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6/9/2015 Global Strategic Foresight Community - Reports - World Economic Forum

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Global Strategic Foresight Community

 Environment and Sustainability

Rethinking Freshwater
Bringing Water Withdrawals Back to a Sustainable Level Is Essential for
Future Growth in Prosperity and Well-Being

Herbert Oberhänsli, Nestlé SA

As most water is used in agriculture (70%), energy (10%) and other industry (10%), overuse will
increasingly manifest itself as a chokepoint for economic development. Population growth and rising
prosperity will see demand rise towards 7,000 km³ annually by 2030 – but only 4,200 km³ can be used
sustainably. Over the next 5 to 10 years, we need to devise new mechanisms, whether price or non-
price, to bring withdrawals back into line with sustainable supply – a challenge, given water’s status as a
basic necessity and its perception as a free good given its abundance until 2000. Global principles can
give guidance, but all mechanisms need to be local; the cross-border management of river basins offers
an opportunity to foster peaceful cooperation and overcome potential conflict among stakeholders.

The world is already withdrawing freshwater at an unsustainable rate, which is Share this page:

projected to increase further. Avoiding crises means managing water

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geographically, but river basins tend to cross political boundaries, raising
additional complexities. We need new ways of thinking about water: how can we
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reflect its value, whether in its price or some other way, without compromising on
economic development and the human right to access water for basic needs? 

Discussions about water are often reduced to achieving tap water security for
all. But this is only a small part of the many roles of water. Seventy per cent of all
water withdrawn for human use goes towards growing food and 20% is used in
industry, about half of which is for energy generation, mostly the cooling of thermal
power plants. Only 10% is for households – and less than a quarter of that is for
basic human needs. The rest is used in less essential ways, such as filling pools
and watering lawns.
Herbert Oberhänsli
Water has always been required for economic growth and prosperity and is crucial
Vice-President, Economics and
for us at Nestlé – to grow our inputs, work our operations and for consumers to
International Relations, Nestlé
prepare our products. Over the last decade, we have brought withdrawals for our
operations down from 4.5 to 1.5 litres per US dollar of sales – a volume dwarfed by
some in other sectors, where usage can be as high as 200 or 300 litres per US
dollar of sales. More important than the action taken within the company is our
participation in multistakeholder initiatives.
All opinions expressed herein are those
of the authors. The World Economic
Forum provides an independent and
impartial platform dedicated to
Global annual water withdrawals for human use are continuing to increase. generating debate around the key 1/3
6/9/2015 Global Strategic Foresight Community - Reports - World Economic Forum
topics that shape global, regional and
Population growth and spreading prosperity are increasing demand for water- industry agendas.
intensive products such as beef and energy. Usage has increased from 600 km³ in
1900 to 1,400 km³ in 1950 and 4,500 km³ in 2010, and is projected to reach almost
7,000 km³ by 2030. However, the amount of water the world can sustainably use is
estimated at just 4,200 km³ annually. 
Rethinking Freshwater: Can
global principles guide local
Initially, water overuse was at the expense of the environment: drying lakes and action?
rivers and falling groundwater tables from increasing withdrawal of fossil (and
hence non-renewable) water. Increasingly, overuse will manifest itself as a
chokepoint for economic development and will threaten household water supply
and particularly, as the biggest water users, farms and food security – some
scenarios project global cereal shortfalls of 30% by 2030 due to water shortages. 


By 2030 we will use

7000km³/year of water - we
can use only 4200km³

Water’s value and increasing scarcity are not reflected in its price. Water’s
status as a basic necessity, its social, political, environmental and often religious
significance, and the fact that it was largely abundant until around the year 2000 all
make its management particularly difficult. When people use water from an aquifer,
they typically encounter no market or non-market signals that they are running into
a problem. So each individual keeps withdrawing, even if they know they are
contributing to destroying their own future livelihood, because no individual’s
reduction in water use will make a significant difference to water tables without
proper comprehensive management (the “tragedy of the commons”). 

Giving water a value, reflecting its increasing scarcity while still ensuring respect for
the status of water as a basic survival right for all humans, how can we turn this
into an opportunity for more prosperity? 

While global principles can give guidance, all strategies to address water
overdraft must be local. Specifically, they must be based around river basins and
set by governments. River basins often cross political borders, meaning it is
possible for overuse of water in one country to reduce the amount available for its
neighbours: the Colorado River, for example, often runs dry once it crosses the
US-Mexico border.

How can global mechanisms, such as the Sustainable Development Goals, spur
the action needed at various local levels to improve water management by bringing
withdrawals back into line with sustainable supply? How can tools such as those
proposed by the 2030 Water Resources Group stimulate cost-effective local action
on supply and demand?

The potential for conflict as water shortages bite is obvious. Consider the
Indus basin: currently, Indian farmers use subsidized energy to pump up water
accumulated at the end of the last ice age, rather than using water from the river.
These water tables have been falling by one metre per year; what will happen when
Indian farmers inevitably need to step up their use of Indus water, which is now
mainly at the disposal of Pakistan? 2/3
6/9/2015 Global Strategic Foresight Community - Reports - World Economic Forum
Despite these concerns, “water is not the reason for war; it is only an excuse
for war”. Those words, spoken at the World Economic Forum Annual Meeting
2005 in Davos-Klosters by Avishay Braverman, then President of the Ben-Gurion
University of the Negev, remind us not to be fatalistic. Water management can be
an opportunity for peaceful cooperation. The 1804 Rhine Agreement between then
archenemies Germany and France is the oldest active intergovernmental treaty in

What are the societal, political and institutional factors that can turn the tensions
around a cross-border river basin or underground aquifer into an opportunity for

The water challenge is complex, multifaceted and urgent. Decision-makers will

need to respond to this challenge in the next 5 to 10 years.

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