What is Water Worth?

Across Canada, decision-makers are interested in the social and economic values of water. This information can be used, for instance, to assess the economic interests impacted by reduced water availability due to climate change. It can be used to justify the need to focus on climate adaptation or convince political leaders that taxpayers are willing to invest in protecting water quality and availability. This work can also help governments determine what types of investments will produce the greatest benefit for the lowest cost.

Yet, there are few studies of this nature in Canada and an integrated water economy geographical information system does currently not exist. In this project, What is Water Worth? Valuing Canada’s Water Resources and Aquatic Ecosystem Services, researchers are working to advance understanding of the socio-economic value of water in Canada. They are doing this by developing best practice guidelines, providing new empirical evidence, and advancing new policy-relevant decision-support tools that clarify the benefits and return on investment associated with improving the quality of Canada’s freshwater resources.

The team has developed, tested, and applied reliable and robust state-of-the-art valuation methods and techniques for aquatic ecosystem services in different water quality policy contexts across the Canadian landscape. In the Great Lakes basin, they created a new integrated water economy accounting system that links economic activities to water extraction, wastewater discharge, and the release of priority substances like phosphorous. They also operationalized a water quality valuation model in collaboration with Brock University and Environment and Climate Change Canada.

The project’s research developed and/or enhanced several tools and resources:

• An integrated water economy accounting framework uses available statistics from multiple data sources including Statistics Canada and Environment and Climate Change Canada to raise awareness about the relationship between the economy and the water system as a source and a sink for a variety of economic activities. It can be used to simultaneously monitor and evaluate the economic and water impacts of policies over time. Outputs from the framework can be combined with integrated hydro-economic models to predict the economic impacts of future climate change or water policies.
• A multi-regional hydro-economic model built for the Canadian Great Lakes enables decision-makers to assess the economic impacts of climate change in the Great Lakes region. It can be used to determine the least cost-way to achieve different pollution reduction goals, such as phosphorus reduction targets.
• A water quality valuation model translates changes in Great Lakes water quality to the associated economic costs (if water quality deteriorated) or benefits (in cases of water improvement). This data can inform Great Lake restoration policies and decision-making.
• The Value of Water in Canada webinar serieshighlights water valuation practices in Canada from a range of social science and practitioners’ perspectives. The project has hosted 18 webinars as of December 2023, each discussing different aspects of how water value is captured, acknowledged, and integrated in Canadian water policy and decision-making.