Charting our water future
A report on global water resources released Monday said that
governments must address booming water demand or face grave human,
environmental and economic consequences.
The report, released by the
target=”_blank”>2030 Water Resources
Group shows that one-third of the world’s
population would have a 50% deficit in water supply by 2030 if no
action is taken, but that growing water scarcity can be mitigated
affordably and sustainably if action is taken now
Growing competition for scarce
water resources is a growing business risk, a major economic
threat, and a challenge for the sustainability of communities and
the ecosystems upon which they rely. It is an issue that has
serious implications for the stability of countries in which
businesses operate, and for industries whose value chains are
exposed to water scarcity.
“Water needs to rise up the totem pole of political discourse,”
said Giulio Boccaletti of McKinsey, the consulting firm that wrote
the report, during a press conference. “We need to stop flying
blind in making decisions about water without a map on the
table.”
The report, Charting Our Water Future, says that that in 20
years, water demand will be 40 percent higher than it is today, and
more than 50 percent higher in the most rapidly developing
countries. Historic rates of supply expansion and efficiency
improvement will close only a fraction of this gap.
In the world of water resources, economic data
is insufficient, management is often opaque, and stakeholders are
insufficiently linked. As a result, many countries struggle to
shape implementable, fact-based water policies, and water resources
face inefficient allocation and poor investment patterns because
investors lack a consistent basis for economically rational
decision-making. Even in countries with the most advanced water
policies there is still some way to go before the water sector is
managed with the degree of sophistication appropriate for our most
essential resource. Without a step change improvement in water
resource management, it will be very difficult to meet related
resource challenges, such as providing sufficient food or
sustainably generating energy for the world’s population.
Closing the future “water gap” will cost $50 billion to $60
billion per year of investment by expanding measures already being
taken in some communities to boost efficiency, augment supply, or
lessen the water-intensity of the economy.
Peter Brabeck-Letmathe, the chairman of Nestlé, said he expected
the report to “de-emotionalize” the issue of water management by
simply laying out facts in clear terms.
Mr. Brabeck-Letmathe said that water’s value is not adequately
reflected in its cost. He emphasized that access to clean water was
a human right, but that “it’s not a human right to wash your car,
fill up your swimming pool and water your golf course.”
He said South Africa has an example of a sustainable water
policy in which households are entitled to 6,000 liters, or about
1,500 gallons per month of free water, after which they must pay.
He also pointed to what he clearly considered an absurdity: that it
takes 9,100 liters of water to make one one liter of biodiesel
fuel.
“We don’t give value to the most precious resource we have on
earth,” Mr. Brabeck-Letmathe said.
Charting our water future: Economic frameworks to inform
decision-making shows that while meeting competing demands for
water will be a considerable challenge, it is entirely possible to
close the growing gap between water supply and demand. This report
provides greater clarity on the scale of the water challenge and
how it can be met in an affordable and sustainable manner.
The report offers case studies from four countries with
drastically different water issues, which will collectively account
for 40 percent of the world’s population, 30 percent of global GDP
and 42 percent of projected water demand in 2030: China, India,
South Africa and Brazil. The report’s methodology identifies
supply- and demand-side measures that could constitute a more cost
effective approach to closing the water gap and achieve savings in
each country.
Charting our water future is a report of the 2030 Water
Resources Group, which was formed in 2008 to contribute new
insights to the increasingly critical issue of water resource
scarcity. Members include McKinsey & Company, the World Bank
Group, and a consortium of business partners: The Barilla Group,
The Coca Cola Company, Nestlé SA, New Holland Agriculture, SAB
Miller PLC, Standard Chartered and Syngenta AG.
Source: www.mckinsey.com
