SDG 6.4.1. Water-Use Efficiency

Indicator 6.4.1: Change in water-use efficiency over time

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 of the decoupling of productivity from water use through improved efficiency. 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 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 service - 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?

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.)