8. Water and cities

Water and cities

Cities are major contributors to national economies and play a key role as nodes in global markets. But cities can only develop sustainably when they provide reliable water supply and sanitation services to city dwellers, and manage risks of too much, too little and too polluted water.

In OECD countries, cities have achieved high levels of protection against droughts, floods and water pollution, and a vast majority of city dwellers enjoy reliable water services. This remarkable performance derives from distinctive combinations of infrastructures, business models and institutional arrangements. However, whether and how such combinations are fit for future challenges is unclear.

The economic, social and environmental costs of water security are increasing, driven by urban growth, competition among water users, urban and agricultural pollution, and climate change. Existing infrastructures are also ageing and need to adapt to new contexts. In addition, city dwellers have rising expectations as regards to the quality of water services and water security.

The 2015 OECD report Water and Cities: Ensuring Sustainable Futures establishes that cities that effectively manage water for future challenges combine: l Innovation. Technical innovation is burgeoning in cities, but is not fully exploited. Cities would benefit from having wide latitude to explore technologies that fit local contexts, often in combination with non-technical innovation.

l Financing. The financial conundrum in OECD countries is changing rapidly, with rising investment needs to renew ageing infrastructures, declining water demand in city centres, and fierce competition to access public finance. Tariff structures and business models need adjusting accordingly. l Rural-urban linkages. The urban-rural interface can contribute a great deal to OECD cities’ water security, now and in the future, at least cost to society.

National governments should provide incentives and institutional mechanisms to foster the use of cooperative arrangements benefiting cities, surrounding communities, and ecosystems. l Governance. Three issues deserve particular attention: stakeholder engagement; dedicated regulatory agencies; and metropolitan governance. The OECD explores good international practice, drawing on dedicated networks of stakeholders and practitioners.

OECD cities will not be in a position to respond to all the future water challenges on their own. A number of initiatives by other tiers of governments, clustered around three categories – regulation (on land use, reclaimed water and public procurement), resource provision (e.g. information and education) and incentives (e.g. financial) – will also contribute to urban water management. Governments can use urban policies and infrastructure financing to promote water-sensitive urban design, especially in high-risk regions. The interplay between national and local initiatives on water management will shape the cities of the future, including their capacity to thrive and contribute to bettering the lives of their residents.