Environment: The Water Challenge: sharing a precious commodity


07/03/2012 - Water management needs urgent reform if the world is to head off serious deterioration in the quality and quantity of water available.

At the release of the OECD’s Meeting the Water Reform Challenge, OECD Secretary-General, Angel Gurría warned that ,“Without major policy changes, we risk high costs to economic growth, human health, and the environment. But with sustainable financing, effective governance and coherent policies,governments can harness water’s potential. Economic instruments like tariffs, taxes and transfers – the 3Ts – are powerful tools to ensure an efficient use of water."


The report highlights the challenges posed by increasingly rapid urbanisation, population growth and changing economic dynamics for managing water supply.


With water demand projected to increase by 55% by 2050, there will be increased competition for it. By that time, 3.9 billion people – more than 40% of the world’s population - are likely to be living in river basins facing severe water stress.


More than 240 million people (most of them in rural areas) are projected to lack access to an improved water source by 2050, and almost 1.4 billion people will not have access to basic sanitation. In addition, increased flows of nitrogen, phosphorus and pesticides from agriculture and poor wastewater treatment will contaminate ground water, rivers and oceans, harming human health and the environment.

Global water demand: Baseline scenario, 2000 and 2050 

Source: The Environmental Outlook Baseline,output from IMAGE suite of models.
 Download the data in Excel

Addressing these challenges requires strong government responses. Water policies need to place quantity and quality on an equal footing. Efficient use of water is essential, and pricing it properly can discourage waste. Economic instruments such as water markets can help to achieve this in a flexible way. Linking wastewater collection and treatment systems will be essential to safeguard and improve water quality. And governments will have a key role to play in encouraging the innovation and investment needed to build green water infrastructure.  

The question of sustainable financing for water supply and sanitation should remain at the forefront of international discussions on water. The report illustrates how governments can benefit from strategic financial planning and a combination of the 3Ts (tariffs, taxes, transfers) to close the gap between available public and private financing and investment needs. Progress towards the Millennium Development Goals and subsequent international arrangements depend critically on getting sustainable financing in place.


The report also focuses on the importance of effective governance across levels of government and across jurisdictions for ensuring sustainable water reforms. Because policies seemingly unrelated to water can have an adverse impact on its use, governments should pay closer attention to the way in which their water, energy, agriculture and environment policies interact. Unravelling historical and political legacies is an essential first step to breaking down the barriers to more coherent policies. Experience shows, for example, that reform of agricultural support can encourage more efficient water use through changes in farming techniques and crop patterns.

The Secretary-General will outline further responses to water reform challenges at an OECD side event on Tuesday 13 March at 13:15 during the World Water Forum in Marseille.


To obtain a copy of Meeting the Water Reform Challenge or OECD Environmental Outlook to 2050 please e-mail

For further information on Meeting the Water Reform Challenge, and OECD’s Environmental Outlook to 2050, journalists are invited to contact Anthony Cox: or by phone +33 (0)1 45 24 98 70 or Xavier Leflaive in OECD’s Environment directorate: or by phone: + 33 (0)1 45 24 92 94.


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