Water is at the core of sustainable development. SDG 6 to ensure access to water and sanitation for all is a serious policy challenge: over 2 billion people live in countries experiencing high levels of water stress, while 2.4 billion lack access to basic sanitation services (UN 2020). Economic and market failures often get in the way of improved service provision and encourage inefficient use of a scarce resource. Green fiscal policy can introduce appropriate pricing and address these failures.

From surface water to groundwater, green fiscal policies can help improve the sustainable management of all water resources, particularly in cases where water resources are scarce. Green taxes on individuals and businesses, and water tariffs paid by households and businesses can help governments to cover the cost of water supply and sanitation. Green water-related taxes and charges on water abstraction, water use, and wastewater discharges can incentivise more sustainable water consumption and use. Revenues raised through tariffs and service charges can be used to enhance and maintain infrastructure and install water-saving technologies. With reformed fiscal measures ensuring water resource sustainability, water security can be bolstered, and water stress diminished for society, the economy, and all organisms depending on water.