Water security drives growth
Recent droughts and floods in different parts of the world are highlighting the key role of water security in reducing social and economic risks. It is estimated that the lack of water security can impact global economic growth in the order of 0.5%.In monetary terms this represents an annual loss in the order of US$500 billion , excluding environmental risks. This, under any circumstances, is a significant economic opportunity.
At the same time the world is experiencing its biggest infrastructure investment boom in human history with some 8% of global GDP devoted annually to mega projects such as the Panama Canal expansion project. And yet water is not visible in this infrastructure agenda.
In the last decade, water security has gained increased attention in the global political agenda. This need for greater water security is dueto hydrologic uncertainty, intensified by climate change, and increasing demand and competition for water.To meet these challenges it is essential that we focus on water infrastructure , and that this infrastructuredevelopment considers the multiple uses of water (human and industrial consumption, hydropower, irrigation, navigation, recreation and tourism). This will require improved understanding on the capacity of water security to leverage growth and economic opportunities, and synergy between water security and energy, transport, food, land use, and broader environment policy.
Yet, despite the fact that financing for the water sector can easily be justified by the pressing need to adapt to global changes including climate, population growth and urbanization, investment in water infrastructure is underdeveloped. We are simply not doing enough. It is also clear that our current financing models and approaches do not encourage the kind of multi-purpose infrastructure that we need now and in the future. While the sums involved are typically large, some components may not be financially attractive under strict market conditions this is not a reason to avoid investing.In addition, to economic considerations governments should appreciate the social benefits of water infrastructure when making decisions.
Evidence shows that, in addition to existing financial sources, newer funds are available such as pension funds, insurance companies, community microfinance, Sovereign Wealth Funds, climate funds, and Green bonds. We will need to deploy all of these if we are to meet the 6.3 trillion euros of investment needed by 2050 for water supply and sanitation projects alone. Again, under any circumstances, this is a significant economic opportunity.
Progress in the field of water security requires policy-makers to face up to difficult choices. Making trade-offs is possible by sharing the responsibilities and the consequences among the involved sectors and stakeholders. It must take into account the integratedsocial, economic and environmental impacts. As with any intervention in the natural environment there are choices to be made, each with impacts that may be both positive and negative, there are costs and benefits. I firmly believe that the positive impacts outweigh the costs.
The Group of Twenty sees massive infrastructure investment as one of the “silver bullets” that can sustain growthby boosting regional integration and create millions of jobs. Investing in water security has equal potential, as it underpins health, energy, transport, food, tourism returns, while mitigating the socio-economic impacts of floods and droughts. In other words water security is a genuine economic opportunity.
Adaptation to global changestrough water should bethe next chapter on the G20’s agenda to meet sustainable growth. The technical solutions already exist but economic incentives and innovative financing models, along with effective governance must be increased.To achieve this requires policy makers to increase the visibility of water and move water from being a political problem to being aneconomic opportunity.
World Water Council
Benedito Bragais President of the World Water Counciland Secretary of State for Sanitation and Water Resources for the state of Sao Paulo. . He is professor of Civil and Environmental Engineering at Escola Politecnica of University of Sao Paulo (on leave). Mr. Braga chaired the International Steering Committee of the 6th World Water Forum held in Marseille, France. He was a member of the Gulbenkian Think Tank for the future of water and mankind based in Lisbon. Before that, he served on the Board of the Brazilian National Water Agency (ANA) as well as at UNESCO/International Hydrological Program committee where he was elected President of its Intergovernmental Council. He was the President of the International Water Resources Association (1998- 2000). Mr. Braga holds a Ph.D. in Water Resources from Stanford University, USA.
About the World Water Council
The World Water Council is an international organization that aims to promote awareness, build political commitment and trigger action on critical water issues at all levels, including the highest decision-making level, to facilitate the efficient conservation, protection, development, planning, management and use of water in all its dimensions on an environmentally sustainable basis for the benefit of all life on earth. The World Water Council, based in Marseille, France, was created in 1996. It brings together around 300 member organizations from more than 50 different countries. By providing a platform to encourage debates and exchanges of experience, the Council aims to reach a common strategic vision on water resources and water services management amongst all stakeholders in the water community. In the process, the Council also catalyzes initiatives and activities, whose results converge toward its flagship product, the World Water Forum.