Global Goals, Local Basins: Why We Need a Methodology for Targeting Water Investments

Just over two years ago—on September 25, 2015—over 150 world leaders adopted the United Nation's Sustainable Development Goals (SDGs) to end hunger, lift populations up from poverty, fight climate change, protect the natural environment and tackle economic inequality by 2030. SDG 6, the global goal that calls for better management of and universal access to water resources, is crucial to protecting lives and livelihoods and ensuring sustainable economic growth.

Despite some progress, there is a critical lack of investment in water sector capacity and infrastructure on a global scale:

• Since 2012, water crises have consistently ranked as a top societal and environmental risk in the World Economic Forum's global threat rankings.
• The United Nations estimated that water scarcity affects ver 40 percent of the current world population, and that percentage is expected to rise.
• The World Bank predicted that failure to address water scarcity may limit GDP growth by as much as 6 percent in certain regions by 2050, a loss of roughly $4.5 trillion.
• Individuals exposed to drought in their infancy can suffer from its negative impacts on health and economic prosperity far into adulthood, as highlighted by the World Bank in a recent report.

The public and private sectors have made commitments to help. Government—directly and through multilateral development banks and other financial institutions—has funded the bulk of water sector improvements, and many countries rely these funds. The private sector has also stepped up: through the United Nations Global Compact, over 12,000 organizations, including 9,000 companies, have committed to enable and invest in sustainable development around the world. At events such as the 2017 Alliance for Water Stewardship Forum, corporate leaders and water experts convene to identify the best opportunities for the private sector to improve water resource management globally.

Investment to date, however, has been insufficient to address the scope of the challenges. As 2030 nears, global actors such as multinational businesses and multilateral banks will require tools to improve the efficiency and transparency of their investments to meet SDG 6 on a local level.

River Basin Action

There are some estimates for the global cost of meeting parts of SDG 6: the World Bank estimated that $28.4 billion a year could extend water and sanitation services to underserved populations and McKinsey estimated that $50-60 billion a year could end the impacts of water scarcity. These types of predictions offer a necessary overview of the challenge, but do not provide a mechanism to translate global investments into action at a more local level. To make true impact, we must know not just the required global investment, but where and how investments should be made to fully meet SDG 6 on the ground.

Each river basin has a unique environmental, sociological and economic context, so meeting SDG 6 requires different investments and activities across locations. This context can vary greatly across regions. For example, the Mississippi river struggles with water pollution from diffuse sources like agricultural runoff, which falls under SDG target 6.3, whereas northern China must address severe water quality problems and the water supply-demand gap as outlined under SDG 6.3 and 6.4, respectively. Basins in Sub-Saharan Africa require considerable investments to meet SDG 6.1 and 6.2—access to drinking water and sanitation. SDG 6 may be a global vision, but the contextual reality of water requires better ways to map global goals onto local contexts to show what kind of investment is needed for these different environments.

Calculating Local Costs

To make meaningful changes, global investors need to know where and what kinds of investments need to be made in local river basins. Specifically, they need to know:

• The current cost of capital, operations and maintenance for basin water resource management;
• The upfront investment needed for additional activities and facilities to meet each SDG 6 target and eliminate negative water-related issues in a basin;
• Estimates for the continual levels of capital, operations and maintenance costs to maintain SDG 6 progress in a basin after it is achieved (for example, maintaining good water quality requires constant vigilance).

However, these numbers are not easily calculated. The World Resources Institute and Valuing Nature are preparing a method to calculate the investment needed to meet each SDG 6 target in a basin. This will allow for a comprehensive picture of the state of water in a given basin, and will subdivide needed investments by SDG 6 targets. The method will offer a common tool for global actors to compare needs within and across basins. Whereas previous investment estimates focused on SDG 6 targets in isolation, the new method pulls all water targets under one framework, identifying the full investment needed to shift basins from current to desired conditions and allowing cross-cutting comparisons. This is one of the many tools needed to better coordinate responses to increasingly threatening water risks and scarcity.

Now that the global community has committed to achieving the Sustainable Development Goals, we must demand action backed by the right means to put investments where they can do the most good. 2030 is rapidly approaching. We will only be prepared to meet 2030's deadline if we have a range of tools to ensure our efforts result in meaningful change.