Environmental and Water Resources Management

ENVIRONMENT STRATEGY PAPERS NO. 2 Environmental and Water Resources Management

Rafik Hirji Hans Olav Ibrekk

October 2001 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A.

Manufactured in the United States of America First printing October 2001

In 2001, the World Bank completed the comprehensive two-year process of preparing its Environment Strategy, Making Sustainable Commitments: An Environment Strategy for the World Bank. It was endorsed by the Bank’s Board of Directors and published in October 2001. Several background papers were prepared and published by the Bank’s Environment Department to stimulate constructive dialogue and intellectual discussion on a range of issues within the Bank as well as with client countries, partners, and other interested stakeholders. The Environment Strategy Paper series includes revised versions of Environment Strategy background papers, as well as new reports prepared to facilitate implementation of the Strategy. This series aims to provide a forum for discussion on a range of issues related to the strategy, to help the transfer of good practices across countries and regions, and to seek effective ways of improving the Bank’s environmental performance. Contents

v Preface

vii Acknowledgments

1 Executive Summary

7 Chapter 1: Water-Environment-Poverty Linkages 7 Background 10 Sustainable Water Resources Development and Management 11 Poverty Alleviation 11 Notes

13 Chapter 2: Global Trends Relating to Water and Environmental Management 13 Three Profound Changes in Thinking 14 Changing Role of the Public and Private Sector 14 Key Threats 20 Key Challenges 25 New and Emerging Opportunities 25 Notes

27 Chapter 3: Global Lessons from Bank Experience 27 What Has the Bank Been Doing? 28 Lessons Learned

37 Chapter 4: Strategic Framework For Action 37 Adopt Clear Framework for Environmentally Sustainable Water Resources Development 38 A Comprehensive Approach to Water Resources Management 38 Mainstream Environmental Issues in Water Resources Planning and Management Decisionmaking 40 Environment Uses of Water 40 Water Quality and Pollution Management

iii Environmental and Water Resources Management

40 Climate Change Adaptation and Mitigation

43 Chapter 5: Way Forward 43 Develop Human Resources 44 Analytical Work 45 Strategic Partnerships 46 Indicators

Annexes 49 Annex A: Regional Water-Related Environmental Priorities 53 Annex B: Linkages Among Water, Environment, and Dimensions of Poverty

55 References

57 Color Graphics

Boxes 5 Box A. Overall assessment 11 Box 1. Sustainability outcomes for water use 15 Box 2. Water pollution and human health 16 Box 3. Challenges for managing groundwater contamination 17 Box 4. Impact of poor land use on Mombasa water supply infrastructure 18 Box 5. Impacts of poor drainage 19 Box 6. Problems caused by Water Hyacinth 24 Box 7. World Commission on Dams: Priorities for sustaining rivers and livelihoods 28 Box 8. Key environmental findings of OED’s evaluation of the implementation of the Water Resources Management Policy of 1993 28 Box 9. Environment and poverty alleviation objectives of Water Resources Management Policy 31 Box 11. Integrating environmental and social considerations in power sector planning in Nepal 33 Box 12. Strategic Partnership for Nutrient Reduction in the Black Sea/Danube Basins 34 Box 13. Environmental flow assessments for the Lesotho Highlands Water Project 35 Box 14. Overall assessment 46 Box 15. Suggested indicators

Tables 11 Table 1. Linkages between water, environment, and poverty

Figures 7 Figure 1. Water and water-based ecosystems values 8 Figure 2. Water-stressed and water-scarce countries: 2025 projections 23 Figure 3. Wastewater generated and reused in selected countries

iv Environment Strategy Papers Preface

o improve the management of water The paper is based on a review of regional sector investments, the World Bank is environment strategies (prepared for the T preparing a Water Resources Sector Environment Strategy), on a review of the water Strategy, and to enhance the main-streaming of sector portfolio and country focus studies (done the environment in Bank investments, the Bank for the Water Resources Sector Strategy), and is preparing an Environment Strategy. This on consultations with other sector boards and background paper is the Environment Depart- Bank staff. ment’s contribution to both these efforts. It focuses on the environmental sustainability of Chapter 1 outlines water-environment and water-related investments and policies sup- poverty linkages. It identifies the six dimensions ported by the Bank and evaluates how effec- of poverty and how environment and water tively the Bank is integrating environmental management are related to each other. It also quality objectives in water resources planning presents a possible set of sustainable outcomes and management. for the water sector. Chapter 2 addresses emerging global trends related to water and A second objective of this paper is to review environmental management. Chapter 3 summa- the World Bank’s efforts to mainstream the rizes lessons from Bank experience. Chapter 4 environment in its lending and non-lending presents the implications for the Bank in terms water resources activities and operations, and of a strategic framework for action, and Chapter to draw lessons for enhancing the environmen- 5 considers how to support implementation of tal sustainability of water sector investments. the strategic framework.

Acknowledgments

his paper was prepared by Rafik Hirji the World Bank and Deborah S. Rubin from and Hans Olav Ibrekk of the Environ- Cultural Practice. Guidance was provided by T ment Department with support from the Water Supply and Sanitation Sector Board Walter Garvey, David Hanrahan, Nagaraja Rao and many Bank staff during the preparation and Harshadeep, and Stephen F. Lintner of the review process, including Inger Andersen, World Bank, and Alfred Duda of the Global Mohamed Bekechi, Greg Browder, Jack Fritz, Environment Facility. The paper also benefited Jose Furtado, Agi Kiss, Magda Lovei, Andrea from comments on early drafts provided by Merla, Douglas Olson, Robert Robelus, Kate John Briscoe, Franklin Cardy, Salah Darghouth, Stevens, and Heinz Unger. John Shepherd, and Lee Sumter Travers from

vii

Executive Summary

his paper reviews the World Bank’s freshwater biodiversity on which people, efforts to mainstream the environment in especially the poor, often depend directly. T its lending and non-lending water Hence, it is essential to maintain the stability, operations. It is also intended to inform ongo- health, and productivity of the water resources ing Bank efforts to prepare a Water Resources system. Sector Strategy and an Environment Strategy. The paper summarizes lessons from past and A Systemic Water Crisis. Over the past several ongoing practice and recommends a strategic decades, food production as a result of the framework for enhancing the environmental green revolution has improved dramatically, sustainability of water sector investments. It is and access to drinking water expanded for 2.4 based on a review of regional environment billion people, while access to sanitation strategies, on the water sector portfolio and facilities improved for 600 million since 1980. country focus studies, and on consultations The world, however, continues to experience a with other sector boards and Bank staff. systemic water crisis as a result of unsustainable use and management of water resources The Resource Base. The water resources due to poor social, environmental, or economic system—consisting of water (in rivers, aquifers, policies and actions. At the same time, there is and lakes) and land- and water-based ecosys- a need to increase water supplies and services tems (watersheds, wetlands, and floodplains)— to needy populations in an environmentally is essential for the sustenance and health of all sound manner. Traditional problems concern- species. The resource provides services with ing the provision of water supply and sanitation many direct, indirect, option, and non-use services in urban and rural areas will require values. As a source of natural capital, it is a concerted efforts: more than a billion people do primary input for a whole array of human not have access to potable water supply and 3 needs and economic development activities. As billion do not have adequate sanitation. With a a sink, it is used as a receptor for wastewater rapidly increasing population, the problems of discharges. Fresh water sustains the integrity of food security and growing demand for water to the ecosystems that serve important ecological generate electricity, meet domestic supply, and and hydrological functions and as hubs of support industrial development persist.

1 Environmental and Water Resources Management

New Threats. The water sector faces new The potential hydrological, ecological, and threats and challenges related to the local and economic consequences of these new threats basinwide degradation of water resources to the water sector are significant. They can system from water allocation conflicts, water threaten the ability of the water resource pollution, and land degradation, along with system to continue providing the basic hydro- similar issues at the transboundary level and logical and ecological services that traditional climate change considerations at the global services depend on; cause irreversible damage level. These will have a direct bearing on the to and further stress an already stressed water way water resources are managed in the resource; undermine investments in water future. supply, irrigation, and energy services; and affect downstream coastal and marine re- Rapid urbanization, for example, is outpacing sources. The cumulative effects on down- governments’ abilities to provide clean water, stream waters often create new transboundary sanitation, and waste management services, problems that are difficult to deal with. and also forces governments to address the implications of changing land use and en- The new threats have a disproportionate croachment on recharge areas and wetlands. impact on the poor, who directly or indirectly Excessive regulation and overabstraction of depend on terrestrial and aquatic ecosystems water can alter natural flows, cause irrevers- for income generation. Because of social and ible damage, and affect downstream uses, economic disadvantages, the poor often live in triggering a sequence of negative environmen- fringe areas, where access to potable supplies tal impacts. Water pollution from point and and adequate sanitation facilities is limited and nonpoint sources diminishes use of water for where higher mortality, morbidity, and disease other uses, increases cost of treatment, and rates prevail. Or they live in highly vulnerable harms ecosystem functions and people’s areas (floodplains and degraded watersheds), health. Inadequate access to sanitation facili- where the buffering capacity to natural and ties is contributing to waterborne diseases and humanmade shocks and disasters is dimin- illness. Destructive land use (poor cultivation ished. Also, poor communities relying on methods, deforestation, and overgrazing) is flood recession agriculture, dry-season live- reducing storage; altering runoff, infiltration, stock water supplies, or fishing are often left and available water supply; increasing soil out when major upstream water allocation or erosion, sedimentation of reservoirs, and urban/industrial development decisions are irrigation canals; and damaging water supply made without adequate consideration of infrastructure. Poor drainage is causing downstream uses. waterlogging and salinity problems, and, in a few cases, concentrating naturally occurring Key Challenges. To address the emerging chemicals to toxic levels. Introduction of alien threats, many challenges need to be consid- and exotic species is devastating biodiversity, ered. Fundamental policy, legal, and institu- and invasive weeds are causing water losses tional reforms are needed to institutionalize and quality deterioration, serious operational the principles of sound water resources and problems and costly maintenance, and environmental management and to promote damage to ecosystems. their effective implementation. Economic

2 Environment Strategy Papers Executive Summary analysis of natural resources degradation ment. It called for treating water as a scarce (including valuation of resource degradation) resource with an economic value and pro- and management options needs to be inte- moted cost-effective interventions for linking grated fully in the project cost benefit analyses. land use management as an integral part of Halting degradation and loss of ecosystem sustainable water management, for addressing functions needs to be a priority in important quantity and quality concerns in an integrated watersheds, recharge areas, and wetlands. manner, for using river basins as planning and Concerted effort is needed to address the management units, and for addressing water in deterioration of freshwater lakes and reser- an integrated manner. It supported participa- voirs. The promotion of drainage and sanita- tory management and focused on actions that tion projects needs to be examined carefully. improve the lives of the poor. Decentraliza- The technical, social, and institutional dimen- tion, participation, and sustainability have sions related to the reuse of wastewater become important guideposts for project and effluents need careful study. policy design in the water sector. In addition, with the support of the Global Environment Demand management should be a central Facility, the World Bank has significantly element of water sector investments concern- expanded activities dealing with ecological ing consumptive uses of water. To meet aspects of water resources management. growing water demand for domestic, industrial, irrigation, and energy supply, future Increased Role of the Private Sector and development of water resources will require Emerging Global Trends. Governments and additional storage and regulation facilities the public sector are increasingly being (new dams, for example) and interbasin water transformed from owners and managers of transfers. Such investments, if warranted, must water infrastructure and sole provider of water integrate social and environmental assess- services to facilitators, enablers, and regula- ments early in the planning process (as part of tors. As part of a growing trend, community- options assessment), and their outcomes based organizations, user groups, and autono- should effectively inform the project planning mous water utilities are assuming a greater and management decisionmaking. The direct role in management, operation, and management of transboundary waters needs to maintenance of these facilities. The private be based on frameworks promoting the sector is playing a larger role, particularly in sharing of benefits and regional cooperation. the case of management of water utilities. It is Addressing the implications of climate change essential, however, to ensure that such reforms on water resources management will require are complemented by an effective regulatory better preparedness, including adaptive framework for managing water resources and planning and investment, mitigation, and local safeguarding sustainability of the resource predictive and forecasting capability. base. Globalization, new information technologies, and new interdisciplinary ap- Policy Shift. The 1993 Water Resources proaches provide opportunities to improve the Management Policy Paper of the World Bank management of water resources, but such promoted a major shift from a sectoral to a interventions will be sustainable only if comprehensive approach to water manage- appropriate water resources management

Hirji and Ibrekk 3 Environmental and Water Resources Management regulatory frameworks, economic regulators to nicate this message and mobilize support for protect the public and the private sector actions that call for the protection of natural against monopolistic behavior and other assets represents a major failure of the environ- factors, and safety nets to protect the poor are mental community. in place. Otherwise, the risks of creating unnecessary or marginal investments and Safeguards. Environmental assessments (EAs) increasing debt burden will be magnified. have proved to be a useful tool for screening and predicting potential impacts, but capacity Lessons Learned. Box A presents an indicative constraints and lack of commitment and political will hinder the effective integration of assessment of World Bank–funded water environmental issues in water projects. As a projects against the three environmental result, often EAs have limited impact on principles in the Water Resources Manage- project planning and decisionmaking, and ment Policy Paper: safeguarding, demand especially on the analysis of alternatives. management, and protecting biodiversity/ environmental flow. The assessment reflects Demand Management. The Bank’s Water the extent to which the principles have been Resources Policy gives a high priority to institutionalized in Bank policies and proce- encouraging and assisting countries in imple- dures and integrated in water resources menting demand management. Failure to use management operations. (The assessment is economic instruments to manage water based on a “traffic light” characterization demand and to guide allocation often result in consistent with the approach used in the inefficiencies. The strategy stresses the impor- Water Resources Sector Strategy: a “green” tance of using decentralized implementation light implies that the principle has been fully processes and market forces to guide the incorporated into water projects; a “yellow” appropriate mix of public- and private-sector light, that some elements of the principle are provision of water services. Given that there present but that there are also many shortcom- are many environmental externalities associ- ings; a “red” light, that there is little progress.) ated with water development, as well as supply monopolies, the comprehensive Although environmentally sustainable use of framework includes development of a sound water is a fundamental element of sound water regulatory environment and an incentive- resources management, the integration of based management by including concepts of environmental quality objectives remains a charges, resource rights, pollution permits, and major challenge in water policy reform and catchment levies. Thus the framework is water resources project planning, develop- intended to incorporate cross-sectoral and ecosystem interdependencies, along with ment, and management decisionmaking. It socioeconomic concerns and institutions, and remains the most poorly understood topic and to enable participation of all stakeholders in is still considered an obstacle to development. the formulation of policies, regulations, and The value of natural assets such as watersheds, public investment plans for water. recharge areas, and wetlands as storage facilities and as fundamental elements of the Protection of Biodiversity and Environmental hydrological cycle and ecological systems is Flows. Few water policies have recognized not fully appreciated. The inability to commu- and given priority to environmental flow

4 Environment Strategy Papers Executive Summary requirements as important components of mainstreaming environmental quality objec- water use or incorporated them in allocation tives into water resources planning, develop- procedures. Water allocation requirements for ment, and management programs and invest- environmental uses, including the protection ments. The main elements of the framework of biodiversity, should receive increased are: priority, given increased demand for water and Framework for Environmentally Sustainable frequent problems with degradation of water Water Resources Development—adopting a quality. The Bank should support development framework of objectives and criteria for and implementation of water policies that environmentally sustainable water resources include explicit environmental quality criteria management to mainstream integration of that define and set priorities for environmental environmental quality objectives into water uses of water, and that provide for a structured resources planning, development, and man- approach to address them in planning and agement decisionmaking. water allocation decisionmaking. A Comprehensive Approach to Water Re- Strategic Framework for Action. The Strategic sources Management—considering water as a Framework for Action provides a basis for scarce resource with a scarcity value, treating achieving the broad objective of systematically water as a unitary resource that needs to be

BOX A Overall assessment Effective (Please see a color version of this figure in Annex C, page 57.) Institutionalized integrationEffective Institutionalized integration Safeguard principles Effective ! All projects subject to EA Institutionalized integration ! EA is an effective instrument for mainstreaming ! Adequate EA capacity in the water sector Yellow Yellow/Red ! Adequate consultations during the EA process Yellow Yellow/Red ! Sectoral environmental assessments Yellow Yellow/Red Demand management principles ! Demand management included in most WSS projects Yellow Yellow ! Wastewater reuse increasingly being considered Yellow Yellow ! Increased focus on sanitation ! Increased focus on drainage Yellow Yellow ! Use of water quality management strategies

Protection of biodiversity/environmental flow principles ! Regularly addressed in Bank-funded projects Yellow/Red Yellow/Red ! Recognized as a concern in many projects Yellow/Red Yellow/Red ! Water policies include explicit environmental Yellow/Red Yellow/Red criteria Legend: Red = Little progress. Green = The principle has been fully incorporated in water projects. Yellow = Some elements of the principle are present, but there are many shortcomings.

Hirji and Ibrekk 5 Environmental and Water Resources Management addressed in a comprehensive manner using concerns more fully into management strate- hydrologic basis (linking upstream and gies and programs through both preventive downstream considerations of all sectoral and remedial actions to address control of uses), supporting a shift from remedial to point and nonpoint source pollution of surface preventive actions, and improving the integra- and subsurface waters. tion of environmental quality objectives in regional and national water resources manage- Climate Change Adaptation and Mitigation— ment strategies and sectoral activities. supporting strategies for improving preparedness for the impacts of climate change in water Mainstream Environmental Issues in Water resources planning and management Resources Planning and Management decisionmaking, including promotion of Decisionmaking—promoting systematic and adaptive planning and investment, strengthen- timely integration of environmental quality ing predictive and forecasting capability, and and biodiversity conservation objectives in encouraging development of strategic drought water resources policy reforms, projects, and management strategies. investment actions and in river basin planning, and changing the safeguard policy orientation Way Forward. Effective implementation of the from a “do no harm” to “promote improved Strategic Framework for Action will require development.” This also calls for recognizing undertaking a set of complementary measures, biodiversity as a global public good and including: integrating its tradeoff in water resources ! Strengthening environmental management planning and management decisionmaking. capacity ! Use of interdisciplinary teams Environmental Uses of Water—increasing ! Facilitating knowledge sharing attention to downstream impacts of water ! Improving analytical work projects; promoting the allocation of water ! Strengthening strategic partnerships. rights for ecological uses of water and con- ducting environmental flow assessments as Accomplishing these objectives will require a integral parts of water resources management, long-term commitment by the Bank and planning, and investment studies (including allocation of incremental resources for pro- environmental assessments). moting policy dialogue, cooperatively undertaking sector studies, and preparing and Water Quality and Pollution Management— supervising lending operations and the supporting actions to integrate water quality provision of non-lending services.

6 Environment Strategy Papers Chapter 1 Water-Environment-Poverty Linkages

BACKGROUND serve important ecological and hydrological functions and that people, especially the poor, System in Crisis. The water resources often depend on directly. Hence, it is essential system—consisting of water (in rivers, to maintain the stability, health, and productiv- aquifers, and lakes) and water- and A ity of the water resources system. land-based ecosystems (watersheds, wetlands, and floodplains)—is essential for the sustenance The World Water Vision, issued in March and health of all species. Figure 1 highlights the 2000, highlighted two key water management multiple uses, values, services, and functions of water and of land- FIGURE 1. Water and water-based ecosystem values and water-based ecosystems. As a source of natural capital, the water resources system provides fundamen- WATER AND WATER-BASED ECOSYSTEMS tal input for a whole array of human DIRECT VALUES INDIRECT VALUES OPTION VALUES NON-USE VALUES needs and economic Consumptive Ecosystem Premium Intrinsic development and non- functions and placed on significance in consumptive services such as: possible future terms of: activities. As a sink, use of resources Water quality uses and Cultural value it is used as a Domestic use Water flow applications, Aesthetic value including: Industrial input Water storage Heritage value receptor for waste- Water purification Pharmaceutical Bequest value Irrigating crops ... etc. ... water discharges Watering stock Water recharge Agricultural Industrial Hydro-power Flood control Leisure from point and Wild plants Storm protection Nutrient retention Water use nonpoint sources of Wild animals ... etc. ... Fishing Micro-climate pollution. Fresh Transport Shore stabilization ...... Recreation etc. water sustains the ... etc. ... integrity of the ecosystems that Source: Turpie and Van Zyl 2001.

7 Environmental and Water Resources Management achievements of the past decades that have water supplies, and even larger numbers lack significantly improved the welfare of people. adequate sanitation facilities. Traditional The green revolution, facilitated by irrigation problems concerning the provision of water expansion, use of high-yielding crop varieties, supply and sanitation services in urban and application of fertilizers and pesticides, and rural areas will require concerted efforts: more improved management practices, resulted in a than a billion people do not have access to huge increase in food production and cut food potable water supply, and 3 billion do not grain prices in half. Access to potable drinking have adequate sanitation (World Water water has increased for 2.4 billion people, and Council 2000).1 With rapidly increasing 600 million more people have access to population, the problems of food security and sanitation since 1980 (World Water Council growing demand for water to generate electric- 2000). These achievements have contributed ity and support industrial development persist. enormously to a lessening of poverty by These emerging problems arise not only from countering the vulnerability to droughts, increased demand for water, but also from improving standards of living and health, and degradation of water resources and aquatic fostering economic development. ecosystems, which in part are a result of policies and actions to address the traditional Despite these achievements, major challenges problems.2 remain. There is a persistent and systemic water crisis in many countries. Water is a Environmental Degradation Threatens scarce resources in many countries (see Figure Functioning of the Resource Base. The rising 2), and competition over its use is causing demand for and use of water, combined with severe conflicts between and among user unwise land and water use practices, pose a groups. Droughts often exacerbate water use serious threat to people’s health and food conflicts in water-stressed areas, and they security because they threaten present and highlight weaknesses in water management future productivity and functioning of water systems. Large numbers of people remain resource systems. Economic and population without access to safe and reliable drinking growth not only causes an increase in aggre- gate water use but also produces wide-ranging FIGURE 2. Water-stressed and water-scarce countries: 2025 projections and often negative effects on other vital (Please see a full-sized, color version elements of the water resource system. These of this figure in Annex C, page 58.) effects include, for example, degraded soils and land, deforested and degraded watersheds that result in damaging changes in the water cycle (including drying of rivers), increased wastewater discharges that affect downstream uses of water and the coastal and marine resources, and encroachment and interference in the normal functioning of wetlands. Groundwater contamination by toxic sub- Water Water stances reduces the use of water for drinking Stress Scarcity purpose and increases public health risks. Source: Engelman and LeRoy 1993.

8 Environment Strategy Papers Water-Environment-Poverty Linkages

The situation in the Aral Sea demonstrates to address the effects. Compounding the crisis how these effects can take place at a basin or are difficulties in jointly managing the numer- regional scale, and the broad nature of the ous rivers, lakes, and aquifers shared by more economic and social impacts. The desiccation than one nation, given their complex water of the Aral Sea due to heavy withdrawals for rights arrangements and treaties. irrigation has resulted in the degradation of delta ecosystems, the destruction of the open Disproportionate Impacts on the Poor. The water ecosystem, loss of the fishing industry, majority of the poor live in rural areas and creation of salt winds toxic to humans and depend directly or indirectly on terrestrial and deleterious to crops, a depressed economy, aquatic (including coastal and marine) ecosys- and the creation of environmental refugees tems and biodiversity to support their liveli- (World Bank 1993). Annex A provides a hoods. Natural resource products such as summary of water-related environmental firewood and construction materials, along problems in each Region based on regional with non-timber forest products such as environmental strategies. medicinal plants, water, and fish, amount to a large proportion of the household consump- Factors Precipitating the Emerging Crisis. The tion. And their use, collection, and sale emerging “water crisis” in many parts of the contribute significantly to household incomes. world is a result of unsustainable use and management of water resources due to poor The sustainability of traditional agricultural social, environmental, or economic policies systems of the rural poor depends on natural and actions. The crisis has been precipitated resources, which provide fodder, compost, by the combined effects of uncertain water and nutrients. Because of social and economic supply due to climate variability and climate disadvantages, the poor reside in poorly change, declining availability of fresh water serviced and fringe areas such as rural areas, per capita as a result of demands of rapidly slums, and peri-urban squatter settlements, or growing populations, and increasing degrada- in vulnerable areas such as degraded lands tion of surface and groundwater resources due and floodplains, where there is limited buffer- to many types of unsustainable water and land ing capacity to withstand natural or use practices. Destructive land and water use humanmade disasters such as floods, drought, activities undermine the integrity of aquatic or major changes in hydrology due to the ecosystems and threaten both the natural abstraction or regulation of rivers. capital and invested capital and the sustainability of the water resources system. In contrast, the social and economic impact of Overabstraction of surface water and some environmental problems, such as overpumping of groundwater, along with saltwater intrusion or land subsidence induced uncontrolled discharges of municipal, indus- by groundwater pumping or the loss of trial, and agricultural waste, impair water biodiversity values as a result of encroach- quality and impose considerable costs on ment, may be felt across the whole spectrum downstream users. Often, more than one of the society. In reality, the brunt of the factor contributes to a single problem, requir- economic burden falls disproportionately on ing a set of policy decisions and interventions poor, disadvantaged communities with little

Hirji and Ibrekk 9 Environmental and Water Resources Management voice. For example, water allocation decisions useful in assessing where present policies and for hydropower, development of irrigation, or plans may lead or are leading, or in deciding urban/industrial uses are often made without among alternatives strategies. Box 1 outlines adequate consideration of downstream uses one possible framework for defining and needs, and downstream communities who sustainability of the water resource system in rely on flood recession agriculture and dry- operational terms. Note how this framework season water supplies for livestock (such as in has multiple dimensions: it concerns water for many parts of Sub-Saharan Africa) lose access both human needs and ecological functions, to resources, in large part, because their water quality and quantity, the integrity of the interests are either not represented in the hydrologic system and protection of the decisionmaking process or are barely consid- resource, availability and accessibility of ered. information, and the participation of stakeholders in development and management. This framework has the same character as SUSTAINABLE WATER RESOURCES integrated water management in the sense that DEVELOPMENT AND MANAGEMENT consideration of just a single dimension (user, Sustainability is a complex concept with as use, characteristic) of the water system does many definitions as there are settings and not give an adequate framework for develop- advocates. Nevertheless, the lessons of water ment and management. development over the past decades demon- strate that ignoring this issue can lead to The elements outlined in Box 1 are commonly diminished welfare and lost opportunities. An found in new water sector policy statements important focus of the World Bank’s Water developed in recent years, reflecting the Resources Sector Strategy is the issue of widespread and common understanding of the sustainable water service delivery, including direction that future water management must the infrastructure vital to those services. Here take. It is proving much more difficult to we are concerned with the broader concept of translate these policy statements into strategies a sustainable use of the resource base, and the and action plans, in part because they fre- conditions or criteria that might be used to quently involve fundamental changes in assess whether a particular development path institutions, changes in behavior and mind-set, is leading toward a sustainable outcome. and the social mobilization, inclusion, and empowerment of water users who have been Sustainable water use can be defined as the excluded from water resource planning and use of water that supports the ability of human development. The Water Resources Sector society to endure and flourish into the indefi- Strategy devotes considerable attention to the nite future without undermining the integrity political economy of these change issues. of the hydrologic cycle or the ecological systems that depend on it. Sustainable use of Another reason for the difficulty in translating water resources is a key element of the policy into action is the lack of an institutional Convention of Biological Diversity. Any framework, and of the requisite capacity, to number of explicit goals and criteria could be plan and manage resources in a manner developed to express this concept and make it consistent with such a multidimensional,

10 Environment Strategy Papers Water-Environment-Poverty Linkages

BOX 1. monitoring systems for achieving sustainable Sustainable outcomes for water use outcomes, it is difficult in the best of circumstances to formulate such plans. ! A minimum water requirement is guaranteed to all humans (and realized) to maintain human health. POVERTY ALLEVIATION ! Sufficient water is guaranteed to restore and maintain the health, services, and functions Water and environment are linked to poverty of ecosystems. Specific amounts will vary alleviation in two important ways. First, depending on climatic and other conditions. strategies to reduce or alleviate poverty should Setting these amounts will require flexible not lead to further degradation of water and adaptive management. ! Data on water resources availability, use, and resources or ecological functions and services, quality are collected and accessible to all and second, more sustainable water use and stakeholders. improved environmental quality should ! Water quality is maintained to meet agreed contribute directly to reducing poverty. A standards. broad definition of poverty extends well ! Human actions in a basin do not impair the beyond income and consumption to include long-term renewability of freshwater stocks and flows. inequality, health, opportunity, livelihoods, ! Institutional mechanisms exist to resolve and vulnerability. Elements of a basic frame- conflicts over water. work for linking water, environment, and ! Water planning and decisionmaking are poverty are summarized in Table 1 and participatory, and all affected stakeholders elaborated on in Annex B. are represented.

Source: Gleick and others 1995. NOTES 1. In the East Asia and Pacific Region, some integrated framework. Planning and develop- 290 million people lack access to safe ment continue to lie mainly in the hands of water, of which about three-quarters live in narrow, sector-focused agencies that lack the rural areas; in addition, approximately 240 broader mandate, incentives, and experience million people in urban areas and 1,045 with comprehensive participatory planning million in rural areas lack access to sanita- processes. Lacking good indicators and tion. In Middle East and North Africa

TABLE 1. Linkages among water, environment, and poverty Dimensionsof poverty Examplesof water and environmental linkages Incomeand consumption Accessto water for productive use, accessto natural resources, sustainable growth Inequalityand equity Securetenure and access to natural resources, water rights and entitlements Sustainablelivelihoods Sustainableland and water use practices Health Water quality ,safe drinking water andsanitation, water bodies protected from vectorsand disease Securityand vulnerability Improveddisaster preparedness and response, water harvesting and conservation Inclusionand empowerment Participation;devolution of ownership, rights, and respo nsibilitiesto water users, communitygroups, basin organizations, local governments

Hirji and Ibrekk 11 Environmental and Water Resources Management

Region, 45 million people lack access to loads carried in surface waters), and industrial safe water and 85 million people (30 discharge and agricultural runoff (influencing percent of population) lack sanitation. In the chemical, biological, and physical Latin America and Caribbean Region 70–90 properties of water). percent of the urban population and 20–70 percent of the rural population have access The first-order environmental impacts to safe water. Similar variations can be related to water resources concern effects found in South Asia and in Africa (World on the quantity, timing, and quality of water Bank, 2000a). from direct use or management of surface and groundwater and from all sectors that 2. Water resources management activities use water or affect catchment waters. include investments for urban, rural, Hydrological and water quality changes and industrial, and agricultural water supply; other alterations may in turn cause second- sewage treatment; flood control; irrigation order impacts (such as on primary produc- and drainage; and hydropower and naviga- tivity) and third-order impacts (on the food tion projects. Other sectoral activities web), with consequences for downstream affecting catchment waters include forestry, aquatic ecosystems, including wetlands, mining, and construction (indirectly influenc- floodplains, estuaries, the marine environ- ing flow and infiltration regimes and sediment ment, and human settlements.

12 Environment Strategy Papers Chapter 2 Global Trends Relating to Water and Environmental Management

he World Bank’s work in the water and ency, to applying the “user pays” principle, and environment sectors is influenced and to creating a legal and regulatory framework for T shaped by the emerging trends in water rights and private-sector participation in thinking and discourse about the concepts, water service delivery. principles, and approaches that govern water resources management. Participation. The second major change is the shift from centralized technical water resources planning and management to the inclusion of THREE PROFOUND CHANGES all stakeholders in planning and management IN THINKING decisionmaking, implementation, and opera- Decentralization. Many countries are decen- tion of water infrastructure. This change tends tralizing political and economic to reshape objectives and priorities, and creates decisionmaking to subnational levels, providing opportunities for more sustainable and efficient opportunities for institutional change, increased water use. What applies at the local level democratization, more sharing of power over applies equally at the basin level, since all water development and allocation, and a users and stakeholders, sub-basins, and ecosys- greater voice for civil society. This on-going tems constitute the whole system. Moreover, process dramatically affects the traditional top- achieving sustainable water use in a basin down orientation of water service agencies and requires commitment to and ownership by all fundamentally changes the planning process. stakeholders of both the goals of sustainable Decentralization, however, must be matched water resources and the means to achieve by capacity building efforts to ensure that local them. This is more likely to be achieved if there levels can cope with an increasing responsibili- is an opportunity for informed and substantive ties and unequal power structures. Experience participation of stakeholders in indicates that countries with high levels of decisionmaking. economic and political freedom are more likely to undertake reforms in water management, Sustainability. Water development and use is particularly with respect to stakeholder partici- too important and too costly to be short-lived. pation, financial accountability, and transpar- Considerable resources invested in the water

13 Environmental and Water Resources Management sector are used inefficiently, and provisions for needs to be complemented by an effective operation and maintenance are not sufficient regulatory framework for managing water to maintain the condition of vital assets, resources. Privatization often is carried out in resulting in underuse and deteriorating conjunction with deregulation. While consid- performance. What has changed is the recog- erable information and experience has been nition that resource use and development generated on the process of privatization and should be sustainable, and that there is an the development of regulatory frameworks, the integrated, multidimensional outcome. The primary focus has been on economic and implications of unsustainable land and water financial regulation, with little attention on use practices (such as excessive water extrac- regulation of water resources. The contractual tion, single-purpose use, destructive land use, arrangements for private service providers urbanization, encroachment of wetlands, have brought into focus the need for an water pollution, and so on) are significant. effective framework for environmental regula- Such practices not only cause irreversible tion.3 degradation of the resource base and alter the hydrology (and therefore the available water supply), they also undermine investments in KEY THREATS water supply, irrigation, and hydropower The water sector is facing new threats that will infrastructure as well as inflict harm on have a bearing on the way water resources ecosystems and biodiversity. management problems are addressed in the future. Often, more than one threat is present CHANGING ROLE OF THE PUBLIC AND at the same time, magnifying the cumulative PRIVATE SECTOR impacts. Governments and the public sector are increasingly being transformed from owners Excessive Regulation, Abstraction, and and managers of water installations to facilita- Pumping. Water resources development for tors, enablers, and regulators. As part of a consumptive and nonconsumptive uses entails growing trend, community-based organiza- the regulation, storage, and abstraction of tions, user groups, and autonomous water surface waters and pumping of groundwater. utilities are assuming a greater role in manage- Excessive regulation alters the natural flow ment, operation, and maintenance of these regime. Overabstraction of water reduces the facilities. The private sector is playing a greater downstream flow and subsequently diminishes role, particularly in the case of management of the opportunity for other users to draw further water utilities. Nevertheless, the role of water without causing significant deterioration government agencies in protecting the long- of the water environment and riparian habi- term interest of all by acting as the custodians tats. Overpumping of groundwater may induce for—and champions of—the environmental saltwater intrusion and, in some cases, land and social dimensions of water management subsidence and property and infrastructure remains important at both the national and the damage. Without adequate considerations for local level. environmental flow requirements, dams for flood control, water supply, or hydropower An effective water sector, whether it is man- generation or excessive abstractions for aged by the public sector or the private sector,

14 Environment Strategy Papers Global Trends Relating to Water and Environmental Management irrigation or other consumptive purposes can and 14 years of age, who account for over 40 trigger a sequence of negative impacts. These percent of the Region’s population. Five of the include decreased downstream flows, reduced six leading causes of disease are waterborne— aquifer recharge rates, lowered water table, especially diarrheal diseases. Waterborne desiccation of wetlands, destruction of habi- diseases are second only to respiratory dis- tats, and seawater intrusion. Often, environ- eases in causing mortality and morbidity in the mental uses of water and water uses by 0-14 age group. Water pollution in the MENA downstream communities have either been Region is compounding the problem of water neglected altogether or addressed inad- scarcity and increasing the scale of water equately in planning and management crisis. decisionmaking. Addressing pollution of groundwater is a Pollution of Surface and Groundwater and daunting task. The main sources of groundwa- Degradation of Water Quality. Degradation of ter contamination in developing countries water quality affects ecosystem functions and include inadequate sanitation, industrial services, increases health risks (see Box 2), discharge and urban effluents, agriculture, and reduces options for use of the resource, and salinization. Remediation of groundwater is increases the cost of treating water. In the difficult, time-consuming, and expensive, and Middle East and North Africa (MENA) and the the results of cleanup efforts are uncertain (see South Asia regions, the impact of poor water Box 3). quality on public health is significant. The high rate of waterborne diseases in the MENA Urbanization. The urban population, which Region is second only to Sub-Saharan Africa. has more than tripled in the past 50 years, is The group most vulnerable to water-related projected to double in the next 25 years, and disease and illness is children between birth over 90 percent of the addition will be in

BOX 2. Water pollution and human health

Globally, water-related diseases and microbiological contamination from untreated or partially treated sewage remain the overwhelming human health issue (for both mortality and morbidity) in many parts of Africa, Latin America, and Asia. Although there is significant uncertainty associated with estimates of water-related disease, the annual toll is thought to be over 3 million deaths, most of whom are children.

Human activities can generate low concentrations of contaminants over a large area that flow diffusely into water bodies, presenting intractable management problems. Examples include runoff from transportation corridors, urban areas, agriculture, construction activities, forestry, mining operations, or atmospheric pollution. The World Health Organization has estimated that only 41 percent of the urban population in Latin America and the Caribbean has access to sewer systems. Over 90 percent of the collected wastewater is discharged directly to surface waters without any treatment. For example, sewage from Bogota, Colombia, is discharged in the Rio Bogota, creating enormous fecal coliform concentrations downstream. Farmers withdraw this water to irrigate market crops, potentially leading to consumer illness.

Hirji and Ibrekk 15 Environmental and Water Resources Management

BOX 3. wetlands has been lost. Of the more than Challenges for managing groundwater 3,500 species currently threatened worldwide, contamination 25 percent are fish and amphibians. Most of Because of geological variability, groundwater the loss of freshwater biodiversity originates contamination can remain undetected for a long from systemic failure to understand the time. This time lapse is exacerbated in develop- linkages between development activities and ing countries, where the extent and severity of their impact upon freshwater ecosystems, a groundwater contamination remain largely poor understanding of the intrinsic value of unknown for three reasons: biological species, and the difficult tradeoffs ! Lack of monitoring and surveillance programs associated with meeting local and national ! Time elapsed after polluting event due to needs versus the needs of the global commu- slow migration of contaminants and dispersal nity, especially when the cost of conservation in aquifer is not borne by the global community. Inte- ! Expense of monitoring, modeling, and grating operational measures for safeguarding remedying contamination. adequate levels of protection of endemic habitats also remains a major challenge. developing countries. Environmental services, institutions, and policies have failed to keep Destructive Land Use. Destructive land use pace with rapid urbanization. Provision of imposes a huge economic cost on water adequate water supply, sanitation, and waste supplies, land productivity, and water re- services is a major challenge. There is a need sources infrastructure. Poor cultivation prac- to develop appropriate water policies to tices, deforestation, and overgrazing can improve use efficiency, reduce waste, and deplete vegetative cover and topsoil, alter improve service and appropriate water tech- runoff and infiltration rates, reduce storage nologies to serve the growing urban popula- capacity, increase the frequency and intensity tion. The implications of changing land use of floods, and affect groundwater recharge. and encroachment on important recharge They also increase soil erosion and sediment areas and wetland systems also need to be transport and deposition. Sediment deposition addressed. reduces the economic life of storage structures, lowers conveyance capacities in irriga- Loss of Wetlands and Freshwater Biodiversity. tion canals and river channels, increases Globally, the use and importance of wetlands operation and maintenance costs, and raises and freshwater biodiversity is yet to be fully the cost of water treatment due to increased understood and appreciated. Policymakers and coagulants and flocculants required for water managers often still consider wetlands reducing high turbidity levels in treatment as wastelands and not as essential components plants. Excess sediments also wear down of the water resource system. Throughout the pumping equipment and turbines. Box 4 world, human use of water and bad planning describes the impact of poor land use on a have led to drier and polluted rivers, lakes, major water supply infrastructure. Often, it is and groundwater resources—with dramatic more cost-effective to promote sustainable effects on natural ecosystems. In the past land use and watershed management practices century, over 50 percent of the world’s than to restore degraded catchment, replace

16 Environment Strategy Papers Global Trends Relating to Water and Environmental Management water supplies, or institute higher levels of salinity, compounded by groundwater over- treatment.4 draft, dropping water tables, and seawater intrusion. Drainage, Salinity, and Toxicity. Poor drainage can shorten the economic life of irrigation Poor drainage may also induce leaching and investments due to declining land productiv- concentration of naturally occurring sub- ity. In poorly drained soils, when recharge stances. In California, large-scale application exceeds historic rates, water levels tend to rise, of irrigation water in part of the San Joaquin causing waterlogging and salinity buildup (see Valley, where the trace element selenium occurs naturally in the soil, has accelerated its Box 5). Irrigation schemes and leaking water leaching. The collection of drain water and conveyance facilities increase recharge to subsequent evaporation highly concentrated groundwater and may flood the root zone. this toxic element at the Kesterson National Irrigation canals, water and wastewater Wildlife Refuge ponds. Ingestion of drain pipelines, and agricultural drains serve as water by birds and other fauna resulted in recharge sources and may introduce contami- many deaths and species deformation— nants into the groundwater. High water tables amounting to a major disaster and an embar- increase vulnerability to damage from flooding rassment to the state. and reduce crop yields. Irrigation development in the Indus Basin in Pakistan illustrates Introduced Alien and Exotic Species. The classical cases of a range of groundwater- introduction of exotic species—whether related problems—waterlogging and soil intentional or otherwise—is believed to be the

BOX 4. Impact of poor land use on Mombasa water supply infrastructure Mombasa water demand far outstrips supply. This coastal city of Kenya experiences regular and severe water shortages. The primary source of supply is the Baricho intake on the Galana Sabaki River about 40 kilometers north of Malindi. It was constructed in 1981 (with a conventional water treatment plant) with a design capacity of supplying Mombasa and coastal areas with 60,000 cubic meters (m3) per day. During the short period of operations of this Bank-funded project, however, no more than 35,000 m3/ day was ever realized from the source. By 1986, serious siltation problems at the intake had resulted due to upstream catchment degradation on the Galana-Sabaki Rivers. High sediment load during the wet season elevated the raw water turbidity levels to 6,000 Nephelometric Turbidity Units (NTU). Dry season levels are 40-100 NTUs.

The heavy silt load created severe operational difficulties during the wet season and were very costly to mitigate. The intake facilities at Baricho had to be de-silted every day, dosage and volume of coagulants tripled from 4 to 12 tons/day, and pump and pump bearings wore down frequently due to the abrasive action of silt and sediments. During the wet season, pump bearings often had to be replaced every two weeks. Because of the excessive operation and maintenance as well as replacement costs, the surface intake facility at Baricho, including the treatment works, was abandoned after less than a decade of operation, representing a huge economic and financial cost primarily due to poor catchment management. The surface source was replaced with nine boreholes along the banks of the Sabaki River and a 5,000 m3 contact tank for chlorination. The boreholes provide about 55,000 m3/day, of which 45,000 m3 goes to Mombasa and 10,000 m3 to Malindi.

Hirji and Ibrekk 17 Environmental and Water Resources Management

BOX 5. Impacts of poor drainage Waterlogging. Some arid and semiarid regions have inadequate natural drainage, or nonfunctioning drains. In these areas, repeated irrigation and seepage from water conveyance facilities surpasses historic recharge rates, and causes water table rise. Flow patterns through subsurface strata may be altered, leading to migration of agrochemicals or soil leachate into adjacent, high-quality groundwater. In northwest India—Punjab, Haryana, Rajasthan, and Gujarat—water tables were typically 25 meters below land surface before crop irrigation began. The water table has risen 25–30 centimeters a year since the 1890s. By the 1920s, irrigation-induced waterlogging and salinity were observed, and by the 1950s this had become widespread in certain districts of the Punjab and Haryana. Crop yields declined, and farmers abandoned some areas.

Soil Salinization. Irrigation water contains dissolved minerals. Plants absorb the water through the roots and transpire, or the water evaporates through the soil surface, and mineral salts concentrate in the root zone. In arid regions, more irrigation water (and therefore salt) is applied to the land, and less rainfall is available to leach away accumulating salts. The naturally saline soils in many arid regions further exacerbate the problem. Excess salts require plants to expend more energy to acquire water from the soil and make the necessary biochemical adjustments to survive. Energy diverted from essential physiological processes may result in suppressed growth or in desiccation and wilting of the plant. The Food and Agriculture Organization estimates that 10–48 percent of irrigated lands are affected by salinity on a global basis. According to a survey by the Bank, in the San Lorenzo Project Irrigation and Land Settlement in Peru, 20 percent of the land was uncultivable at the time of evaluation. In the Rio Sinaloa Project in Mexico, 17 percent of the project area was abandoned. In both cases, inadequate drainage resulted in waterlogging, salinity accumulation in the soil, and diminished crop productivity. second greatest threat to global biodiversity Water managers have underestimated the after habitat loss (Shumway 1999). The economic loss associated with the prolifera- accidental introduction of alien species of tion of invasive weeds and plants. The world- fauna (such as the sea lamprey and zebra wide infestation of different kinds of invasive mussels in the Great Lakes of North America floating weeds, such as water hyacinth, fern, and Asiatic clams in the Central Valley Project and lettuce, severely degrades surface waters, in California) has caused severe degradation of causes losses in quantity and quality, and surface water bodies, harmed species inhabit- increases operations and maintenance cost of ing particular ecosystems, and affected aquatic various types of infrastructure facilities. Box 6 biodiversity. The introduction of Nile perch in provides examples of the severity of the Lake Victoria in the late 1950s, for example, operational problems caused by water hya- resulted in the extinction of 200 to 300 species cinth in many water subsectors. Introduced of haplochromines (cichlids), representing the weeds flourish under nutrient-rich conditions largest mass extinction of vertebrates world- (near municipal wastewater discharge and wide (Kaufman 1991). This has altered the runoff carrying fertilizers). Some weeds, food web so that biomass now accumulates at including the water hyacinth, have a doubling lower trophic levels, which might be contrib- time of about two weeks. Managing weeds uting to the anoxic conditions in the bottom of under such high (exponential) growth condi- the lake. tions is often a serious problem. Mats of

18 Environment Strategy Papers Global Trends Relating to Water and Environmental Management floating weeds reduce oxygen and light, water use. It will alter precipitation patterns, deplete plankton, and alter the food chain. the magnitude and timing of runoff, and the This can destroy native fish, aquatic plants, intensity and frequency of floods and and other wildlife. Balanced ecosystems that droughts. This is likely to lead to more extreme may have evolved over millions of years can cycles of floods and droughts, with concomi- be destroyed within years. Water-weed masses tant economic damage. Water levels in closed also harbor carriers of human and animal water bodies such as tropical lakes will be diseases and increase occurrences of malaria, impacted greatly. In addition, climate change bilharzia, river blindness, encephalitis, and will degrade water quality through higher schistosomiasis. Water managers are only now temperature and increased pollutant load from realizing the significance of the operations and runoff and overflows from waste facilities. maintenance costs of aquatic weed growth, Impacts on water resources will also result but have yet to fully realize the significant from rising sea levels (estimated to rise 3–35 economic consequences associated with the inches (0.09–0.88 meters) over the next physical loss of water quantity and quality century), adversely affecting freshwater (especially in water-scarce regions) and of supplies in coastal areas. For low-lying areas ecosystem services due to the proliferation of (such as Bangladesh) and small island states, in weed growth. particular, this is likely to be the most significant environmental concern of the century. Climate Change. The Intergovernmental Panel This introduces additional dimensions of on Climate Change (IPCC) has presented uncertainty and complexity in the domain of estimates of a 1.4 –5.8 degrees Celsius water resources management. It will affect the increase in global temperature due to green- economies of many single-purpose projects. house gases over the next century (IPCC Warmer temperatures will also result in 2001a). Global warming will have a differen- changes in water demand. Irrigation, the tial impact on available water resources and largest water user, is the most climate-sensitive

BOX 6. Problems caused by Water Hyacinth

! Hydroelectric power generation. Water hyacinth causes major operational problems at three Hydropower plants on the Awash River (Ethiopia), Chiplima hydropower plant (India), Owen Falls power plant (Uganda), the Kafue river Hydro scheme (Zambia), Hydro scheme at Bayano (Panama), and Brokoponto (Surinam). In all cases, physical barriers (intake screens) have failed to eliminate or reduce the problems, and the problems increase maintenance costs and down time. ! Irrigation and drainage. In Egypt, more than 3,000 kilometers of canals and drains are infested, increasing canal roughness and reducing hydraulic efficiency. Increased evapotranspiration is lowering flow rates by 45–60 percent. Major weed infestation occurs in the Itoikin Rice irrigation canals (Nigeria), and in irrigation canals, reservoirs, tanks, waterways, and lakes in India. ! Ports and waterways. At Port Bell (Uganda), continuous mechanical removal is needed to maintain clear passage for ships to dock. In Nigeria, water transport system disruptions have increased variable and fixed costs of commercial boat transportation, and led to fewer trips, reduced operating profits, and higher fares. (continued on next page)

Hirji and Ibrekk 19 Environmental and Water Resources Management

BOX 6. (continued) Problems caused by Water Hyacinth

! Urban water supply. Urban water supplies from Lake Victoria (Jinja, Uganda) and Lake Chivero (Harare, Zimbabwe) are subject to increased maintenance costs because of blocked intakes and high water treatment costs due to high organic matter and taste and odor problems. ! Industrial supply. In parts of the Vaal River system (South Africa), hyacinth infestation has increased water loss by 24–40 percent through evapotranspiration and reduced supply for mining companies and industries. ! River basin/environmental management. Lake Raw Pening (Philippines) is used extensively as an irrigation, hydroelectric, fishing, and recreational resource. Water hyacinth covers 60 percent of the lake area and poses a major constraint on the efficient use and management of the resource. Water hyacinth is a major constraint to the use of the Citarum river basin (Indonesia) as multipur- pose hydroelectric, fisheries, tourism, and drinking water supply source. It is considered a “supercritical” river basin due to the environmental degradation. ! Fisheries. Water hyacinth is serious problem for summer fishing in San Jacinto dam Bolivia and for artisanal fishing in Benin. It has resulted in 40–50 percent reduction in catches from the Niger river and Shire river (Malawi). In India’s Chilika Lake, hyacinth covers about 40 percent of the surface area and in Ooty Lake, about 40–60 percent of the area, affecting fisheries and recreation. ! Biodiversity/Ecosystem services. An environmental assessment of the Niger River delta (in 1995) rated water hyacinth as a high priority issue with major impacts on the ecosystem, related economic activities, and community livelihoods. In Thailand, the water hyacinth has contributed to a loss of up to 75 percent in aquatic biodiversity of the lower Chao Phraya River Basin.

Source: Joffe and Cooke 1997. use. Industrial and municipal demand as well multiple sectors that use water as well as the as instream water uses such as aquatic ecosys- sectors whose activities have an impact on tem maintenance, instream water quality, water resources (such as forestry, health, and hydroelectric power generation, navigation, environment). and recreation will also be affected. A wide range of policy tools are needed to complement traditional environmental regula- KEY CHALLENGES tory instruments; to promote greater participa- Policy and Institutional Challenges. Market tion, transparency, and accountability in the and policy failures and distortions in the planning and management decisionmaking Bank’s client countries hamper the integration process; to encourage greater environmental of environment in water projects. The public responsibility in the private sector; and to use sector has a key role to play in establishing market mechanisms. Countries need to policies, incentives, and an effective regulatory develop a capacity to introduce and enforce and institutional framework to encourage environmental policies, reform public sector sustainable use of resources, eliminate market management and institutions, and implement distortions, and create markets for environ- clear and consistent rules and guidelines for mental services. It has a central role in promot- assessing environmental impacts of developing a coordinated approach to managing the ment projects and programs. Without full-cost

20 Environment Strategy Papers Global Trends Relating to Water and Environmental Management pricing, the present vicious cycle of waste, ments need to be legally recognized, properly inefficiency, and lack of service for the poor defined, and accorded appropriate priority in will continue. Better understanding needs to water resources policies and legislation in be developed of the many components of order to incorporate this important use in water resources management (over and above overall water allocation decisionmaking. the cost of water supply) that need funding. These include administration, monitoring and Degraded Watersheds, Recharge Areas, enforcement of water rights, and measures for Wetlands, and Loss of Ecosystem Functions. protecting watershed and recharge areas, Watersheds, aquifers, and wetlands provide controlling pollution, protecting wetlands, and natural storage besides serving other functions. so on. Addressing all these challenges will Environmental degradation of water resources entail finding the political will to undertake exacts its own costs in human terms. De- policy, regulatory, and pricing reforms. graded watersheds and recharge areas result in reduced and unreliable water supply. Destabi- Excessive Regulation and Abstraction and lized wetlands result in uncertain food sup- Increased Water Use Conflicts. Water scarcity plies and altered hydrological and ecological has increased the competition among and functions. Declining productivity of commer- between extractive and consumptive uses of cial and subsistence fish, shellfish, or water- water and intensified conflicts between fowl populations carries economic costs and different users. In water-scarce basins, alloca- severely affects indigenous peoples and fishing tion decisions are often a zero sum game. The communities. Recreation and tourism may decision to regulate, store, or allocate water diminish. If wetlands are no longer available for one purpose affects its availability for other to provide storm-surge protection, local and purposes and diminishes the potential for downstream areas may sustain more frequent other users to abstract further water without and severe flood damage. Groundwater causing significant deterioration of the water recharge patterns may be altered, flooding or environment and riparian habitats. In many drying out food crops or contaminating water parts of the world, growing demands from supplies. To safeguard the productivity of cities and industries are competing with water resources, it is essential to protect demands for irrigation, hydropower is compet- watersheds, recharge areas, and ecosystems ing with irrigation, and hydropower and from irreversible degradation. irrigation are at odds with environmental uses. Water scarcity invariably has a significant Lakes and Reservoirs. Lakes and reservoirs are impact on the functioning of aquatic ecosys- critical elements of the earth’s freshwater tems, since environmental flow and quality are hydrological system, contain most of the often ill defined and accorded the lowest earth’s surface stores of liquid fresh water, and priority, relative to other consumptive and must be managed as part of a larger ecosystem nonconsumptive uses. As a result, they are rather than as independent units. Lakes and marginally integrated into the planning, reservoirs provide water for drinking, irriga- design, operation, and management tion, industrial processes, and power genera- decisionmaking processes of water sector tion. Increasingly, the ecological integrity of investments. Environmental flow require-

Hirji and Ibrekk 21 Environmental and Water Resources Management lakes and reservoirs has been threatened. irrigated lands. The need for complementary Recently, the global water community has not drainage projects has to be carefully examined paid adequate attention to the specific con- when supporting irrigation investments. In cerns and requirements of lake and reservoir addition, efforts need to be undertaken management. There is a need to initiate a systematically to support well-planned and program for developing lessons learned from ecologically sensitive drainage activities to lake management programs and for effective correct and/or mitigate drainage problems in sharing and dissemination of such information existing irrigation systems and to deal with to a broad community and to agencies respon- drainage issues associated with urban and sible for preparation of action plans (Ayers and industrial wastewaters in some locations. others 1996). Sanitation. An estimated one billion people Greater Attention to Economic Values. The around the world lack access to potable water Bank has made efforts to estimate the eco- supply and 2–2.5 billion people lack access to nomic costs of water quality degradation, but adequate sanitation facilities. Populations with accurate assessment has been hampered by poor access to adequate water supply and the lack of data. It is not obvious that the sanitation facilities face a very high risk of “pollute-now-clean-up-later” pathway is exposure to waterborne diseases and illnesses. inevitable, but the costs of protecting water Projections indicate that the mortality and systems, in terms of human and institutional morbidity rates among the 0–14 year olds in resources and financial investments, are very the MENA Region can be reduced by over high for many poorer countries. Present one-third by increasing the availability of approaches have tended to ignore the benefits of environmental management and economic potable drinking water supplies, and that cost of degradation of water resources and improved sanitation, particularly increased aquatic ecosystems and their accounting as household connection to sewers, could lower opportunity costs of damaging economic them a further 20 percent (World Bank 1994). activities and management approaches. Many Bank funding for sewerage and sanitation has important options and nonuse values are left been limited. To improve public health, a out of the economic analysis altogether. major shift in strategy is needed. The support Understanding the opportunity cost implica- for sanitation as a complementary activity to tions of water supply and allocation is central water supply investments needs to be carefully for making informed decisions on supply examined. development and allocation tradeoffs. Aquatic Weed Control. The proliferation of Drainage. Inadequate drainage in high water aquatic weeds due to a combination of table areas contributes to the loss of productiv- factors—intentional/accidental introduction ity of agricultural land or diminished crop and the existence of a nutrient-rich environ- productivity—both natural and invested ment that provides the conditions for growth— capital—due to stagnation of surface waters, is creating a serious operational problem as waterlogging, and salinization in many well as a maintenance problem due to the

22 Environment Strategy Papers Global Trends Relating to Water and Environmental Management physical obstruction to water flow at munici- views of parties with diverse perspectives on a pal water supply, hydropower and irrigation range of social, environmental, and political intakes, irrigation canals, navigation routes, choices that have been associated with major and fishing sites. Weed growth is also causing infrastructure development. The World severe losses due to evapo-transpiration and is Commission on Dams (WCD) was set up to affecting water quality due to the decomposi- review the development effectiveness of dams tion of highly organic waters. Although there and to develop internationally acceptable are several methods to control weed growth, criteria, guidelines, and standards for the an effective strategy requires an integrated development of dams. The WCD Final Report approach that involves physical, chemical, and proposes a new framework for decisionmaking biological control methods. for dam projects that emphasizes consideration for environmental and social issues and Reuse of Effluent. It is clear that reuse or more active involvement of stakeholders. (See recycling of lower-quality water, including Box 7.) treated effluents, will be an increasingly important component of overall water re- Interbasin Water Transfers. The increasing use sources management. The practice of using of interbasin water transfers to address local partially treated or diluted municipal wastewa- water deficits can be a solution or a threat. It ter for farm and nonfarm irrigation is growing can be a cooperative way to address water and likely to continue, particularly in water- supply needs in one region by transporting 5 scarce regions. Figure 3 shows the proportion abundant supply from another. The outcome of wastewater generated and reused in Israel, of such transfers hinges on careful planning. Morocco, Tunisia, and Jordan. Wastewater Large transfer projects in Central Asia were reuse potentially offers substantial benefits, but abandoned due to environmental implications also carries substantial risk. If adequate and changing political and economic condi- precautions are not taken, reuse can contami- tions in the region. The social, economic, nate the soil and groundwater with heavy environmental, and political implications of metals and cause infections from intestinal interbasin water transfer should be carefully 6 nematodes and bacteria, especially those that assessed. Given current pressures for water, cause cholera. A range of technical options is even with effective demand management and available, but there often remain a number of Figure 3. Wastewater generated and social, institutional, behavioral, or cost reused in selected countries obstacles to be overcome before reuse be- 400 comes widespread. The International Water 350 Wastewater generated Management Institute is carrying out research 300 Wastewater reused to identify conditions under which wastewater 250 can be used for irrigating and fertilizing crops meter/year 200 without putting people or the environment at cubic 150 risk. 100 Million cubic meter/year 50 0 Construction of Dams. Large dams have Israel Morocoo Tunisia Jordan become highly contested because of polarized Source: Saghir, Schiffler, and Woldu 2000.

Hirji and Ibrekk 23 Environmental and Water Resources Management conservation measures, interbasin water portions of countries sharing water resources, transfers may be necessary in some areas of it can also be a factor for channeling efforts the world for maintaining urban areas and toward integration and searching for joint supporting economic development. development opportunities.

Transboundary Water Management Issues. Climate Change. The greatest vulnerabilities Numerous river basins, groundwater aquifers, are likely to result in water resources systems and coastal and marine environments cross that are not managed (IPCC 2001b). Adaptive boundaries between as well as within coun- planning to integrate the likely impact of tries. The primary management challenges are climate change on the planning and design of allocation or sharing of water, pollution water resources projects will be essential, as control and management of water quality, retrofitting will be much more expensive. The navigation and flood control, and degradation integration of climate change considerations of freshwater, coastal, and marine ecosystems. needs to build on water resources manage- The concerns about environmental flow ment policy and institutional reforms address- requirements in transboundary water-sharing ing natural climate variability. It will be arrangements have rarely been addressed necessary to review engineering design adequately.7 The need for cooperative man- standards as they relate to the construction of agement of shared water resources will water supply and land drainage projects and to increase significantly with the demands from consider the anticipated sea level rise. There is expanding populations and economic growth. also a need to review the existing engineering While transboundary waters can be a factor design criteria and methodology. It will be intensifying conflict among nations and necessary to re-examine the operations of

BOX 7. World Commission on Dams: Priorities for sustaining rivers and livelihoods The WCD has suggested the following strategic priorities for sustaining rivers and livelihoods: ! A basinwide understanding of the ecosystem’s functions, values and requirements, and how community livelihoods depend on and influence them, is required before decisions on development options are made. ! Decisions value ecosystem, social and health issues as an integral part of project and river basin development, and avoidance of impacts is given priority, in accordance with a precautionary approach. ! A national policy is developed for maintaining selected rivers with high ecosystem functions and values in their natural state. When reviewing alternative locations for dams on undeveloped rivers, priority is given to locations on tributaries. ! Project options are selected that avoid significant impacts on threatened and endangered species. When impacts cannot be avoided, viable compensation measures are put in place that will result in a net gain for the species within the region. ! Large dams provide for releasing environmental flows to help maintain downstream ecosystem integrity and community livelihoods and are designed, modified and operated accordingly.

Source: World Commission on Dams 2000.

24 Environment Strategy Papers Global Trends Relating to Water and Environmental Management existing single-purpose storage facilities to Recent information technology (IT) advances, consider flood control and drought manage- development of computerized datasets and a ment as an additional objective. The predictive rapidly expanding skill base now provide the and forecasting capabilities at regional and opportunity to radically change the way national levels in vulnerable countries need to projects are designed, implemented, and be strengthened. monitored. The advent of IT helps stakeholders and managers to manage water resources more efficiently by providing real-time infor- NEW AND EMERGING OPPORTUNITIES mation on the state of the resource, new Globalization. In recent years, a quickly rising modeling and forecasting abilities, new spatial share of economic activity in the world is analysis tools such as geographic information taking place between people who live in systems, and greater information to stakehold- different countries. This growth in cross-border ers. Environment and water resources manage- economic activities takes various forms: ment can be improved by sharing knowledge international trade, increased market access to systematically to ensure that stakeholders who goods and services, foreign direct investments, need the information get it on time. and capital market flows. Global water and environmental management experiences could Skills Levels. The emerging water resources be shared and adopted to meet local needs. and environmental management challenges On the other hand, if this is done without are complex, multifaceted, and adequate considerations of local social, multidisciplinary. Addressing these effectively economic, and cultural conditions and requires that countries and development adequate regulatory provisions to safeguard institutions have the right skills mix. It will be the sustainability of resource use, the chances important for these agencies and the Bank to of creating unnecessary or marginal invest- recruit environment specialists with strong ments and an increased debt burden can be backgrounds in water resources or water magnified. One risk associated with a short- resources specialists with strong backgrounds term investment orientation in the water sector in environmental management. In addition, is the adoption of unsustainable practices that specialist skills in freshwater ecology, water can deplete as well as degrade the resource quality management (environmental engineer- base. ing), and environmental economics also need to be strengthened. Specialists will also need Technology. Without major technological to be conversant with IT. innovation, there is little hope of bringing the water equation into balance (World Water Council 2000). Technological innovation is NOTES needed at the community level (innovative on- 3. An effective water resources management site sanitation technologies, for example), at regulatory framework serves the interest of the basin level (such as use of decision support the public or private supplier of water, the system for addressing multiple objectives such public (also the consumer), and other as flood control and hydro power generation), sectoral users (such as agriculture, energy, and at the high-end utility level (for instance, and mining). The supplier requires a secure, use of membrane filters in water treatment). reliable, and protected source of water

Hirji and Ibrekk 25 Environmental and Water Resources Management

supply, which requires regulations and transfer project exporting water from the investment in watershed protection, water-rich highlands in Lesotho to the pollution control, administration, monitor- water-deficit industrial hub of South Africa. ing, and enforcement of water rights (typical 6. Associated with interbasin transfers are responsibilities related to resource manage- environmental impacts that result in three ment). The interests of the other users and distinct zones: the exporting area, the the consumers also extends to ensuring that importing area, and the path linking the two the supplier operates the water resources areas. The exporting area can experience system in a sustainable manner (for ex- reduced flows, changed seasonal hydrol- ample, pumps groundwater within an ogy, reduced dilution, and decreased water aquifer’s safe yield and does not overpump supply. Impacts in importing areas can in vulnerable areas such as coastal aquifers, include damage from inefficient use or meets downstream environmental flow overuse of water and scouring and erosion requirements and effluent discharge stan- in the receiving rivers. Impacts on the path dards, and encourages water conservation) linking the two areas usually result from the and does not create conflict with other storage and conveyance facilities (Hirji interests using the same water supply 1998). source. 7. The recent flood-related loss of lives in 4. Several cities in the United States (including Mozambique has highlighted the weak- Portland, OR, New York, NY, and Portland, nesses in the system. The Cabora Bassa and ME) found that $1invested in watershed Kariba dams are both being operated as protection could save $7.50–200 in new single-purpose reservoirs for the generation water treatment facilities (Reid 2001). of hydropower. No regular or seasonal 5. Interbasin water transfers form an important releases are made for environmental part of the Government of China’s strategy purposes. This has eliminated seasonal for addressing acute water shortages in the flooding and flood recession agriculture, northern China plain. In India, interbasin has reduced fisheries, and has encouraged transfers are part of water resources plan- residents to move into and live within the ning at the state and federal levels. The floodplains—increasing their risks. Lesotho Highlands Water Project is a major

26 Environment Strategy Papers Chapter 3 Global Lessons from Bank Experience

WHAT HAS THE BANK BEEN DOING? In addition, with the support of the Global Environment Facility (GEF), the World Bank has istorically, the World Bank has significantly expanded activities dealing with funded water sector investments to ecological aspects of water resources manage- H develop water services for a variety of ment. consumptive and nonconsumptive uses, with an emphasis on using water resources for social Water resources has been one of the most and economic development. In 1993, the Bank important areas of World Bank lending during issued a comprehensive statement—the Water the past three decades. Through its support for Resources Management Policy Paper—that sector work and investments in irrigation, marked a major shift in influencing investments hydropower, water supply, sanitation, and in the water sector. The policy promoted a flood control, the Bank has contributed to the comprehensive approach to water management development of many countries through the and called for dealing with the use and protec- provision of essential services to many commu- tion of water resources. Its key elements called nities. Yet, as pointed out by the Operations for: Evaluation Department (OED) (OED 2001),

! Addressing quantity and quality concerns in Bank-supported investments in some cases an integrated approach have encountered implementation, operational, ! Linking land use management as an integral and social problems. Underlying these prob- part of sustainable water management lems is a vicious cycle of poor-quality and ! Using river basins as planning and manage- unreliable services that result in consumers’ ment units unwillingness to pay, which in turn generates ! Recognizing water as a scarce resource with inadequate operating funds and a further an economic good and promotes cost deterioration in services. According to the effective interventions OED, the Bank and governments have not ! Supporting participatory approaches taken sufficient account of environmental ! Focusing on actions that improve the lives of concerns (Box 8) in the management of water people and the quality of their environment. resources.

27 Environmental and Water Resources Management

BOX 8. Key environmental findings of OED’s evaluation of the implementation of the Water Resources Management Policy of 1993 Environment is now the third largest category of water-related institutional support and investment in the Bank’s portfolio. It increased from 11 to 48 projects post-policy, and $3,261 million has been committed since 1993. Many national programs deal with enabling environmental management through legislation and regulation that includes water and institution building. Specific projects are concerned with pollution control, drainage, watershed management, and erosion prevention.

! Groundwater has been mismanaged in many countries and requires greater emphasis. Most of the world’s poor rely on groundwater for drinking, and as much as half of the most efficient irrigation that underpinned the green revolution came from groundwater. ! Investment can improve drainage, but sustainability is key. Drainage should be an integral part of irrigation investments. The effects of poor drainage spoil as much land as new irrigation creates. ! Successful watershed management requires participation and a long-term perspective. Interven- tions in watershed management provide an opportunity for community-based development. ! Compliance with safeguard policies should be strengthened and measures taken to have their use mainstreamed by borrowers.

Source: OED 2001.

LESSONS LEARNED The overall message is simple: environmen-

This paper uses three objectives defined in the tally sustainable use of water is a fundamental Water Resources Management Policy Paper to element of sound water resources manage- assess the Bank’s performance in integrating ment. It deals with not only the protection of environmental issues in water resources the water resource system (watersheds, management and to draw lessons. (See Box 9.) recharge areas, wetlands, floodplains, and

BOX 9. Environment and poverty alleviation objectives of the Water Resources Management Policy The environment and poverty alleviation objectives in the Water Resources Management Policy call for the following:

! More rigorous attention should be given to minimizing resettlement, maintaining biodiversity, and protecting ecosystems in the design and implementation of water projects. ! Water and energy supplies gained through conservation and improved efficiency can be used instead of developing new supplies to extend service to the poor and maintain water-dependent ecosystems. Low cost and environmentally benign methods of developing new supplies for agriculture, rural drinking water, and industry will be pursued. ! The water supply needs of rivers, wetlands, and fisheries will be considered in decisions concerning the operation of reservoirs and the allocation of water.

Source: World Bank 1993.

28 Environment Strategy Papers Global Lessons from Bank Experience coastal zones), but also the use of water within Environmental assessment (EA) has been a key sustainable limits. It also concerns the conser- instrument to help the World Bank and its vation of biodiversity. However, existing borrowers decide what actions need to be practice indicates that the integration of taken to ensure the environmental soundness environmental quality objectives in Bank and sustainability of a project. The World projects remains the weakest and most poorly Bank’s Water Resources Management Policy understood area of the water resources stresses the importance of compliance with the management policy and institutional reform Bank’s 10 environmental and social safeguard process. The value of natural assets such as policies (environmental assessment, forestry, watersheds, recharge areas, wetlands and indigenous peoples, involuntary resettlement, management of cultural property, natural floodplains as storage facilities and as central habitats, pest management, projects in dis- elements of the hydrological cycle and puted areas, projects in international waters, ecological systems is not fully appreciated. and safety of dams). The objective of these The inability to communicate this message and policies is to support informed decisionmaking mobilize support for actions that call for the and to ensure that World Bank–supported protection of natural assets represents a major operations do not cause adverse impacts—that failure of the environmental community. is, that they “do no harm.”

Mainstreaming and Safeguard Policies. Although EAs have helped improve project Mainstreaming the environment means design, the limited capacity of many borrow- achieving environmentally sustainable water ers to undertake these studies themselves has resources management by integrating environ- constrained the extent to which they are mental objectives into all aspects of economic “mainstreamed” into projects that are not and water sector policy, planning, and opera- supported by the World Bank or other interna- tions. The integration of environmental issues tional parties. Clients often have poor under- in Bank-supported water projects needs to standing of the rationale, objectives, and receive greater emphasis and move beyond a procedures of the safeguard policies, and they focus on compliance with safeguard policies. are not always convinced of the benefit. In some of the water projects reviewed, it was Compounding this problem is the general lack found that environmental issues were ad- of capacity and knowledge on integrated water dressed in a disjointed manner and that often resources management, which hinders the greater attention should be given to physical, effective integration of broader environment biological, and socioeconomic impacts in issues into water projects. downstream areas. In contrast, upstream environmental issues have begun to be Another challenge concerns how to use EAs as addressed more systematically. Overall, it can a tool for effectively integrating the environ- be concluded that greater emphasis should be ment into project planning and decision- given to improving the mainstreaming of making. Although EAs have become important environment in Bank-supported water projects, and necessary tools for screening and predict- which would foster the conservation and ing the environmental impacts of projects, restoration of freshwater ecosystems. they are not sufficiently implemented by

Hirji and Ibrekk 29 Environmental and Water Resources Management countries and are often not complemented and tools for integrating environmental with effective national policies. Adoption of considerations into upstream policy work will EA policies has increased awareness about the need to receive increased attention to comple- impacts of different investments and development the traditional role of safeguards. To ment activities, but experience has indicated overcome some of the methodological limita- that sometimes they are prepared too late in tions associated with project-specific EAs, the project cycle to influence decisionmaking sectoral environmental assessments (SEAs) adequately and that the mitigation and moni- have been introduced and are used to facilitate toring plans developed on the basis of these decisionmaking in sector investment pro- studies are not always implemented effec- grams. SEAs take the concept of project-level tively. Thus their influence on actual project impact assessment and move it up into the decisionmaking is limited, and often they only initial phases of planning and assessment of legitimate decisions that have already been alternatives (options). Box 11 provides an made (Hirji and Ortolano 1991). Box 10 example of how this concept is broadly describes factors that can enhance the role of applied. EAs in project decisionmaking. Demand Management. The Bank’s Water Broad macroeconomic and sector policies Resources Policy gives a high priority to may have much more significant and lasting encouraging and assisting countries to imple- environmental impacts than individual ment demand management. Failures to use projects. As the Bank’s focus is shifting toward prices and other instruments to manage water programmatic policy-based lending, the demand and to guide allocation result in understanding of policy-environment linkages inefficiencies. The strategy stresses the impor-

BOX 10. Key factors to enhance the role of environmental assessments on project decisionmaking The influence of EA on project decisionmaking can be enhanced when:

! The environmental assessment process is started at the earliest stage of the evaluation of a proposed development program or project ! The scope of the study provides for broad coverage of the major potential issues and places them in a broader development context ! The analysis of alternatives is undertaken at an early stage and includes evaluation of development, site, and technical alternatives; ! The economic value of resource degradation is incorporated in the project cost-benefit analysis and decisionmaking ! The methods used to predict and forecast the impacts are well selected ! The study is made available in a timely manner and used effectively by decisionmakers and the public in their consideration of the proposed project; ! The mitigation and monitoring plan are realistically designed and can be implemented under local conditions ! There are arrangements in place to oversee environmental aspects of project implementation.

30 Environment Strategy Papers Global Lessons from Bank Experience

BOX 11. Integrating environmental and social considerations into power sector planning in Nepal Following the decision not to proceed with the Arun 3 hydropower project in 1995, the World Bank helped the Government of Nepal identify alternative ways to meet Nepal’s short- and medium-term power demands. The government agreed to follow an approach for expanding power generation capacity that integrated economic, technical, financial, environmental, and social considerations. In the beginning of 1996, Nepal’s Electricity Authority, supported by an interagency steering group, set out a screening and ranking process of hydropower sites in the 10–300 megawatt capacity range, based on:

! An update of the nationwide inventory of sites suitable for medium-scale hydropower projects ! A two-stage review of the techno-economic and environmental social parameters of potential projects and sites, and recalculation of parameters on a consistent basis ! Use of techno-economic and environmental-social screening and ranking criteria developed through a consensus-reaching process ! Provision of open consultation and information sharing with government stakeholders, the professional community, nongovernmental organizations, and the general public on each step in the process.

The exercise was completed in early 1997 as a basic step for selecting 7 out of 138 medium hydro- project sites for further feasibility planning and detailed environmental assessments.

Source: Ministry of Population and Environment and Ministry of Water Resources 1997. tance of using decentralized implementation ment includes educational, technical, and processes and market forces to guide the administrative programs. Numerous examples appropriate mix of public- and private-sector exist of how these are used in combination provision of water services. Given that there with price incentives to conserve water and are many environmental externalities associ- thus limit the need for new supplies. However, ated with water development, as well as there is still scope to expand the number of supply monopolies, the comprehensive management options to be considered. For framework includes development of a sound example, managers can address the possible regulatory environment. Thus the framework is reduction in demand and opportunities for intended to incorporate cross-sectoral and augmenting local supply due to a shift from ecosystem interdependencies, along with agriculture to urban use, technological socioeconomic concerns and institutions, and changes for improving use efficiency (such as to enable participation of all stakeholders in sprinkler or drip irrigation), use of other than the formulation of policies, regulations, and freshwater sources (for example, treated public investment plans for water. brackish water using desalination), and importation of water through interbasin Demand management is now part of the water transfers or use of alternative conveyance supply and sanitation policy, and most Bank technologies. Available demand management projects on this emphasize some elements of and supply augmentation options highlight demand management. Besides price-based different perceptions about water scarcity incentives to conserve water, demand manage- among different sectors (such as those be-

Hirji and Ibrekk 31 Environmental and Water Resources Management tween agriculture, urban, industrial, and selection on wastewater characteristics and on environmental uses). the treatment objectives as translated into desired effluent quality can be found in Bank- Water Quality and Pollution Management. supported environment projects in China. The concept of a comprehensive approach to Where the assimilative capacity of receiving water quality and pollution management has waters is considered adequate, only primary not been widely introduced in Bank-funded treatment is proposed, while in cases where projects. Infrastructure projects have either the assimilative capacity is exceeded, tertiary addressed water quality as standards for treatment is provided. The existing and drinking water quality or included improve- expected usage of the receiving waters is used ment of water quality or reduction of water to determine the required level of treatment. pollution as a long-term objective. There are The control of groundwater pollution has not significant differences in the Bank’s approach yet received serious attention. to water quality management among regions and countries. In middle-income countries, the Water pollution from agricultural sources is focus is on combating water pollution and now starting to be addressed with a series of improving water quality. Key objectives are model projects in the Europe and Central Asia improving human health conditions by Region. This is important since major prob- improving the level of water supply service lems exist with the management of livestock and providing adequate sanitation and treat- wastes and since the consumption of fertilizers ment facilities, with some regard to the quality in some developing countries is high. In some of the receiving waters. In low-income coun- cases, the pollution abatement expected when tries, the primary focus is on basic sanitation measures were targeted at point sources only and water supply services, with little regard to has not occurred. An interesting example of a the quality of receiving waters. The MENA new approach is the joint effort within the Region recently launched a major water framework of the Baltic Sea and Black Sea/ quality initiative within the framework of the Danube River cooperation projects targeting Mediterranean Environmental Technical nonpoint pollution. (See Box 12.) Assistance Program, and the East Asia and Pacific Region has prepared a technical report Irrigation and Drainage. Lack of adequate on water quality modeling. drainage, poor operation and maintenance of irrigation schemes, and inefficient water Comprehensive assessment of pollution applications at the farm level have contributed sources to determine a cost-effective abate- to surface water stagnation, waterlogging, and ment strategy has been performed in only a salinization of many irrigated lands and low- few projects. While regional water quality lying areas. Experience to date suggests that issues have been examined for a number of while some of these conditions are well major drainage basins, such as the Aral Sea, understood and are being addressed in a few Baltic Sea, Black Sea, and Danube River, few projects, the requisite capacity for promoting projects currently address all sources of water environmentally sustainable irrigation is poor. pollution in a comprehensive manner. Interest- Drainage has been neglected in many Bank- ing attempts at basing treatment technology financed projects, and there is considerable

32 Environment Strategy Papers Global Lessons from Bank Experience

BOX 12. Strategic Partnership for Nutrient Reduction in the Black Sea/Danube Basins Eutrophication is the most serious medium- to long-term environmental problem in the Black Sea, caused by nutrients—primarily of agricultural origin—carried by tributary rivers. Because of strong divisions between sectors involved in competitive agricultural production and environmental protection, as well as limited public awareness of the long-term dangers of the problem, it is difficult to implement long-term policies to address this issue. A model project is being implemented in Georgia as an initial intervention in this area.

The World Bank and GEF are supporting The Strategic Partnership for Nutrient Reduction in the Black Sea/Danube Basins. GEF will provide $70 million in grant financing over six years to cover the incremental costs of obtaining global benefits for investments, in conjunction with $210 million mobilized by the Bank with other local, bilateral, and European Union financing. The funds under this “umbrella investment program” would be used for investments in wetland restoration, agricultural nonpoint source pollution, and municipal and small industrial wastewater treatment.

Projects are currently under preparation in Russia to address municipal pollution, in Romania for nonpoint source pollution from agriculture, and in Bulgaria for the demonstration use of wetlands as a nutrient sink. These projects complement the activities in the Baltic Sea basin, including the ongoing Rural Environment Management Project in Poland and the nutrient management activities of the Baltic Sea Regional Project.

Source: World Bank 2000c. scope for demand management within the release from the dam, which does not com- irrigation sector. pletely reflect the full range of ecological and local use issues that should be considered. Environmental Flow Requirements and Protection of Biodiversity. Both within the World Bank-supported projects are starting to Bank and in client countries, greater concern address environmental flow requirements in a should be given to the management of water systematic manner. Box 13 highlights the resources within the framework of their Bank-supported Environmental Flow Assess- sustainable or assimilative capacity. Few water ment (EFA) for the Lesotho Highlands Water policies have recognized and given priority to Project. The EFA study adopted a sophisticated environmental flow requirements as important instream-flow methodology, which integrates components of water use or incorporated them biophysical considerations with social and in the water allocation procedures. Typically economic considerations. It is being comple- the management approach to protecting river mented by an overall economic assessment of ecosystems emphasizes only one issue of increasing downstream releases. Preliminary water quantity—minimum flow—without adequate consideration of biodiversity. In the findings from the EFA study have influenced case of construction of impoundments for the design of the Mohale Dam, and final hydropower, irrigation, or water supply findings in conjunction with the economic development, for example, the usual approach assessment are likely to result in a variety of has been to mandate a certain minimum mitigation measures for offsetting important

Hirji and Ibrekk 33 Environmental and Water Resources Management

BOX 13. Environmental flow assessments for the Lesotho Highlands Water Project The Environmental Flow Assessment for the Lesotho Highlands Water Project (LHWP) is being carried out in four parts. The first part focuses on understanding the complete river ecosystem. The second part develops a series of flow scenarios. Each scenario describes a possible future flow regime in one part of the river system (from dam releases and catchment runoff) and the resulting condition of the river. The third part includes social and economic studies. A social analysis defines the human population directly dependent on the rivers for sustenance and assesses the impact of changes in river flows for the affected population. In the economic analyses, the social implications are translated into the costs of mitigation and compensation for the affected population. In the final part, hydrologists estimate the amount of water that would remain in the dams in each scenario, and thus be available for offstream uses such as transport and sale to South Africa.

The range of completed biophysical/socioeconomic scenarios will provide the LHWP authorities with a sound basis for making informed decisions that integrate environmental flow requirements into operating procedures for the dams.

Source: Hirji 1999. social, ecological, and economic impacts of Summary Evaluation. Box 14 presents an the project on downstream communities. indicative assessment of the World Bank– funded water projects against the three To date there have been only a limited num- environmental principles laid out in the Water ber of projects in which freshwater Resources Management Policy Paper: safe- biodiversity concerns have been effectively guarding, demand management, and the integrated into water resources projects, protection of biodiversity/environmental flow. although through GEF-supported projects the A “traffic light” characterization consistent World Bank’s commitments to freshwater and with the approach used in the Water Re- marine biodiversity and to resource conserva- sources Sector Strategy indicates the extent to tion have increased. Water sector projects which the three basic principles have been present a major opportunity for truly integrat- incorporated in Bank procedures and are ing biodiversity in traditional water resources integrated in operations. (A “green” light projects. In addition, projects in the natural implies that the principle has been fully resource management sectors could have used incorporated into the water projects; a “yel- ecosystem, regional, or basin-level approaches low” light indicates that some elements of the in their project design. Increasingly, however, principle are present, but there are also many actions are being adopted by the Bank in shortcomings; a “red” light indicates little helping its clients integrate freshwater progress.) The assessment reflects the extent to biodiversity conservation in their water which the principles have been both institu- resource management decisions. These tionalized in Bank policies and procedures include integration at the policy, sectoral, and and integrated in water resources management project levels; capacity building; and support operations. for global initiatives and strategic partnerships.

34 Environment Strategy Papers Global Lessons from Bank Experience

BOX 14 Overall assessment (Please see a color version of this figure in Annex C, page 57.) Effective Institutionalized integration Safeguard principles Effective ! All projects subject to EA Institutionalized integration ! EA is an effective instrument for mainstreaming Effective ! Adequate EA capacity in the water sector InstitutionalizedYellow integrationYellow/Red ! Adequate consultations during the EA process ! Sectoral environmental assessments Yellow Yellow/Red

Demand management principles Yellow Yellow/Red ! Demand management included in most Yellow Yellow WSS projects ! Wastewater reuse increasingly being considered Yellow Yellow ! Increased focus on sanitation ! Increased focus on drainage Yellow Yellow ! Use of water quality management strategies

Yellow/Red Yellow/Red Protection of biodiversity/environmental flow principles Yellow/Red Yellow/Red ! Regularly addressed in Bank-funded projects ! Recognized as a concern in many projects Yellow/Red Yellow/Red ! Water policies include explicit environmental criteria

Hirji and Ibrekk 35

Chapter 4 Strategic Framework for Action

he preparation of the Environment and is not just the sustainability of the natural Water Resources Sector Strategies resource system that is important, but the T provides a rare opportunity to discuss the sustainability of water use. emerging issues with clients, partners, and colleagues and to influence the direction of the The strategic framework for action provides a Bank activities in this area over the next 5–10 basis for achieving the broad objective of years. Initial indications from consultations on systematically mainstreaming environmental both strategies are that the importance of the quality objectives in water resources planning water-environment interface is increasingly and in development and management pro- recognized by the water supply and sanitation, grams and investments. rural, energy, environment, and health sector boards as well as by the water resources ADOPT CLEAR FRAMEWORK FOR management group. There is an urgent need to elevate the discourse, and there is broad ENVIRONMENTALLY SUSTAINABLE WATER support for ongoing efforts to ensure that RESOURCES DEVELOPMENT environment becomes one of the basic objec- Sustainable water use can be defined as the use tives in any water resources management of water that supports the ability of human strategy. society to endure and flourish into the indefi- nite future without undermining the integrity of The previous chapters have outlined some of the hydrologic cycle or the ecological systems the important ways that poverty and economic that depend on it. A limited set of outcomes development are inextricably linked to environ- (with explicit goals and criteria) should be mental sustainability, and in particular to water developed to express this concept and make it resources sustainability. The primary focus on operationally useful in assessing where present poverty alleviation underscores the fact that the policies and plans may lead or are leading or in sustainability of the natural water resource deciding among alternatives strategies. Box 1, system is not an end in itself, but an essential at the beginning of this report, outlines one part of the welfare and security of people and possible framework for defining sustainability their livelihoods, especially the poor. Hence, it of a water resource system in operational terms

37 Environmental and Water Resources Management for water and energy utilities that aim to voirs, either as freestanding projects or as balance the use of water resources with the components of projects. conservation of aquatic and marine biodiversity. Integration of Environmental Aspects in Water-Related Sectors. World Bank–supported water resources management strategies A COMPREHENSIVE APPROACH TO should develop explicit criteria for integrating WATER RESOURCES MANAGEMENT environmental quality objectives within their A Management Continuum. The World Bank respective frameworks. The water supply and views freshwater, coastal, and marine re- sanitation, rural, energy, and health subsector sources as a management continuum that boards should be encouraged to develop requires cooperative development of strategies explicit procedures for addressing sector- and implementation of actions at the basin specific environmental issues in a structured level as well as at the regional, national, and manner. Support should be given to the local level. Water is a unitary resource that development of a training program for borrow- needs to be addressed in a comprehensive ers that focuses on the establishment of an manner, with particular attention given to the environmental regulatory framework to environment, to recognize and operationalize complement and support the reforms related the important linkages between actions taken to the privatization of water and energy upstream and their downstream consequences utilities. for river basins, lakes, and coastal and marine environments. The Bank should support the development of national policies and strategies MAINSTREAM ENVIRONMENTAL ISSUES for maintaining in their natural state, with the IN WATER RESOURCES PLANNING AND participation of basin stakeholders, selected MANAGEMENT DECISIONMAKING rivers with high ecosystem functions and Mainstreaming entails systematic and timely values. integration of environmental quality objectives in water resources strategies at all levels; in Moving from Remedial to Preventive Actions. water policies; in decisions on river basin The costs of preventing resource degradation planning, development, and management; and are small compared with remediation and in the evaluation and implementation of policy rehabilitation. A major challenge for water reforms and investment actions. For many resources management organizations and water development projects, development programs is to increase the level of effort for objectives could be balanced with the objec- preventive measures while maintaining tives of conservation of freshwater ecosystem support for curative interventions in degraded functions and services if they are addressed in areas. The World Bank, at the request of its the early stages of planning—provided that borrowers, can support lending operations for there is a commitment by the borrower and preventive and remedial measures that en- the Bank to these objectives. To achieve this, hance the environmental management of no new policies or procedures are needed; water resources, including lakes and reser- however, greater attention to the implementa-

38 Environment Strategy Papers Strategic Framework for Action tion of existing policies and procedures is learned about incorporating the environmental important. The Bank should support countries’ dimension into river basin approaches, and efforts to build national and local government there is a need to develop and disseminate agencies responsible for environmental protec- good practice. The linkage between freshwater tion of water resources, in order to develop and land-based sources and the coastal and environmental assessment policies, procedures, marine resources needs to be strengthened. and regulations. In this regard, the upcoming water resources and environmental management Safeguards Orientation—From a Reactive to a best practice briefs will be useful to improve the Proactive Approach. Mainstreaming also is understanding of the operational implications of consistent with a changing focus and orienta- the various provisions relating to the tion from “do no harm” to “promote improved sustainability of the resource base. development” that the Bank is adopting with its safeguard policies. This calls for improving Support Environmentally Sustainable Water the effectiveness of environmental assessment Policy Reforms. At the country level, the Bank in project planning and management should support water policy reforms that decisionmaking. It also calls for: integrate all water-related subsectors, including environmental uses of water, and should ! Expanding the use of sectoral and strategic promote the use of complementary regulatory environmental assessments (SEAs) measures, use of economic instruments, ! Increasing the emphasis on basinwide participatory processes, and actions to support understanding of the ecosystem’s functions, transparency. values, and requirements, and of how

Incorporate Environment More Fully into community livelihoods depend on and River Basin Approaches. Given that fresh influence them, before decisions on devel- water is a vital but diminishing resource, it is opment alternatives and options are made; essential that the World Bank helps govern- ! Valuing ecosystem, social, and health issues ments and the private sector adopt planning as an integral part of project and river basin and management resources for the develop- development, and giving avoidance of ment and protection of water resources and impacts a priority, in accordance with a the conservation of associated freshwater precautionary approach; ecosystems and habitats. Conceptually, ! Selecting project options that avoid signifi- management of water resources on a system- cant impacts on threatened and endangered wide basis is the best approach. In practice, species—when impacts cannot be avoided, integrated approaches to river basin manage- appropriate mitigation measures and viable ment are difficult to implement, even in compensation measures need to be put in relation to water quantity. These difficulties place are often compounded by poorly developed ! Ensuring that project-affected stakeholders cooperation and coordination between the are being consulted in a timely manner and authorities responsible for water resources and that their views are incorporated in the final irrigation and those responsible for water project design, implementation, and quality and environment. Much remains to be monitoring process.

Hirji and Ibrekk 39 Environmental and Water Resources Management

ENVIRONMENTAL USES OF WATER WATER QUALITY AND POLLUTION ANAGEMENT Allocation of Water Rights to the Environ- M ment. Effective environmental and water Integrated water quality management is the resources management requires that water and planning, organization, design, operation, and property rights are clearly defined to protect monitoring of all aspects that have an effect on the interests of various stakeholders. Changing the quality (physical, chemical, biological, water or property rights has relevance to bacteriological, and so on) of water resources. poverty and social stratification and affects the It incorporates and balances the different efficiency of water use and its allocation. Of requirements of relevant water users and water critical importance to protect the services functions in order to enhance efficient and provided by water resources is the quality, sustainable use of the resource. To assure a quantity, and assurance of water, which are consolidated and coordinated approach to needed to protect basic human needs, and the surface and groundwater quality management, structure and function of ecosystems so as to the World Bank should establish a Water secure ecologically sustainable development Quality Management Initiative. This would and use. The World Bank should support support the promotion of a phased approach for developing and attaining water quality countries’ efforts to develop the legal frame- objectives at both the regional (river basin or work for environmental management of water aquifer) level and the project level, as well as a resources. Bank-wide exchange of knowledge and experience in water quality management that Environmental Flow Assessments. Dam would be reflected in policies, best practices, operations need to include provisions for programs, and individual lending operations. releasing environmental flows to help main- This could include the application of eco- tain downstream ecosystem integrity and nomic analysis for pollution prevention, community livelihoods and need to be control, and reduction programs to ensure that designed, modified, and operated accordingly. the balance between what is desirable from an As part of development projects, the World environmental point of view and what is Bank should support client countries’ efforts to feasible from a technical and economic point prepare the legal framework for environmental of view could be better understood and used flows and to undertake studies to determine in planning and investment processes. This the minimum quantity and quality of water Initiative should be prepared jointly by the required to satisfy basic human needs, protect Environment, Rural, and Infrastructure families aquatic ecosystems, and secure the sustainable of the Bank, building on the work started by development and use of the water resource in the MENA and EAP Regions. question. It should encourage locally driven processes to establish the objectives of environmental flows, ensure that EFA is an integral CLIMATE CHANGE ADAPTATION part of the impact assessment, and include AND MITIGATION monitoring provisions to allow for potential The potential implications of climate change revisions of flow requirements at specific on water resources management (for example, intervals. on the magnitude, frequency, and timing of

40 Environment Strategy Papers Strategic Framework for Action precipitation and runoff events, water demand planning to incorporate the likely impact of patterns, and sea level rise) are likely to be climate change on the planning and design of significant and call for better preparedness. water resources projects, a review of engineer- The impacts will vary. Some parts of the world ing design criteria and methodology, a review are likely to experience more frequent and of operations of single-purpose dams and higher magnitude floods and others are likely reservoirs, and the strengthening of predictive to experience more severe droughts. Low-lying and forecasting capabilities at the national and areas and small islands face the greatest threat regional levels. In water-scarce regions, the from sea level rise. The Bank should promote Bank should promote strategic drought the integration of climate change consider- management. ations in water policy reforms, adaptive

Hirji and Ibrekk 41

Chapter 5 Way Forward

DEVELOP HUMAN RESOURCES substance of the environmental concerns, as well as staff who can quantify the value of trengthen Environmental Management losses associated with resource and ecosystem Capacity. The Water Resources Manage- degradation. Sment Thematic Group and the environment family of the World Bank should jointly Expanded Use of Interdisciplinary Task Teams. undertake a careful review of the Bank’s human To ensure that the task teams are contributing resources needs and skills mix that is required to environmentally sustainable development, to address the environmental management the Bank must provide appropriate and ad- challenges related to water resources management. This review should assess the potential equate staff and budgetary resources to support need for adding experienced water resources the relevant economic sector work and the professionals with the relevant environmental preparation, implementation, and supervision management training and skills as well as of environmental components of projects. environmental professionals with water re- Often, the implementation of well-designed sources management training and skills. It projects has been constrained by lack of should also identify measures that could be resources. Furthermore, there is a need to adopted to encourage sharing of operational ensure better integration of regional environ- experience through interaction among staff, mental staff with water sector operational staff. advisory services, specific training, rotation In client countries, the need for interdiscipli- among staff between regions and field offices, nary teams is even more acute; even where mentoring, and peer review, which would there is a cadre of experienced people, institu- more effectively draw on Bank-wide and tional barriers often constrain their effective- external experience. Preliminary assessment ness. Current efforts in institution building and indicates that there is a clear need to increase training need to be strengthened to help both the numbers of environmental staff who overcome these difficulties. understand and can communicate the aquatic ecosystems issues and the numbers of water Facilitate Knowledge Sharing. The World Bank resources specialists who understand the real is accumulating significant information and

43 Environmental and Water Resources Management knowledge on the issues of environmental Economic and Environmental Goals. There is sustainability. Efforts to consolidate and share a growing recognition that economic and this knowledge need to be reinforced. The environmental goals are compatible rather Water Resources Management Thematic than conflicting. Sharing of water for environ- Group plays an instrumental role in facilitating mental and other uses may seem like a zero knowledge sharing through seminars, brown sum game, but it is not a lose-win situation. bag discussions, and so on. The ongoing Experience has shown that if downstream preparation of water resources and environ- fisheries, agricultural productivity and ground- mental management best practice briefs and water recharge functions, and the storage, case studies supported by the Government of nutrient cycling, and water cleansing functions the Netherlands provides a basis for a broader played by wetlands are not protected, the dissemination of best practice in this area. overall economy suffers (Owens-Viani, Wong, and Gleick 1999). The World Bank should support improved understanding of the ANALYTICAL WORK economic values of environmental services Move Toward Adopting a Comprehensive and functions and integrate this perspective Approach to Water Management. The World into the project planning and management Bank should encourage the adoption of a decisionmaking. comprehensive approach to the management of inland water resources and riparian vegeta- Water Pollution and Health Impacts. It is tion, wetlands, riverine floodplains, and reasonable to assume a relationship between ambient water quality and health, especially associated wildlife and habitats. Growing for areas without a modern water supply awareness of the deterioration of aquatic system. The relationship is complex, however, ecosystems has meant countries need to given the many ways in which people can develop integrated policies and strategies to obtain water or avoid the worst impacts of resolve the complex and interrelated manage- pollution. Methods are being develop to ment problems of water resources as an provide macro-level estimates of the health integral part of the environment, and to impacts of different interventions, to inform overcome the management of water resources decisions on investment programs. The value in isolation from other ecosystems compo- and possible future direction of such efforts nents, namely land, air, and living resources need to be assessed in the context of policy, (linking upstream-downstream activities). This management, and investment decisions made geographically comprehensive multimedia by the Bank and its cooperating countries. approach aims at restoring, maintaining, and improving the conditions and characteristics of Water Conservation. Water conservation will aquatic ecosystems and water resources. The remain a key area of the policy reform process. World Bank should support the concept of The World Bank should promote reforms that comprehensive management in the policy encourage water conservation in all water dialogue and in the design of water resources supply and sanitation projects through a wide planning, development, and management variety of tools, such as better average cost investments. pricing and introduction of inverted block

44 Environment Strategy Papers Way Forward tariffs (especially during drought), long-run program areas—conservation of biodiversity marginal cost pricing as incentive for recy- and the management of transboundary wa- cling, rationing and restrictions, land zoning, ters—directly address the objective of the and improved technology. Conservation Environment Strategy for mainstreaming the should also be encouraged in agricultural environmental aspects of water resources water use to improve on-farm water use management. The Bank is preparing two GEF efficiency and to translate the on-farm water Medium Sized Projects—a Lakes Management savings for intersectoral transfers and over- Initiative and a Water and Nature Initiative—to come policy barriers that discourage such support the mainstreaming effort. transfers. WWF/IUCN/GEF/WB Partnership. The Reuse of Effluent. It is clear that reuse or partnership established after the second World recycling of lower-quality water, including Water Forum brings together skills and treated effluents, will be an increasingly experiences of the GEF, the World Conserva- important component of overall water re- tion Union (IUCN), the World Bank, and the sources management. A range of technical World Wildlife Fund (WWF). It will focus on options are available but a number of institu- demonstrating how integrated approaches to tional, behavioral, or cost obstacles must often land and water resource management can be overcome before reuse becomes wide- incorporate ecosystem and biodiversity spread. Work that has commenced with the conservation considerations. The intention is irrigation sector on this issue should be to achieve this integration in a limited number supported, and opportunities for implementa- of ongoing activities. Such management tion should be identified. The experience projects, which expand on existing activities of gained in the Middle East and North Africa one or more of the interested organizations, and in other regions in this area should be would serve as models to accelerate change in more broadly disseminated. the programs and projects of all four groups, as well as for much wider applications over STRATEGIC PARTNERSHIPS time. The Bank will seek support from GEF to The effective development of partnerships prepare pilot projects in two basins after between a diverse range of cooperating parties consultations with the other partners. is critical for providing the basis for sustained political interest and strong public support, Global Water Partnership (GWP). The GWP, and for facilitating major resource mobiliza- established by the United Nations Develop- tion efforts. Partnerships have proved to be ment Programme, the World Bank, and a important in leveraging resources, the devel- network of donor agencies, professional opment of strategies, identification of priori- organizations, and other institutions, provides ties, development of practical actions, and a key forum for cooperatively advancing major implementation of activities. water-resources initiatives.

Global Environment Facility (GEF). The GEF Bank-Netherlands Water Partnership Program provides grant funds for incremental costs for (BNWPP). The BNWPP is an operational the conservation of global public goods. Two instrument to stimulate innovative approaches

Hirji and Ibrekk 45 Environmental and Water Resources Management in the water operations of the World Bank and IPCC and the global science community to broader development community. The partner- better understand the implications of climate ship operates through a set of windows. Of change on water resources management. particular importance to the environment Specifically, there is need to improve under- community are the windows on Environmental standing of the global climate models and how Flow Allocation, Municipal Wastewater they are coupled with local and regional Treatment, River Basin Management, and models as well as the predictive capabilities, International Waters. The BNWPP offers a unique opportunity to set up additional uncertainties, and limitations of the local and windows to strengthen the integration of regional predictions for precipitation, runoff, environment in water projects, for example, to water supply, and water demand under address water quality management. various scenarios. These will be useful for informing Bank investments in the energy, World Commission on Dams (WCD). The agriculture, urban, industry, mining, forestry, IUCN and World Bank cooperatively estab- and environment sectors. lished the World Commission on Dams, which issued its final report, Dams and Development, in November 2000. As a follow-up to the WCD INDICATORS Report, the World Bank will work with various The Water Resources Sector Strategy and the partners to develop a program to support the Environment Strategy aim to focus on interven- implementation of selected recommendations of the report in a practical and cost-effective tions in the water sector that lead to clear manner in cooperation with its owner members. development outcomes. Box 15 lists examples of process, stress reduction, and environmen- Intergovernmental Panel on Climate Change. tal status indicators for monitoring the specific The World Bank should cooperate with the elements of the mainstreaming process.

BOX 15 Suggested indicators Examples of national process indicators ! Adoption of specific water, environment, or sector-related legal reforms, policies, institutions, standards, and programs necessary to address the water-related environmental priority issues, including stakeholder participation programs ! Adoption of a framework for operationally defining environmentally sustainable water use ! Adoption of broader criteria for project and program evaluation to include environmental economics (to value costs and benefits of resource degradation) in conjunction with the traditional benefit- cost analysis ! Adoption of demand management as a key element of a water strategy.

Examples of stress reduction indicators ! Point source pollution reduction investment completed (kilograms pollutants) ! Nonpoint source pollution programs adopted (area treated with best management practices, kilograms reduced) (continued)

46 Environment Strategy Papers Way Forward

BOX 15 (continued) Suggested indicators

! Amount of underwater or wetland area placed into protected management, including no fishing zones ! Amount of eroded land stabilized, planted to trees (estimated sediment load reduction) ! Amount of fishing fleet removed through alternative livelihoods ! Larger-mesh fish net policy and fishing restrictions documented ! Reduced releases of pollution to groundwater recharge zones ! Additional releases of water from dams for environment purposes.

Examples of environment status indicators ! Measurable improvements in trophic status ! Improved (measurable) ecological or biological indices ! Improved (measurable) chemical, physical (including flow regimes), or biological parameters ! Improved recruitment classes of targeted fish species/diversity/keystone species ! Demonstrable reduction of persistent organic pollutants in the food chain ! Local community income and social conditions stable or not worsened by the intervention, and in some cases improved ! Demonstrable recovery of or increased protection for key flagship species or values as a result of changed rule (operating) curves for dams or vegetative response from wetland re-inundation ! Improvement in hydrologic balance as increases occur in the number of hectares of trees as a result of reforestation programs ! Stakeholder awareness raised and involvement documented.

Source: GEF 2001.

Hirji and Ibrekk 47

Annex A Regional Water-Related Environmental Priorities

Key water and Region environmental issues Impacts Strategic priorities and actions AFR · Soil erosion and · Fresh water, one of the Urban development, water supply, and degradation scarcest commodities, is sanitation: · Water scarcity and rapidly being depleted and · Infrastructure and service improvements deterioration polluted to target diarrheal diseases, malaria, and · Loss and degradation of · Soil degradation has affected cholera natural habitats 65% of the cropland · Setting and enforcement of standards · Environment and health · Coastal, marine, and · Environmental and hygiene education · Urbanization freshwater fisheries · Integrated urban planning · Vulnerability to climate threatened by overfishing and International waters: change pollution · Facilitating cooperative management of · 330 droughts between 1965 shared waters and 1999, resulting in · Addressing both water quantity and 880,000 deaths quality (e.g., preserving environmentally · About 890,000 annual deaths critical volumes of river flow) water/sanitation-related Ecosystem-based approach to environmental · 70% of surface water in management: SADC shared by two or · Need to develop institutions more member states · Indicators and databases · Of the 11 major, · High-level political support multinational watersheds, 8 · Undertake comprehensive inventories have lost over 90% of forest and assessments to identify resources cover available · Most rapidly urbanizing Vulnerability to climate change: region · Adaptation and coping mechanisms · Carbon sinks ECA · Key priority: air · Rising infant mortality rates Safe drinking water and sanitation: pollution linked to poor quality and · Increase health outcome of infrastructure · Safe drinking water and limited supply of drinking investments by incorporating hygiene sanitation water education and basic sanitation · Water resources; 63% · Crumbling water · Analysis of water quality impacts of of water to agriculture infrastructure and wastewater treatment interventions contamination of Water resources: groundwater cause serious · Improve irrigation and drainage health issues · Improve broader WRM · $2 billion—about 5% of · Watershed management Central Asia’s GDP—lost · Disaster mitigation; floods every year as a result of · Improve management of regional seas salinization (Black Sea, Caspian Sea) · Aral Sea area reduced by 70% Source: Regional environment strategies. 49 Environmental and Water Resources Management

Key water and Region environmental issues Impacts Strategic priorities and actions EAP · Key priority: urban and · 500,000 infants die each year Access to clean water and sanitation: industrial air pollution due to waterborne · Support public investments · Access to clean water diseases—60% due to deficit · Press for policy reforms that allows cost and sanitation in urban in rural water supplies; 30% recovery and efficient operation and rural areas due to lack of sanitation in · Expand analysis of human health benefits · Improving natural urban areas · More focus on rural areas resource management · 290 million people lack Reducing vulnerability: · Water resources access to safe water; 75% in · Provide support for relief and management rural areas reconstruction · Mitigate risks from · 240 million people in urban · Address longer-term risk reduction and natural disasters areas and 1,045 million in mitigation measures rural areas lack access to Improve livelihoods: sanitation · Watershed management · Social cost of inadequate · Coastal zone management sanitation in Indonesia River basin management: exceeds $4.7 billion annually, · Mekong River and Chao Phraya River or 2.4% of GDP Increase public participation and · 36.9% of agricultural land is environmental awareness irrigated; uses 80% of water LAC · Mismanagement of · Heavily urbanized region; Integrating pollution management in the natural resources 75% of its 500 million people infrastructure and productive sectors: · Urban-industrial living in cities · mitigate health impact of pollution pollution · Access to safe water: 70– · use market-based instruments · Vulnerability to natural 90% in urban areas, 20–70% · prioritize water supply and sewerage disasters in rural · treat wastewater of highly polluted · Climate change · 2% of wastewater treated in waterbodies · Threats to terrestrial Santiago and San Salvador · focus on large cities and marine biodiversity · Rich natural resource base Improving livelihoods: · 56% of rangelands are · promoting integrated natural resource severely degraded management, e.g. water, fisheries, land, marine · developing natural resource accounting and expenditure accounting frameworks · promoting biodiversity conservation Disaster management: · Preparedness to reduce vulnerability, rather than response · Analysis of human activities that exacerbate the impacts of disasters MENA · Water scarcity—water · Annual cost of environmental Improve water resources management: tapped at unsustainable damages 4–8% of GDP · WRM in Yemen, Jordan, Morocco, level · Environmental health burden Tunisia, Algeria, West Bank/Gaza · Water allocation: 82% is about 14% of the total; 8% · Improve water quality and enhance of water to agriculture attributable to water supply monitoring · Degradation of water and sanitation · Wastewater treatment plants and quality · Land degradation - $1.15 wastewater guidelines · Soil degradation billion/year in lost · Increase awareness · Urban and industrial productivity · Mitigate impacts of floods and droughts pollution · 45 million people without Controlling soil degradation: · Weak institutional and safe water and 85 million · Watershed management legal frameworks (30% of population) without · Establish baseline data for water and soil sanitation contamination from agriculture · Only 15% of wastewater · Develop methods to control agricultural adequately treated pollution

50 Environment Strategy Papers Regional Water-Related Environmental Priorities

Key water and Region environmental issues Impacts Strategic priorities and actions SAR Environment and health: · Over the 1987–98 period, Reducing environmentally related health · Key priority: air the population living on less risks: pollution than $1 day rose from 474 to · Access to safe drinking water and · Lack of access to safe 522 million sanitation water and sanitation · One fifth of the total burden · Hygiene and education programs · Exposure to insect of disease is caused by Improving livelihood systems: vectors environmental health risks · Improve productivity Natural resources issues: · Water and sanitation account · Improve infrastructure, e.g. safe water · Water quality for 9% of the disease burden and water for agriculture degradation · Health and productivity Reducing vulnerability: · Water scarcity impacts in Pakistan are · Changes in land use planning · Dwindling wetlands, estimated at 2.3–4.6% of · Disaster preparedness freshwater bodies and GDP, half of this is · Water conservation and management fisheries attributable to water Water resources management: · Soil degradation pollution · Water sector policy reform · Poorly managed water · From 1990 to 1998, SAR · Integrated river basin planning resources accounted for almost 30% of · Coastal zone management Vulnerability to risks and all natural disasters and 60% · Watershed management natural disasters: of deaths · Improve water service delivery · · Floods, storms, 93% of freshwater · Mainstream land and water interactions tsunami, cyclones, etc. withdrawals for agriculture Urban development: Global environmental · Air quality management issues: · Urban development · Protection of · Pollution management biodiversity, International waters conservation of · Important challenge; GEF provides an watersheds opportunity · Loss of fisheries · Priority to Ganges-Brahmaputra-Meghna · Climate change basin

Hirji and Ibrekk 51

Annex B Linkages Among Water, Environment, and Dimensions of Poverty

n outcome-oriented approach in the of poverty reduction through economic water sector is needed to main- growth. Establishing well-defined and A stream environment-poverty consid- equitable use rights for water, fisheries, and erations. Recognizing the close links between logging would provide the desirable incen- environment and water resources interven- tives and means for managing natural tions and poverty reduction outcomes, there resources in a sustainable manner. are six dimensions of poverty that need to ! Human Health. Improve people’s health by addressed: reducing their exposure to waterborne and vector-borne diseases and to toxic sub- ! Sustainable Growth calls, on the one hand, stances by increasing access to clean water for developing the natural capital (water and adequate sanitation. Improving manage- resources) for human development and ment of water bodies such as reservoirs and welfare, and, on the other hand, protecting canals, and encouraging treatment of the sink function of water essential for industrial and toxic wastewater discharges, human health and protecting natural capital will also improve health. Recent estimates from irreversible damage, ensuring that the suggest that premature death and illness social and economic security of many that due to major environmental health risks depend on the water resources for their account for one-fifth of the total burden of livelihood is not compromised. disease in developing countries, a major ! Equity. Inequitable and unjust laws and ill- proportion of which are concentrated defined property rights that restrict access among the poor. Inadequate water supply to and control over natural resources pose and sanitation poses the largest environ- a major obstacle to efficient management mental related health threat (up to 10 % of of natural resources. Unfair distribution of disease) in many Bank client countries costs and benefits and planning processes (World Bank 2000b). that alienate affected communities from ! Sustainable Livelihoods. Even though decisionmaking and from sharing benefits reducing dependence on natural resources of water development projects fosters may be a more effective route out of social stratification and limits the prospect poverty, natural resources remain the most

53 Environmental and Water Resources Management

important safety net available to poor rural change should be reduced by getting households. The livelihoods of poor people information to governments, the private who depend on land, water, forests, and sector, and poor communities and by biodiversity should be enhanced by helping promoting adaptive strategies. them secure access to resources and ! Empowerment. The empowerment of creating circumstances in which they can people to manage their own environment use and manage those resources and water resources, including water sustainably. infrastructure, should be supported by ! Security and Vulnerability. Poor people, ensuring participation of all stakeholders in especially in poor countries, are particu- decisionmaking, equipping people with the larly vulnerable to both natural disasters ability to monitor and influence public and changes in environmental conditions. resource allocations, creating user organi- Natural disasters—such as floods, storms, zations, transferring operation and mainte- droughts, and landslides—have a dispro- nance responsibility to the users, and so portionate effect on poor people since they forth. This is closely related to issues of often live in vulnerable areas such as good governance, effective decentraliza- floodplains or steep slopes. People’s tion, improved budget management, vulnerability to environmental risks such information and public dialogue, anti- as natural disasters, severe weather corruption efforts, actions on gender fluctuations, and the impacts of climate discrimination, and a fair judicial system.

54 Environment Strategy Papers References

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Lintner, S. 1996. “Strategically Managing the ing and Mainstreaming Environmental World’s Water,” in Environment Matters. Sustainability in Water Resources Manage- Environment Department, Annual Review. ment in Southern Africa. A SADC Technical Washington, D.C.: World Bank. Report. Harare, Zimbabwe: SARDC. Lintner, S. 2000. “Environmental and Social Turral, H. 1998. Hydro Logic? Reform in Safeguard Policies” in Environment Mat- Water Resources Management in Devel- ters. Environment Department, Annual oped Countries with Major Agricultural Review. Washington, D.C.: World Bank. Water Use: Lessons for Developing Na- Ministry of Population and Environment and tions. London: Chameleon Press. Ministry of Water Resources. 1997. Draft United Nations International Conference on Nepal Power Sector Environmental Assess- Water and Environment. 1992. The Dublin ment. Statement and Report of the Conference. OED (Operations Evaluation Department). Watson, R. 2000. “Poverty and Climate 2001. “Implementing the Bank’s Water Change,” in Environment Matters. Environ- Resources Management Strategy. The ment Department, Annual Review. Wash- Lessons of Experience.” Discussion Draft. ington, D.C.: World Bank. Washington, D.C.: World Bank. World Bank. 1993. Water Resources Manage- Owens-Viani, L, A. K. Wong and P. Gleick ment: A World Bank Policy Paper. Wash- (eds). 1999. Sustainable Use of Water: ington, D.C. California Success Stories. Oakland, Calif.: _____. 1998. Integrating Freshwater Pacific Institute for Studies in Development, Biodiversity Conservation with Develop- Environment, and Security. ment: Some Emerging Lessons. Environ- Reid, W. V. 2001. In G. Chichinisky, G. C. ment Department Papers No. 61. Washing- Daily, P. Ehrlick et al., eds. Managing ton, D.C. Human Dominated Ecosystems, Mono- _____. 2000a. “Regional Environmental graphs in Systematic Botany, Missouri Strategies for MENA, LAC, EAP, ECA, SAR Botanical Gardens, St. Louis, Mo., pp. 197– and AFR.” Washington, D.C. 225, cited in N. Johnson, C. Revenge, and _____. 2000b. “Toward an Environment J. Echeverria. 2001. In Managing Water for Strategy for The World Bank Group—A People and Nature in Science, vol. 292, pp. Progress Report and Discussion Draft.” 1071–72. Washington, D.C. Saghir, J., M. Schiffler and M. Woldu. 2000. Urban Water and Sanitation in the Middle _____. 2000c. The World Bank and the Global East and North Africa Region. MENA Environment—A Progress Report. Environ- Region Infrastructure Development Group. ment Department. Washington, D.C. Washington, D.C.: World Bank. WCD (World Commission on Dams). 2000. Shumway, C. 1999. Forgotten Waters: Fresh- Dams and Development. A New Frame- water and Marine Ecosystems in Africa. work for Decision-Making. London: Strategies for Biodiversity Conservation and Earthscan. Sustainable Development. Alexandria, Va.: World Water Council. 2000. World Water Boston University. Vision. Commission Report—A Water Turpie, J., and H. Van Zyl. 2001. “Valuing the Secure World. Vision for Water, Life, and Environment in Water Resources Manage- the Environment. ment,” in R. Hirji, ed. Forthcoming. Defin-

56 Environment Strategy Papers Color Graphics

BOX A / BOX 14 Effective Overall assessment Institutionalized integration Effective Safeguard principles Institutionalized integration ! All projects subject to EA ! EA is an effective instrument for mainstreaming Effective Yellow Yellow/Red ! Adequate EA capacity in the water sector Institutionalized integration ! Adequate consultations during the EA process Yellow Yellow/Red ! Sectoral environmental assessments

Demand management principles Yellow Yellow/Red ! Demand management included in most Yellow Yellow WSS projects Yellow ! Wastewater reuse increasingly being considered Yellow ! Increased focus on sanitation ! Increased focus on drainage Yellow Yellow ! Use of water quality management strategies Yellow/Red Yellow/Red Protection of biodiversity/environmental Yellow/Red Yellow/Red flow principles ! Regularly addressed in Bank-funded projects ! Recognized as a concern in many projects Yellow/Red Yellow/Red ! Water policies include explicit environmental criteria

Legend: Red = Little progress. Green = The principle has been fully incorporated in water projects. Yellow = Some elements of the principle are present, but there are many shortcomings.

57 Environment and Water Resources Management

Figure 2. Water stressed and water scarce countries: 2025 projections

Water Water Stress Scarcity

58 Environment Strategy Papers