Water is an essential resource for virtually all aspects of human enterprise, from agriculture via urbanization to energy and industrial production. Equally, the many uses for water create pressures on the natural systems. In this context, enhanced water productivity and management is a major challenge not only for direct water users, water managers and policy makers but also for businesses and final consumers. In most parts of the world, however, the development of consistent water accounting systems both from the production and consumption perspective is in its infancy.

This report analyses the different ways for quantifying and accounting for water flows and productivity within the economy (including environmental needs). Based on data from the literature, the report provides the current state of knowledge of the different indicators and tools for quantifying water productivity and highlights why this is important for developing robust allocation and management systems that preserve the natural capital. It is therefore an important piece of work to inform the discussions on decoupling economic growth from water use and impacts and the debate on resource productivity indicators going beyond GDP and carbon that underpin a green economy.

The report focuses on two main elements: 1) the conceptual background and knowledge on how water use puts pressure on the environment; 2) methodologies to quantify water availability and use and how this influences ecosystems.