Growing an economy is very thirsty business. We need to double food production – but we’re already using an average 70% of the world’s fresh water for agriculture. Meanwhile industrialised countries – the US in particular – are diverting 40% of their water to energy production, and that demand will also rise. Unsustainable levels of water are being extracted from many of the world’s fresh water ecosystems: up to 80%-90% of water is already being used in many arid and semi-arid river basins where water is scarce, according to the World Water Council. It is, quite simply and literally, unsustainable.
But how best to allocate the water that can meet the needs of the energy sector to power the economy, the needs of cities to provide the water and wastewater services they need, the needs of farmers to grow the food, and the needs of ecosystems to sustain the rivers and aquifers that we all need? These are very real risks and trade-offs that our growing global society and economy must navigate.
Such trade-offs have been poorly executed in the past, even in our most developed economies. In 2011 Texas nearly blacked out due to water shortages for its energy sector. Water experts have calculated that 26% of US-installed power-plant capacity is located in areas of water stress, a situation that will only get worse in the coming decades. Utility engineers in much of the US’s west and midwest will tell you how concerned they are.
These experiences offer valuable lessons for everyone, but particularly for emerging economies, where there is a tremendous opportunity to avoid the mistakes that others have made. The dangers of stranded energy or agricultural assets in a few decades can be minimised if water risk is fully accounted for now in development strategies and investment plans.
As recognition grows about the risk that water poses to our economic growth and development (the top global risk in the World Economic Forum Global Risksreport this year), there are the demands from politicians, farmers and industry for new models and innovative solutions, new collaborative approaches for action at scale. There is a thirst for a new “water economy” where water really is everyone’s business.
This new water agenda could involve building economic development strategies and infrastructure investment portfolios that spot key water risks and develop resilient systems to mitigate them. It could involve developing and growing partnerships such as the 2030 Water Resources Group and collaborations such as the 100 Resilient Cities initiative. The new agenda would also include policies and markets that capture the economic, social and environmental values of fresh water.
Building the foundations for a new water economy will be difficult. It will require different sectors and specialists to work together. How do we construct an economy that is water-smart enough to secure future food and energy needs, while at the same time ensuring water for people and for nature, reducing greenhouse gas emissions and building resilience to manage the future water stresses?
All this was discussed intensively at the 25th Annual World Water Week in Stockholm, with the takeaway lesson being not that we have an off-the-shelf answer to this challenge (there is none) but that we need new models of cooperation, and that we already have sufficient data to begin redressing this systemic problem.
There is now genuine coalescence around a new, more strategic economic imperative to “get water right”, and it is percolating through the water community and beyond. This is exciting. The water agenda is reshaping. From this year’s Stockholm Water Prize Winner Rajendra Singh, who mobilises communities across India to build water security and resilience using traditional rainwater-harvesting techniques, to high-level discussions involving heads of state, leaders of international organisations and world experts, a call to action for a new global water economy is emerging and we must urgently amplify it.
Governments, civil society, corporations, farmers and grassroots organisations are all equally thirsty for a new collaborative water economy agenda. We urge a rapid transition to this new water economy, one in which the full value of water and its sustaining ecosystems, and the risks and trade-offs of its use, fully inform our vital development choices.
And the timing is just right. The important international milestones of 2015 – the launch of the sustainable development goals and the focus on reaching a climate change agreement in Paris – will provide an important launch pad for propelling this much-needed new water economy agenda into 2016 and beyond. The risks of not transitioning to a new water economy are simply too great to contemplate.
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This article is published in collaboration with The Guardian. Publication does not imply endorsement of views by the World Economic Forum.
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Author: Dominic Waughray is head of public-private partnerships at the World Economic Forum. Fred Boltz is managing director for ecosystems with The Rockefeller Foundation.
