World Economic Forum: A big week for water?

A World United on Water
Klaus Schwab and Peter Brabeck-Letmathe | January 21, 2008

THE world is on the verge of a water crisis. As the global economy and the world’s population continue to expand, we are becoming a much thirstier planet. It is important to realise just how much water we need to make the various aspects of our economy work.

Every litre of petrol requires up to 2.5litres of water to produce it. On average, crops grown for their bio-energy need at least 1000 litres of water to make one litre of biofuel. It takes about 2700 litres of water to make one cotton T-shirt, up to 4000litres of water to produce 1kg of wheat and up to 16,000 litres to produce 1kg of beef.

The statistics are equally surprising for hundreds of other products that we all take for granted, such as milk, juice, coffee, fruit, pizza, detergents, carpets, paint, electrical appliances, cosmetics and so on. On average, wealthier people consume upwards of 3000 litres of water every day. Even to produce the much more basic things our economy needs, such as cement, steel, chemicals, mining or power generation, requires tonnes of water.

We have seen how a combination of crop switch for biofuels and drought can have an inflationary impact on food. Water is the bigger problem behind this issue. It has the potential for a much more profound impact on consumers and voters. In the breadbasket areas of the world, which help feed our fast-growing urban populations, we are heading for painful trade-offs or even conflict.

Along the Colorado, the Indus, the Murray Darling, the Mekong, the Nile or within the North China Plain, for example, do we use the scarce water for food, for fuel, for people and cities, or for industrial growth? How much of the upstream river can we really dam? How do we figure out ways for every actor in the economy to get the water they need to meet their human, economic and cultural aspirations? And can we ensure that the environment is not wrecked but can flourish in the process?

These are tough questions. And unlike carbon reduction, there is no alternative, no substitute to promote. Nor is there a global solution to negotiate. Turning off your tap in Vancouver or Berlin will not ease the drought in Rajasthan or Australia.

Water is local. Water basins will become the flashpoints. These are the large areas that drain into the world’s major rivers and eventually into the sea. They contain millions of people, farmland, forests, cities, industry and coastline, and often straddle multiple political boundaries. The sector that will get the most attention will be the water used by agriculture for food and textile production: 70 per cent of all our freshwater withdrawals are in this sector. Savings made here can help elsewhere in the water basin.

The International Water Management Institute had 500 scientists examine the water we use for agriculture.

Their report took five years to complete. It found that we will not have enough water to supply global demand for food during the next few decades unless urgent and substantial reforms in water and agriculture are undertaken.

Climate change will create this situation more quickly and make it worse. The latest Intergovernmental Panel on Climate Change report says that if global average temperature rises by 3C, hundreds of millions of people will be exposed to increased water stress. It provides the wake-up call we all need to start acting on water.

We can see this crisis unfolding during the next few years. A perfect storm is approaching. And all this sits on top of today’s morally indefensible situation where 20 per cent of the world’s population is without access to improved water supply.

But it is not a catastrophe yet. It lies within our collective grasp to find the solutions. Business can improve its water efficiency, and in many cases it has raised the bar. There are many success stories. But it will take everyone in the water basin working together to change the overall game.

This is what makes the challenge complicated. We are ahead of the curve for now. Addressed smartly, innovatively and with new forms of collaboration between government, business and industry, we believe the coming crisis can be averted.

It is against this backdrop that we will come together at the World Economic Forum’s annual meeting to raise the economic and political profile of water: to raise awareness among our business colleagues, our politicians and society at large about adapting to this urgent challenge. How can we start moving to ensure we organise a water-secure world for everyone, including businesses, by 2020?

Our aim is to catalyse at this year’s Davos meeting in Switzerland an unprecedented, high-impact public-private coalition to find ways to manage our future water needs before the crisis hits.

Klaus Schwab is founder and executive chairman of the World Economic Forum. Peter Brabeck-Letmathe is chairman and chief executive of Nestle.