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THE ECONOMICS OF WATER: Valuing the Hydrological Cycle
as a Global Common Good | Global Commission on The Economics of Water Report

Authors: 

Global Commission on the Economics of Water

Co-Chairs

  • Mariana Mazzucato | Founding Director and Professor in the Economics of Innovation and Public Value | UCL Institute for Innovation and Public Purpose
  • Tharman Shanmugaratnam | President | Republic of Singapore
  • Ngozi Okonjo-Iweala | Director-General | World Trade Organization
  • Johan Rockström | Professor in Earth System Science at University of Potsdam | Director of the Potsdam Institute for Climate Impact Research

Download the executive summary

The Global Commission on the Economics of Water: A Paradigm Shift in Water Economics

The Global Commission on the Economics of Water’s groundbreaking final report signals a major shift in how we understand and address water economics. The costs of inaction are staggering: by 2050, the global water crisis could jeopardise more than half of the world’s food production and result in an average loss of 8% of GDP globally, with lower-income countries facing potential losses of up to 15%. This crisis is driven by an outdated economic approach that reacts to market failures rather than shaping sustainable economies, compounded by harmful land use practices, poor water resource management, and the accelerating impacts of climate change, all of which are putting immense pressure on the global water cycle.

However, there is still an opportunity to reverse course. By mobilising systemic, collective, and economy-wide action, we can address the global water crisis through a new economic approach rooted in the common good. This new framework demands that we start by defining the outcomes we want and designing our economies to achieve them. The report recommends that governments focus on five critical mission areas to drive a coordinated, all-of-government response:

  • Launch a new revolution in food systems;
  • Conserve and restore natural habitats crucial for protecting green water;
  • Establish a circular water economy;
  • Enable a clean-energy and AI-driven era with significantly lower water intensity; and
  • Ensure no child dies from unsafe water by 2030.

This report sets the stage for a much-needed transformation in how we value and manage water, essential to building resilient and equitable economies for the future.

Reference:

Mazzucato, M., N. Okonjo-Iweala, J. Rockström and T. Shanmugaratnam. (2024). The Economics of Water: Valuing the Hydrological Cycle as a Global Common Good, Global Commission on the Economics of Water, Paris. Available at: https://economicsofwater.watercommission.org/

For further information visit: https://watercommission.org

This policy report is part of the UCL Institute for Innovation and Public Purpose’s (UCL IIPP) publication series.

Explore more working papers and policy reports here.