An Approach to Sustainable Water Management Using Natural Resource Accounts: the Use of Water, the Economic Value of Water, and Implications for Policy
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A Natural Resource Accounting project is currently underway to document the status of the nation’s resources and their current economic use. Accounts for water constitute a major component of the Natural Resource Accounts (NRA) since water is the limiting resource for economic development in Namibia, as it is for much of Southern Africa. The NRA include both stock and use accounts for water, as well as related environmental statistics. In order to design development strategies that are sustainable over the long run, it is essential to know the full value of this scarce resource. This is especially important for a resource like water which is used throughout the economy and must be managed to achieve sometimes conflicting economic, social, and political objectives. A comparison is made of user fees, costs of delivery, and the economic contribution of water in different sectors of the economy as a first step toward estimating the opportunity cost of water. As in many countries, government-provided water is heavily subsidized, especially in agriculture. An analysis of two of the largest and most heavily subsidized users of water -- commercial crop irrigation and rural subsistence production -- has important implications for agricultural policy and rural development strategy. Further development of the opportunity cost approach to water pricing would greatly enhance policy analysis. There is also a need for similar, coordinated work to be carried out in other countries in Southern Africa in order to design strategies for sustainable management of resources, like water, which transcend national boundaries.
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