Environment Strategy Papers

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Environment Strategy Papers

Environmental Rafik Hhj`Hans Olav lbrekk

and WVaterResources Strategy SeriesManagementrNumber2

Manage ment October 2001

FTnE COPYThe World Bank EJ Environment Department

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ENVIRONMENT

STRATEGY PAPERS No. 2

Environmental and WaterResources Management

Rafik HirjiHans Olav Ibrekk

October 2001

The International Bank for Reconstructionand Development/THE WORLD BANK

1818 H Street, N.W.Washington, D.C. 20433, U.S.A.

Manufactured in the United States of AmericaFirst 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

ny 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 intellectualziscussion 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 StrategyDackground papers, as well as new reports prepared to facilitate implementation of the Strategy. This seriesaims to provide a forum for discussion on a range of issues related to the strategy, to help the transfer of good

xractices across countries and regions, and to seek effective ways of improving the Bank's environmentaloerformrance.

V 2 ' 4','

Contents

v Preface

vii Acknowledgments

1 Executive Summary

7 Chapter 1: Water-Environment-Poverty Linkages7 Background

10 Sustainable Water Resources Development and Management11 Poverty Alleviation1 1 Notes

13 Chapter2: Global Trends Relating to Water and Environmental Management

13 Three Profound Changes in Thinking14 Changing Role of the Public and Private Sector14 Key Threats20 Key Challenges25 New and Emerging Opportunities25 Notes

27 Chapter3: Global Lessons from Bank Experience27 What Has the Bank Been Doing?28 Lessons Learned

37 Chapter 4: Strategic Framework For Action

37 Adopt Clear Framework for Environmenially Sustainable Water ResourcesDevelopment

38 A Comprehensive Approach to Water Resources Management38 Mainstream Environmental Issues in Water Resources Planning and Management

Decisionmaking40 Environment Uses of Water40 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 Resources44 Analytical Work45 Strategic Partnerships46 Indicators

Annexes

49 Annex A: Regional Water-Related Environmental Priorities53 Annex B: Linkages Among Water, Environment, and Dimensions of Poverty

55 References

57 Color Graphics

Boxes

5 Box A. Overall assessment11 Box 1, Sustainability outcomes for water use15 Box 2. Water pollution and human health16 Box 3. Challenges for managing groundwater contamination17 Box 4. Impact of poor land use on Mombasa water supply infrastructure18 Box 5. Impacts of poor drainage19 Box 6. Problems caused by Water Hyacinth24 Box 7. World Commission on Dams: Priorities for sustaining rivers and livelihoods28 Box 8. Key environmental findings of OED's evaluation of the implementation of the

Water Resources Management Policy of 199328 Box 9. Environment and poverty alleviation objectives of Water Resources

Management Policy31 Box 11. Integrating environmental and social considerations in power sector planning

in Nepal33 Box 12. Strategic Partnership for Nutrient Reduction in the Black Sea/Danube Basins34 Box 13. Environmental flow assessments for the Lesotho Highlands Water Project35 Box 14. Overall assessment46 Box 15. Suggested i nd icators

Tables

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

Figures

7 Figure 1. Water and water-based ecosystems values8 Figure 2. Water-stressed and water-scarce countries: 2025 projections

23 Figure 3. Wastewater generated and reused in selected countries

iv Environment Strategy Papers

4,l - .f*- .. o {

Preface

T o improve the management of water The paper is based on a review of regionalsector investments, the World Bank is environment strategies (prepared for the

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.

v

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Acknowledgments

T his paper was prepared by Rafik Hirji the World Bank and Deborah S. Rubin fromand Hans Olav Ibrekk of the Environ- Cultural Practice. Guidance was provided byment Department with support from the Water Supply and Sanitation Sector Board

Walter Garvey, David Hanrahan, Nagaraja Rao and many Bank staff during the preparation andHarshadeep, 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, Andreafrom comments on early drafts provided by Merla, Douglas Olson, Robert Robelus, KateJohn Briscoe, Franklin Cardy, Salah Darghouth, Stevens, and Heinz Unger.John Shepherd, and Lee Sumter Travers from

vii

Executive Summary

T his paper reviews the World Bank's freshwater biodiversity on which people,efforts to mainstream the environment in especially the poor, often depend directly.

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 unsustain-

able use and management of water resourcesThe 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 isand 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 environmentallyis 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 sanitationmany direct, indirect, option, and non-use services in urban and rural areas will requirevalues. As a source of natural capital, it is a concerted efforts: more than a billion people doprimary input for a whole array of human not have access to potable water supply and 3needs and economic development activities. As billion do not have adequate sanitation. With aa sink, it is used as a receptor for wastewater rapidly increasing population, the problems ofdischarges. Fresh water sustains the integrity of food security and growing demand for water tothe ecosystems that serve important ecological generate electricity, meet domestic supply, andand hydrological functions and as hubs of support industrial development persist.

1


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 transboundar'y

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 indirectl'

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 Pdpers

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, indus-

trial, 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 tech-

nologies, 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 suchpromoted 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


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 creatingunnecessary or marginal investments and Safeguards. Environmental assessments (EAs)

increasing debt burden will be magnified. have proved to be a useful tool for screeningand predicting potential impacts, but capacitv

Lessons Learned. Box A presents an indicative constraints and lack of commitment andassessment of World Bank-funded water political will hinder the effective integration cfprojects against the three environmental environmental issues in water projects. As a

result, often EAs have limited impact onprinciples in the Water Resources Manage- poetpann n eiinaig n

ment Policy Paper: safeguarding, demand pmaniagement, and protecting biodiversity! especially on the analysis of alternatives.

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 assupply 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, andmajor challenge in water policy reform and catchment levies. Thus the framework iswater resources project planning, develop- intended to incorporate cross-sectoral and

ment, and management decisionmaking. It ecosystem interdependencies, along with

remains the most poorly understood topic and socioeconomic concerns and institutions, andto enable participation of all stakeholders in

is still considered an obstacle to development. thefoml ation of poiis,aregulatos an

The value of natural assets such as watersheds, pbi in nt plans rewater.

recharge areas, and wetlands as storage

facilities and as fundamental elements of the Protection of Biodiversity and Environmentalhydrological 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 frameworkof biodiversity, should receive increased are:priority, given increased demand for water and Framework for Environmentally Sustainablefrequent problems with degradation of water Water Resources Development-adopting aquality. The Bank should support development framework of objectives and criteria forand implementation of water policies that environmentally sustainable water resourcesinclude explicit environmental quality criteria management to mainstream integration ofthat define and set priorities for environmental environmental quality objectives into wateruses 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 aFramework for Action provides a basis for scarce resource with a scarcity value, treatingachieving the broad objective of systematically water as a unitary resource that needs to be

BOX AOverall assessment Effective

(Please see a color version of this figure in Annex C. page 57.) Institutionalized integration

Safeguard principles* All projects subject to EA* EA is an effective instrument for mainstreaming* Adequate EA capacity in the water sector Yellow Yellow/Red* Adequate consultations during the EA process* Sectoral environmental assessments

Demand monagement principles* Demand management included in most

WSS projects* Wastewater reuse increasingly being considered Yellow Yellow* Increased focus on sanitation* Increased focus on drainage* Use of water quality management strategies

Protection of biodiversitylenvironmental flow principles* Regularly addressed in Bank-funded projects* Recognized as a concern in many projects* Water policies include explicit environmental

criteria Yellow/Red Yellow/RedLegend: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.

Hlrji dnd Ibrekk 5

Env ronmental 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 prepared-

ness 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 under-

taking 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.


Chapter 1 I

Water-Environment-Poverty Linkages

BACKGROUND serve important ecological and hydrologicalSyste inCrisis. Thewaterresou functions and that people, especially the poor,

system-inCistis Th water (riesrcs often depend on directly. Hence, it is essentialrA t aquifers, and lakes) and water-and to maintain the stability, health, and productiv-

w aquifers, and lakes) and water- andland-based ecosystems (watersheds, wetlands, ity of the water resources system.

and floodplains)-is essential for the sustenance The World Water Vision, issued in Marchand health of all species. Figure 1 highlights the 2000, highlighted two key water managementmultiple uses, values, services, and functions ofwater and of land- FIGURE 1. Water and water-based ecosystem values

and water-based

ecosystems. As asource of naturalcapital, the water r _ ;resources systemprovides fundamen- j

tal input for a wholearray of human

DIRECT VALUES INDIRECT VALUES OPTION VALUES NON-USE VALUESneeds and economic Consumptive Ecosystem Premium Intrinsic

development and non- functions and placed on significance inconsumptive 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. he-thAric

Industrial input Water storage including:receptor for waste- Irrigating crops Water purification P-. , B- .il.

water discharges Watering stock Water recharge etc.Hydro-power ~ Flood control

from point and Wild plants Storm protection L, e

nonpoint sources of Wild animals Nutrient retention r etc .,.eI Fishing Micro-climate etc

poll1 ut i o n . F res h | Transport Shore stabilization

water sustains the Recreation etc.

integrity of the

ecosystems that Source: Turpie and Van Zyl 2001.

7


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 a!so 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 traditionalDespite these achievements, major challenges problems.'

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-

FIGURE 2. Water-stressed and gate water use but also produces wide-ranging

water-scarce countries: 2025 projections and often negative effects on other vital(Pleose see a full-sized, color version elements of the water resource system. Theseof this figure in Annex C, poge 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

ii * ' bi 1t # J luses of water and the coastal and marineresources, 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

SourceStrngelan and esos Sc93. typurpose and increases public health risks.Source: Engelman and LeRoy 1993.

8 Environmnent Strategy Papers


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 agriculturalsocial, 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 groundwdter 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 lbrekk 9


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 stake-

holders in development and management.

This framework has the same character asintegrated 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 statementsimportant 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,



BOX I. monitoring systems for achieving sustainableSustainable outcomes for water use outcomes, it is difficult in the best of circum-

stances to formulate such plans.* A minimum water requirement is guaran-teed to all humans (and realized) to maintainhuman health. POVERTY ALLEVIATION

* Sufficient water is guaranteed to restore andmaintain the health, services, and functions Water and environment are linked to povertyof ecosystems. Specific amounts will vary alleviation in two important ways. First,

depending on climatic and other conditions. strategies to reduce or alleviate poverty shouldSetting these amounts will require flexible

not lead to further degradation of waterand 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 andstakeholders. improved environmental quality should

* Water quality is maintained to meet agreed contribute directly to reducing poverty. Astandards. broad definition of poverty extends well

* Human actions in a basin do not impair thelong-term renewability of freshwater stocks beyond i eand cons ti t includeand 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 andparticipatory, 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, someintegrated 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 I. Linkages among water, environment, and povertyDimensions of poverty Examples of water and environmental linkagesIncome and consumption Access to water for productive use, access to natural resources, sustainable

growth

Inequality and equity Secure tenure and access to natural resources, water rights and entitlements

Sustainable livelihoods Sustainable land and water use practices

Health Water quality, safe drinking water and sanitation, water bodies protected fromvectors and disease

Security and vulnerability Improved disaster preparedness and response, water harvesting and conservation

Inclusion and empowerment Participation; devolution of ownership, rights, and responsibilities to water users,community groups, basin organizations, local governments

Hirji and Ibrekk 11


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.


J.~~'4

Chapter 2

Global Trends Relating to Waterand Environmental Management

T he World Bank's work in the water and ency, to applying the "user pays" principle, andenvironment sectors is influenced and to creating a legal and regulatory framework for

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

INTHREENPROFOUNDG CHANGEall stakeholders in planning and managementIN 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 createsdecisionmakingto 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


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 inresulting 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, theintegrated, multidimensional outcome. The primary focus has been on economic andimplications 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 providersurbanization, 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 THREATSwater supply, irrigation, and hydropower The water sector is facing new threats that willinfrastructure as well as inflict harm onecosystems and biodiversity. have a bearing on the way water resources

management problems are addressed in the

future. Often, more than one threat is presentCHANGING ROLE OF THE PUBLIC AND at the same time, magnifying the cumulative

PRIVATE SECTOR impacts.

Governments and the public sector areincreasingly being transformed from owners Excessive Regulation, Abstraction, andand managers of water installations to facilita- Pumping. Water resources development for

tors, enablers, and regulators. As part of a consumptive and nonconsumptive uses entailsgrowing 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 flowment, operation, and maintenance of these regime. Overabstraction of water reduces thefacilities. The private sector is playing a greater downstream flow and subsequently diminishesrole, particularly in the case of management of the opportunity for other users to draw furtherwater utilities. Nevertheless, the role of water without causing significant deteriorationgovernment 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, landand social dimensions of water management-emains important at both the national and the de. Wtou eqte cnsiderationtfr

ocal level. ~~~~~~damage. Without adequate considerations forocal level .environmental flow requirements, dams for

. . ~~flood control, water supply, or hydropowerAn effective water sector, whether it is man- faged by the public sector or the private sector, generation or excessive abstractions for


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 theinclude 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 treatedsewage remain the overwhelming human health issue (for both mortality and morbidity) in many partsof Africa, Latin America, and Asia. Although there is significant uncertainty associated with estimates ofwater-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 diffuselyinto water bodies, presenting intractable management problems. Examples include runoff from trans-portation corridors, urban areas, agriculture, construction activities, forestry, mining operations, oratmospheric pollution. The World Health Organization has estimated that only 41 percent of the urbanpopulation in Latin America and the Caribbean has access to sewer systems. Over 90 percent of thecollected 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 coliformconcentrations downstream. Farmers withdraw this water to irrigate market crops, potentially leadingto consumer illness.

Hirji and lbrekk 15


BOX 3. wetlands has been lost. Of the more thanChallenges for managing groundwater 3,500 species currently threatened worldwicde,contamination 25 percent are fish and amphibians. Most of

Because of geological variability, groundwater the loss of freshwater biodiversity originatescontamination can remain undetected for a long from systemic failure to understand thetime. This time lapse is exacerbated in develop- linkages between development activities anding countries, where the extent and severity of their impact upon freshwater ecosystems, agroundwater contamination remain largely poor understanding of the intrinsic value ofunknown for three reasons: biological species, and the difficult tradeoffs* Lack of monitoring and surveillance pro- associated with meeting local and national

grams* 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 conservationin aquifer is not borne by the global community. Inte-

* Expense of monitoring, modeling, and grating operational measures for safeguardingremedying 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 Luse

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 Llrban 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 tranisport and deposition. Sediment deposition

addressed. reduces the economic life of storage struc-

tures, 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 forwater 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 4world, 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 isand groundwater resources-with dramatic more cost-effective to promote sustainable

effects on natural ecosystems. In the past land use and watershed management practicescentury, over 50 percent of the world's than to restore degraded catchment, replace


Globa 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 seawaterintrusion.

Drainage, Salinity, and Toxicity. Poor drain-

age can shorten the economic life of irrigation Poor drainage may also induce leaching andinvestments 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 seleniumBox 5). Irrigation schemes and leaking water occurs naturally in the soil, has accelerated its

conveyance facilities increase recharge to leaching. The collection of drain water andsubsequent evaporation highly concentrated

groundwater and may flood the root zone.this toxic element at the Kesterson National

Irrigtion anals watr andwasteaterWildlife Refuge ponds. Ingestion of drainpipelines, and agricultural drains serve as

' ~~~~~~~~~~water by birds and other fauna resulted inrecharge sources and may introduce contami- .b

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 severewater shortages. The primary source of supply is the Baricho intake on the Galana Sabaki River about40 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 1 986, serious siltation problems at the intake had resulteddue to upstream catchment degradation on the Galana-Sabaki Rivers. High sediment load during thewet season elevated the raw water turbidity levels to 6,000 Nephelometric Turbidity Units (NTU). Dryseason levels are 40- 100 NTUs.

The heavy silt load created severe operational difficulties during the wet season and were very costly tomitigate. The intake facilities at Baricho had to be de-silted every day, dosage and volume of coagulantstripled from 4 to 12 tons/day, and pump and pump bearings wore down frequently due to the abrasiveaction of silt and sediments. During the wet season, pump bearings often had to be replaced every twoweeks. Because of the excessive operation and maintenance as well as replacement costs, the surfaceintake facility at Baricho, including the treatment works, was abandoned after less than a decade ofoperation, representing a huge economic and financial cost primarily due to poor catchment manage-ment. The surface source was replaced with nine boreholes along the banks of the Sabaki River and a5,000 m3 contact tank for chlorination. The boreholes provide about 55,000 m3/day, of which 45,000m3 goes to Mombasa and 10,000 m3 to Malindi.

Hirji and Ibrekk 17

Evnwonmenta arnd Water Resources Management

BOX 5.Impacts of poor drainage

Waterlogging. Some arid and semiarid regions have inadequate natural drainage, or nonfunctioningdrains. In these areas, repeated irrigation and seepage from water conveyance facilities surpasseshistoric recharge rates, and causes water table rise. Flow patterns through subsurface strata may bealtered, leading to migration of agrochemicals or soil leachate into adjacent, high-quality groundwater. Innorthwest India-Punjab, Haryana, Rajasthan, and Gujarat-water tables were typically 25 metersbelow land surface before crop irrigation began. The water table has risen 25-30 centimeters a yearsince the 1 890s. By the 1920s, irrigation-induced waterlogging and salinity were observed, and by the1950s 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 rootsand transpire, or the water evaporates through the soil surface, and mineral salts concentrate in theroot zone. In arid regions, more irrigation water (and therefore salt) is applied to the land, and lessrainfall is available to leach away accumulating salts. The naturally saline soils in many arid regionsfurther exacerbate the problem. Excess salts require plants to expend more energy to acquire waterfrom the soil and make the necessary biochemical adjustments to survive. Energy diverted fromessential physiological processes may result in suppressed growth or in desiccation and wilting of theplant. The Food and Agriculture Organization estimates that 10-48 percent of irrigated lands areaffected by salinity on a global basis. According to a survey by the Bank, in the San Lorenzo ProjectIrrigation 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 cropproductivity.

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 thie Great Lakes of North America floating weeds, such as water hyacintih, 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 1 950s, 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 199 1). 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


Global T-rends 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 closedalso harbor carriers of human and animal water bodies such as tropical lakes will bediseases and increase occurrences of malaria, impacted greatly. In addition, climate changebilharzia, river blindness, encephalitis, and will degrade water quality through higherschistosomiasis. Water managers are only now temperature and increased pollutant load fromrealizing the significance of the operations and runoff and overflows from waste facilities.maintenance costs of aquatic weed growth, Impacts on water resources will also resultbut have yet to fully realize the significant from rising sea levels (estimated to rise 3-35economic consequences associated with the inches (0.09-0.88 meters) over the nextphysical loss of water quantity and quality century), adversely affecting freshwater

(especially in water-scarce regions) and of supplies in coastal areas. For low-lying areasecosystem services due to the proliferation of (such as Bangladesh) and small island states, inweed growth. particular, this is likely to be the most signifi-

cant environmental concern of the century.Climate Change. The Intergovernmental Panel This introduces additional dimensions ofon Climate Change (IPCC) has presented uncertainty and complexity in the domain ofestimates of a 1.4 -5.8 degrees Celsius water resources management. It will affect theincrease in global temperature due to green- economies of many single-purpose projects.house gases over the next century (IPCC Warmer temperatures will also result in2001 a). Global warming will have a differen- changes in water demand. Irrigation, thetial 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 threeHydropower plants on the Awash River (Ethiopia), Chiplima hydropower plant (India), Owen Fallspower 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 orreduce 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 islowering flow rates by 45-60 percent. Major weed infestation occurs in the Itoikin Rice irrigationcanals (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 maintainclear passage for ships to dock. In Nigeria, water transport system disruptions have increasedvariable and fixed costs of commercial boat transportation, and led to fewer trips, reduced operat-ing profits, and higher fares.

(continued on next page)

Hirji and lbrekk 19


BOX 6. (continued)Problems caused by Water Hyacinth

* Urban water supply. Urban water supplies from Lake Victoria ainja, Uganda) and Lake Chivero(Harare, Zimbabwe) are subject to increased maintenance costs because of blocked intakes andhigh 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 increasedwater loss by 24-40 percent through evapotranspiration and reduced supply for mining companiesand industries.

* River basinlenvironmental management. Lake Raw Pening (Philippines) is used extensively as anirrigation, hydroelectric, fishing, and recreational resource. Water hyacinth covers 60 percent ofthe 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 forartisanal fishing in Benin. It has resulted in 40-50 percent reduction in catches from the Niger riverand Shire river (Malawi). In India's Chilika Lake, hyacinth covers about 40 percent of the surfacearea 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 1 995)rated water hyacinth as a high priority issue with major impacts on the ecosystem, related eco-nomic activities, and community livelihoods. In Thailand, the water hyacinth has contributed to aloss 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

KEY CHALLENGES complement traditional environmental regula-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

pol ic ies, 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 implementdistortions, and create markets for environ- clear and consistent rules and guidelines formental services. It has a central role in promot- assessing environmental impacts of develop-ing a coordinated approach to managing the ment projects and programs. Without full-cost



pricing, the present vicious cycle of waste, ments need to be legally recognized, properlyinefficiency, and lack of service for the poor defined, and accorded appropriate priority inwill continue. Better understanding needs to water resources policies and legislation inbe developed of the many components of order to incorporate this important use inwater 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 providecontrolling pollution, protecting wetlands, and natural storage besides serving other functions.so on. Addressing all these challenges will Environmental degradation of water resourcesentail 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


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 peopleGreater 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 withaccurate assessment has been hampered by

the lack of data. It is not obvious that the poor accsto ad e ater supl andsanitation facilities face a very high risk of

"pollute-now-clean-up-later" pathway isinevitable, but the costs of protecting water exposure to waterborne diseases and illnesses.

systems, in terms of human and institutional Projections indicate that the mortality and

resources and financial investmnents, are very morbidity rates among the 0-14 year olds inthe MENA Region can be reduced by overhigh for many poorer countries. Present g y

approaches have tended to ignore the benefits one-third by increasing the availability of

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 hasimportant 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



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 deconiposi- 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 consider-ation 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- lnterbasin Water Transfers. The increasing use

sources management. The practice of using of interbasin water transfers to address localpartially 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

scarce regions. Figure 3 shows the proportion abundant supply from another.3 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 ofmetals and cause infections from intestinal interbasin water transfer should be carefully

nematodes and bacteria, especially those that assessed.6 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 ofFigure 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 350si _ _ ~~~~~Wastewater generated

Management Institute is carrying out research : 300 gener-t-

to identify conditions under which wastewater r 250

can be used for irrigating and fertilizing crops .; 200

without putting people or the environment at ' 150

risk. v 00

Construction of Dams. Large dams have 0 -_isi, _Israel Morocoo Tunisia Jordan

become highly contested because of polarized Source: Saghir, SchiffIer, and Woldu 2000.

Hirji and lbrekk 23


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

Nunierous river basins, groundwater aquifers, are likely to result in water resources systems

and coastal and marine environments cross that are not managed (IPCC 2001 b). 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 ow

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

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 howcommunity livelihoods depend on and influence them, is required before decisions on developmentoptions 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 ina net gain for the species within the region.

* Large dams provide for releasing environmental flows to help maintain downstream ecosystemintegrity and community livelihoods and are designed, modified and operated accordingly.

Source: World Commission on Dams 2000.


Globa 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

NEW AND EMERGING OPPORTUNITIES more efficiently by providing real-time infor-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 informationtaking 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 needTechnology. 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


supply, which requires regulations and transfer project exporting water from theinvestment 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 areresponsibilities 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 experiencesystem 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 $1 invested 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


Chapter 3

Global Lessons from Bank Experience

WHAT HAS THE BANK BEEN DOING? In addition, with the support of the GlobalH istorically, the World Bank hasEnvironment Facility (GEF), the World Bank hasfunded water sector investments to significantly expanded activities dealing with

develop water services for a variety of ecological aspects of water resources manage-

consumptive and nonconsumptive uses, with ment.

an emphasis on using water resources for social

and economic development. In 1993, the Bank W at res s ha been one ofnthe mostissud a omprhensve tateent-he Wter important areas of World Bank lending during

Resources Management Policy Paper-that the past three decades. Through its support forResources~ ~ ~ ~ ~ ~ ~ ~eco Mangeen Polic invstmntrinirigaio

marked a major shift in influencing investments sector work and investments in irrigation,

in the water sector. The policy promoted a hydropower, water supply, sanitation, andcomprehensive approach to water management flood control, the Bank has contributed to the

and called for dealing with the use and protec- development of many countries through the

tion of water resources. Its key elements called provision of essential services to many commu-

for: nities. Yet, as pointed out by the OperationsEvaluation Department (OED) (OED 2001),

* Addressing quantity and quality concerns in Bank-supported investments in some casesan 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 environniental

* 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 d-d Water Resources Management

BOX 8.Key environmental findings of OED's evaluation of the implementation of the WaterResources Management Policy of 1993

Environment is now the third largest category of water-related institutional support and investment inthe Bank's portfolio. It increased from I I to 48 projects post-policy, and $3,261 million has beencommitted since 1993. Many national programs deal with enabling environmental management throughlegislation and regulation that includes water and institution building. Specific projects are concernedwith pollution control, drainage, watershed management, and erosion prevention.

* Groundwater has been mismanaged in many countries and requires greater emphasis. Most of theworld's poor rely on groundwater for drinking, and as much as half of the most efficient irrigationthat underpinned the green revolution came from groundwater.

* Investment can improve drainage, but sustainability is key. Drainage should be an integral part ofirrigation 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 usemainstreamed by borrowers.

Source: OED 200 1.

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 forthe following:

* More rigorous attention should be given to minimizing resettlement, maintaining biodiversity, andprotecting ecosystems in the design and implementation of water projects.

* Water and energy supplies gained through conservation and improved efficiency can be usedinstead of developing new supplies to extend service to the poor and maintain water-dependentecosystems. Low cost and environmentally benign methods of developing new supplies for agricul-ture, rural drinking water, and industry will be pursued.

* The water supply needs of rivers, wetlands, and fisheries will be considered in decisions concerningthe operation of reservoirs and the allocation of water.

Source. World Bank 1993.



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,

floodplains as storage facilities and as central management Of Cultural property, naturalelements of the hydrological cycle and habitats, pest management, projects in dis-

ecological systems is not fully appreciated. puted areas, projects in international waters,

The inability to communicate this message and and safety of dams). The objective of these

mobilize support for actions that call for the policies is to support informed decisionmaking

protection of natural assets represents a major and to ensure that World Bank-supportedoperations do not cause adverse impacts-that

failure of the environmental community. is'htthy"onohr.is, that they 'do no harm.'

Mainstreaming and Safeguard Polic:ies.Although EAs have helped improve project

Mainstreaming the environment meansdesign, the limited capacity of many borrow-

achieving environmentally sustainable waterers 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 lackfound~~~~~~~~~~~ thatudm envrometa issuesm wer ad-gnralc

found that environmental issues were ad- of capacity and knowledge on integrated waterdressed 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


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 I 1 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 pro-posed development program or project

* The scope of the study provides for broad coverage of the major potential issues and places themin a broader development context

d 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 anddecisionmaking

* 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 thepublic in their consideration of the proposed project;

* The mitigation and monitoring plan are realistically designed and can be implemented under localconditions

* There are arrangements in place to oversee environmental aspects of project implementation.



BOX II.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 Bankhelped the Government of Nepal identify alternative ways to meet Nepal's short- and medium-termpower demands. The government agreed to follow an approach for expanding power generationcapacity that integrated economic, technical, financial, environmental, and social considerations. In thebeginning of 1996, Nepal's Electricity Authority, supported by an interagency steering group, set out ascreening 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 potentialprojects and sites, and recalculation of parameters on a consistent basis

* Use of techno-economic and environmental-social screening and ranking criteria developedthrough a consensus-reaching process

* Provision of open consultation and information sharing with government stakeholders, the profes-sional community, nongovernmental organizations, and the general public on each step in theprocess.

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 interbasinDemand 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 lbrekk 31


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 waterComprehensive 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



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 strongdivisions between sectors involved in competitive agricultural production and environmental protec-tion, as well as limited public awareness of the long-term dangers of the problem, it is difficult toimplement long-term policies to address this issue. A model project is being implemented in Georgia asan initial intervention in this area.

The World Bank and GEF are supporting The Strategic Partnership for Nutrient Reduction in the BlackSea/Danube Basins. GEF will provide $70 million in grant financing over six years to cover the incre-mental costs of obtaining global benefits for investments, in conjunction with $210 million mobilized bythe Bank with other local, bilateral, and European Union financing. The funds under this "umbrellainvestment program" would be used for investments in wetland restoration, agricultural nonpointsource pollution, and municipal and small industrial wastewater treatment.

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

sListainable 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 thembiophysical considerations with social and

in the water allocation procedures. Typically economic considerations. It is being comple-

the management approach to protecting riverecosstem empasizs ony on isse ofmented by an overall economic assessment ofecosystems emphasizes only one Issue of

water quantity-minimum flow-without increasing downstream releases. Preliminary

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 lbrekk 33

Environmentdl 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 carriedout in four parts. The first part focuses on understanding the complete river ecosystem. The secondpart develops a series of flow scenarios. Each scenario describes a possible future flow regime in onepart of the river system (from dam releases and catchment runoff) and the resulting condition of theriver. The third part includes social and economic studies. A social analysis defines the human populationdirectly dependent on the rivers for sustenance and assesses the impact of changes in river flows for theaffected population. In the economic analyses, the social implications are translated into the costs ofmitigation and compensation for the affected population. In the final part, hydrologists estimate theamount of water that would remain in the dams in each scenario, and thus be available for offstreamuses such as transport and sale to South Africa.

The range of completed biophysical/socioeconomic scenarios will provide the LHWP authorities with asound basis for making informed decisions that integrate environmental flow requirements into operat-ing 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.



BOX 14Overall assessment

(Please see a color version of this figure in Annex C, page 57.) EffectiveInstitutionalized integration

Safeguard principles* All projects subject to EA* EA is an effective instrument for mainstreaming L I* Adequate EA capacity in the water sector Yellow Yellow/Red* Adequate consultations during the EA process* Sectoral environmental assessments

Demand management principles* Demand management included in most


Protection of biodiversitylenvironmentalflow principles* 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 lbrekk 35

Chapter 4

Strategic Framework for Action

T he preparation of the Environment and is not just the sustainability of the naturalWater Resources Sector Strategies resource system that is important, but the

provides a rare opportunity to discuss the sustainability of water use.

emerging issues with clients, partners, andcolleagues 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 FORmanagement group. There is an urgent need toelevate the discourse, and there is broad

support for ongoing efforts to ensure that RESOURCES DEVELOPMENT

environment becomes one of the basic objec- Sustainable water use can be defined as the usetives in any water resources management of water that supports the ability of humanstrategy. society to endure and flourish into the indefi-

nite future without undermining the integrity ofThe previous chapters have outlined some of the hydrologic cycle or the ecological systemsthe important ways that poverty and economic that depend on it. A limited set of outcomesdevelopment are inextricably linked to environ- (with explicit goals and criteria) should bemental sustainability, and in particular towar developed to express this concept and make itresources sustainability. The primary focus on operationally useful in assessing where presentpoverty alleviation underscores the fact that the policies and plans may lead or are leading or insustainability of the natural water resource decidn amng maylera sr ategies ox 1,

system is not an end in itself, but an essential' ~~~~~at the beginning of this report, outlines onepart of the welfare and security of people and posibe fewofrkpordi sutainab int

thei lieliood, epecallythepoo. Hnce it possible framework for defining sustainabilitytheir livelihoods, especiallY the poor. Hence, it of a water resource system in operational terms

37


for water and energy utilities that aim to voirs, either as freestanding projects or asbalance the use of water resources with the components of projects.

conservation of aquatic and marinebiodiversity. Integration of Environmental Aspects in

Water-Related Sectors. World Bank-sup-

A COMPREHENSIVE APPROACH TO ported water resources management strategies

WATER RESOURCES MANAGEMENT should develop explicit criteria for integratingenvironmental quality objectives within their

A Management Continuum. The World Bank respective frameworks. The water supply andviews freshwater, coastal, and marine re- sanitation, rural, energy, and health subsectorsources as a management continuum that boards should be encouraged to developrequires cooperative development of strategies explicit procedures for addressing sector-and implementation of actions at the basin specific environmental issues in a structuredlevel as well as at the regional, national, and manner. Support should be given to thelocal 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 INSTR ENVIROE NTAL SUE

for maintaining in their natural state, with the IANATER ESUCESIPLANINGparticipation of basin stakeholders, selected MANAGEMENT DECISIONMAKINGrivers with high ecosystem functions and Mainstreaming entails systematic and timely

values. integration of environmental quality objectives

in water resources strategies at all levels; inMoving 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-



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

the effectiveness of environmental assessmentPolicy Reforms. At the country level, the Bank In project planning and managementshould support water policy reforms that

integrate all water-related subsectors, includ-

ing 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 Managemnent

ENVIRONMENTAL USES OF WATER WATER QUALITY AND POLLUTION

Allocation of Water Rights to the Environ- MANAGEMENT

ment. Effective environmental and water Integrated water quality management is the

resources management requires that water and planning, organization, design, operation, ancl

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 managemenit,

structure and function of ecosystems so as to the World Bank should establish a Watersecure ecologically sustainable development Quality Management Initiative. This would

and use. The World Bank should support support the promotion of a phased approach

coLIntries' efforts to develop the legal frame- for developing and attaining water quality

work for environmental management of water objectives at both the regional (river basin or

resources. aquifer) level and the project level, as well as aBank-wide exchange of knowledge and

Environmental Flow Assessments. Dam experience in water quality management that

operations need to include provisions for would be i.-fl- r-,.1 in policies, best practices,

releasing environmental flows to help main- programs, and individual lending operations.

tain downstream ecosystem integr-ity ancl This could include the application of eco-

community livelihoods and need to be nomic analysis for pollution prevention,

designed, modified, and operated accordingly. control, and reduction programs to ensure thatthe balance between what is desirable from an

As part of development projects, the WorldBank should support client countries' efforts to environmental point of view and what is

Bankshold upprt liet cunties efort to feasible from a technical and economic pointprepare the legal framework for environmental

of view could be better understood and usedflows 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 therequired to satisfy basic human needs, protect Environment, RLiral, and Infrastructure famiies

aquatic ecosystems, and secure the sustainable of the Bank, building on the work started b

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 envi-

ronmental 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 Env ronment Stratesy Papers


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 ofsignificant 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 revieware likely to experience more frequent and of operations of single-purpose dams andhigher magnitude floods and others are likely reservoirs, and the strengthening of predictiveto experience more severe droughts. Low-lying and forecasting capabilities at the national andareas and small islands face the greatest threat regional levels. In water-scarce regions, thefrom sea level rise. The Bank should promote Bank should promote strategic droughtthe integration of climate change consider- management.ations in water policy reforms, adaptive

Hirji and Ibrekk 41

Chapter 5 1 p)

Way Forward

DEVELOP HUMAN RESOURCES substance of the environmental concerns, asS trengthen En vironmental Management well as staff who can quantify the value of

Capacity. The Water Resources Manage- losses associated with resource and ecosystemment Thematic Group and the environ- degradation.

ment family of the World Bank should jointlyundertake a careful review of the Bank's human Expanded Use of Interdisciplinary Task Tea

resources needs and skills mix that is required To ensure that the task teams are contributing

to address the environmental management to environmentally sustainable development,

challenges related to water resources manage- the Bank must provide appropriate and ad-

ment. 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


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 theANALYTICAL VWORK economic values of environmental services

Move TowardAdopting 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.

rcomprehensive 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

associated wildlife and habitats. Growing ambient water quality and health, especially

awareness of the deterioration of aquatic for areas without a modern water supplyecosystems has meant countries need to system. The relationship is complex, however,

develop integrated policies and strategies to given the many ways in which people canobtain water or avoid the worst impacts of

resolve the complex and interrelated manage- oltin Method are being develop o

ment problems of water resources as anprovide macro-level estimates of the health

integral part of the environment, and toovercome thmngeenfaerimpacts of different interventions, to inform

inisovercome them managemenofters respours decisions on investment programs. The value

and possible future direction of such effortsnents, namely land, air, and living resources need to be assessed in the context of policy,

(linking upstream-downstream activities). This managenient, and investment decisions made

geograph ical Iv comprehensive mulItimed ia 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


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. TheReuse 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 thesources 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-

spread. Work that has commenced with the icroaeeoytmadboiestconservation considerations. The intention is

irrigation sector on this issue should beto achieve this integration in a limited number

supported, and opportunities for implementa- of ongoing activities. Such managementtion should be identified. The experiencegained in the Middle East and North Africa projects, which expand on existing acities ofand in other regions in this area should be one or more of the interested organizations,

more broadly disseminated. wOLuld serve as models to accelerate change inthe programs and projects of all four groups,

as well as for much wider applications overSTRATEGIC 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 sustainedpolitical 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 Programprovides 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


in the water operations of the World Bank and IPCC and the global science community tobroader development community. The partner- better understand the implications of climateship 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 howFlow Allocation, Municipal WastewaterTreatment, River Basin Management, and they are coupled with local and regionalInternational Waters. The BNWPP offers a models as well as the predictive capabilities,unique opportunity to set up additional uncertainties, and limitations of the local andwindows 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, whichissued 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 thepartners to develop a program to support theimplemnenation develof selected pgreom rtin oe Environment Strategy aim to focus on interven-implementation of selected recommendations of tosi h ae etrta edt lathe report in a practical and cost-effective tions in the water sector that lead to clearmanner 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 15Suggested 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 econom-ics (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.

Exampies 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)


Way Forward

BOX I5 (continued)Suggested indicators

* Amount of underwater or wetland area placed into protected management, including no fishingzones

* 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 insome cases improved

* Demonstrable recovery of or increased protection for key flagship species or values as a result ofchanged 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 resultof reforestation programs

* Stakeholder awareness raised and involvement documented.

Source: GEF 2001.

Hirji and Ibrekk 47

r - , J.

Annex A

Regional Water-Related EnvironmentalPriorities

Key water andRegion environmental issues Impacts Strategic priorities and actions

AFR * Soil erosion and * Fresh water, one of the Urban development, water supply, anddegradation scarcest commodities, is sanitation:

* Water scarcity and rapidly being depleted and . Infrastructure and service improvementsdeterioration polluted to target diarrheal diseases, malaria, and

* Loss and degradation of * Soil degradation has affected choleranatural 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 and880,000 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 institutionsmore member states . Indicators and databases

. Of the I I major, . High-level political supportmultinational watersheds, 8 * Undertake comprehensive inventorieshave lost over 90% of forest and assessments to identify resourcescover available

. Most rapidly urbanizing Vulnerability to climate change:region * Adaptation and coping mechanisms

* Carbon sinksECA * 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 interventionscontamination of Water resources:groundwater cause serious * Improve irrigation and drainagehealth issues * Improve broader WRM

. $2 billion-about 5% of * Watershed managementCentral Asia's GDP-lost * Disaster mitigation; floodsevery year as a result of . Improve management of regional seassalinization (Black Sea, Caspian Sea)

* Aral Sea area reduced by70% _

Source: Regional environment strategies.

49



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 costand sanitation in urban in rural water supplies; 30% recovery and efficient operationand rural areas due to lack of sanitation in a Expand analysis of human health benefits

- Improving natural urban areas * More focus on rural areasresource management * 290 million people lack Reducing vulnerability:

* Water resources access to safe water; 75% in * Provide support for relief andmanagement rural areas reconstruction

* Mitigate risks from * 240 million people in urban * Address longer-term risk reduction andnatural 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 managementsanitation in Indonesia River basin management:exceeds $4.7 billion annually, * Mekong River and Chao Phraya Riveror 2.4% of GDP Increase public participation and

* 36.9% of agricultural land is environmental awarenessirrigated; uses 80% of water

LAC * Mismanagement of * Heavily urbanized region; Integrating pollution management in thenatural resources 75% of its 500 million people infrastructure and productive sectors:

* Urban-industrial living in cities * mitigate health impact of pollutionpollution * Access to safe water: 70- * use market-based instruments

* Vulnerability to natural 90% in urban areas, 20-70% * prioritize water supply and seweragedisasters in rural a 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 accountingand expenditure accounting frameworks

* promoting biodiversity conservationDisaster management:* Preparedness to reduce vulnerability,

rather than response* Analysis of human activities that

exacerbate the impacts of disastersMENA * 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 enhanceof water to agriculture attributable to water supply monitoring

* Degradation of water and sanitation * Wastewater treatment plants andquality . 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 soilsanitation contamination from agriculture

* Only I 5% of wastewater * Develop methods to control agriculturaladequately treated pollution


Regional Water-Related Environmental Priorities


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 productivityNatural 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 managementfisheries 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 v Coastal zone managementVulnerability to risks and all natural disasters and 60% * Watershed managementnatural 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 managementissues: * Urban development* Protection of * Pollution management

biodiversity, International watersconservation of * Important challenge; GEF provides anwatersheds opportunity

* Loss of fisheries * Priority to Ganges-Brahmaputra-Meghna* Climate change basin

Hirji and lbrekk 51

;. 3SS i£;v)Slf i

Annex B

Linkages Among Water, Environment, andDimensions of Poverty

A n outcome-oriented approach in the of poverty reduction through economicwater sector is needed to main- growth. Establishing well-defined and

14&t stream environment-poverty consid- equitable use rights for water, fisheries, anderations. Recognizing the close links between logging would provide the desirable incen-environment and water resources interven- tives and means for managing naturaltions and poverty reduction outcomes, there resources in a sustainable manner.are six dimensions of poverty that need to * Human Health. Improve people's health byaddressed: 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 andwelfare, and, on the other hand, protecting canals, and encouraging treatment ofthe sink function of water essential for industrial and toxic wastewater discharges,human health and protecting natural capital will also improve health. Recent estimatesfrom irreversible damage, ensuring that the suggest that premature death and illnesssocial and economic security of many that due to major environmental health risksdepend on the water resources for their account for one-fifth of the total burden oflivelihood is not compromised. disease in developing countries, a major

* Equity. Inequitable and unjust laws and ill- proportion of which are concentrateddefined property rights that restrict access among the poor. Inadequate water supplyto 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 % ofof natural resources. Unfair distribution of disease) in many Bank client countriescosts and benefits and planning processes (World Bank 2000b).that alienate affected communities from * Sustainable Livelihoods. Even thoughdecisionmaking and from sharing benefits reducing dependence on natural resourcesof water development projects fosters may be a more effective route out ofsocial stratification and limits the prospect poverty, natural resources remain the most

5.3


important safety net available to poor rural change should be reduced by gettinghouseholds. The livelihoods of poor people information to governments, the privatewho depend on land, water, forests, and sector, and poor communities and bybiodiversity should be enhanced by helping promoting adaptive strategies.them secure access to resources and * Empowerment. The empowerment ofcreating circumstances in which they can people to manage their own environmentuse and manage those resources and water resources, including watersustainably. infrastructure, should be supported by

* Security and Vulnerability. Poor people, ensuring participation of all stakeholders inespecially in poor countries, are particu- decisionmaking, equipping people with thelarly vulnerable to both natural disasters ability to monitor and influence publicand 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 soportionate effect on poor people since they forth. This is closely related to issues ofoften 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 genderfluctuations, and the impacts of climate discrimination, and a fair judicial system.


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~- - d

Color Graphics

BOX A/BOX 14 EffectiveOverall assessment Institutionalized integration

Safeguard principles* All projects subject to EA L* EA is an effective instrument for mainstreaming* Adequate EA capacity in the water sector Yellow Yellow/Red* Adequate consultations during the EA process* Sectoral environmental assessments

Demand management principles* Demand management included in most


Protection of biodiversitylenvironmentalflow principles U* 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

AIIL-a --

A- trco 1~~~~~~~~~~~~~t

Water WaterStress - Scarcity


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