January 31, 2009

World Faces ‘Water Bankruptcy’ In Twenty Years

A new report unveiled Friday at the World Economic Forum (WEF) in Davos, Switzerland says the world is heading toward "water bankruptcy" as demand outpaces the high rate of population growth.

In less than two decades, water scarcity could lose the equivalent of the total grain crops of the U.S. and India, said the report. 

"The world simply cannot manage water in the future in the same way as in the past or the economic web will collapse," said the report.

Water has been consistently under-priced in many areas of the world, and has subsequently been wasted and overused, according to the report.  Many areas are on the cusp of "water bankruptcy" after a spate of regional water "bubbles" over the past 50 years.

The report cited energy production as accounting for roughly 39 percent of all water used in the U.S. and 31 percent of all water withdrawals in the EU.  While only three percent is consumed, competition will intensify over the next 20 years for water access, the report said.

Water requirements for energy are forecasted to increase by up to 165 percent in the U.S. and 130 percent in the EU, which could lessen the amount of water available for agriculture, the WEF said.

The report said that at their current rate of melting, most glaciers in Tibet and the Himalayas will have disappeared by 2100.  These glaciers currently provide water for roughly two billion people.

Additionally, about 70 major rivers throughout the world are close to being completely drained after being used for years to supply water for irrigation and reservoirs.

According to the WEF, water will become a prevalent theme for investors within 20 years, even more so than oil.

"The water problem is broad and systemic. Our work to deal with it must be so as well," said UN Secretary General Ban Ki-moon at the Davos forum on Thursday.

Corporate executives attending the forum also expressed apprehension about the matter.

"I am convinced that, under present conditions and considering the way water is being currently managed, we will run out of water long before we run out of fuel," Peter Brabeck-Letmathe, chairman of Switzerland-based Nestle, told the AFP.

"The only way to measurably and sustainably improve this dire situation is through broad-scale collaborative efforts between governments, industry, academic, and other stakeholders around the world," said Indra Nooyi, chairman and CEO of PepsiCo Inc, which makes enormous use of water.

"Management of future water needs stands out as an urgent, tangible and fully resolvable issue for multiple stakeholders to engage in," said Dominic Waughray, the WEF's head of environmental initiatives.

A skyrocketing demand for food is also expected in the coming years, the report said.


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