The water value-flow concept

Abstract

The value of water is a key issue in managing water resources in an efficient, equitable and sustainable way. Efforts to assess the value of water are often not linked to the properties of the natural water system, which makes it difficult to analyse upstream–downstream dependency. In order to account for the cyclic nature of water in the assessment of water value, Chapagain [Exploring methods to assess the value of water: a case study on the Zambezi basin. Value of Water Research Report Series No. 1, IHE Delft, The Netherlands, 2000] and Hoekstra et al. [Water value flows: a case study on the Zambezi basin. Value of Water Research Report Series No. 2, IHE Delft, The Netherlands, 2000] have introduced the ‘value-flow concept’. This concept aims to provide the missing link between water valuation and hydrology. The hypothesis is that the full value of a water particle depends on the path it follows within the hydrological cycle and the values generated along this path. The full value of a water particle in a certain spot at a certain point in time is supposed to be the sum of its in situ value and all values that will be generated along its path later. It follows that all values generated by water can ultimately be attributed to rain. This simple concept implies that there is a direct analogy between the flow of water and the flow of values, with one crucial difference. Water values flow backward in time and in a direction opposite to that of the water. In other words, the value-flow attributes local water values to the upstream water flows within the natural system. This paper puts the value-flow concept in a proper mathematical model that is able to attribute the value of water produced in a certain place and at a certain time to the source of that water. Three models are considered in a progressive manner, to arrive at a generic form of the value-flow concept. The first two models were developed and used by Chapagain and Hoekstra et al. Here a third model is introduced, in order to properly account for the dynamic nature of the hydrological cycle. It is shown that this third model is the most generic one, able to correctly describe the flow of values in a dynamic water system. The parameterisation of the model is based on the hydrological characteristics of the water system. Further analysis of the value-flow concept addresses the way in which return flows generate a multiplier effect on the value of water.