Wider Approach to Incentives for Water Management

BROADENING OUR APPROACH TO INCENTIVES FOR SUSTAINABLE AND EFFICIENT WATER MANAGEMENT

Steven N. Schonberger

Sector Manager for Water and Agriculture

Middle East and North Africa Region

The World Bank

ICARDA Conference Session 1

24 June 2013

Cairo

“Incentives” defined• Something, such as the fear of punishment or the

expectation of reward, that induces action or motivates effort

Incentives have been with us as long as civilization itself–mainly to avoid conflicts amongst water users

• Khnum, God of Water in Ancient Egypt over 5000 years ago

• Yu the Great’s rules to control flooding of neighbor’s fields in China over 4000 years ago

• Code of Hummarabi regulated water distribution in Mesopotamia almost 4000 years ago

• Laws of Manu 2200 years ago governed shared water resources in Hindu Society

• Justinian Code regulated riparian rights in the Roman Empire 1500 years ago

Now, incentives come from many directions and are inter-linked with issues in other sectors

For example, macroeconomic concerns…

which require more effective cost recovery,

…growing focus on the water-energy nexus,

…and food security policies which respect fiscal as well as water saving objectives,

Source: Larson, World Bank 2013

…while meeting immediate social expectations.

• Youth unemployment:

But scarcity remains the ultimate incentive!

• Scarcity is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources

We are very familiar with physical scarcity…

…which already constrains water use in this Region,…

…likely worsening with climate change.

However, to improve water management, we need a more comprehensive approach to scarcity.

Scarcity of organizational capacity is generally a less severe constraint in the Region…

…as services reach most of the population.

However, scarcity of accountability…

is emerging as a principal constraint to better water sector performance.

This suggests an urgent need to invest in the supply of accountability in water management…

• Public expenditure for water in MENA ranges from one to five percent of GDP.

• Investments focus on development of water sources and construction or rehabilitation of treatment and conveyance systems.

• Limited effort to strengthen water resources assessment and monitoring, basin management, utility reforms, organization of users.

=> Limited impact on the sustainable or efficient use of water resources

… with more attention to policies which share accountabilities amongst stakeholders…

…and integrate innovative technologies in support of those responsibilities.

So we should challenge ourselves in today’s discussions to respond, inter alia, to:

• How are the complex macroeconomic and inter-sectoral aspects of water incentives being identified and addressed in countries?

• What is planned and what are the experiences to-date in increasing the supply of accountability through more decentralized water resources management and service delivery, as well as introducing new technologies to support planning, monitoring, and more sustainable and efficient resources use?

But of course, the ultimate incentive is the realization that we can no longer look at the Earth as an endless expanse of resources…

“This planet is not terra firma. It is a delicate flower and it must be cared for. It's small. It's isolated, and there is no resupply. This is our home, and we are mistreating it.”

but rather…