The valuation of water is a useful approach to inform decision-making processes as it places water in an economic context, enabling its comparison with other natural resources. The box below is a definition of the Valuation of Water provided by the United Nations Statistics Division.
Box: The Value of Water
The need to treat water as an economic good has been recognised as an essential component of sustainable water management. Integrated Water Resources Management (IWRM), a globally endorsed concept for water management, identifies maximising economic value from the use of water and from investments in the water sector as one of the key objectives along with equity and environmental sustainability (Global Water Partnership 2000). This principle was reconfirmed at the 2002 World Summit on Sustainable Development in Johannesburg, the 2003 Third World Water Forum in Tokyo, and the 2005 Millennium Project Report to the UN. The prices charged for water recorded in the national accounts often do not reflect its full economic value.
Source: UNSD 2006.
This chapter covers the following concepts and material: