Options for decoupling economic growth from water use and water pollution – full report. A report of the Water Working Group of the UNEP International Resource Panel


Growing demand for water from households, industry, agriculture, and to maintain the
health of our environmental services poses rapidly growing challenges for the rational
management of this resource. Uncertainty regarding the future availability of water
and universal access to it is increasing on all continents. Water (availability/scarcity/
management) is one of the top global risks according to the 2015 World Economic Forum
Global Risk Report. By 2030, the world could face a 40% shortfall in water supply if no
changes are made in how water is managed. The total demand for agricultural products
in 2030 is expected to grow by around 60% to meet the demands arising from growing
populations and higher incomes.
Water resource management problems are multi-faceted, and cover a wide varierty of
economic, political and social issues. Some of these challenges can be addressed through
sustainable, equitable and eficient governance, which optimizes water use between different
sectors and ecosystems and balances current and future needs. This calls for governments,
businesses, consumers and other sectors to step up and play an active role in improving
management of water resources. In this context, the Sustainable Water Management
Working Group of the International Resource Panel (IRP) seeks to offer an original and
sustainable approach to water management.
This manuscript is the second IRP report on sustainable water management. The
irst report in the series provided a detailed account of how a decoupling policy can be
measured. It introduced and discussed the analytical methods needed to ensure that water
use can be properly quantiied over the life cycle and integrated into other measures within
the green economy.
This second report draws on the conceptual frameworks developed by IRP research and
the existing literature, to provide a conceptual and analytical basis and compelling case for
decoupling policy and decision-making in water resource management.
The report explores innovative technological and policy instruments and opportunities to
accelerate decoupling and achieve the environmental and economic beneits of increased
water-use eficiency and productivity for both developing and developed countries. The
possibilities and limitations of these tools and approaches are presented for agricultural,
municipal and industrial sectors followed by larger scale system water level approaches,
e.g., the river basin.
More broadly, it examines the interlinkages between consumption and production,
analyzing among other issues, the ways in which global trade affects the geographical
distribution of water use and water pollution. Resource and impact decoupling in
the water sector is particularly important in areas where water resources are under
pressure and pose threats to human and ecosystem health.
Decoupling human well-being from water use and impacts is at the heart of the
recently -approved Sustainable Development Goal (SDG) for Water. The contributions of
this report are particularly relevant for the implementation of the Water Goal and those
Goals related to sustainable consumption and production, and resource eficiency.
Co-Chairs, International Resource Panel (IRP)
Dr. Janez Potočnik
Republic of Slovenia
Dr. Ashok Khosla
New Delhi,
Lukas Maverick Greyson / Shutterstock.com
Water is essential for healthy human societies and natural environments to thrive
and prosper. Yet as the population approaches nine billion, nearly half of those
people could suffer water stress by 2030 as a result of accelerating urbanization, new
consumption habits and climate change. This report provides option for a viable and
sustainable alternative; one that swaps economic growth fuelled by escalating water
use and environmental degradation for a more durable model of social, economic and
environmental resilience.
If the world continues on its current course, by 2030, annual demand for water in North
America and Sub-Saharan Africa could increase by 42 and 283 per cent respectively,
compared to 2005 levels. That is why the ambitious 2030 Agenda for Sustainable
Development seeks to decouple economic growth from water consumption and pollution
by integrating water related issues across each of the 17 goals and making a speciic
commitment that “ensures availability and sustainable management of water and
sanitation for all.”
Therefore, this new report outlines the challenges to delivering these goals, while drawing
on the many existing success stories to highlight some of the available solutions and
provide a scientiic assessment of technological and policy tools. Covering agricultural,
municipal and industrial uses as well as water systems, these solutions have already
proven to be practical and effective, with huge potential for scaling up. The report will
help public and private sector decision makers to better understand the strengths and
limitations of various approaches, which alone or in combination, could help break the link
between escalating water use, economic growth and environmental degradation.
I would like to thank all of the experts at the UNEP-hosted International Resource Panel
for the effort and cooperation behind this work. While I cannot mention everyone by name,
I would like to say a particular thanks to Kevin Chika Urama, former Executive Director
of the African Technology Policy Studies Network, Peter Koefoed Bjørnsen, Director of
UNEP-DHI and Kalanithy Vairavamoorthy, Professor at the University of South Florida
School of Global Sustainability for their commitment and leadership in this endeavor.
A chim Steiner
UN Under-Secretary-General
UNEP Executive Director
1. Introduction 8
1.1 What is decoupling? 8
1.2 Renewable and non-renewable water resources 10
2. Making the case for decoupling 11
2.1 Status on decoupling – lessons learned 11
2.2 Why further action is needed 17
2.3 International trade and decoupling 18
3. The water resources challenge 20
3.1 Drivers of the growing water resource challenge 20
3.1.1 Demographic and economic drivers 20
3.1.2 Climate change as a driving force 21
3.1.3 Land-use change impacts as a driver 23
3.2 Impacts of water uses 23
3.2.1 Municipal water use 23
3.2.2 Agricultural water use 24
3.2.3 Industrial water use 26
3.3 Dependence on water 27
3.3.1 Water use and welfare 27
3.3.2 Water pollution and welfare 29
3.3.3 Flooding and welfare 31
4. Technological innovation and decoupling 32
4.1 Agricultural sector 32
4.1.1 Eficient rainwater management 32
4.1.2 Eficient irrigation delivery systems 32
4.1.3 Deicit irrigation 33
4.1.4 Irrigation scheduling 34
4.1.5 Drainage infrastructure 34
4.1.6 Agricultural land management 34
4.1.7 Hydroponics 35
4.1.8 Crop varieties with reduced transpiration requirements 35
4.1.9 Wastewater reuse 35
4.2 Municipal sector 36
4.2.1 Leakage reduction and non-revenue water in domestic
supply systems 36
4.2.2 Improvements to household water use eficiency 37
4.2.3 Improved collection, treatment, and reuse of urban wastewater 38
4.2.4 Disaggregated urban water supply infrastructure 39
4.2.5 Integrated urban water supply systems 39
4.3 Industrial sector 39
4.3.1 Industry water saving schemes 39
4.4 System-level approaches 42
4.4.1 Natural water puriication 42
4.4.2 Multiple-use systems with cascading reuse of water 42
5. Policy innovation and decoupling 44
5.1 Constraints on the economic management of water 44
5.2 Agricultural sector 46
5.2.1 Volumetric water pricing 46
5.2.2 Water markets and trading 47
5.3 Municipal sector 47
5.3.1 Appropriate water pricing 47
5.3.2 Public awareness campaigns 48
5.4 Industrial sector 48
5.4.1 Appropriate water pricing 48
5.4.2 Corporate water reporting and accounting 48
5.5 Systems-level approaches 48
5.5.1 Conjunctive management of surface water and groundwater 49
5.5.2 Water eficiency trading schemes and investment offsets 51
5.5.3 Life Cycle Assessment 51
5.5.4 Virtual water trading 52
5.5.5 Water neutrality 52
5.5.6 Basin-scale water markets 53
5.6 Equity considerations 53
6. Conclusions and recommendations 56
7. Glossary 59
8. References 61
This report is one of a series from
the UNEP International Resource
Panel (IRP) addressing how and
whether economic growth can be
decoupled from depletion of and
damage to natural resources.
The report addresses the issue of
decoupling with respect to water
The document begins with an explanation
of what decoupling is and how it relates
to water. It goes on to outline some
achievements with regard to decoupling
and makes a compelling case for further
decoupling due to growing pressures
on water resources. It also explores the
ways in which global trade affects the
geographical distribution of water use
and water pollution, which is important
for understanding decoupling at different
spatial scales. The report then describes in
more detail the water resources challenges
in terms of drivers for change in demand
and availability of water, the role of water
uses in the economy, and the dependence
on water for human welfare. This section
aims to clarify the conditions and the context
for potential actions and solutions moving
towards decoupling. Finally, a collection
of technical and policy tools to achieve
decoupling is provided. The presentation of
policy tools includes a treatment of equity
1.1 What is decoupling?
Decoupling refers to the ability of an
economy to grow without a corresponding
increase in environmental pressure. The
terms “green economy” and “green growth”
are also frequently used to describe this
phenomenon. The 2011 IRP document,
“Decoupling Natural Resource Use and
Environmental Impacts from Economic
Growth” (UNEP, 2011a), introduced the
IRP’s position on decoupling. As part of
the document, a deinition of decoupling
was provided that distinguishes between
resource decoupling and impact decoupling
(Figure 1.1) – and between absolute and
relative decoupling.
Resource decoupling exists when economic
growth exceeds the growth rate of resource
use; in other words, when the economic
productivity of resources is increasing.
Resource decoupling is important when a
speciic resource is scarce and its further
depletion could frustrate societal progress.
Impact decoupling occurs when the
environmental impact of economic activities
is reduced. Impact decoupling is important
when the use of a resource poses threats to
human and ecosystem health.
In the water sector, resource decoupling is
important in areas where water resources
are under pressure and further depletion
poses obstacles to societal progress. In areas
where land-use activities disrupt renewable
supplies, limiting these activities can also be
viewed as resource decoupling if the ease on
Figure 1.1
The two aspects of “decoupling”
Resource decoupling
Impact decoupling
Source: UNEP (2011a)
water resources is more signiicant than the
loss of economic growth incurred by the land-
use limitations.
Impact decoupling is important when and
where water use poses threats to human or
ecosystem health. For example, water use
can pose threats to human or ecosystem
health both when water is abstracted
from the natural environment, disturbing
ecosystem functions, and when water is
used as a contaminant sink or transport
medium for contaminants.
The 2011 document also distinguishes
between relative and absolute decoupling.
Relative decoupling takes place when the
growth rate of resource use or a relevant
impact parameter is lower than the growth
rate of a relevant economic indicator (for
example, GDP). The association is still
positive, but the elasticity of this relation
is less than one (Mudgal et al., 2010). The
example of resource decoupling presented
in Figure 1.1 is an example of relative
decoupling, as the rate of resource use is
increasing, but at a slower rate than the
rate of economic growth.
Absolute decoupling takes place when
resource use or environmental impacts
decline(s), irrespective of the growth rate of
the relevant economic indicator. Absolute
reductions in resource use are rare (De
Bruyn, 2002; Steger and Bleischwitz, 2009),
and can only occur when the growth rate of
resource productivity exceeds the growth
rate of the economic indicator.
1.2 Renewable and non-
renewable water resources
The distinction between renewable and non-
renewable water resources is important
because it indicates to what extent resource
decoupling with respect to water is needed.
Although the hydrological cycle is a closed
global mechanism linking all water in the
world, the timescale of replenishment of
water resources stocks is vastly different for
different stocks of water, ranging from days
for some lakes to tens of thousands of years
for some groundwater stocks. And because
water is costly to transport over large
distances, the geographical distribution
and location of water resources matter.
Therefore, the use of non-renewable water
resources presents a more serious pressure
and unsustainable use-pattern than the use
of renewable water resources and hence
makes a stronger case for decoupling.
In this report, non-renewable water
resources are deined as large stocks of
freshwater for which the rate of depletion
is out of equilibrium with the rate at
which stocks are renewed. In practice,
all non-renewable water resources are
groundwater resources; large stocks of
surface water resources are comparatively
rare, and those that do exist, such as
large lakes, are generally not perceived
as sources of water supply that may be
depleted over time (there are exceptions,
such as the Aral Sea). On the other hand,
about 98% of the world’s freshwater
resource stocks are groundwater (UN-
Water, 2009), excluding polar ice, and in
many countries groundwater resources are
being depleted at rates faster than they are
renewed by the action of the hydrological
cycle. When withdrawals are not replaced
on a timescale of interest to society,
eventually that stock becomes depleted.
The water itself remains in the hydrologic
cycle, in another stock or low, but it is
no longer available for use in the region
originally found.
Renewable water resources include
surface-water resources and groundwater
resources where the rate of abstraction is
in equilibrium with or lower than the rate
of renewal through the hydrological cycle.
It is important to note that the hydrological
cycle and hence the amount of renewable
water resources can vary over time and be
impacted by a number of factors such as
climate change and land-use change as
described in a subsequent chapter.
©Vladimir Melnikov/Shutterstock
This chapter irst examines the relationship
between water use and economic growth
in order to assess whether water use is
increasing at a slower rate than economic
growth in some countries (in other words,
whether relative decoupling is already taking
place) and which lessons can be learned
from the development process. It then
goes on to illustrate why we still need to do
more and ind new and additional ways to
decouple water use from economic growth.
2.1 Status on decoupling –
lessons learned
Despite the importance of water, many
countries have a mixed track record in
managing their water resources. With some
exceptions, the integrated management
of water resources has simply not been
a top political priority, and in many cases
water supply infrastructures are neither
regularly upgraded nor adequately
maintained. With few exceptions, many
governments have often under-invested
in their water resource systems; failed
to put in place policies for integrated
governance of groundwater supplies
and their management and to establish
effective market or pricing mechanisms;
treated water resources as a public good;
and struggled to enforce individual or
communal property rights. Moreover,
governance reforms to promote innovation
and new technologies for improving
technical eficiency in water supply
infrastructures and/or governance reforms
to improve allocative eficiency and water
productivity in different sectors have often
been inadequate.
On average, national policy responses
to the growing water scarcity have
largely focused on expanding supply
through substantive investments in
water engineering infrastructure such as
building large dams, canals, aqueducts,
pipelines and water reservoirs. With a
few exceptions, in the developed world
these solutions are often ineficient and
many of them are neither economically
viable nor environmentally sustainable.
The energy intensity of water, for instance,
has been rising due to the lowering of
the groundwater table in many areas, the
increasing use of desalination processes,
and the development of mega-projects
for the surface transfer of water (such
as China’s South-North Water Transfer
project, designed to move 45 billion
cubic meters of water per year once
fully completed in 2050). Water losses
through evaporation from conventional
water storage devices are also signiicant.
The amount of water lost through
evaporation from water reservoirs is
higher than the total amount of water
consumed in industrial and domestic uses
(Shiklomanov, 1999).
Making the case for