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DEVELOPMENT: “Water Gap” to Widen Dramatically by 2030

Matthew Berger

WASHINGTON, Nov 23 2009 (IPS) - A balanced approach of demand- and supply-side measures are needed to meet a growing “water gap” in which global water demand will be 40 percent more than supply by 2030, says a new report from the 2030 Water Resources Group.

The group, which includes McKinsey & Company, the World Bank’s International Finance Corporation and several large businesses including The Coca-Cola Company and Nestlé SA, projects that population growth and economic development will lead to one-third of world’s population having half the water they need.

“The conversation needed amongst stakeholders, then, is about a country’s economic and social priorities, what water will be needed to meet those priorities, and which difficult challenges are worth tackling to deliver or free up that water,” says Dutch Crown Prince Willem-Alexander, chair of the U.N. Secretary-General’s Advisory Board on Water and Sanitation, in the report’s foreword.

Sorting out these water priorities amounts to a demand-side approach in which water is used more efficiently, rather than simply what the report terms “traditional supply measures”, such as desalination and improving groundwater infrastructure.

“Some solutions may require potentially unpopular policy changes and the adoption of water-saving techniques and technologies by millions of farmers,” warns Willem-Alexander.

In making its recommendations, the report, entitled “Charting Our Water Future: Economic frameworks to inform decision-making”, places a price tag on the water resource gap. If only supply-side measures are used, it says, it will require an annual investment of 200 billion dollars to fill this gap, while a balanced demand- and supply-side approach would cost 50 to 60 billion dollars a year.

Current expenditure on water provision is less than 50 million dollars annually, says the report.

This may be a small price to pay to secure society’s most crucial resource, but it seems even smaller when put in a global economic context. Sixty billion dollars a year would be 00.099 percent of 2008’s world GDP of 60.6 trillion.

“We don’t give value to the most precious resource we have on earth,” said Nestlé chair Peter Brabeck-Letmathe at a discussion on the report at World Bank headquarters Monday. He said people have a right to water, but that pricing may be needed to prevent wasteful over-consumption.

It should be pointed out, however, that Nestlé, like Coca-Cola and others, is a major player in the bottled water industry, which has been repeatedly accused of producing inefficient amounts of waste to sell perhaps the planet’s most basic product at needlessly elevated prices. These issues are not directly addressed in the report.

The forecasted 40 percent gap in water demand vis-à-vis supply on which the report focuses assumes “an average economic growth scenario [where] no efficiency gains are assumed”.

This gap, the report is careful to point out, is not the gap between projected 2030 needs and the amount of freshwater in the world, but that between projected 2030 needs and the “accessible, reliable, environmentally sustainable supply [of water] – a much smaller quantity than the absolute raw water available in nature”.

Globally, the report says, agriculture currently accounts for 71 percent of water use, though, without efficiency gains, this figure will decrease to 65 percent in 2030 even as the total volume of water withdrawn for agriculture increases. Industrial withdrawal is projected to grow from 16 to 22 percent, while demand for water for domestic use is projected to drop from 14 to 12 percent. Both numbers will grow, however, in regions with emerging markets.

But water is ultimately a local issue with local characteristics and a need for locally-specific responses.

The report’s analysis looked at the very different water issues faced in four representative countries – China, India, South Africa and Brazil’s Sao Paulo state. Together, these four countries account for 40 percent of the world’s population, 30 percent of global GDP and 42 percent of projected 2030 water demand, according to the report’s authors, but there is no silver bullet that can address them all.

“There is no single water crisis,” points out the report. “Different countries, even in the same region, face very different problems, and generalizations are of little help.”

Eighty percent of India’s water demand, for instance, is attributable to growth in its agricultural sector, which is trying to grow at a pace that can feed a booming population with an increasingly middle-class diet. The report therefore identifies agricultural measures like irrigation efficiency or better management of rain water as the most effective for closing its particular water gap – a gap, the authors say, that such measures can shrink by 80 percent by 2030.

In South Africa, on the other hand, household and industrial demand is the biggest factor in forecasted water shortages, and thus the recommendations include efficiency measures like improved plumbing fixtures.

In any region, said the report’s authors in a statement, “many of the most cost-effective measures identified, especially those that increase efficiency and productivity of water use, can pay back their initial capital investment in three years or less”.

They say that with a combined focus on demand and supply these countries can meet their 2030 water needs with a combined 19 billion per year – less than 0.06 percent of their combined projected 2030 GDP.

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