The intensifying competition for surface and groundwater resources is widely documented. The OECD Environmental Outlook to 2050 highlights that water resources are already over-used or over‐allocated in many places, with global demand expected to increase by 55% between 2000 and mid-century. Groundwater withdrawals have risen sharply over the past years – increasing nearly tenfold according to some estimates. These pressures, projected to be further exacerbated by climate change, have already made water allocation an urgent issue in a number of countries and one that is rising on the agenda in many others. Within this context, the OECD published the report Water Resources Allocation: Sharing Risks and Opportunities in 2015 to strengthen the evidence base and develop policy guidance to improve the design of allocation regimes.

As the predominant reservoir of freshwater on Earth, groundwater provides an important source of water supply for drinking, irrigation and industry and contributes to sustaining groundwater-dependent ecosystems, such as streams and wetlands. Pressures on the quantity and quality of the resource have increased significantly over recent decades. Globally, groundwater withdrawals have risen sharply; nearly tenfold in the past 50 years (Shah et al., 2007). At the same time, the resource is becoming increasingly degraded due to pollution and saline intrusion. Unsustainable groundwater use creates negative environmental externalities, including land subsidence, saline intrusion and the deterioration of groundwater-dependent ecosystems. Groundwater depletion also increases the cost of use, as pumping is required from ever-increasing depths, which may disadvantage small scale users. This depletion can also result in water shortage directly affecting users, with an impact on economic activities.