SUSTAINABLE MANAGEMENT OF WATER SUPPLIES FOR DEVELOPED URBAN
AREAS: ISSUES, PERSPECTIVES AND A VISION
G.Kallis * and H.Coccossis *
Environmental Planning Laboratory, Department of Environmental Studies, University of the
Aegean, Nikis 44, Athens 151 23, Greece, E-mail: enpl@env.aegean.gr
ABSTRACT
The costs of meeting society’s demands for water in urban areas increase. Reduction and pollution of resources, excess of regional resource capacities, changes in users’ values aging urban infra-structure, increasing conflicts with other uses and shifting institutional/organizational requirements impose the necessity for revising water management policies and practices. Emphasis should pass from sectoral/centralized to integrated/decentralized approaches, reaction to pro-action, determinism to risk-mitigation, and from supply driven policies to demand management and conservation.
KEYWORDS
Cities; policy; sustainability; water supply.
INTRODUCTION
The design of urban water supply infra-structure and institutions as well as the dominant approaches in managing water, date back to the first stages of industrialization. These are outdated in an era of global inter-dependence, technological development, economic restructuring and unprecedented flows of people, goods and resources, leading to global, regional and local environmental change and transformation of both cities and their societies.
Despite public perceptions of water supply as a granted, continuous, cheap and available upon demand service, evidence from around the world points to a “creeping crisis”.
The Metron research project (financed by CEC, DG-Research, Environment & Climate
Programme, Human Dimension of Environmental Change ) was undertaken on the premise of identifying strategies, policies and tools for the sustainable management of water (supply) for
Europe’s metropolis 1
. The methodology included targeted thematic analyses of key urban water supply issues (pricing and financing; new technologies; water conservation; institutional change; urban and water planning) and five detailed case-studies (Amsterdam,
Athens, London, Seville, Tel Aviv). City research drew upon in-depth interviews with water company engineers, regulators, policy-makers and other city actors and upon an exhaustive survey of relevant official documents, reports and secondary literature concerning environmental and technological characteristics of the systems, institutions, policies and regulation. This paper benefits from the work and ideas of the researchers from the six teams involved in the Metron project.
1
The project built on a multi-disciplinary consortium of four university research teams (U. of the Aegean, Free U. of
Amsterdam, U. of Tel Aviv, U. of Oxford), one European Commission research institute (Institute for Prospective
Technological Studies) and one municipal water company (EMASESA – Seville).

THE CASE STUDIES
The 5 cities
All five cities are major and important political, cultural, economic and demographic centres of their respective regions and countries with a long history and tradition. The urban challenges faced are also to an extent similar, and include the increasing social inequality and polarisation, the decay of parts of the city and its infrastructure and general quality of life concerns. The five cities demonstrate an important diversity reflecting their distinct history and socio-cultural context and a diversity of institutional regimes and "styles" of policymaking from the more decentralized, framework and/or participative systems to the more centralized, prescriptive and closed ones.
Water supply issues

Amsterdam's main water source is the river Rhine; 10% and 70% of river quality measurements do not satisfy heavy metal and agriculture-related micro-pollutant standards, respectively. Treatment of water to potable standards accounts for 30% of total water cost and uses for pre-treatment the coastal dune area (34 km 2 , host to 60% of Dutch flora and native mammals). Replacing the dunes by more advanced treatment, to satisfy environmentalists' and recreation pressure, involves a trade-off with public health risk; the dunes have a 2-month demand storage capacity, critical in the case of a contamination accident in the Rhine (Dalhuisen et al, 2000).

In Athens, in spring 1990 the probability that the city's 1400 Hm 3 reservoirs would run out by the end of the year, was 15%. Construction of the city's main reservoir in Mornos river in 1980, completely blocked downstream flow and vanished a delta estuary. In the 1978-
1989 period, total demand for water increased by 65%; this highlights a process of network expansion and low, irregularly reviewed and reducing in real terms (i.e. by inflation) water prices. Water was drawn mainly from the Mornos reservoir, as transfer was cheaper than from the other sources; just when the 1989-93 drought started its reserves were near depleted (Kallis and Coccossis, 2000).

In Seville, during the same Mediterranean drought, in 1992 daily service to users was reduced to 16 hours. Water had to be abstracted in emergency from polluted river
Guadalquivir, although the existing level of treatment did not suffice to meet EU drinking water standards. A new reservoir for the city is being built in an ecologically important area. Upstream of the new project, a reservoir is maintained for an inefficient (by openchannels) irrigation of water-intensive cultivation. An agreement with the irrigation association for allocation of water to the city in period of droughts failed (Murillo, 2000).

In the Thames area, about 1 Hm
3
of water were leaking every day from the distribution network at the 1995-97 leakage peak (Castro et al, 2000). Post-privatization water price increases in the U.K. by 43% from 1989-1996 were paralleled by increases in disconnection rates. 75% of people in income support were reported as having problems to pay water bills, while water and sewerage bills were expected to account in some regions for up to 14% of a pensioner's income by 2004 (Bakker, 1998).

Tel Aviv is served by Israel's national water carrier system whose limits at a national scale have been reached. Although water allocation to farmers was cut by 40% in 1999, water had to be drawn below the minimum precautionary "red line" of its main source, Lake
Kinneret, with the risk that its ecology/quality and thus availability for drinking water

supply will be irreversibly damaged. Long-term plans include import of water by tankers from Turkey's geo-politically, environmentally and socially disputed Tigris-Euphrates river projects (Tal, 2000).
Similarities and Differences
In terms of climate, the Mediterranean cities are characterized by a higher average temperature and temporal (seasonal and inter-annual) climatic irregularity. In all cases the cities have recourse to distant more water-abundant and or free from pollution sources of water for their supply.
Water systems in the 5 cities, despite a similarity in technology and infra-structure employed, have also a number of differences reflecting the diversity of urban contexts and the different tracks of their evolution. Developments in the water supply systems of the cities are clearly related in time to the processes of urban growth and economic development and therefore closely reflect their history. With respect to distribution, water networks have typically followed the emerging patterns of urban development with little overall and long-term planning, even in the cases of cities with rigorously programmed urban plans, such as
London. Distribution networks have typically developed as small scale ad hoc community systems, which gradually expanded together with the cities. In order to secure the necessary quantities and qualities of drinking water all cities have developed a water production system, which has significantly transformed the natural hydrological landscape. In this sense the cities' water systems are developed and inter-connected to wider hydrologic systems.
Drinking water quality satisfies national standards to a near 100% sample compliance in all 5 cities (note however that standards in Tel Aviv are less stringent than EU standards and raw water undergoes only disinfection without filtration). On the other hand, emerging concerns about new diseases such as cryptosporidium are not addressed in any of the cities; many micro-pollutants are not monitored while there are in instances concerns for the quality of monitoring systems and the transparency of the information. Pollution of raw drinking water from diffuse sources remains a problem for the cities located along busy rivers, such as
London (Thames) and Amsterdam (Rhine), and is an emerging concern for cities which had developed their resources in far-lying rural areas (such as Athens and Seville), which are presently under pressure from development and agricultural pollution.
Despite improvements, losses in conveyance and the distribution network are still considerable in all examined cases, but Amsterdam. Athens, London and Seville have infrastructure leakage indices (ratio of actual to technically un-avoidable real distribution losses) in the order of 7-10.
In the 5 Metron cases there appears a correlation between level/stage of economic development, environmental awareness and in turn implementation of environment
/conservation-related measures. An important observation in the cases of the semi-arid
Athens, Seville and Tel Aviv, is that there appears a complete lack in public discourse of the link between droughts, water supply augmentation and environmental impact. The relatively heavier social scrutinisation of the water industry environmental performance in the U.K. may partly reflect the presence of the environmental regulator and a critical stance of part of the public towards water companies in the post-privatization era.

In the cases of the Mediterranean three very important has been the competition between urban areas and rural areas / agricultural use(r)s for the same resources, stressed in periods of drought. In Israel, there are signs of a "surrendering" of power from an agriculture-oriented management of water, in the recent cut of "quotas" to irrigation in favour of cities, and the transfer of competency of national water management from the Ministry of Agriculture to that of infra-structure. On the other hand, in Seville, political power of irrigation associations remains high and still a barrier to integrated approaches and water conservation at the river basin level. In the cases of Amsterdam and London, "competition" appears to emerge from the increasing importance of the environmental and recreational value (and uses) of water.
In all countries of the Metron case cities, a general tendency of the water administration towards integration of water-related competencies and functions, and planning/management at a regional level are being observed. In some cases, this is also materialized into integrated action at the operational and decision-making levels, environmental and quality considerations being incorporated into water management and water management being incorporated into wider development and land-use planning. Changes, however, are slow, with still limited practical impact, and seriously contested, especially in the case of the three
Mediterranean states. The new EU water framework directive which institutionalizes river basin planning and management for ecosystem-oriented quality objectives will further push for processes of rationalization and integration of water resource. Urban water management becomes increasingly accountable to a higher regional planning level and set of principles and rules and integrated within a wider organization and planning of water resource management.
Although full pricing of water has recently become a EU-wide requirement, in none of the five case studies is there an explicit policy of "full cost pricing". In most cases, capital and depreciation costs of the past have been subsidized considerably and only operational costs are recovered. This is still the case in Athens and Seville, where major new hydraulic projects are covered by EU structural funds. In the U.K., there have been attempts for "valuing" environmental uses of water, as part of comparing costs and benefits of urban supply expansions, but these have been highly controversial and contested between the regulator and the operators.
An important differentiation factor between the cities is the extent to which water supply is metered and therefore priced upon use. In the cases of Amsterdam and to a lesser extent
London, water is not metered at a user level, whereas Athens, Seville and Tel Aviv employ progressive tariffs. In Amsterdam, there is a long-term programme to turn all users into metered supplies and in London there are voluntary schemes, while all new users are being metered. On the other hand, in none of the cases is there an explicit and carefully designed policy of pricing to target specified user patterns nor a "marginal costing" approach.
Regulatory regimes are being transformed to introduce competition in the water sector, urban water service providers are increasingly operating with market performance criteria and private capital is increasingly employed in urban water functions. Independent of the degree of privatization, total costs in achieving objectives rise (e.g. in effective regulation, explicit social schemes, etc) and the role of the state in urban water management appears to become more demanding, in a period when its ability (financial and administrative) to perform it, is being reduced.
In all cities a gradual transformation is observed from a past model of water management characterized by a state-organized subsidized, supply oriented provision of water to all users

upon demand to an efficiency-oriented one with a gradual shift of emphasis to network losses and demand-side measures. This shift of emphasis from developing to managing water resources and systems and the consequent diversification of approaches are partly driven by an economic efficiency rationale and partly by the increasing importance to the environmental value of water resources. On the other hand, in none of the cases is there an integrated longterm demand management programme with a detailed analysis of users' patterns, forecasts, and evaluation/planning of alternatives,
In the context of the Metron project, a structured questionnaire survey was undertaken in order to assess the type and importance of barriers to the employment of new (conservationoriented) approaches to urban water management in the case cities. In all cases it appears that whereas some implementation or "experimentation" with new (conservation and integrationoriented) approaches takes place, water operators are prone in the long-term to rely on conventional approaches and/or development of new technologies which will make new resources accessible. Measures that improve the operation of the sector and cut costs without affecting demand/revenues (e.g. such as structural improvements in aqueducts, uptake of information technologies to improve monitoring and co-ordination of activities, etc) appear to be the most likely "conservation" measures to be taken up by operators.
Generalizing on Tendencies
Less natural water available. Climate change is leading to reduced average precipitation (and therefore average run-off to resources) and/or changed intra-annual distribution (and reduced overall run-off to some resources, given the local geo-hydrological characteristics), and/or changed inter-annual distribution, with prolonged dry and wet periods not foreseen in the design of the storage systems, and therefore decreasing the average “regulated” yield.
Continuous diffuse pollution (from agriculture and/or urbanization in the sources’ catchments) is increasing treatment costs and public health risk (from undetected micropollutants/still unknown health effects). Contamination of other (especially local) waters is reducing the overall potentially available quantities of water. As existing urban water supply infra-structure occupied first the most accessible physically and cost-wise resources, there are few untapped resources at reasonable costs, even at a regional scale.
Increasing "social demands" . In some cases, cities' water demand is increasing due to population increase (in wider, regional metropolitan areas) and/or changing habits (partly related to urban patterns, such as "suburbanization"). New uses of water (e.g. recreation, tourism-related), old uses (e.g. irrigation) and “intangible” demands (related to culture/local history) are competing with cities for the same, present and potential, sources. Ecosystem functions of water (such as wetlands) are increasingly important; new regulations maintain quantities of water for the environment and/or limit new hydraulic development in terms of its environmental impact. Public opposition and legal challenges increase the "transaction costs" of new hydraulic projects. The energy efficiency of the systems is also re-addressed in terms of national energy-saving policies. The "intangible" social function of urban water systems in terms of "public health and hygiene" remains important. Built in the first stages of urban growth, water infra-structure (reservoirs, plants, networks) has aged; the natural trend is for a decreasing water production and delivery efficiency (and therefore increasing “demand” for fresh-water from the source), slower or faster depending on the degree of investment in maintenance in the past.

Increasing costs. Urban water supply can be thought of as a system being based on resources
(water, energy, human) and relating (directly or indirectly) to certain functions that society values (e.g. drinking water production, hygiene, ecosystem sustainability, etc). Although, each of the tendencies mentioned above are not met in all cities a general trend is clear: whereas natural availability (existing and potential) decreases, social expectations from the system increase (from drinking water-only to environment, recreation, energy-efficiency, etc). The
“total cost” in meeting these expectations accordingly increases and shows in the rising investment needs for environmental/resource conservation, new supplies, system maintenance and renewal, etc, which come to add to the important costs for “downstream” environmental improvements (i.e. waste-water treatment) and contrast to the low prices of water-services to the majority of end-users. At the same time, uncertainty for the future is also increasing in terms of an unpredictable (in scale and nature) climatic change and public health risk (from new and unknown polluting substances and/or a contamination accident). These are inherently
"urban" issues of developed "socio-economies", independent of hydrological and infrastructural conditions, relating to a history of expansion of the systems, growing demands of the population, urbanization and economic activity around water sources, and changing contemporary socio-economic conditions.
Trade-offs. A definite trend is that the state, following the economic and public budgetary crises of the 1970s and 80s, is less able and willing to cover this rising cost. Hence the widespread tendency for privatization of parts of the system with the expectation that productivity improvements will reduce cost and improve services to end-users with parallel investment-returns to private capital. Privatization of the water industry in the U.K., however, has seen prices rising to cope with investments, increasing public costs for running regulatory bodies, tensions between operators-regulators on plans for new supply development and level of investment in leakage control, and increasing concerns for affordability and health-related aspects for low-income groups (Bakker, 1998). Such trends highlight a "discomforting" situation: the "total costs" of meeting society's demands from water may be much higher than productivity gains can compensate for. Somebody has to “pay” for this increasing cost (or conversely, reduce their demands), be it the end-users, the state (ultimately urban or national tax-payers), the companies (and their personnel and/or shareholders), non-urban users,
“intangible” uses (public health, cultural, etc), the environment (aquatic, or global in terms of increasing energy use) or “future generations”. Social conflict arises around the valuation of water in its different uses and the allocation of costs as well as the “acceptable” level of risk and its allocation among various use(r)s. Such questions have been driving social (economic) science ever since and are at the core of the debate on the concept of sustainability.

A SUSTAINABILITY AND POLICY VISION
Sustainability can be seen as a balancing between diverse (social, economic, and environmental) goals. It highlights the need for an integrated framework of goals and objectives and a coherent and interdependent set of means to achieve them. Integration is sought across issues, sectors and administrative levels not only in terms of goals and objectives but also in terms of policy measures. This calls for the development of a strategy through a dynamic and cyclical participatory process emphasizing concerted action.
Nature and society however change continuously, transforming one the other. Individuals in creating culture change the environment, which in turn shapes culture (Vlachos, 1982).
Choosing between different courses of action, necessitates a certain process and regime of valuation. The concept of co-evolution (Norgaard, 1994) stresses how values, social organization, environment, technology and knowledge are inter-related yet changing in accordance with this inter-relationship. Sustainable development is the "improvement of the well-being of the people to the extent that their ways of knowing, social organization and technologies select for an evolutionary course of the [environment] that complements [their] values" (Norgaard, 1994). From such a perspective, values are subjective and central to the process of defining sustainability, which is no longer a “property” but rather “the ability of a given society to move, in a finite time, between satisficing, adaptable and viable states”
(Giampetro, 1999). This brings attention to: the evolving character of society and therefore the dynamic character of defining sustainability; the importance of governance structures and an institutionally organized process for negotiation and valuation to reach a "satisficing" decision and to determine "viability"; the un-avoidable existence of uncertainty and indeterminacy , both in understanding and in forecasting, and therefore the need for
" adaptability " and the importance of a ( pluralistic ) scientific analysis to shed light on the potential "viability" of different states and on different "evolutionary courses" and hence help the institutionalized process to shape a vision and reach an "informed" decision. Such a framework shifts emphasis from evaluation and policy predicament to “vision” and “will” in envisaging and working towards a socially-acceptable “nature-society” pathway.
Given the above framework of sustainability, the principles for a sustainable urban water supply policy are: a long-term, multi-dimensional decision-making and planning framework whereby social choice and the wills of those affected will be accounted for; a pro-active, riskbased approach; a shift in practices towards prevention and precaution, i.e. from supply development and treatment intensification to water conservation and pollution prevention, with due consideration to essential ecosystem functions and irreversible impacts.
River basin authorities and planning mechanisms provide an ideal substrate for open and transparent governance structures. The process of integrated resource planning refers to a participatory, long-term process of deciding between alternative options and "futures" of the systems. Marginal costs and time-preferences can be taken into account, as an open, collective process will value environmental and future costs. Alternative allocations as well as different approaches to resource management (conservation vs. supply measures) can be compared and planned within this framework. Accordingly, the role of the planning process changes from problem-solving to problem-defining and from a fixed and pre-determined to a learning and iterative process (Vlachos, 1982). Well-regulated markets and compensation schemes within the river basin structure are effective tools for resolving urban vs. other users’ allocation conflicts. The real challenge, however, is how to make river basin authorities operational in

the above way, within long-established water administrations and in an era of limited public expenditures. For the latter, auto-financing by raw water charges could be a useful tool.
Moreover, and with reference to urban water management, the challenge remains how to integrate the increasingly privatised urban water services, in some cases with sectoral and not integrated competencies, within the river basin structure, more so when spatial scales of reference differ considerably and resource / service policies and regulations have contrasting requirements.
The future of urban water supply systems can not be seen in isolation from the city they serve.
While in the past, water management accommodated selected urban futures; the challenge is to become now part of re-addressing them. This demands an integration of the urban/regional and water/river basin planning and decision-making processes, as well as a transformation of both towards incorporating sustainability goals. Under this perspective, multi-dimensional scenario forecasts become relevant decision-support tools as they allow a "shared vision" to be shaped. Economic evaluations are still important, but as part of pluralistic analyses (e.g. monetary cost-benefit as part of a multi-dimensional analysis of quantifiable and qualitative variables).
Addressing uncertainty and risk effectively, is another major task. Planning has to transform from deterministic to contingency and from reactive to anticipatory (Vlachos, 1982). Climate change scenarios should be built in within future forecasts and standardized responses and institutional procedures set for cases of contingencies (drought, pollution accidents).
Water conservation (demand control, losses reduction and better source management) should gradually replace water supply development as the predominant operational approach. A committed water conservation policy, should aim to maintain the total level of abstractions at steady levels (given no dramatic population increases and/or industrial growth); this entails the “courage” to address behaviors and life-styles per se. While tools have been developed
(e.g. programme and evaluation guidelines, etc), more use-level information needs to be collected and pilot experience disseminated. More critically, planning, decision-making, financing and regulatory bias in favour of water supply expansion has to be addressed. Water conservation should be mandated in cases where supply affects ecologically important areas or carries unwarranted risks; an open, participatory process of integrated resource planning allows conservation options to be compared on an equal footing. Water pricing has a great role to play in shifting behaviors, if properly designed to target actual consumer habits. Tradeoffs with affordability of water by low-income groups should be addressed explicitly, e.g., within a comprehensive social package, by tax rebates, rates relieves and benefits, etc.
Shifting also from the centralized, supply-oriented model of water supply towards more integrated urban water cycle approaches, where polluted, reclaimed and storm waters provide sources for secondary uses, is essential especially for new urban developments. Finally, preventative protection of sources from pollution should be prioritized over reactive intensification of treatment processes. This can also be addressed within the river basin structures, and prohibitive "zoning" land-use regulations give their place to more co-ordinated pollution control schemes (including compensation of local activities).
Regulation of the sector sets the “rules of the game” and therefore enables or hinders the accomplishment of the above vision. The privatisation of functions of the urban water services as a response to the growing public budgetary difficulties versus the increasing investment needs, is leading to a major institutional and regulatory re-thinking of urban water services. Long-standing rules and approaches in terms of service standards, water rights,

protection of resources, prices, etc., are being re-addressed as a consequence of or in order to establish the conditions for the new regime. Urban water services exhibit “natural monopoly” and “public/merit” good characteristics (see Rees, 1998 for an elaborated discussion). The bulky nature of water infrastructure means that “virtual” conditions of competition have to be regulated (e.g. setting standards and measuring/comparing achievement – “benchmarking”) as it is prohibitively expensive for a second provider to compete for supplying existing users.
Moreover, given that the supplier has monopoly power over users, it is important to maintain that the drive to minimise costs and maximise profits will not be materialised on the expense of cutting costs for certain social functions (e.g. environmental standards, drinking water quality, affordability of cost to low-income users) or leading to short-term under-investment, passing costs to the future. Introduction of competition in the water sector (full or “partial” privatisation) in contrast to other sectors characterised by a process of de-regulation is necessarily accompanied by a process of regulation reform or (better) “re-regulation”. A major challenge is thus how to make business models part and not barriers of sustainability initiatives. In this context, a balanced and enforceable system of service, economic, environmental and public health regulation is a pre-requisite. Accounting for regulatory disincentives (towards water conservation, integrated approaches, maintaining cost affordability, etc) at the stage of re-regulation, implicitly (within the sector regulation) or explicitly (by new policies and instruments) is necessary.
As Haughton and Hunter (1994) state: "Sustainable urban development is a process which will necessarily vary between cities, and evolve in different ways in each city. The very notion of what constitutes a sustainable city will change over time. Although there are few universal principles for sustainability, the ways of moving from those to policy implementation are many".

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