Ignoring water crisis could cost global economy, research says

The world is currently in the throes of a water crisis that’s already impacting the health, livelihoods, and economic development of communities — and continuing to ignore it could also cost the global economy trillions, according to new research. Rivers, lakes, wetlands, and aquifers around the world are becoming depleted as a result of climate change and human exploitation via pollution and extraction. Over the past 50 years, one-third of wetlands have been lost, while freshwater wildlife populations have declined by around 83%. Yet these vital sources of food, water, and livelihoods contribute to the global economy. A report by the conservation organization World Wide Fund for Nature, or WWF, puts the first annual estimate of the economic value of water and freshwater ecosystems at $58 trillion — the equivalent of 60% of global gross domestic product in 2021. Direct value, an annual $7.5 trillion, is derived from its use in agriculture, industry, and households as well as via inland transport, hydropower, and recreation. But of significantly more value, at $50 trillion annually, is water’s indirect use in storing carbon, mitigating extreme weather events, and sustaining biodiversity, among other things. Yet many are what WWF calls “water blind” to the value of water ecosystems, and this has only served to exacerbate the water crisis. “Somehow water isn’t even on people’s lips,” Stuart Orr, WWF global freshwater lead, explaining that the issue is rarely present in climate conversations, told Devex. The hope is that reframing what is a priceless commodity in terms of economic value might help governments and other entities better understand the dependency humans have on water, and trigger more action to protect the ecosystems around it. “Given its importance in society, water receives an inadequate amount of political focus, and as a result an inadequate amount of finance and enforcement effort,” said Nick Hepworth, executive director of Water Witness International, explaining that that’s because those most currently affected by the water crisis are the most marginalized whose voices are not heard. Already, half the global population experiences water scarcity on a monthly basis and 55 million people are affected by droughts each year. Globally, 238 million people are currently experiencing acute food and nutrition insecurity, and the depletion of rivers like Asia’s Euphrates River, Africa’s Nile, and China’s Yangtze River is only exacerbating the situation, driving up rates of food insecurity and poverty while holding back efforts to improve global health, the economy, and other areas of development. Those in the global south are disproportionately affected, said Hepworth, as the global north depends on cheap food production in the global south. “We need a drastic overhaul in the way we think about and govern our global water resources,” he added. If governments, businesses, and financial institutions don’t begin to better understand the benefits that healthy freshwater ecosystems bring and invest in innovative solutions to improve water infrastructure, by 2050 GDP may decline by up to 6% in certain parts of the world, according to the report. Thinking in terms of economic value might help, Orr said, adding that the increasing amount of extreme weather events means this could finally be a moment of change after water experts have been advocating for years for more investment. “Climate change isn’t necessarily the reason we have all of our troubles, but it is the way in which we are finally able to tell the water story in a way that people will pay attention to,” he said. WWF recommends governments move to revitalize 30% of degraded rivers and wetlands by 2030, develop national biodiversity and adaptation plans, design locally tailored water allocation systems, and protect groundwater sources. Financial institutions should, it states, dedicate 50% of public climate finance to adaptation and provide climate-proof insurance while businesses disclose their water risk assessments and work to reduce water pollution. “Reversing the loss of freshwater ecosystems will pave the way to a more resilient, nature-positive, and sustainable future for all,” Orr said.