We are on the verge of a water crisis. As world economy and population continue to grow, we are becoming a much thirstier world. It is important to realize just how much water we need to make every aspect of our economy work. Every liter of petrol requires up to 2.5 liters of water to produce it. On average, crops grown for their bioenergy need at least 1,000 liters of water to make one liter of biofuel. It takes about 2,700 liters of water to make one cotton T-shirt, up to 4,000 liters of water to produce a kilo of wheat and up to 16,000 liters to produce a kilo of beef. The statistics are equally surprising for hundreds of other consumer products that we all take for granted like milk, juice, coffee, fruit, pizza, detergents, carpets, paint, electrical appliances, cosmetics and so on. On average wealthier people “consume” upward of 3,000 liters of water every day. Even to produce the much more basic things our economy needs like cement, steel, chemicals, mining or power generation takes literally tons of water.
We have seen this year the impact on food prices that a combination of crop switch for biofuels and drought can have. Water is the bigger problem we can see behind this issue. It has the potential for a much more profound impact on consumers and voters. In the breadbasket areas of the world, which help feed our fast-growing urban populations, we are heading for painful tradeoffs or even conflict. Along the Colorado, the Indus, the Murray Darling, the Mekong, and the Nile or within the North China Plains for example, do we use the scarce water for food, for fuel, for people and cities or for industrial growth? How much of the upstream river can we really dam? How do we figure out ways for every actor in the economy to get the water they need to meet their human, economic and cultural aspirations? And how to ensure the environment is not wrecked but can flourish in the process?
These are really tough questions. And unlike carbon reduction, there is no alternative, no substitute to promote. Nor is there a global solution to negotiate. Turning off your tap in Vancouver or Berlin will not ease the drought in Rajasthan or Australia. Water is local. Water basins will become the flashpoints. These are the large areas, which drain into the world’s major rivers and eventually the sea. They contain millions of people, farmland, forests, cities, industry and coastline and often straddle multiple political boundaries. The sector that will get the most attention, will be the water used by agriculture for food and textile production — 70 percent of all our freshwater withdrawals are in this sector. Savings made here can help elsewhere in the water basin.
The International Water Management Institute has 500 scientists who examine the water we use for agriculture. Their report took 5 years. They found that we would not have enough water to supply global demand for food over the next few decades unless urgent and substantial reforms in water and agriculture are undertaken.
Climate change will make this situation happen more quickly and to a worse degree. The latest IPCC report says that if global average temperature rises by 3°C, hundreds of millions of people will be exposed to increased water stress. It provides the
Wake-up call we all need to start acting on water. We can see this crisis unfolding over the next several years. A perfect storm is approaching. And all this sits on top of the morally indefensible situation of today where 20 percent of the world’s population is without access to improved water supply.
But it is not a catastrophe yet. It lies within our collective grasp to find the solutions. Business can improve its water use efficiency and in many cases it has raised the bar. There are many success stories. But it will take everyone in the water basin working together to change the overall game. This is what makes the challenge complicated. We are ahead of the curve for now. Addressed smartly, innovatively and with new forms of collaboration between government, business and industry we believe the coming crisis can be averted.
It is against this backdrop that we will come together at the World Economic Forum’s annual meeting to raise the economic and political profile of water — to raise awareness among our business colleagues, our politicians and society at large about how we will need to adapt to this fast arriving challenge. How can we start moving now to ensure we organize a water-secure world for everyone, including our own businesses, by 2020? Our aim is to catalyze an unprecedented, high impact public-private coalition to help find ways for us all to manage our future water needs before the crisis hits.
— Klaus Schwab, is founder and executive chairman of World Economic Forum. Peter Brabeck-Letmathe is chairman and chief executive officer, Nestlé.
