The importance of water for people and development
This summer, the extreme weather around the world is a stark reminder of the vast human cost of inadequate water provisions. The United Nations Convention to Combat Desertification (UNCCD) estimates that in 2022 more than 2.3bn people face water stress and almost 160m children are exposed to severe and prolonged droughts. The situation is getting worse with the number and duration of droughts increasing by 29% since 2000—by 2050 droughts may affect more than three-quarters of the world’s population.
This exposure to water scarcity has a major effect on well-being. The World Health Organisation (WHO) estimates that inadequate access to water, sanitation and hygiene (WASH) services may lead to 1.9m preventable deaths annually—children being particularly vulnerable. The protracted droughts are threatening food production in parts of the world where droughts used to be rare. This has coincided with those facing acute food insecurity—people whose limited access to food has put their lives and livelihoods at risk—increasing to 345m across 82 countries, according to the World Food Programme (WFP).
Drawing attention to these issues is essential as efforts towards achieving SDG6, which is aiming for the sustainable management of water and sanitation for all by 2030, are not on track. The UN estimates that governments must quadruple their current progress to be on course to realise SDG6 goals. This will require significant political efforts and financing—an estimated additional $1.7trn, which is three times more than the current investment in water-related infrastructure.
The economic value of water
Along with the enormous human toll, water stress is undermining global economic growth and development. As highlighted in Economist Impact’s Under Pressure and Tapped out: The costs of water stress in Jordan, adequate access to water is crucial for agriculture, energy, manufacturing and service industries, but also for long-term economic productivity. The World Bank estimates that vulnerable regions, such as Central and East Asia, the Middle East and the Sahel in Africa could see their economic growth rates decrease by as much as 6% of GDP by 2050. This is due to water-related effects on agriculture, health and incomes. The UNCCD estimates that droughts caused global economic losses of an estimated $124bn between 1998 and 2017, so growing water scarcity might push millions of people into poverty—particularly in fragile regions.
Inadequate water supply also exacerbates the cycles of water insecurity and fragility that are a long-term barrier to economic growth. The UNCCD estimates that 700m people by 2030 will be displaced by drought. The resulting influx of migrants and refugees from drought-affected areas can add even more pressure on municipal infrastructure and services such as housing, healthcare, education, water and sanitation. Furthermore, migration, displacement and disagreement over water rights can fuel tensions within and between countries, which can significantly undermine economic development. For example, the cost of inaction on water cooperation in Central Asia is estimated at $4.5bn per year.
The value of water for nature and climate
Water-related natural systems such as forests, wetlands and marine and coastal ecosystems are essential for human life. They play a critical role in providing food, energy, medicines and genetic resources and materials fundamental for wellbeing. As highlighted by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), more than 2bn people rely on wood fuel, an estimated 4bn people use natural medicines and 70% of drugs used for cancer are products inspired by nature. Moreover, marine and land ecosystems are extremely valuable as they serve as sole large-scale sinks for man-made carbon emissions. Overall, the WWF estimated that the world’s natural capital was worth $125trn to the world’s economy.
However, as discussed by IPBES and the Dasgupta Review on the economics of biodiversity, ecosystems around the world are irreversibly damaged—or nearing their “tipping points”—with potentially catastrophic consequences for economies and people. The WWF estimates that the world’s stock of natural capital per person has declined by nearly 40% since the early 1990s. Deforestation remains a critical challenge. Although the tropics lost 11% less primary forest last year compared with 2020, this followed a 12% increase from 2019 to 2020—mostly due to an increase in fire-related loss. Deforestation in Brazil's Amazon rainforest is also a concern, reaching a record high for the first six months of 2022. Significant investment in conservation and nature-based solutions for water-related ecosystems are required to avoid the destruction of the world's natural ecosystems.
The road ahead
In a summer of extreme weather, dialogues at World Water Week will be important in shaping agendas at COP27 and the 2023 UN Water Conference. To achieve the objectives of the Sustainable Development Goals and a water-secure world, global leaders must create the momentum to quickly get us back on track.
The conversation about global water stress and security will continue at World Water Week. Economist Impact is a partner of World Water Week and is participating in multiple sessions including “Water-related investments and economic development”, “From words to action: financing from source to sea” and the event’s closing panel. Register here.