MEASURING WATER USE IN A GREEN ECONOMY - UNEP

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2.2.3 Water in international trade The impacts of water use also have to be considered from an international perspective. The concept of ‘virtual water’ (Allan, 2003) presents a way of investigating and understanding the implications of water in connection with the international trade of goods in which or for which water is used. It builds, as a volumetric approach, on the water footprint concept (further developed in Hoekstra et al., 2011) and uses an expression of water intensity (efficiency) for the amount of water consumed in agricultural production, industrial processes and domestic water supply related to a certain traded product. By calculating the water consumed by different economic activities in certain regions throughout the whole supply chain it is possible to identify regions that have a comparative advantage or disadvantage in water efficiency for a certain product, enabling analysis of the water efficiency of an activity in one specific location compared with others. This comparative information can inform economic development policy. The information however has to be analysed throughout the whole supply chain as the highest water use often occurs in the location of agricultural production of raw materials, often in developing countries, and the opportunity costs of blue, green or grey water (see Chapter 4) also have to be considered. The concept gives, however, a useful entry point into discussing inequities in international trade. 2.2.4 Social aspects of water management In addition to the environmental concerns, water management in a green economy is also shaped by other issues such as human health and fundamental rights, as well as social aspects of well-being, in which water plays a key role. At the 2000 United Nations Millennium Summit, world leaders committed themselves to halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation. More recently, in July 2010, the General Assembly of the United Nations adopted a resolution declaring that safe and clean drinking water and sanitation is a human right essential to the full enjoyment of life and all other human rights. The tools and methodologies needed to measure the distance to achieving such societal goals are similar to those presented in this report for the water environment. There are also some common approaches, as in the case of determining water registries and water allocation rights. Overall, decoupling water use from economic growth serves both environmental and societal goals. For example, absolute decoupling of resource use and environmental impacts can benefit human health and preserve environmental assets of cultural, recreational or religious importance, while enabling economic growth to continue. However the full range of social and political issues connected with water and sustainable development cannot be covered in this report, which focuses only on the environmental aspects from a conceptual and methodological perspective. Another report would be needed to enlarge in this very important area and fully integrate the approaches here into the political debate. 2.3 Policy framework and the knowledge base 2.3.1 Policy framework When the green economy is understood in the sense outlined above, it is clear that decisionmakers will need to draw on a substantial knowledge base to be able to embed water resource considerations into related policy cycles in order to achieve a transition to a green economy. It is not enough to know about the amount of water used. Inputs differ hugely: some sources of water are renewable, some depletable, some in more or less finite supply. To target resources and design appropriate policies, decision-makers need information about the natural capital base, including what resources are available and their location, how much ecosystems can provide sustainably, what effects particular pollutants have on ecosystems, and how to offset the loss of 18
Measuring water use in a green economy depletable resources by investing in other forms of (natural) capital. The interplay of resource use and environmental impacts from a life-cycle perspective can be simply conceptualised using the DPSIR framework, which portrays the dynamics and interactions of drivers (D), pressures (P), state (S), impact (I) and responses (R). Figure 2.3 illustrates how population growth and economic activities such as agriculture, energy production and industry act as driving forces to build up pressures on the environment through the use of water, materials, energy and land. This in turn affects the state of the natural environment (biodiversity, air and water quality) and the state of human health and well-being. Specific impacts can be distinguished, for example by considering thresholds related to the state of ecosystems in the context of their resilience. Evidently, water is itself an essential component in all elements of the DPSIR framework. Water supply and sanitation can be considered as a driver with its own dynamics of pricing, infrastructure and governance. Water is a vital good and service represented in the pressure (water use), and it is a core element in the state of an ecosystem in terms of water scarcity, quality, and the state of water and wetland ecosystems. Across the policy cycle there is a need for indicators that can show the source and availability of water, the extent and nature of resource inputs required and taken, and the relationship to economic outputs globally, nationally and in individual sectors. Consumption-focused indicators, which measure the use of resources in products and services across the whole life cycle are also valuable, particularly when resources are not reused, to help designing policies to address resource use embedded in international trade. 2.3.2 Water as a natural resource There are many aspects to quantifying water resources. Many terms are used in everyday speech, others have specific definitions. For Figure 2.3 The DPSIR framework The DPSIR * Water Cycle • Agriculture and forestry • Fisheries • Energy (hydropower / cooling) • Industry • Recreation • Urbanisation • Public Water Supply / Sanitation • Navigation • Water pollution • Water use • Kanalisation / Damming • Flow interrruption P D S • Monotoring • Reporting • Effectiveness evaluations of responses • Stocks / flows of water bodies • Chemical, biological and hydromorpholical status of water bodies • Catchment ecosystems structure + resilience I R • Water scarcity • Drought • Floods • Wetland loss • Salination • Sedimentation • Diseases • Species / habitat loss • Invasive alien species • Eutrophication • Integrated water resource management (IWRM) • Institutional innovation • Transboundary agreements • Water use efficiency measures • Water economics (tariffs, taxes, transfers) • River and Wetland restoration • “Clean production“ • Catchment control and management D Driving forces P Pressures S State of the environnement I Impacts R Responses Source: EEA (1999), Stanners et al. (2007) 19
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Water is an essential resource for
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MEASURING WATER USE IN A GREEN ECONOMY - UNEP

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