublin Statement are (cited from the International conference on water and the environment: Development issues for the 21st century):

II. Integrated Water Resources Development and Management

Based on the four principles, a number of actions were identified which will involve multilateral and bilateral co-operation (Report of the Conference, 1992, Dublin).

III. Elements of a Water Strategy and Strategy Development

1. Elements of a Water Strategy

Although many current water-use patterns and pollution habits are propelling the world towards a series of local and regional water crises, mankind has not yet reached the point of no return. THere are many practical, cost-effective measures that can reduce the strain on water resources. They represent a series of critical investment opportunities that one cannot afford to ignore.

Seven elements of a water strategy were discussed in the UN water document:

Click for required readings of this session: A of Chapter 3 of Comprehensive assessment of the freshwater resources of the world.

Geoff Spencer at the World Bank listed the six key elements of River Basin Development and Management as:

2. Strategy Development IV. Recommendations

Click for required readings of this session: D of Chapter 3 of Comprehensive assessment of the freshwater resources of the world.

Part Four: Project Implementation

I. Introduction

Project implementation must be based on a clear methodology which enables decisions to be made which are relevant to the Bank’s and Client’s business processes. In this case it is the “project cycle” beginning with the creation of the Project Concept Document (PCD). To that end the following project implementation methodology, which includes the use of the Bank’s knowledge and information infrastructure, is suggested.

II. Project Implementation Methodology

1. Using the intranet create, electronically, a (focus) country home page.

2. Import the PCD macro.

3. Import an interactive environment map of the country and attach to the end of the PCD as an Annex.

4. Using the map define the hydrological context of that country by overlaying the river basins and aquifers. Identify the international riparians and ad their maps to that of the (focus) country.

5. Attach a second Annex entitled “Water Related Data and Information”. This annex will contain hydrologic, water resource assessment  information, and socio-economic and environmental water demands of all the riparian countries. Sectors to be included could be rural communities, urban areas, rain fed agriculture, animal farming, irrigation and drainage, industry, the environment, hydropower, forestry, water sheds, and etc.

        Click to get information of "Water in Other Sectors". (Note: When you get into the Water Resources Management page on the Intranet, click the "water links" in the right frame).

6. Add a third Annex entitled “Institutional Structure and Policy and Legal Frameworks”. This annex will encompass water law(s), riparian rights and water management institutions of the (focus) country and riparians.

7. Add a fourth Annex entitled “River Basin Planning”. This annex will provide the basis for allocating water to all sectors. It will contain information on the development aspirations of the country, with particular reference to its economic and financial policy and the environmental and social aspects of water resources management.

8. Determine socio-economic and environment mismatches between present economy and development aspirations from WRM perspective and analyze alternative policy and projects options in a river-basin context  to address them. Then using river basin modeling (Harshadeep’s model) narrow down the options to select the best alternative and project(s).

9. After final selection  by the client, begin creation of the PCD(s) for the selected project(s) not forgetting sustainability aspect of operation and maintenance.

10. Fill out PCD(s) using past, present and future information and knowledge requirements from Bank and Client Information and Knowledge Resources, and others.

11. Geo-reference and imbed past, present and proposed future project information into the interactive map and a simulation model. Share this electronic resource and simulation capacity with country either by CD ROM, laptop carried by task managers whilst on mission, extranet to resident mission, or internet.

12. Continue implementing the project cycle. Use the extranet to resident missions or internet to effect tele-missions and meetings and monitor procurement from Washington.

13. Archive the electronic record of the project for future projects and socio-economic and environmental analysis.

14. Refresh the Bank’s Information and Knowledge Resources with material from the completed project.

Click for required readings of this session: Geoff Spencer, River Basin Development and Management: Key Elements.

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Last updated 30th May '98