Abstract
The impacts of water scarcity are increasing the likelihood of resource conflicts. However, emerging institutional processes and business models show that a sustainable water future is possible. These models assume well-functioning, transboundary hydrological systems as the basis for human innovation. The Blue Peace model brings together the governments of riparian states to see shared water resources as a source of trans-boundary cooperation rather than conflict. Second, new water investment funds create economic incentives among upstream and downstream users of water to ensure water quality and availability. Third, proven technological solutions, such as hydroponic agriculture, are mainstreamed across sectorial divides in regions that face acute water shortages in the next two decades.
Keywords: water scarcity, business risk, investors and water funds, water governance, trans-boundary cooperation, Blue Peace approach, hydroponic agriculture
A silent emergency
A ‘silent emergency’ is taking place as many countries around the world deplete or heavily pollute their water resources. The World Bank recently reported that emerging, populous countries, such as Nigeria and Indonesia, must invest close to US$150 billion a year to deliver safe and clean water to their populations, or risk an economic crisis due to the costs and impacts of their people drinking filthy water.
In the next twelve years, humanity's demand for fresh water is expected to exceed supplies by over 40 per cent. Water is at the centre of climate change impacts, as weather extremes amplify droughts and floods. Despite the unpredictability, a near-certain water crisis is looming as the functioning of the economy is misaligned with the functioning of the Earth's water systems. This will require the development of political, enterprise, and investment models that align economic growth with the stability of hydrological cycles.
Today over 1.7 billion people are living in river basins where water use is exceeding the natural recharge rates. Four billion people face severe water scarcity at least a month every year. In California, droughts and retreating groundwater tables have accentuated the trade-offs between agriculture and household water use. Water scarcity cost the agriculture sector an estimated US$1.5 billion in 2014, including lost revenues and additional operational costs.
In India, the World Bank estimates that parts of the country will have exhausted their available water supplies by 2050. Conflicts over water are multiplying. Most industry sectors in India are exposed to water shortages, from power generation to materials.