The Economics of Water: Valuing the Hydrological Cycle as a Global Common Good

The Global Commission on the Economics of Water set out to recast the economics of water, mapping the systemic links of the hydrological cycle to land, climate change, biodiversity loss, and progress on the SDGs. This report explores and proposes how we can re-define and re-value water as a critical planetary resource and manage the hydrological cycle locally and as a global common good. It highlights changes to the hydrological cycle, including the drivers of change, impacts, and consequences across scales and geographies. It provides the evidence and opportunities for systemic action to address the world’s most important water missions and sets out the critical enablers required for these transformations. The report follows two major reviews that spurred action across scales in response to climate change and the loss of biodiversity: the Stern Review on the Economics of Climate Change (2006), and the Dasgupta Review on the Economics of Biodiversity (2021). Both took on the challenge of re-imagining the way our economies interact with the climate and biodiversity, respectively, in the face of global environmental changes that pose significant risk to our well-being and way of life for generations to come. The Stern Review demonstrated the cost of failing to act on climate change and highlighted that the benefits of strong and early action far outweigh the economic costs of inaction. The Dasgupta Review offered a new framing for how we think about and measure success in our economies in a world where the biosphere is finite and provided a language for understanding our engagement with nature.