Economical, Political, and Social Issues in Water Resources

By Omid Bozorg-Haddad

Economical, Political, and Social Issues in Water Resources provides a fully comprehensive and interdisciplinary overview of all three factors in their relation to water resources. Economic issues consist of Water accounting, Water economy, Water pricing, Water market, Water bank and bourse. Political issues consist of Water power and hydrogemistry, Water diplomacy and hydropolitics, Water rights and water laws, Water governance and policy, Shared water resources management, Water management systems, and social issues consist of Water and culture, civilization and history, Water quality, hygiene, and health, Water and society.

This book familiarizes researchers with all aspects of the field, which can lead to optimized and multidimensional water resources management. Some of abovementioned issues are new, so the other aim of this book is to identify them in order to researchers can easily find them and use them in their studies.

• Includes diverse case studies from around the world
• Presents contributions from global and diverse contributors with interdisciplinary backgrounds, including water engineers, scientists, planners the economic, political and social issues surrounding water
• Contains in-depth definitions and concepts of each topic

• Language: English
• Publisher: Elsevier Science
• Release date: Jul 14, 2021
• ISBN: 9780323906920

Book preview

Chapter 1

Water accounting

Sahar Mohammad-Azaria, Omid Bozorg-Haddada, Asim Biswasb

aDepartment of Irrigation & Reclamation Engineering, Faculty of Agricultural Engineering & Technology, College of Agriculture & Natural Resources, University of Tehran, Karaj, Tehran, Iran

bSchool of Environmental Sciences, University of Guelph, Guelph, Canada

Abstract

In recent years, the concept of water accounting has been applied in wide range of water resources management problems. The importance of water accounting framework has been increased in providing information for use and management of various water related issues. This chapter focuses on the concept of water accounting by bringing together various aspects including purpose, principles and logics, terms and definitions, importance and necessity, methodology, examples in international settings, and footprint. The chapter starts with an introduction and water accounting related studies, followed by important terms of this concept and the principles and logics of water accounting. Then methodology and two examples are discussed in details. Finally, the conclusion is presented in order to discuss the importance of applying this approach in water resources management domain.

Keywords

Water resources management; General purpose; Water accounting; System of environmental-economic accounting; Water footprint accounting

1.1 Introduction

High pressure on water resources and uncertainty in water availability in the future would cause complexity in management and planning decisions. In fact, water availability is important not only for basic human and environmental demands but also as a key factor for economic development of different sectors which face conflict in their demands. Nevertheless, water management is based on political, economic and social issues more than only technical aspects. Therefore, the water stakeholders' partnership should be increased in water management and rules should be set for public partnership and clarification in water governance.

In order to institute mentioned requirements, it is necessary to provide high quality information. In this regard, a new approach is required to go further than water balance analysis. In order to achieve this goal, the concept of water accounting has been introduced in water resources management literature.

Water accounting is a process including water problems' recognition, water allocation, and quantification of water related benefits and reporting for decision making in management process. In fact, the main goal of water accounting process is to consider the impact of economic and social factors on water resources management along with hydrological factors. The implementation of this strategy will be started by derivation of water resources and economically important data (Chalmers et al., 2012a).

Generally, appropriate water accounting framework aids to generate accurate standard information about water supplies, consumptions, social and economic aspects of water consumptions in order to answer questions in water resources management. The first question answered through water accounting process is the causes of imbalances in water supply and demands. Furthermore, what are the best opportunities in order to making sustainable and equitable water use and the desirable level of sustainability in current water use? In fact, water accounting framework can find the limitations, problems and opportunities to improve water resources management for future goals through answering mentioned questions.

Water accounting has been one of the most important and remarkable concepts in scientific and professional water related societies. Many national and international organizations focus on this concept and applied in different aspects of water resources management in recent years. Among these organizations, United Nations (UN), Food and Agricultural Organization (FAO), International Water Management Institute (IWMI) and Australian Government are the ones which played an important role in developing water accounting framework (Chalmers, 2012a).

With regard to the importance of water accounting concept, numerous studies have been carried out worldwide considering different aspects of water accounting and its applicability in water resources planning and management.

One of the first studies in this field belongs to Molden and Sakthivadivel. In 1999, they applied water accounting methodology in order to indicate its usefulness in information provision for stakeholders and decision makers' better understanding about water resources use and productivity. They concluded that these types of information can help decision makers to achieve better knowledge in order to improve integrated water resources management.

Peranginangin et al. (2004) developed a water accounting procedure for groundwater and surface water components separately unlike other studies in which both surface and groundwater were considered. This separation helped achieving more realistic estimate of water availability and also applying to evaluate present and future water use performance.

Lange et al. (2007) applied water accounting framework to the Orange River Basin. The accounting process brought an economic perspective to water management for the mentioned river basin. They also linked the water accounting to economic data in order to compute water use and productivity. The results from water accounting and economic data can be applied in future decisions about water allocation, pricing and infrastructure development.

Vardon et al. (2007) was among the most comprehensive studies that were carried out in Australia at a national scale on water accounting related to natural water scarcity crisis. This study introduced water accounting and mentioned the major Australian organizations involved in water related information provision and information use process. The main goal followed in this process was the improvement of the public knowledge on water resources in Australia. It should be noted that the experience of financial accounting in the case of water reporting is presented in this study which is novel approach implemented in line with water accounting and is named Australian Water Accounting Standard. In other word, this approach is similar to financial accounting in reporting and methodology and is based on water accounting standards. In this regard, Australia is one of the countries that made the water accounting standards with the aim to improve water information.

M. Turner (2010) presented a water accounting system (WAS) for strategic long-term water management. This system was compared to other accounting systems and its benefit was reported. The results indicated the potential of WAS for solving tensions between water supply and demands.

Other studies focusing on water footprint accounting and water productivity were carried out in 2011 by Ercin et al. and Perry, respectively. The first study focused on the water footprint accounting and its impact assessment on a hypothetical sugar-containing carbonated beverage. The results revealed that the biggest share at total water footprint of a product is dedicated to agricultural ingredients despite their small fraction in weight of the final product.

In second study, Perry applied water accounting for evaluation of the water productivity in agricultural sector. Some recent researches are presented to indicate the usefulness of water accounting in the scope of water productivity in agricultural sector.

In 2012, Chalmers et al. discussed the generality of water accounting in a review paper. They also evaluated different water accounting systems, their application and differences. In this study they concluded that water accounting can be considered as a useful tool in order to provide high quality information for water management and decision making.

In another study, these authors evaluated the roles of water accounting, water industries and other stakeholders in general-purpose water accounting. Chalmers et al. (2012a) tried to apply regulatory theories which explain financial accounting standards development to present and discuss the national and international future of general-purpose water accounting.

The study of Karimi et al. (2013) is one of the most remarkable studies in 2013. They introduced a new framework to provide explicit spatial information called Water Accounting Plus (WA+). They provided information related to water depletion and withdrawal processes in river basins.

In another study, Hu et al. (2013) discussed about Water Accounting Standard Boards which formed first time in 2009 in order to plan a sustainable water use in Australia and in following, they investigated the impact of stakeholder theories and also public interest on Board. The results revealed that public interests and stakeholders play key role in determining the effectiveness of standard and causes encouragement usage of water reporting standard.

Zhan-Ming and Chen (2013) investigated the virtual water profile of the world in 2004. This investigation was implemented based on a multi-region input–output model. The results can be applied in policy making focusing on water using pattern adjustment and water security enhancement.

In the following, few studies focusing on water accounting, its development and applicability in different water management issues are presented. For example,

Berger et al. (2014) introduced water accounting and vulnerability evaluation model in order to enhance the analysis of water consumption. Results showed the capability of the model in interpretation of water footprint figures and promotion of sustainable use of freshwater resources.

Karimi et al. (2015) evaluated the impact of remote sensing measurements' errors on water accounting and information provided for policy making. They investigated the reliability of WA+ outputs, using a case study. They reported a reliable performance of the majority of WA+ parameters. On the other hand, utilized flow exhibited low reliability and thus, caution must be administrated to use them formulating important policy decisions.

Momblanch et al. (2014) described the usefulness of Australian Water Accounting Standard. However, the applicability of results in integrated water resources management calls for new level of details and the amount of information. Therefore, a different method was presented and compared with the original Australian Water Accounting Standard.

Morillo et al. (2014) proposed joint evaluation of water footprint accounting for high value crops and irrigation management indicators to evaluate the water use efficiency improvement and actions to reduce water use.

Tilmant et al. (2015) presented a dynamic water accounting approach in which the whole basin was considered as a value chain. The results of a hydro-economic model made it possible to achieve effective water accounting.

M.Borrego-Marin et al. (2016) proposed a methodology that used system of environmental-economic accounting for water standard tables in order to assess cost recovery ratio. Results indicated the capability of the method in cost recovery analysis comparability enhancement and knowledge translation between region and countries worldwide.

Pedro-Monzonis (2016) presented a tool that enabled combined use of hydrological and water resources models to fill in the system of environmental-economic accounting tables.

Manzardo et al. (2016) proposed a methodology in order to assess the water footprint accounting of direct water use at an urban level. The methodology was also tested in the municipality in Vicenza, Italy. The results indicated the applicability of the method in water management issues while it requires large amount of data.

Tello et al. (2016) evaluated the superiority and applicability of general-purpose water accounting reports in potential users' viewpoint. They discussed the general-purpose water accounting as a financial technique that can be extended to other areas of natural resources. Users' perceptions indicated the usefulness of general-purpose water accounting.

Burgia et al. (2017) presented a review of water accounting in order to reveal the evolution of researches on water accounting over time in the accounting, management and organization fields.

L. Burritt and L.Christ (2017) focused on the lack of monetary data in water accounting initiatives. The results indicated that considering monetary business in water accounting process help companies to improve water management. On the other hand, developing environmental management accounting along with physical and monetary information in water accounting framework would be the best way for improvement of water management.

Xu et al. (2017) developed an optimization model based on the blue and grey water footprint accounting results of industrial sectors in Dalian City of China. The results indicated the rationality and applicability of optimal model for water management strategy formulation.

Finally, the recent study in this case was carried out by Bazrafshan et al. (2019). They focused on water footprint accounting and virtual water trading of saffron. Valuable information for managers and policy makers were achieved from their findings to extend cultivation area with low economical water footprint, rain-fed cropping and enough precipitation.

1.2 Terms and definitions

As stated before, water accounting is a formation of a mechanism for organization and combination of accumulated information from different sources in order to achieve set of integrated information and link physical water supply and use data with economic data. In fact, the physical data include all the amount of water which enter the domain or exploit from the domain. On the other hand, the economic data can be described as the income and costs of water use in different sectors.

In a classic water management perspective, the hydrologic aspect is the only important issue that has been carried out based on water balance information without considering social, economic and environmental aspects. But water accounting framework goes beyond the water balance, supply and use analysis (FAO, 2017).

Assessments and evaluations during water accounting process are carried out focusing on hydrologic, engineering and monitoring aspects. In hydrology aspects the focus is on understanding physical process governing water flows and storages in various climatic and management conditions. In fact, this aspect in water accounting generally focused on water flow and depletion accounting. Flow accounting methods are based on flows in river, aquifers, lakes, discharges, diversions and abstracts. On the other hand, depletion accounting is emphasized on all the process with the aim of consumptive use. In fact, in water depletion accounting, the focus is on the water depletion causing limited or no access in the future. The process of depletion is categorized in the form of evaporation, apply in production process or water quality degradation (Chalmers, 2012a, b).

On the other hand, engineering aspects consider design, construction and operation of storage infrastructures, water transfer schemes, urban water supply systems, irrigation and drainage schemes and water treatment. In other word, this aspect emphasizes on spatial and temporal water storage management and its delivery from supply source to demand site. In fact, considering both supply and demand sides are the most important evaluation framework in engineering aspect. In this process different aspects of supply and demand sides that play key roles in the water resources management are discussed. The spatial and temporal availability to rainfall, surface and groundwater, unconventional water resources, capacity, operation and maintenance processes of supply, storage and treatment infrastructures will be assessed and evaluated in the supply side. On the other hand, the spatial and temporal demand of various water users, the level of meeting these demands, and spatial and temporal consumptive and non-consumptive patterns are also evaluated in the demand side. The third aspect in water accounting the monitoring aspect focuses on applying water accounting to support management decision or as a means for achieving improvements in policies and practices in both supply and demand sides.

Ultimately all the information which are being collected, qualified and revised during the water accounting process are classified into a number of accounts and analytical indicators. Accounts are sets of data about water asset that reflect the flow status and the available amount of water and the water abstraction for different users. The costs and benefits of water use, and the social and environmental components are also presented in water accounting related tables. Some analytical indicators are also applied in the water accounting framework. These analytical indicators are described in fraction or in productivity form. After deriving accounts, figures and diagrams will be used to reveal the status of the system and present an integrated framework to connect the physical data to economic data to enhance decision making process based on available information (Chalmers, 2012a).

1.3 Basic principles and logics

The basic principle of water accounting is achieving a systematic frame of processes that collect the water related information. The high-quality data will be provided from the collection and analysis of gathered information. This derived information is presented in a report structure in order to meet a category of goals. These goals include water problems and challenges analysis, the reasons of positive and negative outcomes of policies and strategies in water related issues, provision of an integrated and comprehensive data basis for stakeholders, efficient water allocation and conflict resolution, eliminate the bias in viewpoints toward water management and increasing awareness (Godfrey and Chalmers, 2012).

In other word, the social and biophysical plans and strategies required by water user sectors are recognized through the analysis of water related challenges and accumulate the information and documents about policies, plans and measures. Furthermore, recognition and evaluation of different social, political and economic factors with different outcomes in a specified domain can provide a set of information in line with better understanding of the reasons of positive and negative impacts.

On the other hand, access to stated details in a high quality and comprehensive information framework result in improvement and progress in social, political and biophysical plans for fundamental changes in policies and management infrastructure facing the water related challenges. Furthermore, severe scarcity and challenges rising conflict among different water users and stakeholders. Available qualified and reliable data results should be in place for efficient and effective conflict resolution and achieving agreement among users and stakeholders (FAO, 2017; Chalmers, 2012a).

Finally, the main idea in water accounting procedure is awareness rising among different water user groups, planners, managers, policy makers and stakeholders through presenting reports of accurate water related information and outputs and seek for the fast problem solving complicated social, biophysical, economic and environmental challenges.

1.4 Importance and necessity

As mentioned before, high quality information in a standard framework should be collected in water resources planning and management. In fact, unavailability of appropriate information may lead to uninformed discussions as stakeholders do not have access to a basis for evaluating unbiased and incorrect conditions. Consequently, the efficient planning can be also inaccurate and unreliable based on stakeholders' data basis and approximately impossible. The beliefs based information often lacks the scientific aspect of water management and thus have negative impact on land use and water management.

It should be noted that the importance of water accounting arises from the importance of access to high-quality information towards effective decision making related to water management. In fact, water accounting provide access to measurements, monitoring and effective and proper reporting systems which can help build confidence in public and investor sectors for water trading, water extraction, environmental management and other outcomes of public benefit (Godfrey and Chalmers, 2012).

Furthermore, in water accounting framework current status of water resources and per-capita water consumption in different user sectors can be evaluated. The water use and pollution can be recognized in different services and sectors which use water as an input or a good. Finally, a systematic and organized framework will be achieved which results in efficient water governance and sustainability in water resources management.

1.5 Methodology

From water management viewpoint, the water accounting methodologies should be applicable at a river basin scale or at a water resource system scale. The water accounts should contain complete information about relevant water flows and storages for water users in the accounting domain. Finally, in order to facilitate generalized use, along with information comparison and transfer, the water accounting methodologies should set up standard procedures for calculating and presenting the water accounts. The flowchart of water accounting process is presented in Fig. 1.1.

Fig. 1.1 Flowchart of water accounting process.

Based on different water management strategies, the information and solutions required to meet these goals are different. Consequently, different water accounting systems have been developed for water measuring and reporting at an international scale. These four systems include general purpose water accounting (GPWA), system of environmental-economic accounting for water (SEEAW), international water management institute for water accounting (IWMIWA) and water footprint accounting (WFA) (Godfrey and Chalmers, 2012; FAO, 2017; UNSD, 2012; Tello, 2016).

1.5.1 General purpose water accounting

The GPWA is generally derived of financial accounting focused on general information and reports from a wide range of decision makers. Provision of useful information to water users is one of the main goals of this system along with information for decision making and decision evaluation about water resources allocation. The reports presented in this system include physical turnover statement which similar to statement of cash turnover in financial accounting. This type of statement indicates that how the water availability will change during the reporting period. There are other parts in these reports including financial statements based on common and traditional balance sheet, water income statement, and statement of change in water income (Hu et al., 2013). Water income statement reports the water provision commitment considering rights of stakeholders or any claim about water delivery. The statement of change in water income also indicates the changes in water income during the reporting period. Conceptual statement, sector reporting, additional notes about accounts are other important aspects of GPWA reports.

In fact, considering the application of financial accounting experiences in water reporting resulted in a type of water accounting named standard based water accounting. This is embedded in the framework of GPWA. In other word, GPWA and Standard Based Water Accounting are somehow similar concept to financial accounting in methodology, presentation, and have been formed based on the water accounting standards.

The outstanding aspect of GPWA which distinguishes this approach with other water accounting approaches is the nature of GPWA that emphasizes data preparation for stakeholders. In fact, these data are provided in order to make decisions including evaluating the response to water management and economic, environmental or social allocation outcomes. It should be noted that GPWA is a powerful tool for considering water markets, natural events or reporting on disasters like flood (Chalmers et al., 2012b).

1.5.2 System of environmental-economic accounting for water

The SEEAW was developed by United Nations Statistics Divisions (UNSD) between 2004 and 2007. In fact, this approach brings together experiences and measures of different countries and international organizations in a water accounting framework. In other word, SEEAW is a conceptual framework for organizing water related environmental and economic data. In this approach the key hydrological and economic concepts are explained and presented in a group of tables which reveal the interaction between water, environment and economy. This approach presents data around environmental, economic and social indices like the processes take place in financial accounts.

SEEWA presents a structure including standard tables in order to report hydrologic and economic data. These tables indicate interrelation among water, environment and economy as well as among different economic components. The environmental and economic data are not the only information that is considered in this system. There are other complementary tables which cover social aspects.

The first groups of tables and accounts in SEEWA belong to physical supply and use. Physical supply and use related accounts describe the interaction between environment and economic. In other word, this process focus on (1) water cycle in environment which includes natural flows, surface water resources and groundwater, (2) flows from environment to economy which includes water abstraction from environment by economy for meeting consumption and production goals, (3) inter economy flows which includes water transfer among economy units and (4) return flows from economy to environment which includes water discharge from production economy units to the environment (UNSD, 2012; Pedro-Monzonis, 2016; FAO,