As part of Target 6.4 (“By 2030, substantially increase water-use efficiency across all sectors”), this indicator is mean to assess how efficiently water is being used in different countries. As discussed in Chapter 4 Section 4 (as well as in sector-specific contexts in Chapters 15, 17, and 18), we know that doing more with less water – through improved technologies and thoughtful management – is a key solution to water scarcity, and that there are many examples where improved efficiency leads to the decoupling of productivity from water use. However, it turns out to be hard to define and measure a global metric of water-use efficiency, and I argue below that the UN’s chosen metric for this indicator is fundamentally flawed.

Water-use efficiency is generally defined as the ratio of two quantities: some measure of production (e.g., kg of wheat grown, tons of steel produced, dollars added to GDP) divided by some measure of water use (withdrawal or consumption). In this case, the Food and Agriculture Organization (FAO) – the custodian of this indicator – has chosen to use dollar value as the numerator in order to allow comparison across the whole array of water-using activities. In particular, the FAO uses the equation shown below, in which country-level water-use efficiency is calculated for each water-using sector – agriculture, industry, and services – and then weighted by the proportion of water use that each sector represents (in a given country) to calculate that country’s overall water-use efficiency. Think about this for a minute; do you see the problem with this approach?

FAO definition of Indicator 6.4.1. Modified from a UN report.

As a way to compare different countries, this equation is fundamentally flawed, since it mixes together water-intensive agricultural activities with other sectors that typically have much higher water productivity. Regardless of the country, water used by agriculture always has a much lower economic value than the same amount of water used in industry, households, or the service sector. Farmers—at least under our current economic arrangements—produce a water-intensive product that is relatively cheap, while industrial users and commercial establishments produce greater economic value with relatively small volumes of water. (This also underlies the fact that farmers generally pay much less for water than other users.)

The table below illustrates the problem with the SDG approach to water efficiency, using Nepal and Serbia as examples. Nepal has higher water-use efficiency in each of the three sectors, but Serbia’s overall WUE is higher than Nepal’s – simply because Serbia’s economy is less dependent on agriculture. The aggregated WUE is simply too strongly influenced by the low efficiency of agriculture to be of much use.

Comparison of water-use efficiency parameters for Nepal and Serbia. Data for 2020 from FAO AQUASTAT.

The map below shows the variation in water-use efficiency by country. However, because of the definitional problems noted above, it is really less about true differences in efficiency and more about differences in the role of (irrigated) agriculture in each country’s economy.

Map of Indicator 6.4.1 (water-use efficiency). Source: UN Water.