Journal of Environmental and Natural Resource Economics

Journal of Environmental and Natural Resource Economics

A Systematic Review of the Role of Integrating Water Accounting and Systems Thinking in Strengthening Sustainable Water Resources Governance

Document Type : Research Paper

Authors
Donya Solouki
Ali Lal Bar
Department of Accounting Ar,c, Islamic Azad University, Arak, Iran
10.22054/eenr.2026.89759.221
Abstract
Introduction
Human societies are facing increasingly severe water-related challenges, including droughts, sudden floods, groundwater depletion, land subsidence, and environmental degradation. These challenges are exacerbated by climate change, rapid population growth, and unsustainable water consumption patterns. Traditional water management approaches often rely on sectoral interventions and overlook the systemic feedback loops that perpetuate water-related problems, thereby contributing to policy failures. Achieving sustainable water resources management therefore requires integrated, interdisciplinary frameworks that account for the complex interactions between human and hydrological systems and ensure stakeholder participation in decision-making.
Objective
This study aims to systematically review and analyze the role of integrating water accounting and systems thinking in strengthening sustainable water resources governance. Specifically, it examines how this integration enhances transparency, institutional accountability, intersectoral coordination, and policy effectiveness in water allocation and management.
Research Method
This research employed a systematic review methodology to analyze studies published over the past two decades in reputable scientific databases. The content analysis focused on water accounting applications, systems thinking frameworks, dynamic system modeling, and integrated governance approaches.
Results and Discussion
The findings indicate that water accounting provides structured quantitative data on water flows, stocks, consumption, and economic value across sectors, thereby forming the informational foundation for system modeling. Systems thinking complements this approach by analyzing causal relationships, feedback loops, and time delays, thus facilitating adaptive and long-term decision-making. Integrated approaches improve transparency, stakeholder participation, institutional accountability, and the efficiency of water policies. International case studies from Australia, Spain, and the Netherlands demonstrate that such integration enables scenario-based evaluation of social and environmental impacts, identifies leverage points, and supports evidence-based adaptive governance. However, challenges remain, including limited high-quality data, the absence of standardized indicators, differences in temporal and spatial scales, and weak interdisciplinary collaboration.
Conclusion
Integrating water accounting and systems thinking provides a comprehensive framework for understanding and managing human-water systems. This approach supports evidence-based, long-term, and adaptive policymaking, improves transparency and accountability, and enhances institutional coordination. For future research and practice, developing localized models, standardizing key indicators, leveraging emerging technologies such as remote sensing and AI, and strengthening multilevel governance frameworks are recommended to achieve resilient and sustainable water resources management in Iran and similar contexts.
Keywords
Keywords: Water Accounting
Systems Thinking
Water Resources Sustainability
Water Governance
Subjects
 
References
Bagstad, K.J., Ingram, J.C., Shapiro, C.D., La Notte, A., Maes, J., Vallecillo, S., Casey, C. F., Glynn, P.D., Heris, M.P., Johnson, J.A., Lauer, C. (2021). Lessons learned from development of natural capital accounts in the United States and European Union. Ecosystem Services, 52(C). DOI: 10.1016/j.ecoser.2021.101429
Bhuyan, M. J., & Deka, N. (2024). Understanding human-water nexus in a floodplain district of the Brahmaputra Valley, India: An integration of socio-hydrological and rural hydrological approaches. Science of The Total Environment, 906, 167525.
Gohari, A., Savari, P., Eslamian, S., Etemadi, N., & Keilmann-Gondhalekar, D. (2022). Developing a system dynamic plus framework for water-land-society nexus modeling within urban socio-hydrologic systems. Technological Forecasting and Social Change, 185, 122092.
Jarzebski, M. P., Karthe, D., Chapagain, S. K., Setiawati, M. D., Wadumestrige Dona, C. G., Pu, J., & Fukushi, K. (2024). Comparative analysis of water sustainability indices: A systematic review, Water, 16(7), 961.
Levy, M. C., Garcia, M., Blair, P., Chen, X., Gomes, S. L., Gower, D. B., Grames, J., Kuil, L., Liu, Y., Marston, L., & McCord, P. F. (2016). Wicked but worth it: Student perspectives on socio-hydrology. Hydrological Processes, 30(9), 1467–1472.
Masoumi Bilandi, Z., & Hejazi, R. (2019). Water Management Accounting. Water and Sustainable Development Journal, 6(1), 113- 124 [In Persian].
Moshir Panahi, D., Kalantari, Z., Ghajarnia, N., Seifollahi-Aghmiuni, S., & Destouni, G. (2020). Variability and change in the hydro-climate and water resources of Iran over a recent 30-year period. Scientific Reports, 10(1), 7450.
Naeem, K., Zghibi, A., Elomri, A., Mazzoni, A., & Triki, C. (2023). A literature review on system dynamics modeling for sustainable management of water supply and demand, Sustainability, 15(8), 6826.
Namazi, M., & Mosallinejad, A. (2021). Designing an Integrated Water Management Accounting Model Using the Balanced Scorecard Approach. Empirical Studies in Financial Accounting, 18(72), 27-56 [In Persian].
Organisation for Economic Cooperation and Development, O. F. E. C. A. D. (2018). Implementing the OECD principles on water governance: indicator framework and evolving practices (pp. 148-pp).
Phan, T. D., Bertone, E., & Stewart, R. A. (2021). Critical review of system dynamics modelling applications for water resources planning and management. Cleaner Environmental Systems, 2, 100031.
Polaine, X. K., Dawson, R., Walsh, C. L., Amezaga, J., Peña-Varón, M., Lee, C., & Rao, S. (2022). Systems thinking for water security. Civil Engineering and Environmental Systems, 39(3), 205-223.
Sheikhbabaei, A., Hosseini Baghanam, A., Zarghami, M., Pouri, S., & Hassanzadeh, E. (2022). System thinking approach toward reclamation of regional water management under changing climate conditions. Sustainability, 14(15), 9411.
Simonovic, S. P. (2020). Systems approach to management of water resources—Toward performance based water resources engineering. Water, 12(4), 1208.
Tello, E., Hazelton, J., & Cummings, L. (2016). Potential users’ perceptions of general purpose water accounting reports. Accounting, Auditing & Accountability Journal, 29(1), 80–110.
United Nations. (2012). System of Environmental-Economic Accounting for Water (SEEA-Water). New York: United Nations Statistics Division)
Vardon, M. J., Le, T. H. L., Martinez-Lagunes, R., Pule, O. B., Schenau, S., May, S., & Grafton, R. Q. (2023). Water accounts and water accounting. Global Commission on the Economics of Water: Paris, France.
Wan Rosely, W. I. H., & Voulvoulis, N. (2024). System thinking for sustainable water management: The use of system tools in sustainability transitions. Water Resources Management, 38(4), 1315-1337.
 
Wang, X., Dong, Z., & Sušnik, J. (2023). System dynamics modelling to simulate regional water-energy-food nexus combined with the society-economy-environment system in Hunan Province, China. Science of The Total Environment, 863, 160993.
Yu, Y., Song, X., Zhang, Y., & Zheng, F. (2020). Assessment of water quality using chemometrics and multivariate statistics: a case study in chaobai river replenished by reclaimed water, North China. Water, 12(9), 2551.
Zhang, D., Liu, B., Liu, P., & Wang, Z. (2025). Accounting and system dynamics simulation of water resource liabilities in the Yangtze River Economic Zone, China. Evaluation and Program Planning, 111, 102586.
Zomorodian, M., Lai, S. H., Homayounfar, M., Ibrahim, S., Fatemi, S. E., & El-Shafie, A. (2018). The state-of-the-art system dynamics application in integrated water resources modeling. Journal of Environmental Management, 227, 294–303
Journal of Environmental and Natural Resource Economics
Volume 5, Issue 13
Summer 2025
Pages 72-95

  • Receive Date 07 December 2025
  • Revise Date 20 January 2026
  • Accept Date 21 January 2026