World water news: The global economics of water

In October, the economics of water captured global attention, as leaders and economists spotlighted essential steps for a resilient, water-secure future. From economic forecasts to policy shifts, discussions underscored the urgent need to manage water as a critical resource, highlighting the need for aligned policies, sustainable practices and innovative solutions.

Here are some of the latest reports and findings:

A water crisis could cost trillions 

A new report from the Global Commission on the Economics of Water warns that water overuse could eliminate trillions from the world economy by 2050, reducing GDP by 8% in developed countries and 15% in developing ones. The commission, which includes the President of Singapore and prominent ministers and economists, points to climate change, overconsumption and ecological degradation as driving forces behind this. Henk Ovink, the commission’s executive director, warns that in dry and geopolitically sensitive regions like the Middle East, water scarcity is particularly urgent.

As CNN reports, without intervention, water shortages could severely disrupt the global food supply, putting 50% of global food production at risk within 25 years. The commission also calculated that the average person requires 4,000 litres of water a day to “live a dignified life,” factoring in what is needed to produce food and energy. This is far above previous baselines of 50 to 100 litres for basic needs.

One prominent recommendation from the commission is to set water prices that reflect its true cost and scarcity, discouraging excessive use across industries. The report suggests that today’s underpricing of water has enabled wasteful consumption.

Echoing the influential 2006 Stern Report on climate economics, the report advocates a proactive approach to water management, emphasising that a shift in mindset will drive the transformation needed. As Italian economist Mariana Mazzucato said in The National, “We must move beyond a reactive market-fixing approach towards a proactive market-shaping one that catalyses mission-orientated innovation… Only with a new economic mindset can governments value, govern and finance water in a way that drives the transformation we need.”

Read more coverage in The National here, and access the full report here

The world’s rivers are drying up at the fastest rate in 30 years

According to the World Meteorological Organization (WMO), rivers worldwide dried up at the highest rate in three decades in 2023, with over 50% of global river catchments showing abnormally low levels. Major rivers like the Amazon and Mississippi saw record lows, while the Ganges, Brahmaputra and Mekong rivers had lower-than-normal conditions, impacting water supply in vast regions across the Americas, Asia and Oceania.

“As a result of rising temperatures, the hydrological cycle has accelerated. It has also become more erratic and unpredictable, and we are facing growing problems of either too much or too little water,” said WMO secretary general, Celeste Saulo in The Guardian. “A warmer atmosphere holds more moisture which is conducive to heavy rainfall. More rapid evaporation and drying of soils worsen drought conditions.”

Echoing these challenges, a story in The New York Times reports that the Amazon river has dried to shallow pools only a few feet deep in certain stretches, gridlocking “a vital watery superhighway that serves as practically the only way to connect forest communities and move commerce around some of the most remote stretches on the planet.” 

The Guardian reports that 3.6 billion people face inadequate access to water for at least one month a year. This is expected to increase to more than 5 billion by 2050, according to UN Water, underlining the urgent need for scalable, sustainable solutions.

Access the full articles in The Guardian here and The New York Times here

CEOs call for climate action at COP29

In light of developments like these, more than 100 CEOs, including leaders from Ikea, AstraZeneca and Volvo, have signed an open letter urging governments to boost support for green investments. Organised by a World Economic Forum alliance of CEOs, the letter calls for strong climate targets and better policies to remove barriers to renewable energy and green technology. 

Ambitious national climate plans have huge potential: unleashing new jobs, more affordable energy and opportunities for businesses. 

However, as the Financial Times reports, a divide is emerging as several major companies are rolling back emissions targets, citing a lack of government support. The upcoming COP29 climate summit in Baku, Azerbaijan will test global commitment as nearly 200 countries are expected to gather to discuss funding for a green transition.

Read the full letter from the Alliance of CEO Climate Leaders here 

Stay tuned for future editions of World Water News, where we’ll continue to highlight crucial developments and innovative solutions in water security and sustainability.