Source: LinkedIn Pulse Blog by Peter Brabeck Letmathe
The 2015 Global Risk Report of the World Economic Forum (WEF) is a reminder, and stark warning, that we use far more water than what is sustainably available. According to the report just published in Davos, water scarcity is the biggest economic and societal risk for the next ten years. The 2030 Water Resources Group that I am chairing is the most important Davos-based initiative to address this risk.
First, some orders of magnitude of the problem. In 2015, freshwater abstraction for all kind of human use, mostly to grow food, increased to some 5,000 cubic kilometres, while sustainable annual supply is only 4,200 cubic kilometres. If there is no change in the way we use water, withdrawals will continue to increase with world population and prosperity to some 7,000 cubic kilometres by 2030. In other words, to re-establish balance and sustainability by then, we have to find ways to reduce withdrawals by some 40%.
The 2030 Water Resources Group (2030 WRG) aims to respond to this challenge with a global, multi-stakeholder structure, becoming active through local structures. In many respects, it is a unique form of public-private-civil society partnership; it helps governments, at their request, transforming the management of their water resources for the sustainable development and economic growth of their countries.
2030 WRG is founded on the understanding that governments, the private sector, and civil society have a common interest in the sustainable management of water resources, and that unsustainable use of water will have negative effects for economic development, wellbeing of people, food security, and ecosystems. As we want to broaden the membership base, this post is also an invitation to signal your possible interest in joining.
2030 WRG was launched in Davos in 2009 and later on formally incubated in the International Finance Corporation (IFC), part of the World Bank Group. It is a combined global and local public-private partnership, involving also NGOs.
Initial discussions that ultimately led to its creation started at a private breakfast organised by Nestlé, with guests from other companies, governments, intergovernmental agencies, academia and civil society in January 2005, an event where I personally together with other leading participants for the first time clearly supported water as a human right.
But, since declaration alone are never sufficient, we defined an initial roadmap to overcome the increasing freshwater overdraft. We agreed that it was necessary to first create awareness outside the specialised water community, to develop some new analytical tools (the water cost curve), to contribute to creating an enabling environment, and to bring together the relevant local stakeholders to actually drive the process in order to solve the emerging global water crisis with a specific set of relevant, cost-effective local individual and collective actions.
2030 WRG wants to be disruptive – in the way Schumpeter defined it: i.e., not re-inventing any wheels, but re-arranging information into a perspective that triggers different, more relevant action.
Water is local, overuse requires local solutions; one-fits-all approaches do not work. Water overuse must be addressed in the main river basins; at this level our tools are supposed to help close the gap between long-term water resource needs and water resource availability in a sustainable, cost-effective and equitable manner.
This approach was discussed and confirmed at the 2015 Annual Meeting of the Governing Council of 2030 WRG in Davos. It is about local solutions, as the following examples of country- and watershed-specific action shows:
In South Africa, in close co-operation with, and actually driven by government and local partners, measures were taken to reduce the very high leakage in municipal water supply systems: the No Drop incentive program to reduce municipal leakages with a focus on performance based contracts to achieve desired outcomes. There are measures to address drainage from coal-mines, which pollutes rivers for downstream users and ecosystems. And there are efforts to improve inefficient and outdated irrigation schemes, as well as current exclusion of new farmers in these old schemes.
In Bangladesh, first discussions with government and local stakeholders took place in 2014, with a focus on improving water use efficiency (increasing reuse and recycling) and reducing pollution from certain industries. Further discussions have taken place on improving agricultural efficiency and water productivity, and enhancing wastewater treatment and surface water quality.
In Mongolia, the partnership with 2030 WRG was initiated personally by the country’s president Elbegdorj in one of the water sessions in Davos some years ago. In the meantime, several rounds of discussions with government and local stakeholders addressed incentives for sustainable water resources management, water challenges in the Gobi area, including a need to reduce water use by industry, mining and municipalities to make sure herders are not losing their livelihood. Discussions further addressed Ulaanbaatar’s – the capital of Mongolia—future water and waste water challenges, including the need for reducing leakage in the existing system and increasing service to existing “Ger” areas (informal settlements). Stakeholders agree that this requires robust data systems and water governance structures.
In India, at national level, 2030 WRG discussed with the government its possible national engagement with a specific emphasis on the Ganga river, possibly as a demonstration of replicable water sustainability models for public-private-civil society engagement within the urban, industrial and agricultural sectors. A broad variety of stakeholders that 2030 WRG brought together wants to develop and implement economic incentives for enhanced long-term sustainability of waste-treatment plant operations. Additional discussions and projects were set up in two of the Indian states, namely Karnataka and Maharashtra.
In Tanzania, and then in Kenya 2030 WRG discussed with the government and local stakeholders possibilities to increase water use efficiency across all sectors, but in particular in irrigated agriculture, better inter-sectoral coordination (including at the Government level) to overcome conflicting demands on water between agricultural and energy sectors as well as for ecosystems and municipal use, and the need to improve water security, including potential interventions relating to better use of groundwater, increased small scale storing capacity and rainwater harvesting, and potential for inter basin transfers etc. but also enhancing wastewater treatment and reducing pollution and, very importantly in this country, improving the collection and dissemination of water related data.
Finally, in Peru, together with the government and local stakeholders, 2030 WRG looked into ways to prioritise investments in coastal catchments and the need for innovative financial instruments to develop and promote investment mechanisms to attract funds to the water sector.
Let me add three final comments:
The WRG is not a lobby group, but a partnership looking for solutions in the interest of all stakeholders around a watershed. In that sense, it is also not a charity or a philanthropic effort by private enterprise, but rather something that has to be seen within the concept of creating shared value. We are engaged as private enterprises, putting our money and personal efforts into this effort, because it is important both for society and for the success of our business.
Second, from our discussions with local stakeholders, we know of the need for credibly comprehensive solutions for individual watersheds, particularly to overcome the so-called ‘tragedy of the commons’.
What we have made a rule, therefore, is that we only work in a country if we are requested to by the government, to ensure comprehensive views and strategies. Normally, it’s either the President or the Prime Minister who expresses their interest; we then suggest that they appoint a coordinator because water is treated by many different agencies, ministries, etc.
Third, with help of the WEF, and our partners in government, intergovernmental agencies, academia and civil society, we still have to create more awareness about the urgency of increasing water scarcity and the need for comprehensive solutions to it. We have to make governments aware that the water issue is urgent and has to be tackled now.
As ever, I welcome your comments.
Source: LinkedIn Pulse Blogs (190 likes, 65 comments)
This article was featured in Green Business and LinkedIn Pulse.
Over several years, World Economic Forum (WEF) Global Risk Reports have identified water as one of the three most important challenges worldwide. This year it has moved to the top, as the biggest societal and economic risk for the next ten years. The report assesses risks that are global in nature and have the potential to cause significant negative impact across entire countries and industries: Water is key for life, central to societal development. Water risks affect industrialised and developing economies alike, repercussions of its overuse and increasing shortage are multiple and complex, widespread and severe.
The report also assesses risks in terms of probability – in the case of water, it is not about problems outlined by models and simulations that start from a diversity of assumptions; shortages from overuse are already facts today and are rapidly getting worse.
Let me mention five aspects of these risks:
1. Water for people: according to the World Health Organization there are still more than 700 million people without access to so-called ‘improved’ water – here the trend is positive; the proportion of the world’s population with access to improved drinking water sources increased from 76% to 89% globally between 1990 and 2012. But ‘improved’ is by no means ‘safe’. An article by Gérard Payen, former chairman of Aquafed and Member of the United Nations Secretary General’s Advisory Board on Water and Sanitation, states that close to 2 billion people use water that is unsafe and dangerous for their health, while 3.4 billion people use water of doubtful quality, at least from time to time. And these problems are getting worse, due to insufficient investment in water infrastructure – also in advanced economies.
2. Water for food: we start seeing the first problems in regions where natural buffers – groundwater reservoirs – have been used up in times of normal rainfall. In other words: media will see drought as the problem, but droughts come and go. The real problem is that we destroyed the ‘natural’ safety nets by overusing groundwater. So without a change in the way we use water, the global growth in population and prosperity are rapidly leading us into massive shortfalls in global cereal production.
3. In the past water was mostly abundant – at least up to the 1990s – so we have forgotten how important it is for growth in prosperity. Some episodes where power generation in thermal plants had to be slowed down because of lack of cooling water may be early signs for more widespread problems ahead.
4. There is a cross-border, and increasingly geopolitical dimension, e.g., in the Nile basin, along the Panj river, Euphrates/Tigris, Indus, Mekong and Colorado, to mention but a few of cross-border basins.
5. Water for the environment: this is about urgently needed wetlands, about biodiversity. But drying rivers also destroy human livelihoods, and sinking groundwater tables threaten human settlements.
Thanks to the WEF and the team behind the Global Risk Report for the careful, fact-based work. It sets the right focus for discussions in Davos and beyond.
As ever, I welcome your comments.
Source: LinkedIn Pulse Blogs by Peter Brabeck Letmathe – 4613 views, 482 likes, 64 comments
By AJIT GULABCHAND
Water must be managed by a coalition of public, private and civil society interests.
Water is one of the most indispensable of all natural resources. It is vital for the survival of human beings and the scarcity of water has a significant impact on our economic development and biological diversity.
Water is one of the most indispensable of all natural resources. It is vital for the survival of human beings and the scarcity of water has a significant impact on our economic development and biological diversity.
Nations across the world, including India, have recently been facing the challenge of rapidly growing water demands, driven by an increased population and economic growth, linked to urbanisation and industrialisation. Also, the prevailing water scarcity is not only a result of quantitative or qualitative scarcity but also a consequence of inefficient use and poor water management, which has been recognised in India’s draft Water Policy (2012).
Water security is one of the most tangible and fastest-growing social, political and economic challenges faced today. It is also a fast-unfolding environmental crisis. In every sector, the demand for water is expected to increase and analysis suggests that the world will face a 40 per cent global shortfall between forecast demand and available supply by 2030.
This outlook bears potential for crisis and conflict since water lies at the heart of everything that is important for human life: food, sanitation, energy, and production of goods, transport and the biosphere as such.
BASIC RIGHT AND BEYOND
Water has been argued to be a social good. It is commonly accepted that access to water is a basic human right. However, being a social good and private good are not mutually exclusive conditions. In fact, more water for one individual can mean less water for other individuals who share a water-supply system. Classifying water as a basic human right, therefore, introduces further social complications in terms of equitable distribution.
Water is a commercial good when it comes to farming, manufacturing, etc. Water is environmental good and we need to conserve it to conserve our environment.
Water needs to be defined not only as a social good, to which everybody is entitled free of cost, but also as commercial good — to be paid for and an environmental good that you treat with great respect.
India will face around 50 per cent of water shortage and an expenditure of around $6 billion per annum for the next 5-6 years is needed to restore the balance.
While the Government must be the ultimate custodian of the national water resources and plays the key role in setting frameworks and strategies, many other stakeholders also have a role to play in delivering solutions.
Proper coordination within government-set strategies requires sound facts and an approach that supports cost-effective solutions. The resulting need for multi-stakeholder engagement means that coalitions are required; public-private-civil society coalitions focused collectively on addressing the water security issue, each leveraging its own comparative advantage towards meeting the challenge within a common policy framework.
Theoretically, managing water as an economic good entails that water can be allocated across competing uses in a way that maximises the net benefit from the amount of water in question. Practically, the increasing financial burden on users to pay for clean water has social and political implications. There has been growing controversy over the privatisation of water worldwide as the economic principles of valuation, privatisation and efficiency are being applied to water, a resource that many consider a basic human need and right.
Growing competition for scarce water resources is a growing business risk, a major economic threat, and a challenge for the sustainability of communities and the ecosystems upon which they rely. It is an issue that has serious implications for the stability of countries in which businesses operate, and for industries whose value chains are exposed to water scarcity.
Recognising the gravity of the problem, The 2030 Water Resources Group (WRG) was formed in 2008 to contribute new insights to the increasingly critical issue of water resource scarcity. Members include McKinsey & Company and the World Bank Group (led by the International Finance Corporation – IFC) with a consortium of business partners, including Hindustan Construction Company.
All the competing sectors, be it agriculture or industry, must practise water use efficiency to the extent possible. Water efficiency measures must be viewed holistically within a business’ strategic planning. Businesses that use water more efficiently now will have a competitive advantage over those that choose to wait. A successful programme must prioritise needs, set well-informed goals, establish current performance minimums and carefully plan a course for action.
WAYS TO BOOST EFFICIENCY
Some ways to achieve water use efficiency within the fence of a given industry are:
Identifying and eliminating wastage and inefficient processes: This may be the most low-cost area for water savings, as it involves minimal capital outlay. Savings can be made through implementing procedural changes, such as cleaning plant areas with brooms rather than water.
Changing processes and equipment: A retrofit of key plant equipment may increase efficiency. Alternatively, upgrades to more efficient models can be factored into planned maintenance and replacement schedules.
Recycling and Reusing treated wastewater: This option may improve the reliability of supply, whilst reducing trade waste charges and associated environmental risks.
Out of suggested measures, equipment (and/or process) changes may be viewed as a ‘permanent fix’ to achieve water efficiency. Changing employee behaviour, such as an operating procedure, may be viewed as a quick and inexpensive way to achieve similar savings without up-front capital expenses. Both the technical and human side of water management is important. Consistent training and awareness, in combination with proper tools and equipment, have the potential to achieve more permanent water savings.
Recycling or reuse of industrial wastewater is possible through adoption of preventive approaches at each production stage to minimise the generation of wastewater.
Segregation of wastewater streams is one of the commonly used preventive strategies to achieve efficient treatment of effluent aimed at recycle and reuse.
Although there is a growing awareness of the strategic importance of water, very few industries across India manage water in a systemic and holistic way.
Water management, in the majority of industries, is limited to ensuring the provision of water. In some instances, there are efforts to control or treat effluents and some responsible businesses go beyond the convention and adopt absolute water use efficiency. However, in most of the cases where water efficiency efforts are implemented as a mere formality, they tend to be unorganised, often leading to sub-optimal results.
These disappointing results may make the management more inclined to withhold its support for any future efficiency projects. Potential exists within the industrial sector to substantially boost water productivity provided it is being adopted/guided by an adequate mechanism.
(The author is Chairman and Managing Director, Hindustan Construction Company)
by Dominic Waughray* for the Guardian Professional Network
Dominic Waughray explains the need for urgency in dealing with the world’s growing demand for freshwater.
The future security of freshwater resources around the world is of increasing concern. Due to our interlinked global economy, water scarcity in many parts of the world could harm the global economy in ways we had not thought of. Shortfalls in crop yields and more variable food prices could be an early impact.
Our demand for water is closely linked to economic growth. As we grow wealthier, the more freshwater we require to supply cities, powerplants, factories, and the production of high-protein food such as dairy, meat, and fish.
It is not just a question of more people requiring more water. Rather, it is a case of more wealthy societies demanding much more water. In the 20th century, while the population grew by a factor of four, freshwater withdrawals grew by a factor of nine. If we take these past patterns and look forward, the outlook for 2030 is stark.
Currently, about 70% of the world’s freshwater withdrawals is for agriculture, 16% is for energy and industry, and 14% is for domestic purposes. Recent work suggests that unless we change our historic approach to how we use water, we could face a 40% gap by 2030 between global demand and what can sustainably be supplied.
Why is this so, and what are the implications?
To meet the forecasted growth in demand for food over the next 20 years, farmers will need to increase production by 70% to 100%. Changing diets will increase the demand for meat and dairy products in particular. A kilogram of meat requires up to 20,000 liters of water to produce (compared to about 1,200 liters to produce a kilo of grain), and the global demand for meat is forecasted to increase by 50% by 2025.
Herein lies the water challenge. If we already use over 70% of freshwater withdrawals for agriculture and face an increase in demand for food by 70% by 2030, especially for water-intensive meat and dairy, it is clear that a business-as-usual approach is not an option. We cannot use over 100% of our freshwater for agriculture. Significant, perhaps radical changes in agricultural water usage will be required.
At the same time, our demand for energy will also grow, and energy is also a thirsty sector.
The International Energy Agency forecasts that the world economy will demand at least 40% more energy by 2030. McKinsey and Company estimate that 77% of the power stations we will need by then have yet to be built. By that year, China will need to expand its power-generating capacity by over 1,300 GW (1.5 times the current level of the United States) and India by 400 GW (equal to the current combined total power generation of Japan, South Korea, and Australia).
Increasing access to energy is a priority for many countries. 1.5 billion people in the developing world still lack access to electricity, and over 3 billion rely on biomass for heating and cooking. Yet energy needs a lot of water. In richer countries, up to 50% of freshwater withdrawals can be used in the production of oil, gas, and electricity.
Take the United States (US) for example. The US Geological Survey estimates that to produce and burn the billion tons of coal the country uses each year, the mining and utility industries withdraw 55- to 75-ton gallons of water annually. That’s about equal to all the water that pours over Niagara Falls in five months. In other words, about half of all water withdrawals in the US today are used to cool electricity-generating stations. (It is important to note that this water is not consumed; it is withdrawn from rivers and reservoirs and used for cooling, etc., then returned. But access to freshwater is still vital. No water, no power station.)
By 2030, the US is forecasted to increase its energy demand by 40%. Using current energy systems, this could translate into a large increase in freshwater access needs, up to 165% according to some analyses. The maths suggests that, with the demands from other areas such as agriculture, this simply can’t be done.
More challenging still, many “clean” energy solutions that the US may wish to pursue to meet its wider environmental obligations, such as carbon capture and storage, shale gas, nuclear power, and solar thermal plants, can actually require even more water for their systems than a coal-fired power station.
Against this water and growth conundrum, General Electric has asked if there will be enough water in the US to power the future. The Economist has written about the end to farming in the California valleys as a result of water shortages and water reallocations. In the future, the US will likely have to depend much more on other countries’ agriculture and water, so it will import its orange juice and raisins (and potentially its wine). Even the US Department of Energy recently told Congress that energy production in the US is at the mercy of water availability.
This water for food versus water for energy dilemma that the US already faces is similar to that which many fast-growing economies will have to tackle very soon. As much of Asia urbanizes and industrializes (and is encouraged to pursue lower-emission energy choices), more water will have to be directed toward energy and away from agriculture. Some modelings suggest that a 76% increase in water demand for energy and industry will be required across Asia by 2030 compared to today. Recall that this will occur at exactly the same time as these countries will also need to almost double their food production. Against a baseline of 70% of water already being used for agriculture, how can these competing challenges be squared off?
We can see first responses to the growth challenge of the food-energy-water nexus already being played out around the world as water-scarce, fast-growing economies in Asia and the Gulf seek to acquire agricultural land in water-rich countries like equatorial Africa. These so called “land grabs” are really about water. If our global trading regime offered a more effective trade in agricultural goods, there would be much less need for such land/water deals.
This challenging scenario of water trade-offs over the next two decades should also be set against the context of today’s water management challenges. Unfortunately, the story gets worse. Due to historical profligacy of water use, the old adage of “You wouldn’t want to be starting from here” holds true.
Many countries are extracting groundwater faster than it can be replenished (Mexico by 20%, China by 25%, and India by 56%). Over 70 of the world’s major rivers now hardly reach the ocean due to the extensive diversion of water for human use. If current trends continue, by 2030, increasing water scarcity could cause annual grain losses equivalent to 30% of current world consumption (just as we need 70% more food). As demand continues to grow, competition for water will intensify between economic sectors, as well as between geographies.
In addition, let’s not forget that a potentially changing climate will simply accelerate freshwater security challenges faced in many places around the world. Unlike options in energy, there are no substitutes or alternatives to water. We will simply have to adapt.
This is not just a problem for the very poorest nations. Water security will affect people in Australia, the Balkans, California, China, India, Jordan, Greece, Mexico, North Africa, Pakistan, Saudi Arabia, Spain, South Africa, and Turkey among others. Even southern parts of the United Kingdom can already be classed as under water stress.
For all these reasons, business-as-usual is not an option. We cannot manage water into the future as we have in the past. Given the timescales associated with turning things around in the water sector, the need for long-term planning, and the dire conditions in which some countries already find themselves, senior analysts suggest we have about ten years to act.
The good news is that the next few years hold great potential for a transformation in the world’s water management. Unlike climate change, no one can argue that the problem does not exist, or that solutions are quickly required. New technologies, new arrangements, and new policies will be required.
The water services sector, water processing, water recycling technologies, and water policy links to the energy and agricultural sectors are fast becoming a busy space for business, financial, and professional services firms, policymakers, and issue specialists. The World Economic Forum itself has embarked on a major initiative to help develop an improved fact base, and a public-private platform of advisory services to help governments that wish to engage in transformational water reform. This will tackle many of the challenges set out above in real-time and in real situations, and I will write more about what we find as it gets underway.
Suffice it to say the arrival of a space to talk about water and its links to business, governments, and growth is very timely. My congratulations go to the Guardian Sustainable Business section for embarking on this exercise. I look forward to a vibrant expert community of bloggers emerging and sharing thoughts and experiences on water, water and business, and water and our wider economic growth.
*While Dominic Waughray is senior director and head of environmental initiatives at the World Economic Forum, he emphasizes that he is writing in a personal capacity. The views expressed here do not necessarily represent those of either the World Economic Forum or any of its constituent partners.