Efficiency in Water Management Will Reduce Risks

New research modelling various levels of economic growth and water management efficiencies underscores the need for change in how society manages water resources and water productivity (economic output per drop). Analysis was conducted by Veolia Water and the International Food Policy Research Institute (IFPRI), an international agricultural research centre studying sustainable solutions to ending hunger and poverty. The study assessed water stress, measured as water use in excess of 40% of available resources, at river basin and country levels, to identify countries and regions where water scarcity will put economic development and food production at risk.

Key findings include that by 2050, current "business as usual" water management practices will put at risk approximately USD63 trillion, or 45% of the projected 2050 global GDP (at 2000 prices), equivalent to 1.5 times the size of today's entire global economy. Moreover, 4.8 billion people (52% of the world population) will live in water-stressed areas by 2050.

If sustainable behaviours and practices are adopted, more than 1 billion people and approximately USD17 trillion of GDP could escape exposure to risks and challenges from severe water scarcity. This USD17 trillion figure reflects an amount larger than the entire GDP of the United States in 2010.

Implementation of sustainable water management practices would also reduce by 21% the number of children projected to suffer from malnourishment compared to a business-as-usual approach.

To assess the impact of water on economic growth, IFPRI and Veolia Water have analysed what economic growth levels can be sustained at today's water management efficiency and to what extent gains in efficiency and water productivity (economic output per drop) can sustain higher levels of growth. Four scenarios were developed representing four different levels of water management efficiency. These four scenarios, BAU (Business as Usual), Low-Carbon, Grey, and Blue, were assessed against three levels of economic growth to examine in each case the impact of growth on water scarcity and food security.

The proportion of water withdrawal with respect to total renewable water resources was used to determine levels of water stress and scarcity. Water stress puts at risk businesses, agriculture and people who need stable and reliable water supplies.

Already, 39% of the world's grain production is at risk of non-sustainable water use. That number would increase to 49% by 2050 if BAU practices continue.

A Low-Carbon model remains close to BAU levels because low-carbon energy production requires more water production due to greater levels of biomass consumption and hydropower development.

A Grey Model – growth at all cost – does not enable high-growth levels to be sustained due to limits in water resource availability.

For China, India and many other rapidly-developing countries, water scarcity has already started to materially risk growth. Even many of the most advanced regions of the industrialized world such as California and Florida will have to increasingly cope with the effect of growing pressure on water resources and their effects on growth. For instance, the positive effects of water productivity for California means the state could avoid the negative effects of water stress and be able to support high-growth rates.

The Blue model is centred on improving water productivity: producing more with less water. This includes greater public awareness; higher levels of water reuse by all users of water; improvements and evolution of water technology; water and wastewater infrastructure improvements; extension of services to rural and urban poor populations; and greater energy efficiency along with increased use of renewable energy.