Many countries in the world experience problems of water scarcity, and have to cope with risks of flooding at the same time. There are three reasons to believe that these problems will increase in the future rather than decrease.

One is the growth of population and economic activity, both leading to an increase of water demand and water shortages during dry periods. Second, the use of land is constantly intensifying (increase of paved area, intensification of agriculture, canalisation of water flows), which generally leads to accelerated runoff and increasing peak flows.

Finally, there is the expected effect of global warming, which means that many dry regions and periods will become drier and many wet regions and periods will become wetter.

The relative importance of the three phenomena differs per country, but there are no places in the world where none of the phenomena have not become an issue.

The objective of this research was to develop a methodology for water valuation that can be used to assess the socio-economic, cultural and environmental values of different types of water stocks and flows, accounting for variations in time and space.

Given the large socio-economic and cultural differences between dissimilar societies and the existence of different schools of thought within societies, the methodology should accommodate a diversity of valuation approaches.

The methodology was formalised in the form of a valuation model, and is used to evaluate different management strategies.

The evaluation criterion was the net added value of a certain management strategy. The added value can include economic values, but other types of values as well.

The methodology was developed and applied in two case studies, one for the Rhine Basin and one for the Zambezi Basin. Within these two case studies, a few very practical and concrete policy questions were addressed.

Interdisciplinary Research

The research consisted of two main parts: the methodological part - in which methods were developed that can be used for the proper weighting of the multiple values of water in policy making - and the practical part - the two case studies.

Development of Methods and Analytical Tools

Different types and schools of valuation were listed and evaluated with respect to their characteristics, including pros and cons, particularly with respect to the water field. How different types of values can be quantified were also considered. In addition, different methods of valuation have been analysed in relation to how they can apply to different types of use and different forms of water.

Water is continually being processed from one type into another, through natural processes, but also through human interference. Each transition from one form to another means a change of value. The value of a water particle at a certain place and a certain point in time depends on its value in situ and on its value at a later stage (downstream).

How the value of water in a certain place puts a value to the water upstream was also be analysed. A method has been developed for the calculation of the value of water as a function of its downstream benefits and costs (e.g. in case of flooding). As a final step, the methodology of water valuation was formalised in the form of a computer model.

Case studies

The case studies for the Rhine and Zambezi basins explored how people can use and allocate water in an efficient manner. In practical terms, this means that it should be avoided that people allocate water to places where there are low net benefits or even costs.

Groundwater recharge in the upstream parts of the Rhine Basin for instance, is high-value water, which should be prevented from turning into rapid surface runoff, forming peak discharges downstream (low-value water).

Or another example, the full costs involved with the provision of water to a certain sector should not exceed the benefit obtained.

In the Zambezi case study, the valuation model was linked to a dynamic water resources model, so that interventions in the water system can be translated directly into a net value added for the river basin as a whole.