2009 McKinsey Report: M Ki R t Charting Our Water Future

:

A Useful Planning Tool? g

Arjun Thapan
Special Senior Advisor (Infrastructure and Water) Office of the President

Aggregated global gap between existing accessible, reliable supply1 and 2030 water withdrawals, assuming no efficiency gains
6,900 2% CAGR 1,500 Municipal & Domestic Industry I d t 4,500 600 800 4,500 Agriculture 3,100 2,800 100
Relevant supply quantity is much lower that the absolute renewable water availability in nature

Billion m3, 154 basins/regions

900 -40% 40% 4,200 700 Groundwater

3,500

Surface water

Existing 2030 Basins with 2 3 withdrawals withdrawals deficits

Basins with surplus

1 Existing supply which can be provided for at 90% reliability, based on historical hydrology and infrastructure  investments scheduled through 2010; net of environmental requirements 2 Based on 2010 agricultural production analyses from IFPRI 3 Based on GDP, population projections and agricultural productions from IFPRI; considers no water productivity gains  3 Based on GDP, population projections and agricultural productions from IFPRI; considers no water productivity gains between 2005‐2030

Existing accessible, reliable, li bl sustainable supply 1

Aggregated global gap between existing accessible, reliable supply1 and 2030 water withdrawals, assuming no efficiency gains
6,900 2% CAGR 1,500 Municipal & Domestic Industry 4,500 600 800 4,500 Agriculture 3,100 900

Billion m3, 154 basins/regions

Agriculture  g 2,800 demand:
Relevant supply quantity is much lower that the absolute renewable water availability in nature

-40% 40%

India  1,195 B m3 4,200 100 Sub‐Saharan Africa        820 B m3 700 China  420 B m3
3,500

Groundwater

Surface water

Existing 2030 Basins with 2 3 withdrawals withdrawals deficits

Basins with surplus

1 Existing supply which can be provided for at 90% reliability, based on historical hydrology and infrastructure  investments scheduled through 2010; net of environmental requirements 2 Based on 2010 agricultural production analyses from IFPRI 3 Based on GDP, population projections and agricultural productions from IFPRI; considers no water productivity gaiins  3 Based on GDP, population projections and agricultural productions from IFPRI; considers no water productivity gaiins between 2005‐2030

Existing accessible, accessible reliable, sustainable supply 1

Aggregated global gap between existing accessible, reliable supply1 and 2030 water withdrawals, assuming no efficiency gains
6,9 00 2% C A GR M un icipal & D om estic In dustry 4,5 00 6 00 8 00 4,5 00 Agriculture 3,1 00 9 00

Billion m3, 154 basins/regions

-40% 1,5 00 2,800 1 00
Relevant supp ly q uantity is m uch low er that the abso lu te ren ewable w ater availability in nature

4,2 00 7 00 Gro u n dw ater

3 ,5 00

Surface w ater

Existing with draw als 2

2 0 30 with draw als 3

Basins with deficits

Basins with surplus

Existin g accessib le, re lia b le , susta in a b le su pply 1

1 Existing supply which can be provided for at 90% reliability, based on historical hydrology and infrastructure  investments scheduled through 2010; net of environmental requirements 2 Based on 2010 agricultural production analyses from IFPRI 3 Based on GDP, population projections and agricultural productions from IFPRI; considers no water productivity gaiins  3 Based on GDP, population projections and agricultural productions from IFPRI; considers no water productivity gaiins between 2005‐2030

Aggregated global gap between existing accessible, reliable supply1 and 2030 water withdrawals, assuming no efficiency gains
6,9 00 2% CAGR M un icip a l & D om estic In d ustry 4,5 00 6 00 8 00 4,5 00 A griculture 3,1 00 9 00

Billion m3, 154 basins/regions

-4 0% 1,5 00 2,8 00 1 00
R eleva nt sup p ly q ua ntity is m uch low er tha t the a b so lu te ren ewa ble w a ter a va ila bility in na ture

4,2 00 7 00 G ro u n dw ater

3 ,5 00

Surface w ater

Existing w ith d ra w als 2

2 0 30 w ith d ra w als 3

Basins w ith d eficits

Basins w ith surp lus

1 Existing supply which can be provided for at 90% reliability, based on historical hydrology and infrastructure  investments scheduled through 2010; net of environmental requirements 2 Based on 2010 agricultural production analyses from IFPRI 3 Based on GDP, population projections and agricultural productions from IFPRI; considers no water productivity gaiins  between 2005‐2030 b 200 2030

Existin g accessib le, re lia b le , su sta i a b l t in le su pply 1

How do we close the supplydemand gap? d d ?
Based on patterns of past improvement, it is unlikely that the water sector will provide solutions that are environmentally sustainable and economically viable.

The annual rate of efficiency improvement  in agriculture and industry

=1%

Given this rate, improvements in agriculture and industry will  only address 20% of the supply‐demand gap by 2030.

Business-as-usual approaches will not meet demand for raw water t td df t
Billion m3
8,000 Demand with no productivity improvements 7,000 Historical improvements in t i water productivity 1 d ti it 6,000 Remaining gap 5,000 Increase i supply2 under I in l d business-as-usual 3,000 Today 2 Existing accessible, reliable supply3 20% 60% 20% Portion of gap Percent

If these t ends a e trends are insufficient to close the gap: - Depletion of fossil reserves - Water for environment is drained - Demand will go unmet

2030

Climate change will exacerbate the problem

Representative demand- and supply-side measures l id Cost of measure
$/m3
Desalination 0.70 - 0.90

Typical groundwater supply measures

0.04 - 0.21

Agricultural measure – Irrigation scheduling

(0.12) - (0.02)

Industrial measure – paste tailings (mining)

(0.60) - (0.30)

Without a new, balanced approach, additional investment requirements in upstream infrastructure will reach up to more than 4 times current expenditure expenditure.

$200 Billion over and above current levels –

Base-case demand, supply, corresponding and gaps for the regional case studies fo egional st dies

1 Gap greater than demand supply difference due to mismatch between supply and demand at basin level 2 South Africa Agriculture demand includes a 3% contribution from afforestation

SOURCE: Water 2030 Resources Group

The water availability cost curve and specified s ppl demand deficit supply-demand
Net marginal cost in 2030 $/m3

Water availability cost curve

India

In Summary
We need to see major efficiency gains in Improved Agriculture Gains G i must also come from I d t i l and t l f Industrial d Municipal Systems Water quality and volume are closely related

Transforming Country Water Agendas
Technical program of solutions across agencies and related sectors (food, water and energy) Long-term structured management and change program to help countries achieve their reform initiatives Promote local governance measures in partnership with industry and communities Develop benchmarks and monitor progress

The Davos Initiative:

What Wh t it means for ADB f
Need to expand investments in water stressed countries Focus on:
• • • • Higher efficiencies in Irrigated Agriculture g g g Higher efficiencies in Industrial and Urban Water Use Water Quality Improvements li Adapting Water Management to Climate Change

Focus on C F Countries that are t i th t Water Stressed
• Agriculture: achieving higher efficiencies and “more crop per drop” - both irrigated and rainfed areas • Cities and industry: demand management, y g , non-revenue water reduction, and reuse • River basins: surface and groundwater storage, allocation, and ecosystem services

Water Quality
• Environmental Sanitation: Designing business propositions • Clean Up Programs and Projects: Restoration of rivers, lakes, groundwater aquifers and g coastal zones • Payment for Ecosystem services: managing the environment as an integral part of infrastructure

Adapting to Climate Change
• Investing: in adaptation, and climate proofing projects in basins and cities • Risk management: water-related disasters including floods, droughts, storms g g • River basins: building resilience through integrated water resources management processes

Preparing the New Program P i th N P
• Water Operations Plan: underpinning an expanded investment program for 2011-2020

• Launching the New Program at the ADB and Partners Conference: Water Crisis and Choices, 12 14 Choices 12-14 October 2010

Launching the New Program

Objectives:

Knowledge exchange with the Asia-Pacific Region and beyond Networking and partnering to address the region’s water challenges Focus on k issues including climate change, energy-food-water nexus key i l d l h f d Launch the successor Water Financing Program 2011-2020 with partners

Launching the New Program

Program:
• • • • 3 day technical program 6 Keynotes, 12 Technical sessions, 4 parallel themes on cities, food, water quality, IWRM in river basins Regional sessions and side events Targeting 500+ participants