Global water governance: Conceptual design of global institutional arrangements

Abstract

This study builds upon the explorative study of Hoekstra (2006), who puts forward an argument for coordination at the global level in 'water governance'. Water governance is understood here in the broad sense as 'the way people use and maintain water resources'. One of the factors that give water governance a global dimension is 'virtual water trade' between nations, i.e. the trade in water in virtual form through trade in water-containing products. Virtual water trade involves advantages as well as disadvantages. The development of institutional arrangements to account for these disadvantages has not kept pace with the enhancement of international trade in general and virtual water trade in particular. The objective of this study is to design alternative institutional arrangements to deal with the global dimension of water governance. The study elaborates three arrangements: a Water Pricing Protocol, a Business Agreement on Sustainability Reporting of water-intensive goods, and a system of Water Footprint Permits. The three institutional arrangements are aimed to improve the ecological sustainability, economic efficiency and social equity of water governance. The arrangements aim to influence change agents in the virtual water chain (the production chain of water-containing products). Behavioural mechanisms bring about behavioural change of other agents in the virtual water chain.