508 ITU‐T's Technical Reports and Specifications systems. These informal systems operate largely unregulated, posing major health risks to the population. Pressures to respond to this increasing demand have led cities to import water resources, contributing to increase urban carbon emissions. 3.2 Leadership and governance Sustainable policies, strategies and practices are necessary to respond to the challenges affecting urban water resources. However, weak regulatory water and sanitation frameworks, along with overlapping functions within governmental agencies and institutions, have led to an unclear division of responsibilities and to uncoordinated efforts in urban water management. This has caused the fragmentation of strategies, as well as redundancies, jurisdictional conflicts, wastage of resources and conflicts in financing, resulting in inefficient and unsustainable approaches to urban water management in many cities around the globe. Heavy subsidies and fixed rates implemented by governments have encouraged ineffective usage and high consumption rates of water resources, ultimately placing further stress on this fragile resource. Adding to these challenges, sectoral politicization has fostered short‐term decision‐making, while management goals and strategies are often limited to the term of the elected government. Insufficient capacity development and outdated management practices cause decisions to be made with inadequate information, or lead to poor implementation. Without capable staff and relevant information, the adoption of novel technology solutions needed to enhance a city's water management becomes unfeasible. Weak leadership and governance within the urban water structure has limited the sector's capacity to effectively address many of the existing and emerging challenges related to water resources. Some of these challenges are explored in OECD's report 'Water Governance in OECD Countries: A Multi‐level Approach'10, including the co‐ordination \"gaps\" that exist in water policy, multi‐level governance challenges in decentralized public policy, and relevant policy responses. The OECD study suggests that the implementation of performance measurements, water information systems and databases, financial transfers, inter‐municipal collaboration, citizen participation and innovative mechanisms (e.g. experimentation) are important tools for better co‐ordination of water policy at the territorial level, and between levels of government. 3.3 Investment Urban water management cannot be effective without the investment needed for a comprehensive, system‐wide implementation. Increasing urbanization poses the need for new infrastructure to satisfy the requirements of the present as well as the future. The high cost and substantial investment requirements for the establishment and operation of such services has led to shifting responsibilities between governments and municipalities (e.g. jurisdictional financing conflicts), governments and industries/businesses (e.g. polluter pay effect), as well as between governments and the public (e.g. underpriced water due to insufficient tariffs) in order to generate the revenue and payment systems needed to finance urban water investments. Consequently, the financing of water and sanitation services constitutes a major issue. The fact that aging infrastructure is crippling urban water distribution systems is a clear indicator that there is insufficient financing and investment within the urban water structure. To ensure a sustainable development of water infrastructure, appropriate investment levels are needed to support both short‐ and long‐term decision‐making, and to address the uncertainty and emerging risks associated with urban water challenges.