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Trade Essential to Develop New Economics of Water to Reduce Waste, Says Okonjo-Iweala

Trade Essential to Develop New Economics of Water to Reduce Waste, Says Okonjo-Iweala

Bennett Oghifo

The World Water Conference came to a close in New York, U.S.A at the weekend, with a call on the global community to develop a new economics of water to reduce waste, increase efficiency and equitable distribution, adding that trade will be essential for this to be realised.

This is contained in a message sent to the World Water Conference by Dr. Ngozi Okonjo-Iweala, a co-Chair of The Global Commission on the Economics of Water, which was launched a year ago to outline a new economics of water.

According to a statement by officials, The Global Commission on the Economics of Water presented its first report during the UN 2023 Water Conference. “Interest was great when the first results were shared at the UN 2023 Water Conference by the four co-chairs Professor Mariana Mazzucato, WTO Director-General Ngozi Okonjo-Iweala, Professor Johan Rockström and Singapore Senior Minister Tharman Shanmugaratnam.”

In her message, ‘Turning the Tide on the World Water Crisis’ Okonjo-Iweala, Director-General of the World Trade Organisation, said, “At a time of demographic shifts, and climate change, among other stresses, we need to develop a new economics of water that will help us reduce water waste, improve water efficiency and provide opportunities for greater water equity.”

She said, “We also urgently need a new science of water, focused on green water, including water vapour transportation of green plants and atmospheric rivers, making rivers not just a local resource, but one with important regional and even global dimensions. In this regard, one of the most important conclusions of our work is that water efficiency should not be seen as in tension with equity goals. To the contrary, efficiency is what makes possible the reallocation of water to those who are currently underserved.” 

According to Okonjo-Iweala, “We know that if water supply falls short of demand, it will almost certainly be the poor that will bear the burden. Global cooperation is essential to the success in managing water as a global common good, just as it is to a successful international response to climate change.”

She said, “Fragmentation in the trading system or pull back from international commerce threatens to push nations away from from the collaborative spirit required not only to keep trade flowing, but also to ensure that nations work together on shared challenges, including water management and availability, as well as climate change.”

And that “Without cooperation, there are risks to poverty and falling prosperity with developing countries losing out more. Developing and emerging nations, especially those countries that are in water stressed areas, need to, one, better manage their water resources to ensure water access for all. And two, attract financing for the water infrastructure that they need to build to expand access.”

She said this was why the Global Commission report puts such emphasis on the need for a new economics of water that provides incentives for water efficiency and for investment in water projects. “Trade will be essential. It promotes dissemination and speed of the best production practices,  new technologies and innovations more boldly. Trade policy and the WTO are thus positioned to be an important point of leverage for investment in, and action on, the water-related Sustainable Development Goals as well as climate change.”

She said as one of the co-Chairs, she has had the honour “to work on this report. We hope policy makers will use those recommendations so that this report makes sense for all people and all communities.”

SIWI Mobilises to Support Follow-up to UN 2023 Water Conference

The UN 2023 Water Conference initiated a new era for water where it is considered as a global common good. Next, the world must embark on a mission to change the governance and economics of water at both the local and the global levels. Here, SIWI shares seven reflections on what lies ahead.

Twelve Heads of State, 80 Ministers and 6,500 non-state actors converged on New York for the UN 2023 Water Conference 22-24 March. SIWI played an active role in the conference and its year-long preparation, with 21 experts on-site to discuss, collaborate and share their expertise. While in-depth analysis of the outcomes will take a bit more time, here are seven immediate take-aways from the historic water conference.

1. Today’s many interconnected global crises can only be solved through improved water governance.

Many discussions at the UN 2023 Water Conference, and the first report from the 

Global Commission on the Economics of Water, shows that water governance is the key to future water security for all. A growing body of research indicates that we are facing a new magnitude of the global water crisis and that we need to profoundly transform how we use, manage and value water.

“We all depend on the same water cycle and must, therefore, treat water as a global common good. In coming years, we need to transform our political and economic systems to create the right incentives and innovations for a more sustainable and just future. To achieve this and deliver on the whole 2030 Agenda for Sustainable Development, we need a systemic shift in our thinking, at both the global and the local levels.”

Water is a powerful tool for ambitious climate action

The UN conference showed how fast the climate debate is now changing, with water increasingly at the core of both adaptation and mitigation discussions. But when it comes to implementation, many obstacles remain, often due to a lack of enabling environments, such as finance, capacity, information and political will. For the water-climate nexus to work seamlessly, incentives and regulations in both areas need to be harmonized. There is also a need for better cooperation between global and local levels. SIWI shared insights about how water can play a key role in climate mitigation, not least in cities, a topic which has so far received very little attention.

The water and climate agendas are increasingly connected, and water will likely again feature prominently at this year’s UNFCCC COP28 climate conference. SIWI is again playing a leading role in the coordination of the Water Pavilion, where a growing number of organizations are advocating for more water-wise climate policies.

3. The source-to-sea approach can help us restore the water cycle

There has been significant interest in source-to-sea management during the conference, as evidenced in Interactive Dialogue 3, as well as many side events. We seem to be starting to take the next step, moving from the question about what the source-to-sea approach is to how to implement it. The discussions are increasingly concrete, and as a leading expert in this field, SIWI has been able to contribute knowledge and experience and continue to provide support to the Action Platform for Source-to-Sea Management.

4. We need much stronger commitments to achieve universal access to water and sanitation

We have not seen any significant new commitments to improve water and sanitation services. Many countries have stated what they already do, and that is a good reminder, but from a WASH perspective we need to see much stronger and more forward-looking initiatives than what this conference has provided us with. The financing gap for water and sanitation remains significant, especially for sanitation services and wastewater treatment, and especially in least developed countries. Strengthened cooperation and partnership in this domain can make a difference!

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