Environment and WRM WB 2001

Public Disclosure Authorized
24095
Environment Strategy Papers

Environmental
and WVater Resources Strategy Series ManagementrNumber2 Manage ment

October 2001
Rafik Hhj` Hans Olav lbrekk
The World Bank
FTnE COPY EJ Environment Department
ENVIRONMENT
STRATEGY PAPERS
No. 2
Environmental and Water Resources Management
Rafik Hirji Hans Olav Ibrekk October 2001
The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. Manufactured in the United States of America First printing October 2001
In 2001, the World Bank completed the comprehensive two-year process of preparing its Environment Strategy, Making Sustainable Commitments: An Environment Strategy for the World Bank. It was endorsed 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 intellectual ziscussion on a range of issues within the Bank as well as with client countries, partners, and other interested stakeholders. The Environment Strategy Paper series includes revised versions of Environment Strategy Dackground papers, as well as new reports prepared to facilitate implementation of the Strategy. This series aims to provide a forum for discussion on a range of issues related to the strategy, to help the transfer of good xractices across countries and regions, and to seek effective ways of improving the Bank's environmental oerformrance.
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Contents
v vii 1 7 7 10 11 11 13 13 14 14 20 25 25 27 27 28 37 37 38 38 40 40
Preface Acknowledgments Executive Summary Chapter 1: Water-Environment-Poverty Linkages Background Sustainable Water Resources Development and Management Poverty Alleviation Notes Chapter2: Global Trends Relating to Water and Environmental Management Three Profound Changes in Thinking Changing Role of the Public and Private Sector Key Threats Key Challenges New and Emerging Opportunities Notes Chapter3: Global Lessons from Bank Experience What Has the Bank Been Doing? Lessons Learned Chapter 4: Strategic Framework For Action Adopt Clear Framework for Environmenially Sustainable Water Resources Development A Comprehensive Approach to Water Resources Management Mainstream Environmental Issues in Water Resources Planning and Management Decisionmaking Environment Uses of Water Water Quality and Pollution Management
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40 Climate Change Adaptation and Mitigation
43
43 44 45 46
Chapter 5: Way Forward

Develop Human Resources Analytical Work Strategic Partnerships Indicators
Annexes 49 53 55 57 Boxes Annex A: Regional Water-Related Environmental Priorities Annex B: Linkages Among Water, Environment, and Dimensions of Poverty References Color Graphics
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11 15 16 17 18 19 24 28 28 31 33 34 35 46 Tables 11 Figures 7 8 23
Box Box Box Box Box Box Box Box Box Box Box Box Box Box Box
A. Overall assessment 1, Sustainability outcomes for water use 2. Water pollution and human health 3. Challenges for managing groundwater contamination 4. Impact of poor land use on Mombasa water supply infrastructure 5. Impacts of poor drainage 6. Problems caused by Water Hyacinth 7. World Commission on Dams: Priorities for sustaining rivers and livelihoods 8. Key environmental findings of OED's evaluation of the implementation of the Water Resources Management Policy of 1993 9. Environment and poverty alleviation objectives of Water Resources Management Policy 11. Integrating environmental and social considerations in power sector planning in Nepal 12. Strategic Partnership for Nutrient Reduction in the Black Sea/Danube Basins 13. Environmental flow assessments for the Lesotho Highlands Water Project 14. Overall assessment 15. Suggested i nd icators
Table 1. Linkages between water, environment, and poverty
Figure 1. Water and water-based ecosystems values Figure 2. Water-stressed and water-scarce countries: 2025 projections Figure 3. Wastewater generated and reused in selected countries
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Preface
o improve the management of water

sector investments, the World Bank is preparing a Water Resources Sector
The paper is based on a review of regional

environment strategies (prepared for the Environment Strategy), on a review of the water sector portfolio and country focus studies (done for the Water Resources Sector Strategy), and on consultations with other sector boards and Bank staff. Chapter 1 outlines water-environment and poverty linkages. It identifies the six dimensions of poverty and how environment and water management are related to each other. It also presents a possible set of sustainable outcomes for the water sector. Chapter 2 addresses emerging global trends related to water and environmental management. Chapter 3 summarizes lessons from Bank experience. Chapter 4 presents the implications for the Bank in terms of a strategic framework for action, and Chapter 5 considers how to support implementation of the strategic framework.
Strategy, and to enhance the main-streaming of the environment in Bank investments, the Bank is preparing an Environment Strategy. This background paper is the Environment Department's contribution to both these efforts. It focuses on the environmental sustainability of water-related investments and policies supported by the Bank and evaluates how effectively the Bank is integrating environmental quality objectives in water resources planning and management. A second objective of this paper is to review the World Bank's efforts to mainstream the environment in its lending and non-lending water resources activities and operations, and to draw lessons for enhancing the environmental sustainability of water sector investments.
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Acknowledgments
his paper was prepared by Rafik Hirji and Hans Olav Ibrekk of the Environment Department with support from Walter Garvey, David Hanrahan, Nagaraja Rao Harshadeep, and Stephen F. Lintner of the World Bank, and Alfred Duda of the Global Environment Facility. The paper also benefited from comments on early drafts provided by John Briscoe, Franklin Cardy, Salah Darghouth, John Shepherd, and Lee Sumter Travers from
the World Bank and Deborah S. Rubin from Cultural Practice. Guidance was provided by the Water Supply and Sanitation Sector Board and many Bank staff during the preparation and review process, including Inger Andersen, Mohamed Bekechi, Greg Browder, Jack Fritz, Jose Furtado, Agi Kiss, Magda Lovei, Andrea Merla, Douglas Olson, Robert Robelus, Kate Stevens, and Heinz Unger.
vii
Executive Summary
his paper reviews the World Bank's

efforts to mainstream the environment in its lending and non-lending water
freshwater biodiversity on which people,

especially the poor, often depend directly. Hence, it is essential to maintain the stability, health, and productivity of the water resources system. A Systemic Water Crisis. Over the past several decades, food production as a result of the green revolution has improved dramatically, and access to drinking water expanded for 2.4 billion people, while access to sanitation facilities improved for 600 million since 1980. The world, however, continues to experience a systemic water crisis as a result of unsustainable use and management of water resources due to poor social, environmental, or economic policies and actions. At the same time, there is a need to increase water supplies and services to needy populations in an environmentally sound manner. Traditional problems concerning the provision of water supply and sanitation services in urban and rural areas will require concerted efforts: more than a billion people do not have access to potable water supply and 3 billion do not have adequate sanitation. With a rapidly increasing population, the problems of food security and growing demand for water to generate electricity, meet domestic supply, and support industrial development persist.
operations. It is also intended to inform ongoing Bank efforts to prepare a Water Resources Sector Strategy and an Environment Strategy. The paper summarizes lessons from past and ongoing practice and recommends a strategic framework for enhancing the environmental sustainability of water sector investments. It is based on a review of regional environment strategies, on the water sector portfolio and country focus studies, and on consultations with other sector boards and Bank staff. The Resource Base. The water resources system-consisting of water (in rivers, aquifers, and lakes) and land- and water-based ecosystems (watersheds, wetlands, and floodplains)is essential for the sustenance and health of all species. The resource provides services with many direct, indirect, option, and non-use values. As a source of natural capital, it is a primary input for a whole array of human needs and economic development activities. As a sink, it is used as a receptor for wastewater discharges. Fresh water sustains the integrity of the ecosystems that serve important ecological and hydrological functions and as hubs of
Environmental and Water Resources Management New Threats. The water sector faces new threats and challenges related to the local and basinwide degradation of water resources system from water allocation conflicts, water pollution, and land degradation, along with similar issues at the transboundary level and climate change considerations at the global level. These will have a direct bearing on the way water resources are managed in the future. Rapid urbanization, for example, is outpacing governments' abilities to provide clean water, sanitation, and waste management services, and also forces governments to address the implications of changing land use and encroachment on recharge areas and wetlands. Excessive regulation and overabstraction of water can alter natural flows, cause irreversible damage, and affect downstream uses, triggering a sequence of negative environmental impacts. Water pollution from point and nonpoint sources diminishes use of water for other uses, increases cost of treatment, and harms ecosystem functions and people's health. Inadequate access to sanitation facilities is contributing to waterborne diseases and illness. Destructive land use (poor cultivation methods, deforestation, and overgrazing) is reducing storage; altering runoff, infiltration, and available water supply; increasing soil erosion, sedimentation of reservoirs, and irrigation canals; and damaging water supply infrastructure. Poor drainage is causing waterlogging and salinity problems, and, in a few cases, concentrating naturally occurring chemicals to toxic levels. Introduction of alien and exotic species is devastating biodiversity, and invasive weeds are causing water losses and quality deterioration, serious operational problems and costly maintenance, and damage to ecosystems. 2 The potential hydrological, ecological, and economic consequences of these new threats to the water sector are significant. They can threaten the ability of the water resource system to continue providing the basic hydrological and ecological services that traditional services depend on; cause irreversible damage to and further stress an already stressed water resource; undermine investments in water supply, irrigation, and energy services; and affect downstream coastal and marine resources. The cumulative effects on downstream waters often create new transboundar'y problems that are difficult to deal with. The new threats have a disproportionate impact on the poor, who directly or indirectl' depend on terrestrial and aquatic ecosystems for income generation. Because of social and economic disadvantages, the poor often live in fringe areas, where access to potable supplies and adequate sanitation facilities is limited and where higher mortality, morbidity, and disease rates prevail. Or they live in highly vulnerable areas (floodplains and degraded watersheds), where the buffering capacity to natural and humanmade shocks and disasters is diminished. Also, poor communities relying on flood recession agriculture, dry-season livestock water supplies, or fishing are often left out when major upstream water allocation or urban/industrial development decisions are made without adequate consideration of downstream uses. Key Challenges. To address the emerging threats, many challenges need to be considered. Fundamental policy, legal, and institutional reforms are needed to institutionalize the principles of sound water resources and environmental management and to promote their effective implementation. Economic Environment Strategy Pdpers
Executive Summary analysis of natural resources degradation (including valuation of resource degradation) and management options needs to be integrated fully in the project cost benefit analyses. Halting degradation and loss of ecosystem functions needs to be a priority in important watersheds, recharge areas, and wetlands. Concerted effort is needed to address the deterioration of freshwater lakes and reservoirs. The promotion of drainage and sanitation projects needs to be examined carefully. The technical, social, and institutional dimensions related to the reuse of wastewater effluents need careful study. Demand management should be a central element of water sector investments concerning consumptive uses of water. To meet growing water demand for domestic, industrial, irrigation, and energy supply, future development of water resources will require additional storage and regulation facilities (new dams, for example) and interbasin water transfers. Such investments, if warranted, must integrate social and environmental assessments early in the planning process (as part of options assessment), and their outcomes should effectively inform the project planning and management decisionmaking. The management of transboundary waters needs to be based on frameworks promoting the sharing of benefits and regional cooperation. Addressing the implications of climate change on water resources management will require better preparedness, including adaptive planning and investment, mitigation, and local predictive and forecasting capability. Policy Shift. The 1993 Water Resources Management Policy Paper of the World Bank promoted a major shift from a sectoral to a comprehensive approach to water manageHirji and Ibrekk
ment. It called for treating water as a scarce resource with an economic value and promoted cost-effective interventions for linking land use management as an integral part of sustainable water management, for addressing quantity and quality concerns in an integrated manner, for using river basins as planning and management units, and for addressing water in an integrated manner. It supported participatory management and focused on actions that improve the lives of the poor. Decentralization, participation, and sustainability have become important guideposts for project and policy design in the water sector. In addition, with the support of the Global Environment Facility, the World Bank has significantly expanded activities dealing with ecological aspects of water resources management. Increased Role of the Private Sector and Emerging Global Trends. Governments and the public sector are increasingly being transformed from owners and managers of water infrastructure and sole provider of water services to facilitators, enablers, and regulators. As part of a growing trend, communitybased organizations, user groups, and autonomous water utilities are assuming a greater direct role in management, operation, and maintenance of these facilities. The private sector is playing a larger role, particularly in the case of management of water utilities. It is essential, however, to ensure that such reforms are complemented by an effective regulatory framework for managing water resources and safeguarding sustainability of the resource base. Globalization, new information technologies, and new interdisciplinary approaches provide opportunities to improve the management of water resources, but such interventions will be sustainable only if appropriate water resources management
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Environmental and Water Resources Management regulatory frameworks, economic regulators to protect the public and the private sector against monopolistic behavior and other factors, and safety nets to protect the poor are in place. Otherwise, the risks of creating unnecessary or marginal investments and increasing debt burden will be magnified. Lessons Learned. Box A presents an indicative assessment of World Bank-funded water projects against the three environmental principles in the Water Resources Management Policy Paper: safeguarding, demand maniagement, and protecting biodiversity! environmental flow. The assessment reflects the extent to which the principles have been institutionalized in Bank policies and procedures and integrated in water resources management operations. (The assessment is based on a "traffic light" characterization consistent with the approach used in the Water Resources Sector Strategy: a "green" light implies that the principle has been fully incorporated into water projects; a "yellow" light, that some elements of the principle are present but that there are also many shortcomings; a "red" light, that there is little progress.) Although environmentally sustainable use of water is a fundamental element of sound water resources management, the integration of environmental quality objectives remains a major challenge in water policy reform and water resources project planning, development, and management decisionmaking. It remains the most poorly understood topic and is still considered an obstacle to development. The value of natural assets such as watersheds, recharge areas, and wetlands as storage facilities and as fundamental elements of the hydrological cycle and ecological systems is not fully appreciated. The inability to commu4 Protection of Biodiversityand Environmental Flows. Few water policies have recognized and given priority to environmental flow Environment Strategy Papers nicate this message and mobilize support for actions that call for the protection of natural assets represents a major failure of the environmental community. Safeguards. Environmental assessments (EAs) have proved to be a useful tool for screening and predicting potential impacts, but capacitv constraints and lack of commitment and political will hinder the effective integration cf environmental issues in water projects. As a result, often EAs have limited impact on poetpann n eiinaig n p especially on the analysis of alternatives. Demand Management. The Bank's Water Resources Policy gives a high priority to encouraging and assisting countries in implementing demand management. Failure to use economic instruments to manage water demand and to guide allocation often result in inefficiencies. The strategy stresses the importance of using decentralized implementation processes and market forces to guide the appropriate mix of public- and private-sector provision of water services. Given that there are many environmental externalities associated with water development, as well as supply monopolies, the comprehensive framework includes development of a sound regulatory environment and an incentivebased management by including concepts of charges, resource rights, pollution permits, and catchment levies. Thus the framework is intended to incorporate cross-sectoral and ecosystem interdependencies, along with socioeconomic concerns and institutions, and to enable participation of all stakeholders in thefoml ationpoiis,aregulatos of an pbi in nt plans rewater.
Executive Summary
requirements as important components of
mainstreaming environmental quality objec-
water use or incorporated them in allocation procedures. Water allocation requirements for environmental uses, including the protection of biodiversity, should receive increased priority, given increased demand for water and frequent problems with degradation of water quality. The Bank should support development and implementation of water policies that include explicit environmental quality criteria that define and set priorities for environmental
uses of water, and that provide for a structured
tives into water resources planning, development, and management programs and investments. The main elements of the framework are: Framework for Environmentally Sustainable Water Resources Development-adopting a framework of objectives and criteria for environmentally sustainable water resources management to mainstream integration of environmental quality objectives into water
resources planning, development, and man-
approach to address them in planning and water allocation decisionmaking. Strategic Framework for Action. The Strategic Framework for Action provides a basis for achieving the broad objective of systematically BOX A Overall assessment (Please see a color version of this figure inAnnex C.page 57.)
Safeguard principles
agement decisionmaking. A Comprehensive Approach to Water Resources Management-considering water as a scarce resource with a scarcity value, treating water as a unitary resource that needs to be
Effective Institutionalized integration
* * * * *
All projects subject to EA EA isan effective instrument for mainstreaming Adequate EA capacity inthe water sector Adequate consultations during the EA process Sectoral environmental assessments
Yellow
Yellow/Red
Demand monagement principles * Demand management included inmost WSS projects * Wastewater reuse increasingly being considered * 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
Legend: Red = Little progress. Green = The principle has been fully incorporated in water projects.
Yellow
Yellow
Yellow/Red
Yellow/Red
Yellow = Some elements of the principle are present, but there are many shortcomings.
Hlrji dnd Ibrekk
Env ronmental and Water Resources Management addressed in a comprehensive manner using hydrologic basis (linking upstream and downstream considerations of all sectoral uses), supporting a shift from remedial to preventive actions, and improving the integration of environmental quality objectives in regional and national water resources management strategies and sectoral activities. Mainstream Environmental Issues in Water Resources Planning and Management Decisionmaking-promotingsystematic and timely integration of environmental quality and biodiversity conservation objectives in water resources policy reforms, projects, and investment actions and in river basin planning, and changing the safeguard policy orientation from a "do no harm" to "promote improved development." This also calls for recognizing biodiversity as a global public good and integrating its tradeoff in water resources planning and management decisionmaking. Environmental Uses of Water-increasing attention to downstream impacts of water projects; promoting the allocation of water rights for ecological uses of water and conducting environmental flow assessments as integral parts of water resources management, planning, and investment studies (including environmental assessments). Water Quality and Pollution Managementsupporting actions to integrate water quality concerns more fully into management strategies and programs through both preventive and remedial actions to address control of point and nonpoint source pollution of surface and subsurface waters. Climate Change Adaptation and Mitigationsupporting strategies for improving preparedness for the impacts of climate change in water resources planning and management decisionmaking, including promotion of adaptive planning and investment, strengthening predictive and forecasting capability, and encouraging development of strategic drought management strategies. Way Forward. Effective implementation of the Strategic Framework for Action will require undertaking a set of complementary measures, including: * Strengthening environmental management capacity * Use of interdisciplinary teams * Facilitating knowledge sharing * Improving analytical work * Strengthening strategic partnerships. Accomplishing these objectives will require a long-term commitment by the Bank and allocation of incremental resources for promoting policy dialogue, cooperatively undertaking sector studies, and preparing and supervising lending operations and the provision of non-lending services.
Chapter 1
Water-Environment-Poverty Linkages
BACKGROUND Thewaterresou inCrisis. Syste system-inCistis Th water (riesrcs rA t aquifers, and lakes) and water-and
w
aquifers, and lakes) and water- and
serve important ecological and hydrological functions and that people, especially the poor, often depend on directly. Hence, it is essential to maintain the stability, health, and productivity of the water resources system. The World Water Vision, issued in March 2000, highlighted two key water management
land-based ecosystems (watersheds, wetlands, and floodplains)-is essential for the sustenance and health of all species. Figure 1 highlights the multiple uses, values, services, and functions of
water and of landand water-based
FIGURE 1. Water and water-based ecosystem values
ecosystems. As a source of natural capital, the water resources system provides fundamental input for a whole array of human needs and economic
development activities. As a sink,
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DIRECT VALUES Consumptive and nonconsumptive use of resources Domestic use
INDIRECT VALUES Ecosystem functions and services such as: Water quality Water flow
OPTION VALUES Premium placed on possible future uses and
NON-USE VALUES Intrinsic significance in terms of: Cultural value

he-thAric
it is used as a receptor for wastewater discharges

from point and
Industrial input Irrigating crops

Watering stock Hydro-power Wild plants Wild animals I Fishing Transport Recreation
Water storage Water purification
applications. including:
P-.
,
B-
. il.
Water recharge Flood control Storm protection Nutrient retention Micro-climate Shore stabilization etc.
etc.
L,
nonpoint sources of poll1 ut ion. Fres h

water sustains the integrity of the ecosystems that
retc.,.e etc
Source: Turpie and Van Zyl 2001.
Environmental and Water Resources Management achievements of the past decades that have significantly improved the welfare of people. The green revolution, facilitated by irrigation expansion, use of high-yielding crop varieties, application of fertilizers and pesticides, and improved management practices, resulted in a huge increase in food production and cut food grain prices in half. Access to potable drinking water has increased for 2.4 billion people, and 600 million more people have access to sanitation since 1980 (World Water Council 2000). These achievements have contributed enormously to a lessening of poverty by countering the vulnerability to droughts, improving standards of living and health, and fostering economic development. Despite these achievements, major challenges remain. There is a persistent and systemic water crisis in many countries. Water is a scarce resources in many countries (see Figure 2), and competition over its use is causing severe conflicts between and among user groups. Droughts often exacerbate water use conflicts in water-stressed areas, and they highlight weaknesses in water management systems. Large numbers of people remain without access to safe and reliable drinking FIGURE 2. Water-stressed and water-scarce countries: 2025 projections
(Pleose see a full-sized, color version of this figure in Annex C,poge 58.)
water supplies, and even larger numbers lack adequate sanitation facilities. Traditional problems concerning the provision of water supply and sanitation services in urban and rural areas will require concerted efforts: more than a billion people do not have access to potable water supply, and 3 billion do not have adequate sanitation (World Water Council 2000).1 With rapidly increasing population, the problems of food security and growing demand for water to generate electricity and support industrial development persist. These emerging problems arise not only from increased demand for water, but a!so from degradation of water resources and aquatic ecosystems, which in part are a result of policies and actions to address the traditional problems.' Environmental Degradation Threatens Functioningof the Resource Base. The rising demand for and use of water, combined with unwise land and water use practices, pose a serious threat to people's health and food security because they threaten present and future productivity and functioning of water resource systems. Economic and population growth not only causes an increase in aggregate water use but also produces wide-ranging and often negative effects on other vital elements of the water resource system. These 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
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' bi 1t luses
of water and the coastal and marine resources, and encroachment and interference in the normal functioning of wetlands. Groundwater contamination by toxic substances reduces the use of water for drinking
and increases public health risks.
Environmnent Strategy Papers
Water
Water
Sc93. and typurpose SourceStrngelan esos Source: Engelman and LeRoy 1993.
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The situation in the Aral Sea demonstrates how these effects can take place at a basin or regional scale, and the broad nature of the economic and social impacts. The desiccation of the Aral Sea due to heavy withdrawals for irrigation has resulted in the degradation of delta ecosystems, the destruction of the open water ecosystem, loss of the fishing industry, creation of salt winds toxic to humans and deleterious to crops, a depressed economy, and the creation of environmental refugees (World Bank 1993). Annex A provides a summary of water-related environmental problems in each Region based on regional environmental strategies. Factors Precipitating the Emerging Crisis. The emerging "water crisis" in many parts of the world is a result of unsustainable use and management of water resources due to poor social, environmental, or economic policies and actions. The crisis has been precipitated by the combined effects of uncertain water supply due to climate variability and climate change, declining availability of fresh water per capita as a result of demands of rapidly growing populations, and increasing degradation of surface and groundwdter resources due to many types of unsustainable water and land use practices. Destructive land and water use activities undermine the integrity of aquatic ecosystems and threaten both the natural capital and invested capital and the sustainability of the water resources system. Overabstraction of surface water and overpumping of groundwater, along with uncontrolled discharges of municipal, industrial, and agricultural waste, impair water quality and impose considerable costs on downstream users. Often, more than one factor contributes to a single problem, requiring a set of policy decisions and interventions
Hirji and lbrekk
to address the effects. Compounding the crisis are difficulties in jointly managing the numerous rivers, lakes, and aquifers shared by more than one nation, given their complex water rights arrangements and treaties. Disproportionate Impacts on the Poor. The majority of the poor live in rural areas and depend directly or indirectly on terrestrial and aquatic (including coastal and marine) ecosystems and biodiversity to support their livelihoods. Natural resource products such as firewood and construction materials, along with non-timber forest products such as medicinal plants, water, and fish, amount to a large proportion of the household consumption. And their use, collection, and sale contribute significantly to household incomes. The sustainability of traditional agricultural systems of the rural poor depends on natural resources, which provide fodder, compost, and nutrients. Because of social and economic disadvantages, the poor reside in poorly serviced and fringe areas such as rural areas, slums, and peri-urban squatter settlements, or in vulnerable areas such as degraded lands and floodplains, where there is limited buffering capacity to withstand natural or humanmade disasters such as floods, drought, or major changes in hydrology due to the abstraction or regulation of rivers. In contrast, the social and economic impact of some environmental problems, such as saltwater intrusion or land subsidence induced by groundwater pumping or the loss of biodiversity values as a result of encroachment, may be felt across the whole spectrum of the society. In reality, the brunt of the economic burden falls disproportionately on poor, disadvantaged communities with little 9
Environmental and Water Resources Management voice. For example, water allocation decisions for hydropower, development of irrigation, or urban/industrial uses are often made without adequate consideration of downstream uses and needs, and downstream communities who rely on flood recession agriculture and dryseason water supplies for livestock (such as in many parts of Sub-Saharan Africa) lose access to resources, in large part, because their interests are either not represented in the decisionmaking process or are barely considered. useful in assessing where present policies and plans may lead or are leading, or in deciding among alternatives strategies. Box 1 outlines one possible framework for defining sustainability of the water resource system in operational terms. Note how this framework has multiple dimensions: it concerns water for both human needs and ecological functions, water quality and quantity, the integrity of the hydrologic system and protection of the resource, availability and accessibility of information, and the participation of stakeholders in development and management. This framework has the same character as integrated water management in the sense that consideration of just a single dimension (user, use, characteristic) of the water system does not give an adequate framework for development and management. The elements outlined in Box 1 are commonly found in new water sector policy statements developed in recent years, reflecting the widespread and common understanding of the direction that future water management must take. It is proving much more difficult to translate these policy statements into strategies and action plans, in part because they frequently involve fundamental changes in institutions, changes in behavior and mind-set, and the social mobilization, inclusion, and empowerment of water users who have been excluded from water resource planning and development. The Water Resources Sector Strategy devotes considerable attention to the political economy of these change issues. Another reason for the difficulty in translating policy into action is the lack of an institutional framework, and of the requisite capacity, to plan and manage resources in a manner consistent with such a multidimensional,
DEVELOPMENT AND MANAGEMENT Sustainability is a complex concept with as many definitions as there are settings and advocates. Nevertheless, the lessons of water development over the past decades demonstrate that ignoring this issue can lead to diminished welfare and lost opportunities. An important focus of the World Bank's Water Resources Sector Strategy is the issue of sustainable water service delivery, including the infrastructure vital to those services. Here we are concerned with the broader concept of a sustainable use of the resource base, and the conditions or criteria that might be used to assess whether a particular development path is leading toward a sustainable outcome. Sustainable water use can be defined as the use of water that supports the ability of human society to endure and flourish into the indefinite future without undermining the integrity of the hydrologic cycle or the ecological systems that depend on it. Sustainable use of water resources is a key element of the Convention of Biological Diversity. Any number of explicit goals and criteria could be developed to express this concept and make it
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BOX I. Sustainable outcomes for water use
*
*
A minimum water requirement is guaranteed to all humans (and realized) to maintain human health. Sufficient water is guaranteed to restore and maintain the health, services, and functions of ecosystems. Specific amounts will vary depending on climatic and other conditions. Setting these amounts will require flexible and adaptive management. Data on water resources availability, use, and quality are collected and accessible to all stakeholders. Water quality is maintained to meet agreed standards. Human actions ina basin do not impair the long-term renewability of freshwater stocks and flows. Institutional mechanisms exist to resolve conflicts over water. Water planning and decisionmaking are participatory, and all affected stakeholders are represented.
monitoring systems for achieving sustainable outcomes, it is difficult in the best of circumstances to formulate such plans.
POVERTY ALLEVIATION
Water and environment are linked to poverty alleviation in two important ways. First, strategies to reduce or alleviate poverty should not lead to further degradation of water resources or ecological functions and services, and second, more sustainable water use and improved environmental quality should contribute directly to reducing poverty. A broad definition of poverty extends well beyond i eand cons ti tinclude inequality, health, opportunity, livelihoods, and vulnerability. Elements of a basic framework for linking water, environment, and poverty are summarized in Table 1 and elaborated on in Annex B.
* *
* *
Source: Gleick and others 1995.
NOTES
integrated framework. Planning and development continue to lie mainly in the hands of narrow, sector-focused agencies that lack the broader mandate, incentives, and experience with comprehensive participatory planning processes. Lacking good indicators and 1. In the East Asia and Pacific Region, some 290 million people lack access to safe water, of which about three-quarters live in rural areas; in addition, approximately 240 million people in urban areas and 1,045 million in rural areas lack access to sanitation. In Middle East and North Africa
TABLE I. Linkages among water, environment, and poverty

Dimensions of poverty Income and consumption Inequality and equity Sustainable livelihoods Health Security and vulnerability Inclusion and empowerment Examples of water and environmental linkages Access to water for productive use, access to natural resources, sustainable growth Secure tenure and access to natural resources, water rights and entitlements Sustainable land and water use practices Water quality, safe drinking water and sanitation, water bodies protected from vectors and disease Improved disaster preparedness and response, water harvesting and conservation Participation; devolution of ownership, rights, and responsibilities to water users, community groups, basin organizations, local governments 11
Hirji and Ibrekk
Environmental and Water Resources Management Region, 45 million people lack access to safe water and 85 million people (30 percent of population) lack sanitation. In Latin America and Caribbean Region 70-90 percent of the urban population and 20-70 percent of the rural population have access to safe water. Similar variations can be found in South Asia and in Africa (World Bank, 2000a). 2. Water resources management activities include investments for urban, rural, industrial, and agricultural water supply; sewage treatment; flood control; irrigation and drainage; and hydropower and navigation projects. Other sectoral activities affecting catchment waters include forestry, mining, and construction (indirectly influencing flow and infiltration regimes and sediment loads carried in surface waters), and industrial discharge and agricultural runoff (influencing the chemical, biological, and physical properties of water). The first-order environmental impacts related to water resources concern effects on the quantity, timing, and quality of water from direct use or management of surface and groundwater and from all sectors that use water or affect catchment waters. Hydrological and water quality changes and other alterations may in turn cause secondorder impacts (such as on primary productivity) and third-order impacts (on the food web), with consequences for downstream aquatic ecosystems, including wetlands, floodplains, estuaries, the marine environment, and human settlements.
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Chapter 2
Global Trends Relating to Water and Environmental Management
he World Bank's work in the water and

environment sectors is influenced and shaped by the emerging trends in
ency, to applying the "user pays" principle, and

to creating a legal and regulatory framework for water rights and private-sector participation in water service delivery. Participation. The second major change is the shift from centralized technical water resources planning and management to the inclusion of
thinking and discourse about the concepts, principles, and approaches that govern water resources management.
INTHREENPROFOUNDG
CHANGEall
IN THINKING
Decentralization. Many countries are decentralizing political and economic decisionmakingto subnational levels, providing opportunities for institutional change, increased democratization, more sharing of power over water development and allocation, and a greater voice for civil society. This on-going process dramatically affects the traditional topdown orientation of water service agencies and fundamentally changes the planning process. Decentralization, however, must be matched by capacity building efforts to ensure that local levels can cope with an increasing responsibilities and unequal power structures. Experience indicates that countries with high levels of economic and political freedom are more likely to undertake reforms in water management, particularly with respect to stakeholder participation, financial accountability, and transpar-
stakeholders in planning and management decisionmaking, implementation, and operation of water infrastructure. This change tends to reshape objectives and priorities, and creates opportunities for more sustainable and efficient water use. What applies at the local level applies equally at the basin level, since all users and stakeholders, sub-basins, and ecosystems constitute the whole system. Moreover, achieving sustainable water use in a basin requires commitment to and ownership by all stakeholders of both the goals of sustainable water resources and the means to achieve them. This is more likely to be achieved if there is an opportunity for informed and substantive participation of stakeholders in decisionmaking. Sustainability.Water development and use is too important and too costly to be short-lived. Considerable resources invested in the water 13
Environmental and Water Resources Management sector are used inefficiently, and provisions for operation and maintenance are not sufficient to maintain the condition of vital assets, resulting in underuse and deteriorating performance. What has changed is the recognition that resource use and development should be sustainable, and that there is an integrated, multidimensional outcome. The implications of unsustainable land and water use practices (such as excessive water extraction, single-purpose use, destructive land use, urbanization, encroachment of wetlands, water pollution, and so on) are significant. Such practices not only cause irreversible degradation of the resource base and alter the hydrology (and therefore the available water supply), they also undermine investments in water supply, irrigation, and hydropower infrastructure as well as inflict harm on ecosystems and biodiversity. needs to be complemented by an effective regulatory framework for managing water resources. Privatization often is carried out in conjunction with deregulation. While considerable information and experience has been generated on the process of privatization and the development of regulatory frameworks, the primary focus has been on economic and financial regulation, with little attention on regulation of water resources. The contractual arrangements for private service providers have brought into focus the need for an effective framework for environmental regulation.3
KEY THREATS
The water sector is facing new threats that will have a bearing on the way water resources management problems are addressed in the future. Often, more than one threat is present at the same time, magnifying the cumulative impacts. Excessive Regulation, Abstraction, and Pumping. Water resources development for consumptive and nonconsumptive uses entails the regulation, storage, and abstraction of surface waters and pumping of groundwater. Excessive regulation alters the natural flow regime. Overabstraction of water reduces the downstream flow and subsequently diminishes the opportunity for other users to draw further water without causing significant deterioration of the water environment and riparian habitats. Overpumping of groundwater may induce saltwater intrusion and, in some cases, land de. Wtou eqte cnsiderationtfr
CHANGING ROLE OF THE PUBLIC AND PRIVATE SECTOR Governments and the public sector are increasingly being transformed from owners and managers of water installations to facilitators, enablers, and regulators. As part of a growing trend, community-based organizations, user groups, and autonomous water utilities are assuming a greater role in management, operation, and maintenance of these facilities. The private sector is playing a greater role, particularly in the case of management of water utilities. Nevertheless, the role of government agencies in protecting the longterm interest of all by acting as the custodians for-and champions of-the environmental and social dimensions of water management -emains important at both the national and the ocal level . ocal level. . . An effective water sector, whether it is managed by the public sector or the private sector,
14
~~~~~~damage. Without adequate considerations for

environmental flow requirements, dams for ~~flood control, water supply, or hydropower f generation or excessive abstractions for
Global Trends Relating to Water and Environmental Management irrigation or other consumptive purposes can trigger a sequence of negative impacts. These include decreased downstream flows, reduced aquifer recharge rates, lowered water table, desiccation of wetlands, destruction of habitats, and seawater intrusion. Often, environmental uses of water and water uses by downstream communities have either been neglected altogether or addressed inadequately in planning and management decisionmaking. and 14 years of age, who account for over 40 percent of the Region's population. Five of the six leading causes of disease are waterborneespecially diarrheal diseases. Waterborne diseases are second only to respiratory diseases in causing mortality and morbidity in the 0-14 age group. Water pollution in the MENA Region is compounding the problem of water scarcity and increasing the scale of water crisis. Addressing pollution of groundwater is a daunting task. The main sources of groundwater contamination in developing countries include inadequate sanitation, industrial discharge and urban effluents, agriculture, and salinization. Remediation of groundwater is difficult, time-consuming, and expensive, and the results of cleanup efforts are uncertain (see Box 3).
Pollution of Surface and Groundwater and Degradation of Water Quality. Degradation of

water quality affects ecosystem functions and services, increases health risks (see Box 2), reduces options for use of the resource, and increases the cost of treating water. In the Middle East and North Africa (MENA) and the South Asia regions, the impact of poor water quality on public health is significant. The high rate of waterborne diseases in the MENA Region is second only to Sub-Saharan Africa. The group most vulnerable to water-related disease and illness is children between birth
Urbanization. The urban population, which

has more than tripled in the past 50 years, is projected to double in the next 25 years, and over 90 percent of the addition will be in
BOX 2. Water pollution and human health Globally, water-related diseases and microbiological contamination from untreated or partially treated sewage remain the overwhelming human health issue (for both mortality and morbidity) in many parts of Africa, Latin America, and Asia. Although there issignificant uncertainty associated with estimates of water-related disease, the annual toll isthought to be over 3 million deaths, most of whom are children. Human activities can generate low concentrations of contaminants over a large area that flow diffusely into water bodies, presenting intractable management problems. Examples include runoff from transportation corridors, urban areas, agriculture, construction activities, forestry, mining operations, or atmospheric pollution. The World Health Organization has estimated that only 41 percent of the urban population in Latin America and the Caribbean has access to sewer systems. Over 90 percent of the collected wastewater is discharged directly to surface waters without any treatment. For example, sewage from Bogota, Colombia, isdischarged in the Rio Bogota, creating enormous fecal coliform concentrations downstream. Farmers withdraw this water to irrigate market crops, potentially leading to consumer illness.
Hirji and lbrekk 15
Environmental and Water Resources Management BOX 3. Challenges for managing groundwater contamination Because of geological variability, groundwater contamination can remain undetected for a long time. This time lapse isexacerbated indeveloping countries, where the extent and severity of groundwater contamination remain largely unknown for three reasons: * Lack of monitoring and surveillance programs * Time elapsed after polluting event due to slow migration of contaminants and dispersal in aquifer * Expense of monitoring, modeling, and remedying contamination. developing countries. Environmental services, institutions, and policies have failed to keep pace with rapid urbanization. Provision of adequate water supply, sanitation, and waste services is a major challenge. There is a need to develop appropriate water policies to improve use efficiency, reduce waste, and improve service and appropriate water technologies to serve the growing Llrban population. The implications of changing land use and encroachment on important recharge areas and wetland systems also need to be addressed. Loss of Wetlands and Freshwater Biodiversity. Globally, the use and importance of wetlands and freshwater biodiversity is yet to be fully understood and appreciated. Policymakers and water managers often still consider wetlands as wastelands and not as essential components of the water resource system. Throughout the world, human use of water and bad planning have led to drier and polluted rivers, lakes, and groundwater resources-with dramatic effects on natural ecosystems. In the past century, over 50 percent of the world's
16
wetlands has been lost. Of the more than 3,500 species currently threatened worldwicde, 25 percent are fish and amphibians. Most of the loss of freshwater biodiversity originates from systemic failure to understand the linkages between development activities and their impact upon freshwater ecosystems, a poor understanding of the intrinsic value of biological species, and the difficult tradeoffs associated with meeting local and national needs versus the needs of the global community, especially when the cost of conservation is not borne by the global community. Integrating operational measures for safeguarding adequate levels of protection of endemic habitats also remains a major challenge. Destructive Land Use. Destructive land Luse imposes a huge economic cost on water supplies, land productivity, and water resources infrastructure. Poor cultivation practices, deforestation, and overgrazing can deplete vegetative cover and topsoil, alter runoff and infiltration rates, reduce storage capacity, increase the frequency and intensity of floods, and affect groundwater recharge. They also increase soil erosion and sediment tranisport and deposition. Sediment deposition reduces the economic life of storage structures, lowers conveyance capacities in irrigation canals and river channels, increases operation and maintenance costs, and raises the cost of water treatment due to increased coagulants and flocculants required for reducing high turbidity levels in treatment plants. Excess sediments also wear down pumping equipment and turbines. Box 4 describes the impact of poor land use on a major water supply infrastructure. Often, it is more cost-effective to promote sustainable land use and watershed management practices than to restore degraded catchment, replace
Globa Trends Relating to Water and Environmental Management
water supplies, or institute higher levels of treatment.

4
salinity, compounded by groundwater overdraft, dropping water tables, and seawater intrusion. Poor drainage may also induce leaching and concentration of naturally occurring substances. In California, large-scale application of irrigation water in part of the San Joaquin Valley, where the trace element selenium occurs naturally in the soil, has accelerated its
Drainage, Salinity, and Toxicity. Poor drainage can shorten the economic life of irrigation investments due to declining land productivity. In poorly drained soils, when recharge exceeds historic rates, water levels tend to rise, causing waterlogging and salinity buildup (see Box 5). Irrigation schemes and leaking water conveyance facilities increase recharge to
leaching. The collection of drain water and subsequent evaporation highly concentrated groundwater and may flood the root zone. this toxic element at the Kesterson National Irrigtion watr andwasteaterWildlife anals Refuge ponds. Ingestion of drain pipelines, and agricultural drains serve as ' ~~~~~~~~~~water by birds and other fauna resulted in recharge sources and may introduce contamib . many deaths and species deformationamounting to a major disaster and an embarnants into the groundwater. High water tables increase vulnerability to damage from flooding and reduce crop yields. Irrigation development in the Indus Basin in Pakistan illustrates classical cases of a range of groundwaterrelated problems-waterlogging and soil Introduced Alien and Exotic Species. The introduction of exotic species-whether intentional or otherwise-is believed to be the rassment to the state.
BOX 4. Impact of poor land use on Mombasa water supply infrastructure Mombasa water demand far outstrips supply. This coastal city of Kenya experiences regular and severe water shortages. The primary source of supply is the Baricho intake on the Galana Sabaki River about 40 kilometers north of Malindi. It was constructed in 1981 (with a conventional water treatment plant) 3 with a design capacity of supplying Mombasa and coastal areas with 60,000 cubic meters (m ) 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 resulted due to upstream catchment degradation on the Galana-Sabaki Rivers. High sediment load during the wet season elevated the raw water turbidity levels to 6,000 Nephelometric Turbidity Units (NTU). Dry season levels are 40- 100 NTUs. The heavy silt load created severe operational difficulties during the wet season and were very costly to mitigate. The intake facilities at Baricho had to be de-silted every day, dosage and volume of coagulants tripled from 4 to 12 tons/day, and pump and pump bearings wore down frequently due to the abrasive action of silt and sediments. During the wet season, pump bearings often had to be replaced every two weeks. Because of the excessive operation and maintenance as well as replacement costs, the surface intake facility at Baricho, including the treatment works, was abandoned after less than a decade of operation, representing a huge economic and financial cost primarily due to poor catchment management. The surface source was replaced with nine boreholes along the banks of the Sabaki River and a 3 3 /day, of which 45,000 contact tank for chlorination. The boreholes provide about 55,000 m 5,000 m 3 3 m goes to Mombasa and 10,000 m 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 nonfunctioning drains. In these areas, repeated irrigation and seepage from water conveyance facilities surpasses historic recharge rates, and causes water table rise. Flow patterns through subsurface strata may be altered, leading to migration of agrochemicals or soil leachate into adjacent, high-quality groundwater. In northwest India-Punjab, Haryana, Rajasthan, and Gujarat-water tables were typically 25 meters below land surface before crop irrigation began. The water table has risen 25-30 centimeters a year since the 1 890s. By the 1920s, irrigation-induced waterlogging and salinity were observed, and by the 1950s this had become widespread in certain districts of the Punjab and Haryana. Crop yields declined, and farmers abandoned some areas. Soil Salinization. Irrigation water contains dissolved minerals. Plants absorb the water through the roots and transpire, or the water evaporates through the soil surface, and mineral salts concentrate in the root zone. In arid regions, more irrigation water (and therefore salt) is applied to the land, and less rainfall is available to leach away accumulating salts. The naturally saline soils in many arid regions further exacerbate the problem. Excess salts require plants to expend more energy to acquire water from the soil and make the necessary biochemical adjustments to survive. Energy diverted from essential physiological processes may result in suppressed growth or in desiccation and wilting of the plant. The Food and Agriculture Organization estimates that 10-48 percent of irrigated lands are affected by salinity on a global basis. According to a survey by the Bank, in the San Lorenzo Project Irrigation and Land Settlement in Peru, 20 percent of the land was uncultivable at the time of evaluation. In the Rio Sinaloa Project in Mexico, 17 percent of the project area was abandoned. In both cases, inadequate drainage resulted in waterlogging, salinity accumulation in the soil, and diminished crop productivity. second greatest threat to global biodiversity after habitat loss (Shumway 1999). The accidental introduction of alien species of fauna (such as the sea lamprey and zebra mussels in thie Great Lakes of North America and Asiatic clams in the Central Valley Project in California) has caused severe degradation of surface water bodies, harmed species inhabiting particular ecosystems, and affected aquatic biodiversity. The introduction of Nile perch in Lake Victoria in the late 1950s, for example, resulted in the extinction of 200 to 300 species of haplochromines (cichlids), representing the largest mass extinction of vertebrates worldwide (Kaufman 199 1). This has altered the food web so that biomass now accumulates at lower trophic levels, which might be contributing to the anoxic conditions in the bottom of the lake. 18 Water managers have underestimated the economic loss associated with the proliferation of invasive weeds and plants. The worldwide infestation of different kinds of invasive floating weeds, such as water hyacintih, fern, and lettuce, severely degrades surface waters, causes losses in quantity and quality, and increases operations and maintenance cost of various types of infrastructure facilities. Box 6 provides examples of the severity of the operational problems caused by water hyacinth in many water subsectors. Introduced weeds flourish under nutrient-rich conditions (near municipal wastewater discharge and runoff carrying fertilizers). Some weeds, including the water hyacinth, have a doubling time of about two weeks. Managing weeds under such high (exponential) growth conditions is often a serious problem. Mats of Environment Strategy Papers
Global T-rends Relating to Water and Environmental Management floating weeds reduce oxygen and light, deplete plankton, and alter the food chain. This can destroy native fish, aquatic plants, and other wildlife. Balanced ecosystems that water use. It will alter precipitation patterns, the magnitude and timing of runoff, and the intensity and frequency of floods and droughts. This is likely to lead to more extreme
may have evolved over millions of years can be destroyed within years. Water-weed masses also harbor carriers of human and animal diseases and increase occurrences of malaria, bilharzia, river blindness, encephalitis, and schistosomiasis. Water managers are only now realizing the significance of the operations and maintenance costs of aquatic weed growth, but have yet to fully realize the significant economic consequences associated with the
physical loss of water quantity and quality
cycles of floods and droughts, with concomitant economic damage. Water levels in closed water bodies such as tropical lakes will be impacted greatly. In addition, climate change will degrade water quality through higher temperature and increased pollutant load from runoff and overflows from waste facilities. Impacts on water resources will also result from rising sea levels (estimated to rise 3-35 inches (0.09-0.88 meters) over the next
century), adversely affecting freshwater
(especially in water-scarce regions) and of ecosystem services due to the proliferation of weed growth. Climate Change. The Intergovernmental Panel on Climate Change (IPCC) has presented estimates of a 1.4 -5.8 degrees Celsius increase in global temperature due to greenhouse gases over the next century (IPCC 2001 a). Global warming will have a differential impact on available water resources and BOX 6. Problems caused by Water Hyacinth *
supplies in coastal areas. For low-lying areas (such as Bangladesh) and small island states, in particular, this is likely to be the most significant environmental concern of the century. This introduces additional dimensions of uncertainty and complexity in the domain of water resources management. It will affect the economies of many single-purpose projects. Warmer temperatures will also result in changes in water demand. Irrigation, the largest water user, is the most climate-sensitive
Hydroelectric power generation. Water hyacinth causes major operational problems at three Hydropower plants on the Awash River (Ethiopia), Chiplima hydropower plant (India), Owen Falls power plant (Uganda), the Kafue river Hydro scheme (Zambia), Hydro scheme at Bayano (Panama), and Brokoponto (Surinam). In all cases, physical barriers (intake screens) have failed to eliminate or reduce the problems, and the problems increase maintenance costs and down time. Irrigation and drainage. In Egypt, more than 3,000 kilometers of canals and drains are infested, increasing canal roughness and reducing hydraulic efficiency. Increased evapotranspiration is lowering flow rates by 45-60 percent. Major weed infestation occurs inthe Itoikin Rice irrigation canals (Nigeria), and inirrigation canals, reservoirs, tanks, waterways, and lakes in India. Ports and waterways. At Port Bell (Uganda), continuous mechanical removal isneeded to maintain clear passage for ships to dock. In Nigeria, water transport system disruptions have increased variable and fixed costs of commercial boat transportation, and led to fewer trips, reduced operating profits, and higher fares.
(continued on next page)
Hirji and lbrekk
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Environmental and Water Resources Management 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 and high water treatment costs due to high organic matter and taste and odor problems. Industrial supply. In parts of the Vaal River system (South Africa), hyacinth infestation has increased water loss by 24-40 percent through evapotranspiration and reduced supply for mining companies and industries. River basinlenvironmental management. Lake Raw Pening (Philippines) is used extensively as an irrigation, hydroelectric, fishing, and recreational resource. Water hyacinth covers 60 percent of the lake area and poses a major constraint on the efficient use and management of the resource. Water hyacinth is a major constraint to the use of the Citarum river basin (Indonesia) as multipurpose hydroelectric, fisheries, tourism, and drinking water supply source. It is considered a "supercritical" river basin due to the environmental degradation. Fisheries. Water hyacinth is serious problem for summer fishing in San Jacinto dam Bolivia and for artisanal fishing in Benin. It has resulted in 40-50 percent reduction in catches from the Niger river and Shire river (Malawi). In India's Chilika Lake, hyacinth covers about 40 percent of the surface area and in Ooty Lake, about 40-60 percent of the area, affecting fisheries and recreation. Biodiversity/Ecosystem services. An environmental assessment of the Niger River delta (in 1995) rated water hyacinth as a high priority issue with major impacts on the ecosystem, related economic activities, and community livelihoods. In Thailand, the water hyacinth has contributed to a loss of up to 75 percent in aquatic biodiversity of the lower Chao Phraya River Basin.
Source: Joffe and Cooke 1997.
use. Industrial and municipal demand as well as instream water uses such as aquatic ecosystem maintenance, instream water quality, hydroelectric power generation, navigation, and recreation will also be affected.
multiple sectors that use water as well as the sectors whose activities have an impact on water resources (such as forestry, health, and environment). A wide range of policy tools are needed to
KEY CHALLENGES Policy and Institutional Challenges. Market and policy failures and distortions in the Bank's client countries hamper the integration of environment in water projects. The public sector has a key role to play in establishing pol icies, incentives, and an effective regulatory and institutional framework to encourage sustainable use of resources, eliminate market distortions, and create markets for environmental services. It has a central role in promoting a coordinated approach to managing the 20
complement traditional environmental regulatory instruments; to promote greater participation, transparency, and accountability in the planning and management decisionmaking process; to encourage greater environmental responsibility in the private sector; and to use market mechanisms. Countries need to develop a capacity to introduce and enforce environmental policies, reform public sector management and institutions, and implement clear and consistent rules and guidelines for assessing environmental impacts of development projects and programs. Without full-cost Environment Strategy Papers
Global Trends Relating to Water and Environmental Management
pricing, the present vicious cycle of waste, inefficiency, and lack of service for the poor will continue. Better understanding needs to be developed of the many components of water resources management (over and above the cost of water supply) that need funding.
These include administration, monitoring and
ments need to be legally recognized, properly defined, and accorded appropriate priority in water resources policies and legislation in order to incorporate this important use in overall water allocation decisionmaking.
Degraded Watersheds, Recharge Areas,
enforcement of water rights, and measures for protecting watershed and recharge areas, controlling pollution, protecting wetlands, and so on. Addressing all these challenges will entail finding the political will to undertake policy, regulatory, and pricing reforms.
Excessive Regulation and Abstractionand Increased Water Use Conflicts. Water scarcity
Wetlands, and Loss of Ecosystem Functions. Watersheds, aquifers, and wetlands provide natural storage besides serving other functions. Environmental degradation of water resources exacts its own costs in human terms. Degraded watersheds and recharge areas result in reduced and unreliable water supply. Destabilized wetlands result in uncertain food supplies and altered hydrological and ecological
has increased the competition among and between extractive and consumptive uses of
water and intensified conflicts between different users. In water-scarce basins, allocation decisions are often a zero sum game. The decision to regulate, store, or allocate water for one purpose affects its availability for other purposes and diminishes the potential for other users to abstract further water without causing significant deterioration of the water environment and riparian habitats. In many parts of the world, growing demands from cities and industries are competing with demands for irrigation, hydropower is competing with irrigation, and hydropower and irrigation are at odds with environmental uses. Water scarcity invariably has a significant impact on the functioning of aquatic ecosystems, since environmental flow and quality are often ill defined and accorded the lowest priority, relative to other consumptive and nonconsumptive uses. As a result, they are marginally integrated into the planning, design, operation, and management decisionmaking processes of water sector investments. Environmental flow requireHirji and Ibrekk
functions. Declining productivity of commercial and subsistence fish, shellfish, or waterfowl populations carries economic costs and severely affects indigenous peoples and fishing communities. Recreation and tourism may diminish. If wetlands are no longer available to provide storm-surge protection, local and downstream areas may sustain more frequent and severe flood damage. Groundwater recharge patterns may be altered, flooding or drying out food crops or contaminating water supplies. To safeguard the productivity of water resources, it is essential to protect watersheds, recharge areas, and ecosystems from irreversible degradation. Lakes and Reservoirs. Lakes and reservoirs are critical elements of the earth's freshwater hydrological system, contain most of the earth's surface stores of liquid fresh water, and must be managed as part of a larger ecosystem rather than as independent units. Lakes and reservoirs provide water for drinking, irrigation, industrial processes, and power generation. Increasingly, the ecological integrity of
21
Environmental and Water Resources Management lakes and reservoirs has been threatened. Recently, the global water community has not paid adequate attention to the specific concerns and requirements of lake and reservoir management. There is a need to initiate a program for developing lessons learned from lake management programs and for effective sharing and dissemination of such information to a broad community and to agencies responsible for preparation of action plans (Ayers and others 1996). Greater Attention to Economic Values. The Bank has made efforts to estimate the economic costs of water quality degradation, but accurate assessment has been hampered by the lack of data. It is not obvious that the "pollute-now-clean-up-later" pathway is inevitable, but the costs of protecting water systems, in terms of human and institutional resources and financial investmnents, are very high for many poorer countries. Present approaches have tended to ignore the benefits of environmental management and economic cost of degradation of water resources and aquatic ecosystems and their accounting as opportunity costs of damaging economic activities and management approaches. Many important options and nonuse values are left out of the economic analysis altogether. Understanding the opportunity cost implications of water supply and allocation is central for making informed decisions on supply development and allocation tradeoffs. Aquatic Weed Control. The proliferation of Drainage. Inadequate drainage in high water table areas contributes to the loss of productivity of agricultural land or diminished crop productivity-both natural and invested capital-due to stagnation of surface waters, waterlogging, and salinization in many 22 aquatic weeds due to a combination of factors-intentional/accidental introduction and the existence of a nutrient-rich environment that provides the conditions for growthis creating a serious operational problem as well as a maintenance problem due to the Environment Strategy Papers Sanitation. An estimated one billion people around the world lack access to potable water supply and 2-2.5 billion people lack access to adequate sanitation facilities. Populations with poor accsto ad e ater supl and sanitation facilities face a very high risk of exposure to waterborne diseases and illnesses. Projections indicate that the mortality and morbidity rates among the 0-14 year olds in the MENA Region can be reduced by over g y one-third by increasing the availability of potable drinking water supplies, and that improved sanitation, particularly increased household connection to sewers, could lower them a further 20 percent (World Bank 1994). Bank funding for sewerage and sanitation has been limited. To improve public health, a major shift in strategy is needed. The support for sanitation as a complementary activity to water supply investments needs to be carefully examined. irrigated lands. The need for complementary drainage projects has to be carefully examined when supporting irrigation investments. In addition, efforts need to be undertaken systematically to support well-planned and ecologically sensitive drainage activities to correct and/or mitigate drainage problems in existing irrigation systems and to deal with drainage issues associated with urban and industrial wastewaters in some locations.
Global Trends Relating to Water and Environmental Management physical obstruction to water flow at municipal water supply, hydropower and irrigation intakes, irrigation canals, navigation routes, and fishing sites. Weed growth is also causing severe losses due to evapo-transpiration and is affecting water quality due to the deconiposition of highly organic waters. Although there are several methods to control weed growth, an effective strategy requires an integrated approach that involves physical, chemical, and biological control methods. Reuse of Effluent. It is clear that reuse or recycling of lower-quality water, including treated effluents, will be an increasingly important component of overall water resources management. The practice of using partially treated or diluted municipal wastewater for farm and nonfarm irrigation is growing and likely to continue, particularly in waterscarce regions. Figure 3 shows the proportion of wastewater generated and reused in Israel, Morocco, Tunisia, and Jordan. Wastewater reuse potentially offers substantial benefits, but also carries substantial risk. If adequate precautions are not taken, reuse can contaminate the soil and groundwater with heavy metals and cause infections from intestinal nematodes and bacteria, especially those that cause cholera. A range of technical options is available, but there often remain a number of social, institutional, behavioral, or cost
obstacles to be overcome before reuse be-
views of parties with diverse perspectives on a range of social, environmental, and political choices that have been associated with major infrastructure development. The World Commission on Dams (WCD) was set up to review the development effectiveness of dams and to develop internationally acceptable criteria, guidelines, and standards for the development of dams. The WCD Final Report proposes a new framework for decisionmaking for dam projects that emphasizes consideration for environmental and social issues and more active involvement of stakeholders. (See Box 7.) lnterbasin Water Transfers. The increasing use of interbasin water transfers to address local water deficits can be a solution or a threat. It can be a cooperative way to address water supply needs in one region by transporting abundant supply from another.3 The outcome of such transfers hinges on careful planning. Large transfer projects in Central Asia were abandoned due to environmental implications and changing political and economic conditions in the region. The social, economic, environmental, and political implications of interbasin water transfer should be carefully assessed. 6 Given current pressures for water, even with effective demand management and Figure 3. Wastewater generated and reused in selected countries
400
-
comes widespread. The International Water

Management Institute is carrying out research
:
350
300
si _ _
~~~~~Wastewater generated
gener-t-
to identify conditions under which wastewater can be used for irrigating and fertilizing crops without putting people or the environment at risk. Construction of Dams. Large dams have become highly contested because of polarized Hirji and lbrekk
r
.;
250 200 00 0 -_isi, Israel
' 150
v
Morocoo
Tunisia
_ Jordan
23
Source: Saghir, SchiffIer, and Woldu 2000.
Environmental and Water Resources Management conservation measures, interbasin water transfers may be necessary in some areas of the world for maintaining urban areas and supporting economic development. Transboundary Water Management Issues. Nunierous river basins, groundwater aquifers, and coastal and marine environments cross boundaries between as well as within countries. The primary management challenges are allocation or sharing of water, pollution control and management of water quality, navigation and flood control, and degradation of freshwater, coastal, and marine ecosystems. The concerns about environmental flow requirements in transboundary water-sharing arrangements have rarely been addressed adequately.7 The need for cooperative management of shared water resources will increase significantly with the demands from expanding populations and economic growth. While transboundary waters can be a factor intensifying conflict among nations and portions of countries sharing water resources, it can also be a factor for channeling efforts toward integration and searching for joint development opportunities. Climate Change. The greatest vulnerabilities are likely to result in water resources systems that are not managed (IPCC 2001 b). Adaptive planning to integrate the likely impact of climate change on the planning and design ow water resources projects will be essential, as retrofitting will be much more expensive. The integration of climate change considerations needs to build on water resources management policy and institutional reforms addressing natural climate variability. It will be necessary to review engineering design standards as they relate to the construction of water supply and land drainage projects and to consider the anticipated sea level rise. There also a need to review the existing engineering design criteria and methodology. It will be necessary to re-examine the operations of
BOX 7. World Commission on Dams: Priorities for sustaining rivers and livelihoods
The WCD has suggested the following strategic priorities for sustaining rivers and livelihoods: * A basinwide understanding of the ecosystem's functions, values and requirements, and how community livelihoods depend on and influence them, is required before decisions on development options are made. * Decisions value ecosystem, social and health issues as an integral part of project and river basin development, and avoidance of impacts is given priority, in accordance with a precautionary approach. A national policy is developed for maintaining selected rivers with high ecosystem functions and values in their natural state. When reviewing alternative locations for dams on undeveloped rivers, priority is given to locations on tributaries. Project options are selected that avoid significant impacts on threatened and endangered species. When impacts cannot be avoided, viable compensation measures are put in place that will result in a net gain for the species within the region. Large dams provide for releasing environmental flows to help maintain downstream ecosystem integrity and community livelihoods and are designed, modified and operated accordingly.
Source: World Commission on Dams 2000.
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Globa Trends Relating to Water and Environmental Management existing single-purpose storage facilities to consider flood control and drought management as an additional objective. The predictive and forecasting capabilities at regional and national levels in vulnerable countries need to be strengthened. Recent information technology (IT) advances, development of computerized datasets and a rapidly expanding skill base now provide the opportunity to radically change the way projects are designed, implemented, and monitored. The advent of IT helps stakeholders and managers to manage water resources more efficiently by providing real-time information on the state of the resource, new modeling and forecasting abilities, new spatial analysis tools such as geographic information systems, and greater information to stakeholders. Environment and water resources management can be improved by sharing knowledge systematically to ensure that stakeholders who need the information get it on time. Skills Levels. The emerging water resources and environmental management challenges are complex, multifaceted, and multidisciplinary. Addressing these effectively requires that countries and development institutions have the right skills mix. It will be important for these agencies and the Bank to recruit environment specialists with strong backgrounds in water resources or water resources specialists with strong backgrounds in environmental management. In addition, specialist skills in freshwater ecology, water quality management (environmental engineering), and environmental economics also need to be strengthened. Specialists will also need to be conversant with IT.
NEW AND EMERGING OPPORTUNITIES

Globalization. In recent years, a quickly rising share of economic activity in the world is taking place between people who live in different countries. This growth in cross-border economic activities takes various forms: international trade, increased market access to goods and services, foreign direct investments, and capital market flows. Global water and environmental management experiences could be shared and adopted to meet local needs. On the other hand, if this is done without adequate considerations of local social, economic, and cultural conditions and adequate regulatory provisions to safeguard the sustainability of resource use, the chances of creating unnecessary or marginal investments and an increased debt burden can be magnified. One risk associated with a shortterm investment orientation in the water sector is the adoption of unsustainable practices that can deplete as well as degrade the resource base. Technology. Without major technological innovation, there is little hope of bringing the water equation into balance (World Water Council 2000). Technological innovation is needed at the community level (innovative onsite sanitation technologies, for example), at the basin level (such as use of decision support system for addressing multiple objectives such as flood control and hydro power generation), and at the high-end utility level (for instance, use of membrane filters in water treatment). Hirji and Ibrekk
NOTES 3. An effective water resources management regulatory framework serves the interest of the public or private supplier of water, the public (also the consumer), and other sectoral users (such as agriculture, energy, and mining). The supplier requires a secure, reliable, and protected source of water 25
Environmental and Water Resources Management supply, which requires regulations and investment in watershed protection, pollution control, administration, monitoring, and enforcement of water rights (typical responsibilities related to resource management). The interests of the other users and the consumers also extends to ensuring that the supplier operates the water resources system in a sustainable manner (for example, pumps groundwater within an aquifer's safe yield and does not overpump in vulnerable areas such as coastal aquifers, meets downstream environmental flow requirements and effluent discharge standards, and encourages water conservation) and does not create conflict with other interests using the same water supply source. 4. Several cities in the United States (including Portland, OR, New York, NY, and Portland, ME) found that $1invested in watershed protection could save $7.50-200 in new water treatment facilities (Reid 2001). 5. Interbasin water transfers form an important part of the Government of China's strategy for addressing acute water shortages in the northern China plain. In India, interbasin transfers are part of water resources planning at the state and federal levels. The Lesotho Highlands Water Project is a major transfer project exporting water from the water-rich highlands in Lesotho to the water-deficit industrial hub of South Africa. 6. Associated with interbasin transfers are environmental impacts that result in three distinct zones: the exporting area, the importing area, and the path linking the two areas. The exporting area can experience reduced flows, changed seasonal hydrology, reduced dilution, and decreased water supply. Impacts in importing areas can include damage from inefficient use or overuse of water and scouring and erosion in the receiving rivers. Impacts on the path linking the two areas usually result from the storage and conveyance facilities (Hirji 1998). 7. The recent flood-related loss of lives in Mozambique has highlighted the weaknesses in the system. The Cabora Bassa and Kariba dams are both being operated as single-purpose reservoirs for the generation of hydropower. No regular or seasonal releases are made for environmental purposes. This has eliminated seasonal flooding and flood recession agriculture, has reduced fisheries, and has encouraged residents to move into and live within the floodplains-increasing their risks.
26
Chapter 3
Global Lessons from Bank Experience
WHAT HAS THE BANK BEEN DOING?

funded water sector investments to develop water services for a variety of consumptive and nonconsumptive uses, with an emphasis on using water resources for social and economic development. In 1993, the Bank issud a omprhensve tateent-he Wter
In addition, with the support of the Global significantly expanded activities dealing with ecological aspects of water resources management. W at res s ha been one ofnthe most important areas of World Bank lending during
istorically, the World Bank hasEnvironment Facility (GEF), the World Bank has
Resources Management Policy Paper-that the past three decades. Through its support for Resources~ ~ ~ Polic~ ~ ~ Mangeen ~ ~eco invstmntrinirigaio marked a major shift in influencing investments sector work and investments in irrigation, in the water sector. The policy promoted a comprehensive approach to water management and called for dealing with the use and protection of water resources. Its key elements called for: * Addressing quantity and quality concerns in an integrated approach * Linking land use management as an integral part of sustainable water management * Using river basins as planning and management units * Recognizing water as a scarce resource with an economic good and promotes cost effective interventions * Supporting participatory approaches * Focusing on actions that improve the lives of people and the quality of their environment. hydropower, water supply, sanitation, and flood control, the Bank has contributed to the development of many countries through the provision of essential services to many communities. Yet, as pointed out by the Operations Evaluation Department (OED) (OED 2001), Bank-supported investments in some cases have encountered implementation, operational, and social problems. Underlying these problems is a vicious cycle of poor-quality and unreliable services that result in consumers' unwillingness to pay, which in turn generates inadequate operating funds and a further deterioration in services. According to the OED, the Bank and governments have not taken sufficient account of environniental concerns (Box 8) in the management of water resources.
27
Environmental d-d Water Resources Management BOX 8. Key environmental findings of OED's evaluation of the implementation of the Water Resources Management Policy of 1993 Environment is now the third largest category of water-related institutional support and investment in the Bank's portfolio. It increased from I I to 48 projects post-policy, and $3,261 million has been committed since 1993. Many national programs deal with enabling environmental management through legislation and regulation that includes water and institution building. Specific projects are concerned with pollution control, drainage, watershed management, and erosion prevention. * Groundwater has been mismanaged in many countries and requires greater emphasis. Most of the world's poor rely on groundwater for drinking, and as much as half of the most efficient irrigation that underpinned the green revolution came from groundwater. Investment can improve drainage, but sustainability is key. Drainage should be an integral part of irrigation investments. The effects of poor drainage spoil as much land as new irrigation creates. Successful watershed management requires participation and a long-term perspective. Interventions in watershed management provide an opportunity for community-based development. Compliance with safeguard policies should be strengthened and measures taken to have their use mainstreamed by borrowers.
* * *
Source: OED 200 1.
LESSONS LEARNED This paper uses three objectives defined in the Water Resources Management Policy Paper to assess the Bank's performance in integrating environmental issues in water resources management and to draw lessons. (See Box 9.)
The overall message is simple: environmentally sustainable use of water is a fundamental element of sound water resources management. It deals with not only the protection of the water resource system (watersheds, recharge areas, wetlands, floodplains, and
BOX 9. Environment and poverty alleviation objectives of the Water Resources Management Policy The environment and poverty alleviation objectives in the Water Resources Management Policy call for the following: * * More rigorous attention should be given to minimizing resettlement, maintaining biodiversity, and protecting ecosystems in the design and implementation of water projects. Water and energy supplies gained through conservation and improved efficiency can be used instead of developing new supplies to extend service to the poor and maintain water-dependent ecosystems. Low cost and environmentally benign methods of developing new supplies for agriculture, rural drinking water, and industry will be pursued. The water supply needs of rivers, wetlands, and fisheries will be considered in decisions concerning the operation of reservoirs and the allocation of water.
Source. World Bank 1993.
28
Global Lessons from Bank Experience coastal zones), but also the use of water within sustainable limits. It also concerns the conservation of biodiversity. However, existing practice indicates that the integration of environmental quality objectives in Bank projects remains the weakest and most poorly understood area of the water resources management policy and institutional reform process. The value of natural assets such as watersheds, recharge areas, wetlands and floodplains as storage facilities and as central elements of the hydrological cycle and ecological systems is not fully appreciated. The inability to communicate this message and mobilize support for actions that call for the protection of natural assets represents a major failure of the environmental community. Environmental assessment (EA) has been a key instrument to help the World Bank and its borrowers decide what actions need to be taken to ensure the environmental soundness and sustainability of a project. The World Bank's Water Resources Management Policy stresses the importance of compliance with the Bank's 10 environmental and social safeguard policies (environmental assessment, forestry, indigenous peoples, involuntary resettlement, management Of Cultural property, natural habitats, pest management, projects in disputed areas, projects in international waters, and safety of dams). The objective of these policies is to support informed decisionmaking and to ensure that World Bank-supported operations do not cause adverse impacts-that is'htthy"onohr.
is, that they 'do no harm.'
Mainstreaming and Safeguard Polic:ies.

Mainstreaming the environment means achieving environmentally sustainable water resources management by integrating environmental objectives into all aspects of economic and water sector policy, planning, and operations. The integration of environmental issues in Bank-supported water projects needs to receive greater emphasis and move beyond a focus on compliance with safeguard policies, In some of the water projects reviewed, it was found~~~~~~~~~~~ envrometa issuesm thatudm wer ad-gnralc found that environmental issues were addressed in a disjointed manner and that often greater attention should be given to physical, biological, and socioeconomic impacts in downstream areas. In contrast, upstream environmental issues have begun to be addressed more systematically. Overall, it can be concluded that greater emphasis should be given to improving the mainstreaming of environment in Bank-supported water projects, which would foster the conservation and restoration of freshwater ecosystems. Hirji and Ibrekk
Although EAs have helped improve project design, the limited capacity of many borrowers to undertake these studies themselves has constrained the extent to which they are "mainstreamed" into projects that are not supported by the World Bank or other international parties. Clients often have poor understanding of the rationale, objectives, and procedures of the safeguard policies, and they are not always convinced of the benefit. Compounding this problem is the general lack of capacity and knowledge on integrated water resources management, which hinders the effective integration of broader environment issues into water projects. Another challenge concerns how to use EAs as a tool for effectively integrating the environment into project planning and decisionmaking. Although EAs have become important and necessary tools for screening and predicting the environmental impacts of projects, they are not sufficiently implemented by 29
Environmental and Water Resources Management countries and are often not complemented with effective national policies. Adoption of EA policies has increased awareness about the impacts of different investments and development activities, but experience has indicated that sometimes they are prepared too late in the project cycle to influence decisionmaking adequately and that the mitigation and monitoring plans developed on the basis of these studies are not always implemented effectively. Thus their influence on actual project decisionmaking is limited, and often they only legitimate decisions that have already been made (Hirji and Ortolano 1991). Box 10 describes factors that can enhance the role of EAs in project decisionmaking. Broad macroeconomic and sector policies may have much more significant and lasting environmental impacts than individual projects. As the Bank's focus is shifting toward programmatic policy-based lending, the understanding of policy-environment linkages Demand Management. The Bank's Water Resources Policy gives a high priority to encouraging and assisting countries to implement demand management. Failures to use prices and other instruments to manage water demand and to guide allocation result in inefficiencies. The strategy stresses the imporand tools for integrating environmental considerations into upstream policy work will need to receive increased attention to complement the traditional role of safeguards. To overcome some of the methodological limitations associated with project-specific EAs, sectoral environmental assessments (SEAs) have been introduced and are used to facilitate decisionmaking in sector investment programs. SEAs take the concept of project-level impact assessment and move it up into the initial phases of planning and assessment of alternatives (options). Box I1 provides an example of how this concept is broadly applied.
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: * *
d
The environmental assessment process is started at the earliest stage of the evaluation of a proposed development program or project The scope of the study provides for broad coverage of the major potential issues and places them in a broader development context The analysis of alternatives is undertaken at an early stage and includes evaluation of development, site, and technical alternatives; The economic value of resource degradation is incorporated in the project cost-benefit analysis and decisionmaking The methods used to predict and forecast the impacts are well selected The study is made available in a timely manner and used effectively by decisionmakers and the public in their consideration of the proposed project; The mitigation and monitoring plan are realistically designed and can be implemented under local conditions There are arrangements in place to oversee environmental aspects of project implementation. Environment Strategy Papers
* * * * * 30
Global Lessons from Bank Experience 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 Bank helped the Government of Nepal identify alternative ways to meet Nepal's short- and medium-term power demands. The government agreed to follow an approach for expanding power generation capacity that integrated economic, technical, financial, environmental, and social considerations. In the beginning of 1996, Nepal's Electricity Authority, supported by an interagency steering group, set out a screening and ranking process of hydropower sites in the 10-300 megawatt capacity range, based on: * * * * An update of the nationwide inventory of sites suitable for medium-scale hydropower projects A two-stage review of the techno-economic and environmental social parameters of potential projects and sites, and recalculation of parameters on a consistent basis Use of techno-economic and environmental-social screening and ranking criteria developed through a consensus-reaching process Provision of open consultation and information sharing with government stakeholders, the professional community, nongovernmental organizations, and the general public on each step in the process.
The exercise was completed in early 1997 as a basic step for selecting 7 out of 138 medium hydroproject 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 processes and market forces to guide the appropriate mix of public- and private-sector provision of water services. Given that there are many environmental externalities associated with water development, as well as supply monopolies, the comprehensive framework includes development of a sound regulatory environment. Thus the framework is intended to incorporate cross-sectoral and ecosystem interdependencies, along with socioeconomic concerns and institutions, and to enable participation of all stakeholders in the formulation of policies, regulations, and public investment plans for water. Demand management is now part of the water supply and sanitation policy, and most Bank projects on this emphasize some elements of demand management. Besides price-based incentives to conserve water, demand manageHirji and lbrekk
ment includes educational, technical, and administrative programs. Numerous examples exist of how these are used in combination with price incentives to conserve water and thus limit the need for new supplies. However, there is still scope to expand the number of management options to be considered. For example, managers can address the possible reduction in demand and opportunities for augmenting local supply due to a shift from agriculture to urban use, technological changes for improving use efficiency (such as sprinkler or drip irrigation), use of other than freshwater sources (for example, treated brackish water using desalination), and importation of water through interbasin transfers or use of alternative conveyance technologies. Available demand management and supply augmentation options highlight different perceptions about water scarcity among different sectors (such as those be31
Environmental and Water Resources Management tween agriculture, urban, industrial, and selection on wastewater characteristics and on
environmental uses). Water Quality and Pollution Management. The concept of a comprehensive approach to water quality and pollution management has not been widely introduced in Bank-funded projects. Infrastructure projects have either addressed water quality as standards for drinking water quality or included improvement of water quality or reduction of water pollution as a long-term objective. There are significant differences in the Bank's approach to water quality management among regions and countries. In middle-income countries, the focus is on combating water pollution and improving water quality. Key objectives are improving human health conditions by improving the level of water supply service and providing adequate sanitation and treatment facilities, with some regard to the quality of the receiving waters. In low-income countries, the primary focus is on basic sanitation and water supply services, with little regard to the quality of receiving waters. The MENA Region recently launched a major water quality initiative within the framework of the Mediterranean Environmental Technical Assistance Program, and the East Asia and Pacific Region has prepared a technical report on water quality modeling. Comprehensive assessment of pollution sources to determine a cost-effective abatement strategy has been performed in only a few projects. While regional water quality issues have been examined for a number of major drainage basins, such as the Aral Sea, Baltic Sea, Black Sea, and Danube River, few projects currently address all sources of water pollution in a comprehensive manner. Interesting attempts at basing treatment technology
32
the treatment objectives as translated into desired effluent quality can be found in Banksupported environment projects in China. Where the assimilative capacity of receiving waters is considered adequate, only primary treatment is proposed, while in cases where the assimilative capacity is exceeded, tertiary treatment is provided. The existing and expected usage of the receiving waters is used to determine the required level of treatment. The control of groundwater pollution has not yet received serious attention. Water pollution from agricultural sources is now starting to be addressed with a series of model projects in the Europe and Central Asia Region. This is important since major problems exist with the management of livestock wastes and since the consumption of fertilizers in some developing countries is high. In some cases, the pollution abatement expected when measures were targeted at point sources only has not occurred. An interesting example of a new approach is the joint effort within the framework of the Baltic Sea and Black Sea/ Danube River cooperation projects targeting nonpoint pollution. (See Box 12.) Irrigation and Drainage. Lack of adequate drainage, poor operation and maintenance of irrigation schemes, and inefficient water applications at the farm level have contributed to surface water stagnation, waterlogging, and salinization of many irrigated lands and lowlying areas. Experience to date suggests that while some of these conditions are well understood and are being addressed in a few projects, the requisite capacity for promoting environmentally sustainable irrigation is poor. Drainage has been neglected in many Bankfinanced projects, and there is considerable
Global Lessons from Bank Experience BOX 12. Strategic Partnership for Nutrient Reduction in the Black Sea/Danube Basins Eutrophication isthe most serious medium- to long-term environmental problem in the Black Sea, caused by nutrients-primarily of agricultural origin--carried by tributary rivers. Because of strong divisions between sectors involved in competitive agricultural production and environmental protection, as well as limited public awareness of the long-term dangers of the problem, it is difficult to implement long-term policies to address this issue. A model project is being implemented in Georgia as an initial intervention in this area. The World Bank and GEF are supporting The Strategic Partnership for Nutrient Reduction inthe Black Sea/Danube Basins. GEF will provide $70 million in grant financing over six years to cover the incremental costs of obtaining global benefits for investments, in conjunction with $210 million mobilized by the Bank with other local, bilateral, and European Union financing. The funds under this "umbrella investment program" would be used for investments in wetland restoration, agricultural nonpoint source pollution, and municipal and small industrial wastewater treatment. Projects are currently under preparation in Russia to address municipal pollution, in Romania for nonpoint source pollution from agriculture, and in Bulgaria for the demonstration use of wetlands as a nutrient sink. These projects complement the activities inthe Baltic Sea basin, including the ongoing Rural Environment Management Project in Poland and the nutrient management activities of the Baltic Sea Regional Project.
Source: World Bank 2000c.
scope for demand management within the irrigation sector. Environmental Flow Requirements and Protection of Biodiversity. Both within the Bank and in client countries, greater concern should be given to the management of water resources within the framework of their sListainable or assimilative capacity. Few water policies have recognized and given priority to environmental flow requirements as important components of water use or incorporated them in the water allocation procedures. Typically the management approach to protecting river ecosstem empasizs ony ecosystems emphasizes only on one isse Issue ofmented of water quantity-minimum flow-without adequate consideration of biodiversity. In the case of construction of impoundments for hydropower, irrigation, or water supply development, for example, the usual approach has been to mandate a certain minimum
Hirji and lbrekk
release from the dam, which does not completely reflect the full range of ecological and local use issues that should be considered. World Bank-supported projects are starting to address environmental flow requirements in a systematic manner. Box 13 highlights the Bank-supported Environmental Flow Assessment (EFA) for the Lesotho Highlands Water Project. The EFA study adopted a sophisticated instream-flow methodology, which integrates biophysical considerations with social and economic considerations. It is being compleby an overall economic assessment of increasing downstream releases. Preliminary findings from the EFA study have influenced the design of the Mohale Dam, and final findings in conjunction with the economic assessment are likely to result in a variety of mitigation measures for offsetting important
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 carried out in four parts. The first part focuses on understanding the complete river ecosystem. The second part develops a series of flow scenarios. Each scenario describes a possible future flow regime inone part of the river system (from dam releases and catchment runoff) and the resulting condition of the river. The third part includes social and economic studies. A social analysis defines the human population directly dependent on the rivers for sustenance and assesses the impact of changes inriver flows for the affected population. In the economic analyses, the social implications are translated into the costs of mitigation and compensation for the affected population. In the final part, hydrologists estimate the amount of water that would remain inthe dams ineach scenario, and thus be available for offstream uses such as transport and sale to South Africa. The range of completed biophysical/socioeconomic scenarios will provide the LHWP authorities with a sound basis for making informed decisions that integrate environmental flow requirements into operating procedures for the dams.
Source Hirji 1999.
social, ecological, and economic impacts of the project on downstream communities. To date there have been only a limited number of projects in which freshwater biodiversity concerns have been effectively integrated into water resources projects, although through GEF-supported projects the World Bank's commitments to freshwater and marine biodiversity and to resource conservation have increased. Water sector projects present a major opportunity for truly integrating biodiversity in traditional water resources projects. In addition, projects in the natural resource management sectors could have used ecosystem, regional, or basin-level approaches in their project design. Increasingly, however, actions are being adopted by the Bank in helping its clients integrate freshwater biodiversity conservation in their water resource management decisions. These include integration at the policy, sectoral, and project levels; capacity building; and support for global initiatives and strategic partnerships.
Summary Evaluation. Box 14 presents an indicative assessment of the World Bankfunded water projects against the three environmental principles laid out in the Water Resources Management Policy Paper: safeguarding, demand management, and the protection of biodiversity/environmental flow. A "traffic light" characterization consistent with the approach used in the Water Resources Sector Strategy indicates the extent to which the three basic principles have been incorporated in Bank procedures and are integrated in operations. (A "green" light implies that the principle has been fully incorporated into the water projects; a "yellow" light indicates that some elements of the principle are present, but there are also many shortcomings; a "red" light indicates little progress.) The assessment reflects the extent to which the principles have been both institutionalized in Bank policies and procedures and integrated in water resources management operations.
34
Global Lessons from Bank Experience
BOX 14 Overall assessment (Please see a color version of this figure inAnnex C,page 57.) Institutionalized Effective integration
Safeguard principles * All projects subject to EA
* *
* *
EA is an effective instrument for mainstreaming

Adequate EA capacity in the water sector Adequate consultations during the EA process Sectoral environmental assessments
LI
Yellow
Yellow/Red
Demand management principles * Demand management included in most WSS projects * Wastewater reuse increasingly being considered * 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
Yellow
Yellow/Red
Yellow/Red
Hirji and lbrekk
35
Chapter 4
Strategic Framework for Action
he preparation of the Environment and

Water Resources Sector Strategies provides a rare opportunity to discuss the
is not just the sustainability of the natural

resource system that is important, but the sustainability of water use. The strategic framework for action provides a basis for achieving the broad objective of systematically mainstreaming environmental quality objectives in water resources planning and in development and management programs and investments. ADOPT CLEAR FRAMEWORK FOR
emerging issues with clients, partners, and colleagues and to influence the direction of the Bank activities in this area over the next 5-10 years. Initial indications from consultations on both strategies are that the importance of the water-environment interface is increasingly recognized by the water supply and sanitation, rural, energy, environment, and health sector boards as well as by the water resources management group. There is an urgent need to elevate the discourse, and there is broad support for ongoing efforts to ensure that environment becomes one of the basic objectives in any water resources management strategy. The previous chapters have outlined some of the important ways that poverty and economic development are inextricably linked to environmental sustainability, and in particular towar resources sustainability. The primary focus on poverty alleviation underscores the fact that the sustainability of the natural water resource system is not an end in itself, but an essential ' part of the welfare and security of people and thei lieliood, epecallythepoo. Hnce it their livelihoods, especiallY the poor. Hence, it
RESOURCES DEVELOPMENT Sustainable water use can be defined as the use of water that supports the ability of human society to endure and flourish into the indefinite future without undermining the integrity of the hydrologic cycle or the ecological systems that depend on it. A limited set of outcomes (with explicit goals and criteria) should be developed to express this concept and make it operationally useful in assessing where present policies and plans may lead or are leading or in decidn amng maylera sr ategies ox1,
~~~~~at the beginning of this report, outlines one
posibe fewofrkpordi sutainab int possible framework for defining sustainability of a water resource system in operational terms
37
for water and energy utilities that aim to balance the use of water resources with the conservation of aquatic and marine
biodiversity.
voirs, either as freestanding projects or as components of projects.

Integration of Environmental Aspects in Water-Related Sectors. World Bank-sup-
A COMPREHENSIVE
APPROACH TO
ported water resources management strategies should develop explicit criteria for integrating
WATER RESOURCES MANAGEMENT
A Management Continuum. The World Bank views freshwater, coastal, and marine resources as a management continuum that requires cooperative development of strategies and implementation of actions at the basin level as well as at the regional, national, and
local level. Water is a unitary resource that needs to be addressed in a comprehensive manner, with particular attention given to the environment, to recognize and operationalize the important linkages between actions taken upstream and their downstream consequences for river basins, lakes, and coastal and marine environments. The Bank should support the development of national policies and strategies for maintaining in their natural state, with the participation of basin stakeholders, selected rivers with high ecosystem functions and values. Moving from Remedial to Preventive Actions. The costs of preventing resource degradation are small compared with remediation and rehabilitation. A major challenge for water resources management organizations and programs is to increase the level of effort for preventive measures while maintaining support for curative interventions in degraded areas. The World Bank, at the request of its borrowers, can support lending operations for preventive and remedial measures that enhance the environmental management of water resources, including lakes and reser38
environmental quality objectives within their respective frameworks. The water supply and sanitation, rural, energy, and health subsector boards should be encouraged to develop explicit procedures for addressing sectorspecific environmental issues in a structured manner. Support should be given to the
development of a training program for borrowers that focuses on the establishment of an environmental regulatory framework to complement and support the reforms related to the privatization of water and energy utilities.
INSTR IANATER
ENVIROE
NTAL SUE
ESUCESIPLANING MANAGEMENT DECISIONMAKING

Mainstreaming entails systematic and timely integration of environmental quality objectives in water resources strategies at all levels; in water policies; in decisions on river basin planning, development, and management; and in the evaluation and implementation of policy reforms and investment actions. For many water development projects, development objectives could be balanced with the objectives of conservation of freshwater ecosystem functions and services if they are addressed in the early stages of planning-provided that there is a commitment by the borrower and the Bank to these objectives. To achieve this, no new policies or procedures are needed; however, greater attention to the implementaEnvironment Strategy Papers
Strategic Framework for Action tion of existing policies and procedures is important. The Bank should support countries' efforts to build national and local government agencies responsible for environmental protection of water resources, in order to develop environmental assessment policies, procedures, and regulations. In this regard, the upcoming water resources and environmental management best practice briefs will be useful to improve the understanding of the operational implications of the various provisions relating to the sustainability of the resource base. Safeguards Orientation-From a Reactive to a Proactive Approach. Mainstreaming also is consistent with a changing focus and orientation from "do no harm' to
"promote
learned about incorporating the environmental dimension into river basin approaches, and there is a need to develop and disseminate good practice. The linkage between freshwater and land-based sources and the coastal and marine resources needs to be strengthened.
improved
development" that the Bank is adopting with its safeguard policies. This calls for improving
Policy Reforms. At the country level, the Bank should support water policy reforms that integrate all water-related subsectors, including environmental uses of water, and should promote the use of complementary regulatory measures, use of economic instruments, participatory processes, and actions to support transparency. Incorporate Environment More Fully into River Basin Approaches. Given that fresh water is a vital but diminishing resource, it is essential that the World Bank helps governments and the private sector adopt planning and management resources for the development and protection of water resources and the conservation of associated freshwater ecosystems and habitats. Conceptually, management of water resources on a systemwide basis is the best approach. In practice, integrated approaches to river basin management are difficult to implement, even in relation to water quantity. These difficulties are often compounded by poorly developed cooperation and coordination between the authorities responsible for water resources and irrigation and those responsible for water quality and environment. Much remains to be Hirji and Ibrekk
the effectiveness of environmental assessment In project planning and management
* Expanding the use of sectoral and strategic environmental assessments (SEAs) * Increasing the emphasis on basinwide understanding of the ecosystem's functions, values, and requirements, and of how community livelihoods depend on and influence them, before decisions on development alternatives and options are made; * Valuing ecosystem, social, and health issues as an integral part of project and river basin development, and giving avoidance of impacts a priority, in accordance with a precautionary approach; * Selecting project options that avoid significant impacts on threatened and endangered species-when impacts cannot be avoided, appropriate mitigation measures and viable compensation measures need to be put in place * Ensuring that project-affected stakeholders are being consulted in a timely manner and that their views are incorporated in the final project design, implementation, and monitoring process. 39
Environmental and Water Resources Managemnent ENVIRONMENTAL USES OF WATER Allocation of Water Rights to the Environment. Effective environmental and water resources management requires that water and property rights are clearly defined to protect the interests of various stakeholders. Changing water or property rights has relevance to poverty and social stratification and affects the efficiency of water use and its allocation. Of critical importance to protect the services provided by water resources is the quality, quantity, and assurance of water, which are needed to protect basic human needs, and the structure and function of ecosystems so as to secure ecologically sustainable development and use. The World Bank should support coLIntries' efforts to develop the legal framework for environmental management of water resources.
Environmental Flow Assessments. Dam
WATER QUALITY AND POLLUTION MANAGEMENT Integrated water quality management is the planning, organization, design, operation, ancl monitoring of all aspects that have an effect on the quality (physical, chemical, biological, bacteriological, and so on) of water resources. It incorporates and balances the different requirements of relevant water users and water functions in order to enhance efficient and sustainable use of the resource. To assure a consolidated and coordinated approach to surface and groundwater quality managemenit, the World Bank should establish a Water Quality Management Initiative. This would support the promotion of a phased approach for developing and attaining water quality objectives at both the regional (river basin or aquifer) level and the project level, as well as a Bank-wide exchange of knowledge and
experience in water quality management that
operations need to include provisions for releasing environmental flows to help maintain downstream ecosystem integr-ity ancl community livelihoods and need to be designed, modified, and operated accordingly. As part of development projects, the World Bank should support client countries' efforts to Bankshold upprt liet cunties efort to prepare the legal framework for environmental flows and to undertake studies to determine the minimum quantity and quality of water required to satisfy basic human needs, protect aquatic ecosystems, and secure the sustainable development and use of the water resource in question. It should encourage locally driven processes to establish the objectives of environmental flows, ensure that EFA is an integral part of the impact assessment, and include monitoring provisions to allow for potential revisions of flow requirements at specific intervals. 40
would be i.-fl- r-,.1 in policies, best practices, programs, and individual lending operations. This could include the application of economic analysis for pollution prevention, control, and reduction programs to ensure that the balance between what is desirable from an environmental point of view and what is feasible from a technical and economic point of view could be better understood and used in planning and investment processes. This Initiative should be prepared jointly by the Environment, RLiral, and Infrastructure famiies of the Bank, building on the work started b the MENA and EAP Regions.
CLIMATE CHANGE ADAPTATION AND MITIGATION The potential implications of climate change on water resources management (for example, on the magnitude, frequency, and timing of Env ronment Stratesy Papers
Strategic Framework for Action precipitation and runoff events, water demand patterns, and sea level rise) are likely to be significant and call for better preparedness. The impacts will vary. Some parts of the world are likely to experience more frequent and higher magnitude floods and others are likely to experience more severe droughts. Low-lying areas and small islands face the greatest threat from sea level rise. The Bank should promote the integration of climate change considerations in water policy reforms, adaptive planning to incorporate the likely impact of climate change on the planning and design of water resources projects, a review of engineering design criteria and methodology, a review of operations of single-purpose dams and reservoirs, and the strengthening of predictive and forecasting capabilities at the national and regional levels. In water-scarce regions, the Bank should promote strategic drought management.
Hirji and Ibrekk
41
Chapter 5
1 p)
Way Forward
DEVELOP HUMAN RESOURCES trengthen En vironmental Management Capacity. The Water Resources Management Thematic Group and the environ-
substance of the environmental concerns, as well as staff who can quantify the value of losses associated with resource and ecosystem
degradation.
ment family of the World Bank should jointly

undertake a careful review of the Bank's human resources needs and skills mix that is required to address the environmental management challenges related to water resources management. This review should assess the potential need for adding experienced water resources professionals with the relevant environmental management training and skills as well as environmental professionals with water resources management training and skills. It should also identify measures that could be adopted to encourage sharing of operational experience through interaction among staff, advisory services, specific training, rotation among staff between regions and field offices, mentoring, and peer review, which would more effectively draw on Bank-wide and external experience. Preliminary assessment indicates that there is a clear need to increase both the numbers of environmental staff who understand and can communicate the aquatic ecosystems issues and the numbers of water resources specialists who understand the real
Expanded Use of Interdisciplinary Task Tea

To ensure that the task teams are contributing to environmentally sustainable development, the Bank must provide appropriate and adequate staff and budgetary resources to support the relevant economic sector work and the preparation, implementation, and supervision of environmental components of projects. Often, the implementation of well-designed projects has been constrained by lack of resources. Furthermore, there is a need to ensure better integration of regional environmental staff with water sector operational staff. In client countries, the need for interdisciplinary teams is even more acute; even where there is a cadre of experienced people, institutional barriers often constrain their effectiveness. Current efforts in institution building and training need to be strengthened to help overcome these difficulties. Facilitate Knowledge Sharing. The World Bank is accumulating significant information and
43
Environmental and Water Resources Management knowledge on the issues of environmental sustainability. Efforts to consolidate and share this knowledge need to be reinforced. The Water Resources Management Thematic Group plays an instrumental role in facilitating knowledge sharing through seminars, brown bag discussions, and so on. The ongoing preparation of water resources and environmental management best practice briefs and case studies supported by the Government of the Netherlands provides a basis for a broader dissemination of best practice in this area. Economic and Environmental Goals. There is a growing recognition that economic and environmental goals are compatible rather than conflicting. Sharing of water for environmental and other uses may seem like a zero sum game, but it is not a lose-win situation. Experience has shown that if downstream fisheries, agricultural productivity and groundwater recharge functions, and the storage, nutrient cycling, and water cleansing functions played by wetlands are not protected, the overall economy suffers (Owens-Viani, Wong, and Gleick 1999). The World Bank should support improved understanding of the economic values of environmental services and functions and integrate this perspective into the project planning and management decisionmaking. Water Pollution and Health Impacts. It is reasonable to assume a relationship between ambient water quality and health, especially for areas without a modern water supply system. The relationship is complex, however, given the many ways in which people can obtain water or avoid the worst impacts of oltin Methodare being develop o
ANALYTICAL VWORK
Move TowardAdopting a Comprehensive Approach to Water Management. The World Bank should encourage the adoption of a rcomprehensive approach to the management of inland water resources and riparian vegetation, wetlands, riverine floodplains, and associated wildlife and habitats. Growing awareness of the deterioration of aquatic ecosystems has meant countries need to develop integrated policies and strategies to resolve the complex and interrelated management problems of water resources as an
provide macro-level estimates of the health integral part of the environment, and to overcome thmngeenfaerimpacts of different interventions, to inform managemenofters inisovercome them respours decisions on investment programs. The value and possible future direction of such efforts need to be assessed in the context of policy, managenient, and investment decisions made by the Bank and its cooperating countries. Water Conservation. Water conservation will remain a key area of the policy reform process. The World Bank should promote reforms that encourage water conservation in all water supply and sanitation projects through a wide variety of tools, such as better average cost pricing and introduction of inverted block Environment Strategy Papers
nents, namely land, air, and living resources (linking upstream-downstream activities). This geograph ical Iv comprehensive mulItimed ia approach aims at restoring, maintaining, and improving the conditions and characteristics of aquatic ecosystems and water resources. The World Bank should support the concept of comprehensive management in the policy dialogue and in the design of water resources planning, development, and management investments. 44
Way Forward
tariffs (especially during drought), long-run marginal cost pricing as incentive for recycling, rationing and restrictions, land zoning, and improved technology. Conservation should also be encouraged in agricultural water use to improve on-farm water use efficiency and to translate the on-farm water savings for intersectoral transfers and overcome policy barriers that discourage such transfers. Reuse of Effluent. It is clear that reuse or recycling of lower-quality water, including treated effluents, will be an increasingly important component of overall water resources management. A range of technical options are available but a number of institutional, behavioral, or cost obstacles must often be overcome before reuse becomes widespread. Work that has commenced with the irrigation sector on this issue should be supported, and opportunities for implementation should be identified. The experience gained in the Middle East and North Africa and in other regions in this area should be more broadly disseminated.
program areas-conservation of biodiversity and the management of transboundary waters-directly address the objective of the Environment Strategy for mainstreaming the environmental aspects of water resources management. The Bank is preparing two GEF Medium Sized Projects-a Lakes Management Initiative and a Water and Nature Initiative-to support the mainstreaming effort. WWF/IUCN/GEF/WB Partnership. The partnership established after the second World Water Forum brings together skills and experiences of the GEF, the World Conservation Union (IUCN), the World Bank, and the World Wildlife Fund (WWF). It will focus on demonstrating how integrated approaches to land and water resource management can icroaeeoytmadboiest conservation considerations. The intention is to achieve this integration in a limited number of ongoing activities. Such management projects, which expand on existing acities of one or more of the interested organizations, wOLuld serve as models to accelerate change in the programs and projects of all four groups, as well as for much wider applications over time. The Bank will seek support from GEF to prepare pilot projects in two basins after consultations with the other partners. Global Water Partnership (GWP). The GWP, established by the United Nations Development Programme, the World Bank, and a network of donor agencies, professional organizations, and other institutions, provides a key forum for cooperatively advancing major water-resources initiatives. Bank-Netherlands Water Partnership Program (BNWPP). The BNWPP is an operational instrument to stimulate innovative approaches 45
STRATEGIC PARTNERSHIPS
The effective development of partnerships between a diverse range of cooperating parties is critical for providing the basis for sustained political interest and strong public support, and for facilitating major resource mobilization efforts. Partnerships have proved to be important in leveraging resources, the development of strategies, identification of priorities, development of practical actions, and implementation of activities. Global Environment Facility (GEF). The GEF provides grant funds for incremental costs for the conservation of global public goods. Two Hirji and Ibrekk
Environmental and Water Resources Management in the water operations of the World Bank and broader development community. The partnership operates through a set of windows. Of particular importance to the environment community are the windows on Environmental Flow Allocation, Municipal Wastewater Treatment, River Basin Management, and International Waters. The BNWPP offers a unique opportunity to set up additional windows to strengthen the integration of environment in water projects, for example, to address water quality management. World Commission on Dams (WCD). The IUCN and World Bank cooperatively established the World Commission on Dams, which issued its final report, Dams and Development, in November 2000. As a follow-up to the WCD Report, the World Bank will work with various partners to develop a program to support the implemnenation develof selected pgreom rtin oe implementation of selected recommendations of the report in a practical and cost-effective manner in cooperation with its owner members. Intergovernmental Panel on Climate Change. The World Bank should cooperate with the BOX 15 Suggested indicators Examples of national process indicators * Adoption of specific water, environment, or sector-related legal reforms, policies, institutions, standards, and programs necessary to address the water-related environmental priority issues, including stakeholder participation programs * * Adoption of a framework for operationally defining environmentally sustainable water use Adoption of broader criteria for project and program evaluation to include environmental economics (to value costs and benefits of resource degradation) inconjunction with the traditional benefitcost analysis Adoption of demand management as a key element of a water strategy. IPCC and the global science community to better understand the implications of climate change on water resources management. Specifically, there is need to improve understanding of the global climate models and how they are coupled with local and regional models as well as the predictive capabilities, uncertainties, and limitations of the local and regional predictions for precipitation, runoff, water supply, and water demand under various scenarios. These will be useful for informing Bank investments in the energy, agriculture, urban, industry, mining, forestry, and environment sectors.
INDICATORS The Water Resources Sector Strategy and the Environment Strategy aim to focus on interventosi h ae etrta edt la tions in the water sector that lead to clear development outcomes. Box 15 lists examples of process, stress reduction, and environmental status indicators for monitoring the specific elements of the mainstreaming process.
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) 46 Environment Strategy Papers
Way Forward BOX I5 (continued) Suggested indicators * * * * * * Amount of underwater or wetland area placed into protected management, including no fishing zones Amount of eroded land stabilized, planted to trees (estimated sediment load reduction) Amount of fishing fleet removed through alternative livelihoods Larger-mesh fish net policy and fishing restrictions documented Reduced releases of pollution to groundwater recharge zones Additional releases of water from dams for environment purposes.
Examples of environment status indicators * Measurable improvements in trophic status * * * * * * * * Improved (measurable) ecological or biological indices Improved (measurable) chemical, physical (including flow regimes), or biological parameters Improved recruitment classes of targeted fish species/diversity/keystone species Demonstrable reduction of persistent organic pollutants in the food chain Local community income and social conditions stable or not worsened by the intervention, and in some cases improved Demonstrable recovery of or increased protection for key flagship species or values as a result of changed rule (operating) curves for dams or vegetative response from wetland re-inundation Improvement in hydrologic balance as increases occur in the number of hectares of trees as a result of reforestation programs Stakeholder awareness raised and involvement documented.
Source: GEF 2001.
Hirji and Ibrekk
47
J.
Annex A
Regional Water-Related Environmental Priorities

Region AFR Key water and environmental issues * Soil erosion and degradation * Water scarcity and deterioration * Loss and degradation of natural habitats * Environment and health . Urbanization * Vulnerability to climate change Impacts
* Fresh water, one of the
scarcest commodities, is rapidly being depleted and polluted * Soil degradation has affected 65% of the cropland . Coastal, marine, and freshwater fisheries threatened by overfishing and pollution * 330 droughts between 1965 and 1999, resulting in 880,000 deaths * About 890,000 annual deaths water/sanitation-related * 70% of surface water in SADC shared by two or more member states . Of the I I major, multinational watersheds, 8 have lost over 90% of forest cover . Most rapidly urbanizing region
* Rising infant mortality rates
ECA
* Key priority: air
pollution - Safe drinking water and sanitation * Water resources; 63% of water to agriculture
linked to poor quality and limited supply of drinking water * Crumbling water infrastructure and contamination of groundwater cause serious health issues . $2 billion-about 5% of Central Asia's GDP-lost every year as a result of salinization * Aral Sea area reduced by 70% _ 49
Strategic priorities and actions Urban development, water supply, and sanitation: . Infrastructure and service improvements to target diarrheal diseases, malaria, and cholera . Setting and enforcement of standards . Environmental and hygiene education * Integrated urban planning International waters: . Facilitating cooperative management of shared waters . Addressing both water quantity and quality (e.g., preserving environmentally critical volumes of river flow) Ecosystem-based approach to environmental management: . Need to develop institutions . Indicators and databases . High-level political support * Undertake comprehensive inventories and assessments to identify resources available Vulnerability to climate change: * Adaptation and coping mechanisms * Carbon sinks Safe drinking water and sanitation: * Increase health outcome of infrastructure investments by incorporating hygiene education and basic sanitation * Analysis of water quality impacts of wastewater treatment interventions Water resources: * Improve irrigation and drainage * Improve broader WRM * Watershed management * Disaster mitigation; floods . Improve management of regional seas (Black Sea, Caspian Sea)
Source: Regional environment strategies.
Environmental and Water Resources Management Key water and environmental issues * Key priority: urban and industrial air pollution * Access to clean water and sanitation in urban and rural areas - Improving natural resource management * Water resources management * Mitigate risks from natural disasters
Region EAP
Impacts
* 500,000 infants die each year
* LAC
* Mismanagement of *
natural resources * Urban-industrial pollution * Vulnerability to natural disasters * Climate change * Threats to terrestrial and marine biodiversity
* *
due to waterborne diseases-60% due to deficit in rural water supplies; 30% due to lack of sanitation in urban areas 290 million people lack access to safe water; 75% in rural areas 240 million people in urban areas and 1,045 million in rural areas lack access to sanitation Social cost of inadequate sanitation in Indonesia exceeds $4.7 billion annually, or 2.4% of GDP 36.9% of agricultural land is irrigated; uses 80% of water Heavily urbanized region; 75% of its 500 million people living in cities Access to safe water: 7090% in urban areas, 20-70% in rural 2% of wastewater treated in Santiago and San Salvador Rich natural resource base 56% of rangelands are severely degraded
Strategic priorities and actions Access to clean water and sanitation: * Support public investments * Press for policy reforms that allows cost recovery and efficient operation a Expand analysis of human health benefits * More focus on rural areas Reducing vulnerability: * Provide support for relief and reconstruction * Address longer-term risk reduction and mitigation measures Improve livelihoods: * Watershed management * Coastal zone management River basin management: * Mekong River and Chao Phraya River Increase public participation and environmental awareness Integrating pollution management in the infrastructure and productive sectors: * mitigate health impact of pollution * use market-based instruments * prioritize water supply and sewerage a treat wastewater of highly polluted waterbodies . focus on large cities Improving livelihoods: * promoting integrated natural resource management, e.g. water, fisheries, land,
marine
MENA
* Water scarcity-water
* Annual cost of environmental
tapped at unsustainable level * Water allocation: 82% of water to agriculture * Degradation of water quality * Soil degradation * Urban and industrial pollution . Weak institutional and legal frameworks
damages 4-8% of GDP

* Environmental health burden
is about 14% of the total; 8% attributable to water supply and sanitation . Land degradation -$1.15 billion/year in lost productivity . 45 million people without safe water and 85 million (30% of population) without sanitation * Only I 5% of wastewater adequately treated
* developing natural resource accounting and expenditure accounting frameworks * promoting biodiversity conservation Disaster management: * Preparedness to reduce vulnerability, rather than response * Analysis of human activities that exacerbate the impacts of disasters Improve water resources management: * WRM inYemen, Jordan, Morocco, Tunisia, Algeria, West Bank/Gaza * Improve water quality and enhance monitoring * Wastewater treatment plants and wastewater guidelines * Increase awareness * Mitigate impacts of floods and droughts Controlling soil degradation: * Watershed management * Establish baseline data for water and soil contamination from agriculture * Develop methods to control agricultural pollution
50
Regional Water-Related Environmental Priorities Key water and environmental issues Environment and health: * Key priority: air pollution * Lack of access to safe water and sanitation * Exposure to insect vectors Natural resources issues: * Water quality degradation * Water scarcity * Dwindling wetlands, freshwater bodies and fisheries * Soil degradation * Poorly managed water resources Vulnerability to risks and natural disasters: * Floods, storms, tsunami, cyclones, etc. Global environmental issues: * Protection of biodiversity, conservation of watersheds * Loss of fisheries * Climate change
Region SAR
Impacts
* Over the 1987-98 period,
the population living on less than $1 day rose from 474 to 522 million * One fifth of the total burden of disease is caused by environmental health risks * Water and sanitation account for 9% of the disease burden * Health and productivity impacts in Pakistan are estimated at 2.3-4.6% of GDP, half of this is attributable to water pollution * From 1990 to 1998, SAR accounted for almost 30% of all natural disasters and 60% of deaths * 93% of freshwater withdrawals for agriculture
Strategic priorities and actions Reducing environmentally related health risks: * Access to safe drinking water and sanitation * Hygiene and education programs Improving livelihood systems: * Improve productivity * Improve infrastructure, e.g. safe water and water for agriculture Reducing vulnerability: * Changes in land use planning * Disaster preparedness * Water conservation and management Water resources management: * Water sector policy reform * Integrated river basin planning v Coastal zone management * Watershed management * Improve water service delivery * Mainstream land and water interactions Urban development: * Air quality management * Urban development * Pollution management International waters * Important challenge; GEF provides an opportunity * Priority to Ganges-Brahmaputra-Meghna basin
Hirji and lbrekk
51
;.
i;v)Slf
3SS
Annex B
Linkages Among Water, Environment, and Dimensions of Poverty
n outcome-oriented approach in the water sector is needed to main14&t stream environment-poverty considerations. Recognizing the close links between environment and water resources interventions and poverty reduction outcomes, there are six dimensions of poverty that need to addressed: * Sustainable Growth calls, on the one hand, for developing the natural capital (water resources) for human development and welfare, and, on the other hand, protecting the sink function of water essential for human health and protecting natural capital from irreversible damage, ensuring that the social and economic security of many that depend on the water resources for their livelihood is not compromised. * Equity. Inequitable and unjust laws and illdefined property rights that restrict access to and control over natural resources pose a major obstacle to efficient management of natural resources. Unfair distribution of costs and benefits and planning processes that alienate affected communities from decisionmaking and from sharing benefits of water development projects fosters social stratification and limits the prospect
of poverty reduction through economic growth. Establishing well-defined and equitable use rights for water, fisheries, and logging would provide the desirable incentives and means for managing natural resources in a sustainable manner. * Human Health. Improve people's health by reducing their exposure to waterborne and vector-borne diseases and to toxic substances by increasing access to clean water and adequate sanitation. Improving management of water bodies such as reservoirs and canals, and encouraging treatment of industrial and toxic wastewater discharges, will also improve health. Recent estimates suggest that premature death and illness due to major environmental health risks account for one-fifth of the total burden of disease in developing countries, a major proportion of which are concentrated among the poor. Inadequate water supply and sanitation poses the largest environmental related health threat (up to 10 % of disease) in many Bank client countries (World Bank 2000b). * Sustainable Livelihoods. Even though reducing dependence on natural resources may be a more effective route out of poverty, natural resources remain the most 5.3
Environmental and Water Resources Management important safety net available to poor rural households. The livelihoods of poor people who depend on land, water, forests, and biodiversity should be enhanced by helping them secure access to resources and creating circumstances in which they can use and manage those resources sustainably. * Security and Vulnerability. Poor people, especially in poor countries, are particularly vulnerable to both natural disasters and changes in environmental conditions. Natural disasters-such as floods, storms, droughts, and landslides-have a disproportionate effect on poor people since they often live in vulnerable areas such as floodplains or steep slopes. People's vulnerability to environmental risks such as natural disasters, severe weather fluctuations, and the impacts of climate change should be reduced by getting information to governments, the private sector, and poor communities and by promoting adaptive strategies. * Empowerment. The empowerment of people to manage their own environment and water resources, including water infrastructure, should be supported by ensuring participation of all stakeholders in decisionmaking, equipping people with the ability to monitor and influence public resource allocations, creating user organizations, transferring operation and maintenance responsibility to the users, and so forth. This is closely related to issues of good governance, effective decentralization, improved budget management, information and public dialogue, anticorruption efforts, actions on gender discrimination, and a fair judicial system.
54
References
Ayers, W. S., A. Busia, A. Dinar, R. Hirji, S. Lintner, A. McCalla, and R. Robelus. 1996. Integrated Lake and Reservoir Management: World Bank Approach and Experience. Technical Paper No. 358. Washington, D.C.: World Bank. Engelman, R., and P. LeRoy. 1993. Sustaining Engelman, R., Water: Population and the Future of Renewable Water Supplies. Washington, D.C.: Populaton Actin Interational
Population Action International.
Gleick, P., P. Loh, S.V. Gomez and J. Morrison (eds.) 1995. California Water 2020: A Sustainable Vision. Oakland, Calif.: Pacific Institute for Studies in Development, Environment, and Security. GEF (Global Environment Facility). 2001. Monitoring and Evaluation Indicators for International Waters projects. Washington, D.C. Hirji, R. 1998. "Inter-Basin Water TransfersEmerging Trends," in Environment Matters, Eashinvionm Department, Bannua Review. Washington, D.C.: World Bank. . 1999. "Integrating the Environment in Water Resources Management-Emerging Innovations," in Environment Matters. Environment Department, Annual Review. Washington, D.C.: World Bank. Hirji, R., and L. Ortolano. 1991. "Strategies for Managing Uncertainties Imposed by Envi-
ronmental Impact Assessment: Analysis of a Kenya River Development Authority." Environmental Impact Assessment Review 11:203-30. New York: Elsevier Science Publishing Co. Intergovernmental Panel on Climate Change. 2001a. Summary for Policymakers. A Report ~~~~~~of Working Group II of the Intergovernmenta Panel onl thange. tal Panel on Climate Change. Intergovernmental Panel on Climate Change. 2001 b. Summary for Policymakers-Climate Change 2001: Impacts, Adaptation and Vulnerability. A Report of Working Group II of the Intergovernmental Panel on Climate Change. IUCN (World Conservation Union). 2000. Vision for Water and Nature. A World Strategy for Conservation and Sustainable Management of Water Resources in the 21"' Century. Gland, Switzerland. Joffe S. and S. Cooke. 1997. Management of the Water Hyacinth and other Invasive Aquatic Weeds: Issues for the World Bank. Draft Report prepared for the Rural DevelKaufman, L. 1991. "A Fish Faunal Conservation Program: The Lake Victoria Cichlids." Endangered Species Update 8 (1):72-75. Le Moigne, G. et al., eds. 1994. A Guide to the Formulation of Water Resources Strategy. Technical Paper No. 263. Washington, D.C.: World Bank.
opment Department of the World Bank
55
Lintner, S. 1996. "Strategically Managing the World's Water," in Environment Matters. Environment Department, Annual Review. Washington, D.C.: World Bank. Lintner, S. 2000. "Environmental and Social Safeguard Policies" in Environment Matters. Environment Department, Annual Review. Washington, D.C.: World Bank. Ministry of Population and Environment and Ministry of Water Resources. 1997. Draft Nepal Power Sector Environmental Assessment. OED (Operations Evaluation Department). 2001. 'Implementing the Bank's Water Resources Management Strategy. The Lessons of Experience." Discussion Draft. Washington, D.C.: World Bank.
Owens-Viani, L, A. K. Wong and P. Gleick
ing and Mainstreaming Environmental Sustainability in Water Resources Management in Southern Africa. A SADC Technical Report. Harare, Zimbabwe: SARDC. Turral, H. 1998. Hydro Logic? Reform in Water Resources Management in Developed Countries with Major Agricultural Water Use: Lessons for Developing Nations. London: Chameleon Press. United Nations International Conference on Water and Environment. 1992. The Dublin Statement and Report of the Conference. Watson, R.2000. "Poverty and Climate Change," in Environment Matters. Environment Department, Annual Review. Washington, D.C.: World Bank. Wor d Bank. 1993. Water Resources Management: A World Bank Policy Paper. Wash-
(eds). 1999. Sustainable Use of Water: California Success Stories. Oakland, Calif.: .1998. Integrating Freshwater witev Conseratin B Pacific Institute for Studies in Development, mtome Emergions. evironEnvironment, and Security. ment: Some Emerging Lessons. EnvironReid, W. V. 2001. In G. Chichinisky, C. C. Daily, P.Erikel,ement Department Papers No. 61. WashingDaily, P. Ehrlick et al., eds. Managing ten, D.C. Human Dominated Ecosystems, MonoEnvironmental s. 2000a. Regional graphs in Systematic Botany, Missouri Strategies for MENA, LAC, EAP, ECA, SAR Botanical Gardens, St. Louis, Mo., pp. 197atid AFR." Washington, D.C. 225, cited in N. Johnson, C. Revenge, and _. 2000b. "Toward an Environment _ for J. Echeverria. 2001. In Managing Water Slrategy for The World Bank Group-A People and Nature in Science, vol. 292, pp. P-ogress Report and Discussion Draft." 1071-72. D.C. Washington, Saghir, J., M. Schiffler and M. Woldu. 2000. _. 2000c. The World Bank and the Global _ Urban Water and Sanitation in the Middle Environment-A Progress Report. EnvironEast and North Africa Region. MENA nTient Department. Washington, D.C. Region Infrastructure Development Group. WCD (World Commission on Dams). 2000. Washington, D.C.: World Bank. Dams and Development. A New FrameFreshWaters: Forgotten Shumway, C. 1999. work for Decision-Making. London: water and Marine Ecosystems in Africa. Earthscan. Strategies for Biodiversity Conservation and Water Council. 2000. World Water World Va.: Alexandria, Sustainable Development. Vision. Commission Report-A Water Boston University. World. Vision for Water, Life, and Secure Turpie, J., and H. Van Zyl. 2001. "Valuing the the Environment. Environment in Water Resources Management," in R. Hirji, ed. Forthcoming. Defin56 Environment Strategy Papers
~-
Color Graphics
BOX A/BOX 14 Overall assessment
Institutionalized
Effective integration
Safeguard principles * All projects subject to EA * EA is an effective instrument for mainstreaming * Adequate EA capacity in the water sector * Adequate consultations during the EA process * Sectoral environmental assessments Demand management principles * Demand management included in most
WSS projects
L
Yellow Yellow/Red
* * * *
Wastewater reuse increasingly being considered Increased focus on sanitation Increased focus on drainage Use of water quality management strategies
Yellow
Yellow
Protection of biodiversitylenvironmental flow principles * Regularly addressed in Bank-funded projects * Recognized as a concern in many projects * Water policies include explicit environmental criteria
U
Yellow/Red Yellow/Red
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
Stress
-
Water
Scarcity
58
Environment Department The World Bank 1818 H Street, NW Washington, DC 20433 USA For information: ESSD Advisory Service Telephone: 202-522-3773 Facsimile: 202-522-3243 E-mail: eadvisor@worldbank.org Web: www.worldbank.org/eadvisor

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Rafik Hhj` Hans Olav lbrekk

The World Bank

FTnE COPY EJ Environment Department

Environmental and Water Resources Management

Rafik Hirji Hans Olav Ibrekk October 2001

Environmental and Water Resources Management

Chapter 5: Way Forward

Table 1. Linkages between water, environment, and poverty

Environment Strategy Papers

o improve the management of water

The paper is based on a review of regional

his paper reviews the World Bank's

freshwater biodiversity on which people,

requirements as important components of

mainstreaming environmental quality objec-

Effective Institutionalized integration

Hlrji dnd Ibrekk

Environment Strategy Papers

aquifers, and lakes) and water- and

FIGURE 1. Water and water-based ecosystem values

DIRECT VALUES Consumptive and nonconsumptive use of resources Domestic use

OPTION VALUES Premium placed on possible future uses and

NON-USE VALUES Intrinsic significance in terms of: Cultural value

it is used as a receptor for wastewater discharges

Industrial input Irrigating crops

Water storage Water purification

nonpoint sources of poll1 ut ion. Fres h

Source: Turpie and Van Zyl 2001.

BOX I. Sustainable outcomes for water use

Source: Gleick and others 1995.

TABLE I. Linkages among water, environment, and poverty

Hirji and Ibrekk

Environment Strategy Papers

Global Trends Relating to Water and Environmental Management

he World Bank's work in the water and

ency, to applying the "user pays" principle, and

~~~~~~damage. Without adequate considerations for

Pollution of Surface and Groundwater and Degradation of Water Quality. Degradation of

Urbanization. The urban population, which

Globa Trends Relating to Water and Environmental Management

water supplies, or institute higher levels of treatment.

Hirji and lbrekk

Source: Joffe and Cooke 1997.

Global Trends Relating to Water and Environmental Management

comes widespread. The International Water

250 200 00 0 -_isi, Israel

Source: Saghir, SchiffIer, and Woldu 2000.

Source: World Commission on Dams 2000.

Environment Strategy Papers

NEW AND EMERGING OPPORTUNITIES

Environment Strategy Papers

Global Lessons from Bank Experience

WHAT HAS THE BANK BEEN DOING?

Source: OED 200 1.

Source. World Bank 1993.

Environment Strategy Papers

Mainstreaming and Safeguard Polic:ies.

Environment Strategy Papers