Last April, decision-makers and stakeholders gathered at the OECD Infrastructure Forum in Paris. The discussion focused on the key challenges related to a more across all levels of government and society.

The Covid-19 pandemic triggered the discussion about resilience in the aftermath of supply chain disruption and the need to ensure the channelling of resources to ensure proper service provision.

Amongst essential public services, water services are probably the most prone to climate change not only in terms of security of infrastructures and equipment, but also because of water scarcity or floods which may be directly influenced by climate change. Demand for water have been growing, but the water cycle distributes water unevenly across different locations and different periods of the year. This requires an effort for adaptation of uses to the projected availability.

This is increasingly true in Portugal where in some areas, water is abundant and available at any time of the year. On the other hand, in some areas the climate scenarios for the coming decades point to a significant reduction (up to 35%) of annual rainfall and increasing seasonality which may create additional pressure on aquifer recharge. Due to the occurring this year in the Algarve (South of Portugal), a recent Council of Ministers Resolution determined a set of measures applicable to different water uses to reduce water consumption and to ensure the continuity of essential uses, in particular drinking water supply. These measures aim to address the specific situation of drought and are complemented through a recommendation issued by ERSAR of specific tariffs applicable by utilities in the situation of scarcity to penalise higher consumptions and create incentives to reduce water consumption.

On a long-term approach, there is an ongoing set of investments financed by the Recovery and Resilience Facility till 2026 to reduce water losses in water systems and  irrigation, to improve water governance and monitoring, to produce and reuse reclaimed water, to ensure alternative bulk water sources and to build a desalination plant.

Floods and stormwater management are also a growing concern. The Portuguese Environmental Agency is developing specific Flood Risk Management Plans. In the most recent plan for water services – PENSAARP 2030 – stormwater management was also incorporated as a key topic, including measures to fully manage the urban water cycle. ERSAR also monitors the performance of wastewater systems in terms of episodes of flooding and has adapted its quality-of-service indicators to reflect indicators on broader wastewater and stormwater management.

Resilience and redundancy may be seen as dismissible objectives because of the relatively low likelihood of occurrence. However, this likelihood is increasing with climate change and the impacts in the event of these extreme situations happening may be quite severe, as shown in recent studies, both due to water scarcity or water abundance (flooding), so preparedness is essential and may help to mitigate those effects. The role of the regulator is, thus, to foster this preparedness in an equilibrium between costs and probable effects so that there is no significant impact on the provision of these essential services.

However, these resilience-driven investments, which we observe as a growing concern for economic regulators worldwide, come with a price tag that should be split between its beneficiaries in proportion to their benefit. Water services consumers are often overburdened with the capital expenditure aimed to ensure water availability for other uses, such as irrigation, industry, or tourist activity. Knowing how much water is being used by each activity is important as a proxy to divide the additional expenditures deriving from resilience-driven investments.

Resilience is, in fact, a topic where there are overlapping responsibilities from the economic and the environmental regulators, so a reinforced role in defining the economic mechanisms that create the right incentives to invest in resilience could prove important for economic regulators.

Resilience is not just a trend or a fancy word. It must be a key objective to ensure better water management and preparedness for adversity, especially in vital services such as water and sanitation.

Interested in learning more? Discover IWA’s work on water policy & regulation.