Here we are posting an exclusive discussion paper written by Colin Green (Professor of Water Economics at the Middlesex University) with contributions from Josefina Maestru (Director of the UN-Water Decade Programme on Advocacy and Communication). You can download and read the discussion paper here.
The paper reflects on how we can transition to the green economy with respect to water, and on the usefulness of economic tools to facilitate this transition. Below are a few extracts from the papers, with key questions raised. We’ll be inviting key figures in the water community to give their perspective on these issues.
As the paper puts simply, to shift to a ‘green economy’ we need to do more with less. This means “getting more per drop (and for less pollution)”. It suggests that options are limited to: (1) converting more rainfall to runoff or infiltration; (2) reducing consumption including by reuse and recycling; (3) shifting between uses; (4) improving delivery, reducing losses and reducing use of nutrients and pesticides, and; (5) storage. Do you agree that these are the options available to us, and which of them offer the greatest potential for improvements?
If we know the answers, what is stopping us from establishing a flourishing green economy NOW? The difficulty of course lies in ‘how’ we implement these changes.
The paper emphasises that a shift to a green economy will require increasing productivity by bringing up the worst performing closer to the best performing. The good news is – there is a huge scope for doing this. However, doing so will require a greater understanding of “why these differences occurred in the first place: the type and rate of technological diffusion and adaptation, and the barriers to adoption.” Did the best performers face lower barriers to adopting the best available technology or were they better equipped to overcome those barriers? What are the main barriers to change, and how can we overcome them?
The paper notes that the scope for improving water productivity by reallocating water from lower (i.e. agriculture) to higher value uses (e.g. urban) is limited due to concerns about global food supply. It goes on to state that “agriculture is the critical issue”. Do you agree that agriculture lies at the heart of the green economy challenge for the water sector?
The paper poses the question, are economic instruments effective in inducing change? The ability to generate change in water usage generally comes down to the adoption of technology (rather than change in behaviour), the paper argues. For any change, there needs to be a signal to indicate what technology (or behaviour) should be adopted and an incentive able to overcome the barriers to adoption. Incentives can be regulations or prohibitions of certain behaviours, but economic incentives rely on encouraging or discouraging behaviour rather than mandating it.
Are economic policy instruments such as tradable instruments, subsidies and charges effective tools for change?
What examples are there of economic instruments that have successfully improved water management or use?
How can we ensure that the issue of equity is not neglected in the pursuit of efficiency?