|Effective management of the demand for water is one of several critical challenges worldwide in the face of increasing water scarcity. Demand for water can be affected by pricing, quotas, and improvements in water-use efficiency.
IWRM has made limited progress in most client countries. Most often IWRM is seen in a particular location at a time of necessity—for instance, after a natural disaster. To open the window of opportunity without waiting for a calamity is to support monitoring processes that deliver information to relevant public and private stakeholders. Within the World Bank there has been considerable progress in integrating water into the work of other sectors and in consolidating institutional structures to carry out water-related activities.
Watershed management projects that take a livelihood-focused approach perform better than those that do not. Projects combining livelihood interventions with environmental restoration enjoyed high success rates, although effects on downstream communities (such as reduced flooding and improved water availability) and social benefits in both upstream and downstream communities often were not measured.
Focusing on environmental restoration and coastal management is critical. Environmental restoration is underemphasized in Bank projects. Priority improvements to degraded environments, even when small, can have large impacts. At the same time, countries and donors need to focus more on coastal management, because roughly 75 percent of the world’s population will soon be living near the coast, putting them at heightened risk from the consequences of climate change.
Urbanization and population increase will require more attention on water service delivery and sanitation. Although water services are delivered by public providers in most countries, international private firms have been successful in some urban areas, investing in infrastructure and increasing the efficiency of water utilities' operations. The World Bank has increasingly focused on water service delivery, but there has been a declining emphasis on monitoring economic returns, water quality, and health outcomes. At the same time, an expansion of piped water services and increased household water use will lead to an accelerating demand for adequate sanitation. Within sanitation, more emphasis is needed on household connections.
Hydropower potential remains untapped for appropriate development. The World Bank has recently increased its financing for dam construction, in many cases for multipurpose dams that provide hydropower and often also support irrigation, flood protection, or industrial use. It will be vital to use the experience with hydropower projects, including their scale and socioeconomic and environmental impacts.
Supply and use of data on water needs to be strengthened. Access to data can promote better understanding of the linkages among water, economic development, and project achievement. Support for more frequent and more thorough water monitoring in client countries, particularly the most vulnerable, can help ensure that countries treat monitoring data as a public good and make those data broadly available.