Key recommendations for saving the hydrological cycle

The Global Commission on the Economics of Water published its Valuing the Hydrological Cycle as Global Common Good with nine key recommendations for undertaking a 'sea change' in how 'we understand and act on water'. The report makes clear that efforts to tackle climate change will fail if our efforts to protect the hydrological cycle.

Building on the past to build a more resilient future

The report was inspired by, and builds on, two earlier reports: the Stern Review on the Economics of Climate Change (2006) and Dasgupta Review on the Economics of Biodiversity (published 2024).

The Commission views the latest report as forming a research trilogy that will help to help advance new and integrated thinking and actions under a multilateral water agenda that includes the work of the UN Special Envoy for Water, the UN System-wide Strategy for Water and Sanitation, and the initiatives that will lead to the UN Water Conference 2026.

The Commission's co-chairs also state in the report that protection of the hydrological cycle now needs to be recognised in deliberations under the UN Framework Convention on Climate Change (UNFCCC), Convention to Combat Desertification (UNCCD) and Convention on Biological Diversity (CBD).

On the creation of the Commission, co-chair, Henk Ovink, told media: "We aimed to bring together leaders across generations, expertise and cultures, beyond water. I am convinced that the water cycle needs to be understood and valued by everyone."

He added: "Working together and fostering our collective perspectives, we were able to capture the true values of both green and blue water and imagine just water partnerships. We want to inspire and provoke, because we must reshape our shared relationship with water for sustainable, impactful and just transitions."

The need to protect the hydrological cycle

The report sets out the reasons that action need to be taken:

• Bring back stability to the global water cycle
• Deliver on the human right to safe water
• Achieve food security and development that works for all and keep our planet safe for generations to come.

Discussions about water security, quantity and quality, often focus on big projects such as desalination, treatment, watersheds, but in doing so there is a danger of failing to identify the human costs of a water cycle that has suffered as a result of 'our collective actions over decades'.

As the report makes clear, the 'global crisis of water hurts the most vulnerable first, and hardest'. More than 1,000 children under the age of five die every day from unsafe water and lack of sanitation. This shocking fact is a gateway to the knowledge that failure to act on protecting the hydrological cycle will mean that the water crisis will affect every community in the future.

As the report states: 'Most dangerously, we will fail on climate change if we fail on water. We will also fail on each and every one of the Sustainable Development Goals.'

The world can turn the tide

Despite the gloomy outlook, the co-chairs of the report state their belief that the world can 'turn the tide on the crisis'. To do so, means acknowledging that existing approaches are failing and embracing new policy with an urgency 'the crisis demands'. There needs to be a radical shift in how water is valued, managed, and used.

As an economic commission, the co-chairs state that the water crisis can only be averted by valuing water properly, to reflect its worth as 'Earth's most precious resource'. Economies must be shaped to 'to allocate and use water properly from the start and avoid having to fix problems after they occur'.

Action needs to be global, collaborative, collective, and reach beyond cultural and physical boundaries. This collective action, the report states, must include all marginal voices such as youth, women, marginalised communities, and the Indigenous Peoples on the frontlines of water conservation.

Water availability and cost must be sustainable and equitable across populations. As the report states:

“We must shape economies to allocate and use water properly from the start and avoid having to fix problems after they occur. And we must organise all stakeholders, from local to global, around the missions that get to the heart of the global water crisis, so as to spur a wave of innovations, capacity-building and investments – and evaluate them not in terms of short-run costs and benefits but for how they can catalyse long-run, economy-wide benefits.”

Five critical missions identified

Speaking at the launch of the report, Tharman Shanmugaratnam, president of Singapore and co-chair off the commission, told media: "We can only solve this crisis if we think in much broader terms about how we govern water... By thinking and acting multilaterally. So, we not only save countless children's lives and improve communities' livelihoods today but secure a much better and safer future everywhere."

The Commission identified five critical mission areas, which when taken together can guide action towards stabilising the hydrological cycle:

• Launch a new revolution in food systems to improve water productivity in agriculture while meeting the nutritional needs of a growing world population.
• Conserve and restore natural habitats critical to protect green water.
• Establish a circular water economy, including changes in industrial processes, so that every drop of used water generates a new drop through reuse.
• Enable a clean energy and AI-rich era with much lower water intensity.
• Ensure that no child dies from unsafe water by 2030, by securing the reliable supply of potable water and sanitation for underserved communities.

Key recommendations for integrated action

The Commission's recommendations are proposed as the beginning of a new journey that needs to involve continuous dialogue, and that makes inclusivity an action, not just a goal.To do so, we must:

1. Govern the hydrological cycle as a global common good, recognising our interdependence through both blue and green water flows; the deepening interconnections between the water crisis, climate change, and the loss of the planet’s natural capital; and how water flows through all our 17 Sustainable Development Goals.
2. Recognise the minimal water requirements of water for a dignified life. This report offers 4,000 l/p/d as a reference for further discussion.
   • New water provision should focus on those left behind first.
3. Value water to reflect its scarcity, ensure its efficient and equitable use, and preserve its critical role in sustaining all other natural ecosystems.
   • We must price water properly to incentivise its conservation, particularly by the largest users. Today’s massive subsidies that contribute to water’s overuse in many sectors and environmental degradation should be redirected towards water-saving solutions, protecting and restoring freshwater ecosystems, and ensuring access to clean water for vulnerable communities.
   • We must account for the impacts of industrial, national and global development on both blue and green water resources.
   • We must also embed the value of green water systematically in decisions on land use, to better protect evapotranspiration hotspots such as forests, wetlands, and watersheds. Measuring green water’s benefits, including its co-benefits, can also enable schemes for Payment for Ecosystem Services.
4. Shape markets to spur a wave of mission-oriented innovations, capacity-building and investments across the entire water cycle, including blue and green water, to radically transform how water is used, supplied, and conserved. These investments must be evaluated not in terms of short-run costs and benefits, but for how they can catalyse dynamic, long-run economic benefits.
5. Forge partnerships between all stakeholders, from local to global, around five missions that address the most important and interconnected challenges of the global water crisis, and must drive innovation in policies, institutions and technologies:
• Launch a new revolution in food systems to improve water productivity in agriculture while meeting the nutritional needs of a growing world population.
• Conserve and restore natural habitats critical to protect green water.
• Establish a circular water economy, including changes in industrial processes.
• Enable a clean-energy and AI-rich era with much lower water intensity.
• Ensure that no child dies from unsafe water by 2030, by securing the reliable supply of potable water and sanitation for underserved communities.
6. Forge symbiotic partnerships between the public and private sectors to deliver efficient, equitable, and environmentally sustainable use of water from the start.
• Governments should incorporate conditionalities in contracts and property rights to ensure high standards of water use efficiency and environmental protection, including corporate responsibility for watershed and water basin conservation programmes. They should also provide certainty for investors through clear and consistent regulation and policies, including realistic tariff adjustments.
• For utilities, collaborative decision-making and contract designs can steer the private sector toward public value creation with appropriate risk and reward sharing. The focus of partnerships should be on outcome-based performance for operational efficiencies and long-term system resilience.
7. Raise the quantity, quality and reliability of finance for water in every sector.
• Government budgets themselves must reprioritise investments in water, and repurpose today’s environmentally harmful subsidies, estimated at over US$700 billion per year in agriculture and water and sanitation alone. The discount rates used to assess investments in water infrastructure and ecosystem preservation should take into account their long term – including intergenerational – social, economic and environmental benefits.
• Development finance institutions (DFIs) – national, regional, and multilateral – must be regeared to provide catalytic finance to unlock vastly greater amounts of private finance, including more patient finance for water infrastructure projects.
• Just Water Partnerships involving DFIs and national authorities should be established to build capacity and mobilise investments for low and lower-middle income countries. There is large untapped potential for doing so, such as by leveraging concessional finance and pooling risk through bundling projects across sectors. Also key in creating an enabling environment for financing is to build a pipeline of bankable projects, consistent with holistic, programmatic approaches and national development strategies.
8. Harness data as a foundation for action by governments, businesses, and communities.
• Work towards a new global water data infrastructure, building on and strengthening capacities for data collection on blue and green water at every level of the water cycle, from local to river basin to global. It should include local and Indigenous knowledge and aim for interoperability of data reporting.
• Accelerate efforts toward market-based disclosure of corporate water footprints, and expedite work towards regulatory standards for mandatory disclosure, so as to steer action toward sustainable water practices. The aim must be providing transparency on the double materiality of water risks posed by companies’ operations – including both their own vulnerabilities, and the impact of their operations on blue and green water resources. We recommend that water disclosure be integrated in carbon transition plans and be an integral part of sustainability-related disclosures.
• Develop pathways to value water as natural capital to enable responsible stewardship of freshwater ecosystems, including enabling governments and all stakeholders to evaluate the costs and benefits associated with land use changes.
9. Build global water governance that values water as an organising principle, recognises that water is both a local and global issue, and that the hydrological cycle encompassing both blue and green water is a collective and systemic challenge.
• The ultimate ambition should be the establishment of a Global Water Pact that sets clear and measurable goals to stabilise the hydrological cycle and safeguard the world’s water resources for a sustainable and just water future.
• To achieve such a Pact, we need a multi-stakeholder approach that provides for a clear action agenda, institutional innovation, and capacity building.
• The five critical water missions offer a starting framework for developing public-private-people coalitions, drawing on diverse expertise and engaging with all sectors and voices, including Indigenous Peoples and local communities, women, and youth.
• Water and its values should be anchored in every convention, including climate, biodiversity, wetlands, and desertification, and UN agreement, with clear goals and targets.

Read the full report here.