Special Feature Story: Shaping Policy on Valuing Water in Bangladesh

By Jennifer Moeller-Gulland and Toaha Muhammad

In the land of the world’s largest river delta, famous for its epic monsoons, millions of people do not have safe drinking water. Many Bangladeshis spend each day collecting water and making it safe enough to use, taking time from other necessary activities such as childcare, education, and household chores. These indirect costs need to be considered alongside direct threats to human and environmental health when making decisions and investments relating to water management and socio-economic development. In a country where most water services do not have a price tag to allow for cost recovery, we need to value water better – not necessarily through pricing, but through sustainable actions.

A new direction for Bangladesh

Bangladesh is considering the value of water at a national level. This is a unique initiative, and to the best of our knowledge, no country has done this before. This consideration of the value of water has now been formalized through the 8th Five-Year Plan. This is a key planning document for the Government of Bangladesh, that now includes targets to value water. The strategic objectives and targets of the water sector for this plan is aligned with Vision 2041 and Bangladesh Delta Plan 2100 and includes the following:

  • Mainstreaming Valuing Water into public investment decision-making in collaboration with the Planning Commission to allow for future investment decisions that further support sustainable water resources management and thus sustainable economic development
  • Identifying and demonstrating options to incorporate Valuing Water into private decision-making in order to lead to more sustainable investment and operational choices

The achievement of this governance reform lays a key foundation for more sustainable water resources management in Bangladesh – and for considering the value of water (and thus the impact on water resources) across investment decisions by the public and private sectors.

Understanding the applicability of Valuing Water in Bangladesh

Bangladesh’s Honorable Prime Minister (PM) was a member of the United Nations and World Bank High-Level Panel on Water (HLPW), which prioritized Valuing Water as a foremost action toward sustainable water resources management. As part of this process, the HLPW has made key recommendations and adopted key principles to value water, believing that “Valuing water means identifying and taking into account the multiple and diverse values of water to different groups and interest in all decisions affecting water” (HLPW Outcome Document, 2018). The Bangladesh Water Multi-Stakeholder Platform (BWMSP), a 2030 WRG MSP, has sought to apply such principles in its initiatives.

For instance, the Principal Coordinator for Sustainable Development Goals (SDG) Affairs of the Prime Minister’s Office – one of the country’s highest-ranked public officials – took up the task of understanding the applicability of Valuing Water in Bangladesh; finding practical and consensual ways to streamline Valuing Water into the existing policy and regulatory framework; and driving the implementation and enforcement of the same.

Position paper sets the stage

To support this initiative and explore the potential application of Valuing Water to Bangladesh’s context, the 2030 Water Resources Group (2030 WRG) presented a draft position paper on Valuing Water to the National Steering Board (NSB), chaired by the Cabinet Secretary, the country’s highest-ranked public official, of the BWMSP.

Seeing the potential of the initiative and to drive it forward, the NSB of the BWMSP set up a High-Level Valuing Water Committee in 2018, chaired by the Principal Coordinator for SDG Affairs of the PM Office. This initiative is further supported by a Technical Valuing Water Committee, chaired by Professor Dr. Mohammad Rezaur Rahman of the Institute of Water and Flood Management of the Bangladesh University of Engineering and Technology.

Operational shadow prices for water study

The Position Paper on Valuing Water in Bangladesh was finalized in cooperation with the Government of Bangladesh, and the High-Level and Technical Valuing Water Committees of the BWMSP. Based on this position paper, the Committees, in cooperation with the Ministry of Water Resources, developed a Pro Forma for Study Proposal on a Study to Develop Operational Shadow Prices for Water to Support Informed Policy and Investment Decision-Making Processes. This was approved by the Ministry of Water Resources and is now being implemented by the Water Resources Planning Organization.

Given the identified relevance of Valuing Water, the Government of Bangladesh has included the above-mentioned strategic objectives and targets of the water sector in the 8th Five-Year Plan.

The Valuing Water Initiative in Bangladesh is the first national-level initiative on Valuing Water anywhere in the world, and the activities under the High-Level Valuing Water Committee are considered potential “lighthouse” examples that demonstrate international best practices in the area to transform water resources management.

Valuing Water in Bangladesh

The Position Paper on Valuing Water in Bangladesh, recently published by 2030 WRG, the Government of Bangladesh, and the High-Level and Technical Valuing Water Committees of the BWMSP, outlines the importance of Valuing Water and provides some thoughts as to how this can be done.

Approaches

The position paper discusses three possible approaches to Valuing Water:

  1. The revealed preference approach observes peoples’ behavior in markets where water is a relevant variable;
  2. The cost-based approach infers the value of water based on costs incurred to mitigate damage or replace the ecosystem services, or avoided costs if the ecosystem services are maintained; and
  3. The stated preference approach involves directly asking stakeholders about their preferences around water.

The position paper includes case studies on how these three approaches have been applied in the country. These case studies focus on agricultural practices in Barind Tract, falling groundwater tables in Dhaka, and balancing competing water demands in Halda River.

Institutionalizing the value of water

To put principles into practice, the position paper also identifies an entry point for integrating and institutionalizing the value of water in public sector decision-making. Currently, investment decisions in Bangladesh follow guidelines provided by the Planning Commission of the Ministry of Planning. A financial and economic analysis is required to assess the profitability of an investment and its impacts on the wider economy, society, and environment. However, this analysis, which uses specified shadow prices, does not include the impacts on water resources, such as the effects of new irrigation projects on falling groundwater tables, of new industrial sites on additional point source pollution, or of new urban developments on wetlands on lost flood retention potential, to name but a few. Assessing such impacts is a practical entry point for including the value of water in the government’s investment decisions.

Next steps

Based on the position paper and with the support of the High-Level and Technical Valuing Water Committees of the BWMSP to which 2030 WRG provides Secretariat support, Bangladesh’s Ministry of Water Resources has initiated and financed a project to develop operational shadow prices for water to support informed policy and investment decision-making. The project, which targets both the public and private sectors, is scheduled for completion in June 2021.

Some other steps being taken are:

  • Raising awareness: The High-Level and Technical Valuing Water Committees are also developing an interactive awareness-raising campaign on the value of water, along with a knowledge hub to share information, connect experts, and coordinate research to further improve our understanding of the value of water.
  • Initiating the implementation process: Given the inclusion of the targets on Valuing Water in the 8th FYP, the High-Level and Technical Valuing Water Committees will convene to discuss how to best support the implementation of these targets.
  • Policymaking: By adopting Valuing Water as an integral part of policymaking and investment decisions, Bangladesh can take a leading role in sustainable water resources management, long-term economic growth, and equitable access to water for all.

The experience in Bangladesh can provide lessons for the other countries/states where 2030 WRG operates.