This study examines how environmental issues have been addressed in the water sector in Brazil, within the context of activities of the Federal Government, generally, and those implemented under Bank sector operations, in particular. The core focus of the study lies in the management of water quality, as it affects both the users of raw water, and those who are primarily concerned with the disposal of wastewater. The report considers the following three sectoral areas concomitantly - water resources management, water supply and sanitation, and, the environment - thus limiting its review, and focus to those themes which are key to the over-arching issue of water quality. Water resources management in the country relied upon heavy investments in medium, and large scale projects that provided basic infrastructure for water uses. However, these have produced questionable impacts in terms of reducing poverty, and inequality. One of the reasons for this, has been the poor infrastructure management, which despite its importance, has been largely underestimated. While improvements in the utilization of existing infrastructure in the water sector remain critical, it needs to be complemented by incentives to both service providers, and water users. Moreover, low economic, environmental, and social returns from investments in the water sector, reflect the tendency to distract attention from the objectives in the design, and implementation of projects. Thus, an assessment of water quality goals is required, which should be based on systematic evaluations of the costs, and benefits of reaching alternative standards, and explicit social objectives.

Climate change is at the top of the development agenda in Central America. This region, together with the Caribbean, is highly vulnerable to the effects of climate change in Latin America. Climate change is manifesting itself through higher average temperatures and more frequent droughts that result in higher water stress, and through the rising frequency of extreme weather events such as tropical storms, hurricanes, floods and landslides, all of which pose significant challenges in the rural water supply and sanitation sector. The paper starts with a review of the historic data on temperature and precipitation trends in Central America and particularly at the regional level in Nicaragua. The data reveal a clear trend of the growing climate variability, increased water stress for crops, and greater frequency of extreme weather events. The rising intensity and frequency of ex-treme weather events is among the most critical risks to the region's development agenda, and they translate into high economic losses. This paper examines the impacts and implications of potential climate change on water resources in Nicaragua and makes key recommendations to integrate climate change and rural water supply and sanitation policies and programs in a way that increase resilience to current and future climate conditions. | 0