The Global Commission on the Economics of Water (GCEW) has launched a report redefining the economics of water. The report maps the systemic links of the hydrological cycle to land, climate change, biodiversity loss, and progress on the SDGs. It proposes ways to “re-define and re-value” water to manage the hydrological cycle locally as well as a global common good.
The report is titled, ‘The Economics of Water: Valuing the Hydrological Cycle as a Global Common Good.’ Warning that the hydrological cycle is out of balance, jeopardizing an equitable and sustainable future for all, it calls for a new economics of water that understands the hydrological cycle’s deep interlinkages with climate change and biodiversity loss.
Such an economy will transform water governance at every scale and bring together fundamental economic concepts and tools to value water properly by reflecting its scarcity and the multiple benefits it provides. It will tackle externalities caused by the misuse and pollution of water by shaping economies where water is used efficiently, equitably, and sustainably from the start.
Spurring a wave of innovations, capacity building, and investments to catalyze economy-wide benefits in the long run and recognizing that the costs entailed in these actions are very small in comparison to the harm that continued inaction will inflict on economies and humanity are also among its characteristics.
The report highlights five mission areas to address the water crisis: launch a new revolution in food systems; conserve and restore natural habitats critical to protect green water; establish a circular water economy; enable a clean energy- and artificial intelligence (AI)-rich era with much lower water intensity; and ensure that no child dies from unsafe water by 2030.
To successfully tackle these five missions, the report identifies critical enablers of change, including:
- Governing partnerships, property rights, and contracts for an efficient, equitable and sustainable future;
- Shaping finance for a just and sustainable water future;
- Harnessing data as a foundation for action; and
- Building global water governance.
The report offers a set of recommendations to value and govern water in a way that would “stabilize the hydrological cycle, enable food security and human dignity, and keep the Earth system safe for humanity.”
In a preface, the GCEW Co-Chairs express confidence that “the world can turn the tide on [the water] crisis” by acknowledging why existing approaches have failed, embracing a fresh policy lens, and moving “with the boldness and urgency that the crisis demands.”
Casting the water crisis as “fundamentally an intergenerational issue” in a preface of her own, a youth representative calls attention to the Youth Water Agenda, which seeks to “secure dignified livelihoods for current and future generations in a world where uncertainty is rapidly becoming the norm.”
The GCEW released the report on 17 October and launched it during the 2024 Annual Meetings of the World Bank and the International Monetary Fund (IMF). The report is the water equivalent of two major reviews that sought to reimagine the way our economies interact with the climate and biodiversity – the Stern Review on the Economics of Climate Change (2006) and the Dasgupta Review on the Economics of Biodiversity (2021). [Publication: The Economics of Water: Valuing the Hydrological Cycle as a Global Common Good] [Executive Summary] [Publication Landing Page] [Interactive Microsite]