A framework for financing water resources management

• Publisher: OECD
• Year: 2012
• Leaves: 98
• Series: OECD studies on water
• Category: Library

✦ Synopsis

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.  Read more...

Foreword --

Acronyms --

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.

✦ Table of Contents

Acronyms 11
Executive Summary 13

Chapter 1. Why is financing water resources management an issue? 19
Future challenges regarding water resources management 20
Financing WRM:Expenditures and sources of finance 23
References 34

Chapter 2. Four principles for WRM financing 37
A case for public funding 38
Two well-established principles: Polluter Pays and Beneficiary Pays 39
Two additional principles: Equity and Policy Coherence 45
References 48

Chapter 3. The value added of economic instruments 51
Economic instruments for water management 52
Abstraction charges in OECD countries 53
Pollution charges in OECD countries 54
Putting a price on water 60
Innovative instruments to finance water resources management 62
A note of caution: Requisites for economic instruments to deliver 66
References 68

Chapter 4. Issues related to the implementation of the four principles 71
Earmarking revenues from water-related taxes: Balancing efficiency and financial security 71
How can costs of water management be reduced: Efficiency and cost- effectiveness as drivers for financial performance 72
Roles for the private sector: Harnessing private sources of finance 76
How to value water services: A precondition for sound financing 77
Governance arrangements that match financing strategies 80
References 81

Annex A. Cost-recovery strategies in selected OECD countries and BRICS 83
Cost-recovery strategies in Australia 83
Cost-recovery strategies in Brazil 85
Cost-recovery strategies in the Czech Republic 86
Cost-recovery strategies in France 87
Cost-recovery strategies in India 89
Cost-recovery strategies in Sweden 90

Annex B. An OECD survey on investment needs for water supply and sanitation 93