Mechanism and Incentives To Increase Good Water Stewardship Performance

14 November 2022

Water is essential for human health and wellbeing and in developing and maintaining successful and healthy economies. Failure to manage water resources properly can threaten many aspects of development. Currently, economic losses related to water insecurity are estimated to include US$260 billion per year from inadequate water supply and sanitation, US$120 billion per year from urban property flood damages and US$94 billion per year of water insecurity to irrigators (Organisation for Economic Co-operation and Development (2022)). For this reason, responsible and inclusive stewardship of this critical and finite resource is needed from various parties.

Good water stewardship provides the opportunity to make an impact at catchment or landscape level, and support sustainable production and protection efforts by emphasising and strengthening good water management and governance practices. To bring the action to scale, many obstacles are present. Lack of insights into the financial mechanisms and incentives, fragmented water governance leading to confusion in mapping key stakeholders and limited access to reliable data on water, and a shortfall of enforcement and monitoring are among them. While the Alliance for Water Stewardship (AWS) is seeing a growing uptake of its Standard by business sites, catchment-scale multi-stakeholder collaborations to achieve the five water stewardship outcomes remain limited.

As part of ‘Boosting sustainability practice and performance at the landscape level through good water stewardship’ project, AWS Indonesia, in collaboration with researchers from the Institute for Economic and Social Research of the University of Indonesia (LPEM UI), embarked on a study to explore potential financial incentives and funding mechanisms to support better uptake of good water stewardship in Indonesia.

This study aims to identify the enabling environment and high opportunity mechanisms and incentives for government, financial institutions, companies and smallholders to escalate the uptake of and joint investment in good water stewardship, particularly in Indonesia. The analysis is conducted by defining the existing government and financial sector landscape as well as by looking at some best practices of financing mechanisms and incentives in the region and globally. Through consultation and collaboration with partner organisations and Standard implementers, recommendations are provided to support government and financial institutions in Indonesia to drive good water stewardship practices.

To be able to gain full understanding of good water stewardship, the AWS Standard and the intention and requirements of its indicators, download AWS Standard and Guidance at: https://a4ws.org/the-aws-standard-2-0/ 

Download the summary document and please contact AWS to get access to the full document.  

Contact (Mr) Fany Wedahuditama: Fany@a4ws.org for more information and further collaboration.

This document is part of a set of reports resulting from the “Boosting Sustainability Practice and Performance at Landscape Level through good water stewardship” project. This document was developed by Yayasan Aliansi Wali Sumber Daya Indonesia (Yayasan AWS Indonesia) and the Alliance for Water Stewardship (AWS), in collaboration with the Faculty of Economics and Business, University of Indonesia. This project was possible thanks to a grant from the ISEAL Innovations Fund which is supported by the Swiss State Secretariat for Economic Affairs SECO

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