Water, climate, and finance know no borders. This brings both challenges and opportunities. When it comes to freshwater, a majority of the world’s surface water flows in transboundary basins, spanning multiple federal states and countries. At the same time, most impacts from climate change are felt through the global water cycle and sub-cycles. Thus, transboundary cooperation is crucial for strengthening climate resilience. And, when done appropriately, riparian countries and river basin organizations (RBOs) can harness their unique attributes to secure adaptation financing from a range of sources.
In our daily lives we are bombarded by offers to get more for less. And we respond accordingly as we strive to balance our household budgets. This saves us a few dollars here and there, perhaps hundreds of dollars on a big-ticket item, and we get to feel good about ourselves and our financial skills.
This is a question that is difficult to answer.
As practitioners we often focus our attention on operational efficiency. What were this year’s costs compared to last year’s? Is efficiency increasing or decreasing? There are suites of tools to give technical comfort to back up such assessments – from simple ratio analyses through to more sophisticated approaches such as econometric modeling and Data Envelope Analysis.
But what about capital efficiency? The assessment is not so simple as, in most cases, this is a prospective assessment – that is to say, a comparison of what was spent compared to a hypothetical of what might have been spent. It is rare to have a side by side comparison. Yet in the water sector, annualized capital costs can be equal to the annual operating costs. So, when we focus on operational efficiency, we are in fact only looking at half the story.
At the same time, we talk about mobilizing more finance to fill the gap between historic investment levels and projected investment needs. Yes, there will always be a financing gap in all countries around the world. However, whilst thinking about bridging that financing gap (“Maximizing Finance for Development” comes to mind), shouldn’t we also be thinking about how to reduce the financing gap by being more efficient in our use of capital?
The Water Blog provided plenty to chew on if you’ve been following the interesting and insightful posts we published here in 2018.
Here's a rundown of some of 2018’s most popular blogs. From wastewater treatment, to water-energy nexus, to solar pumping, and to shared sanitation, what you liked reading on The Water Blog speaks volumes about the wide-ranging topics we’ve covered and the diverse perspectives we’ve brought to the global conversation on water and sanitation issues.