Scope

In the SA context water is, first and foremost, treated as a common (social) good. Water is recognised as being essential for sustaining life and is a commodity to which people and the aquatic environment have a legally protected right. However, water is also recognised as an economic good, the use of which has a major impact on the creation of wealth and the well-being of people. Almost without exception, there is an increasing interest in assessing the economic value of water, using water as a catalyst for the generation of wealth and prosperity, and using economic instruments to increase efficiency and effect desired behavioural change among water users. The use of water tariffs to effect changes in water consumption and the use of waste discharge charges to internalise pollution costs and, in so doing, effect pollution reduction and desirable improvements in water quality, are examples of management options that are being implemented along with the selling of water use licences under specific circumstances. There is also recognition of the need to deal with complex water-economy systems such as catchments and to determine how sensitive socio-economic activities and their associated value are to the impacts of extreme events such as floods or droughts, or to gradual changes over the longer term, such as global climate change.

This Impact Area will continue to integrate the economic aspects of water-related investigations funded by the KSAs. It will also identify overarching issues that need to be addressed at a higher level of integration. Projects and activities under this Impact Area will determine the role of water in economic development, the use of economic instruments for improved water management and the economics of dealing with complex systems at the appropriate micro-, regional and national levels.

Objectives

This Impact Area aims to be instrumental in integrating the economic aspects of water-related investigations that are under way within the WRC's KSAs, and in identifying and initiating further important investigations which may be needed in this domain, Water and the Economy.

The primary aim of the research portfolio facilitated through this Impact Area is to demonstrate the applicability of economic principles in the water field and to provide convincing evidence as well as sound knowledge and support to water management institutions and implementing authorities. The legal framework is already reasonably accommodating and stakeholders are therefore expected to be receptive to the knowledge generated.

Secondary objectives are to:

• Assess the role of water in economic development
• Use economic instruments for improved management of water
• Deal with complex water economy systems

Budget Allocation

The funding for research projects in this Impact Area is supported by the individual water-centred KSAs.