There can be no doubt that water is moving up the political agenda. After President Barack Obama used part of his inauguration speech to highlight the importance of water in poverty reduction, the World Economic Forum took a break from the global financial crisis to stress its concern over water resources.

First Obama, who affirmed the USA’s commitment to help the developing world, said: “To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.”

That was 20 January 2009. Nine days later at Davos Klosters in Switzerland the World Economic Forum described water as the nexus linking together a web of food, energy, climate, economic growth and human security.

The bubble is close to bursting

A report The Bubble is Close to Bursting warned, “Worsening water security will soon tear into various parts of the global economic system. It will start to emerge as a headline geopolitical issue. The volatility in food prices in 2008 should be treated as an early warning sign of what is to come."

“In many places around the world, we have consistently under-priced water, wasting and overusing it as a result. We have depleted stocks of groundwater at the expense of our future water needs. In effect, we have enjoyed a series of regional water “bubbles” to support economic growth over the past 50 years or so, especially in agriculture. We are now on the verge of water bankruptcy in many places with no way of paying the debt back.”

For many, investors water is already a better “pick” than oil

Some of the highlights of the forecast include:

• By 2025, water scarcity could affect annual global crop yield to the equivalent of losing the entire grain crops of India and the US combined (30% of global cereal consumption). Yet, food demand is expected to grow 70-90% by 2050.
• Energy production accounts for about 39% of all water withdrawals in the US and 31% of water withdrawals in the EU. The competition for access to water between energy and other sectors will intensify over the next two decades.
• The glaciers of the Himalayas and Tibet alone feed seven of the world’s greatest rivers, providing water to more than 2 billion people. These glacial banks are disappearing at an accelerating rate. Most analyses suggest the majority of them will disappear by 2100 under current trends. Further, 70 major rivers around the world are close to being totally drained in order to supply water for irrigation systems and reservoirs.
• Within two decades, water will become a mainstream theme for investors; for many, water is already a better “pick” than oil. With good regulation, this will enable much more financing to be mobilized to invest in water infrastructure and technology. With poor regulation, innovative investment funds in water could expand.

"Our work to deal with water problem must be broad and systemic"

UN Secretary General Ban Ki-moon commented: “The water problem is broad and systemic. Our work to deal with it must be so as well. The World Economic Forum’s effort to develop the economic and geopolitical forecast on water is essential. For the first time, all the different perspectives and expertise required to define the full dimension of the problem and propose solutions are brought together.”

Dominic Waughray, Senior Director and Head of Environmental Initiatives of the World Economic Forum, and lead author of the report said that the economic downturn offered an opportunity to start addressing the water crisis. “Management of future water needs stands out as an urgent, tangible and fully resolvable issue for multiple stakeholders to engage in.”

The Report from the World Economic Forum Water Initiative is called The Bubble Is Close to Bursting: A Forecast of the Main Economic and Geopolitical Water Issues Likely to Arise in the World during the Next Two Decades. It is available online at http://www.weforum.org/documents/gov/gov09/envir/Water_Initiative_Future_Water_Needs.pdf

Peter McIntyre

Tags: advocacy, policies & legislation, water resources management