PARIS - Water-related disasters – floods, droughts, storms – account for the majority of disasters taking lives, and are estimated to cost more than USD 500 billion in damages annually.
Over the next 30 years, the number of people at risk from water-related disasters is projected to rise to 20% of the world’s population as the climate changes.
But managing the rise of water-related disasters is only the tip of the iceberg.
Pressures on freshwater resources are mounting
The OECD projects that by 2050, global water demand will rise by 55% and 40% of the world’s population will likely be living in severely water-stressed river basins. Many areas of the world are already experiencing moderate to high levels of water stress, meaning demand for good quality water is exceeding supply.
Among other things, freshwater availability is affected by water abstractions (from lakes, rivers and underground sources), with over-abstraction leading to low river flows, depleted groundwater, and desertification. In the coming decades, groundwater depletion in particular may become the greatest threat to agriculture and urban water supplies in several regions.
While agriculture is expected to be impacted by future water stress, it is also a major contributor to water stress, accounting for more than 70% of freshwater abstractions. The sector therefore has a major role to play in mitigating future risks, notably though improving the efficiency of resource management and reducing negative impacts on water quality.
But well-designed allocation regimes are needed across sectors to ensure water is allocated where it can create the most value economically, socially and environmentally.
Aquatic pollution is a pervasive environmental issue
From plastics to agricultural run-off, OECD countries still face important water quality challenges – despite decades of regulation and investment to reduce water pollution.
Plastics have been accumulating in the aquatic environment since the 1950s, and it is estimated that some 140 Mt of plastics have found their way into the aquatic environment globally, of which 78% in freshwater systems.
Globally, agriculture’s impact on water quality – from nutrients, soil sediments and pesticides – has either not improved or has deteriorated over the past decade, notably linked to large irrigation schemes.
And micro-pollutants – such as medicines, cosmetics, cleaning agents, biocide residues and micro-plastics from textile products and vehicle tyres – have become an emerging concern in many countries. They have been detected at concentrations significantly higher than expected, with extremely uncertain risks to human and environmental health.
Water disasters and risks threaten food production
Agriculture is the sector most affected by droughts, and droughts are the single greatest cause of agricultural production losses. Over 34% of crop and livestock production losses in LDCs and LMDCs are due to drought, costing the sector USD 37 billion overall between 2008 and 2018.
During this period, drought caused the largest crop and livestock production losses in Africa (over USD 14 billion), and in Latin American and the Caribbean (USD 13 billion), which also suffered from severe storms (USD 6 billion). Asia also suffered equally huge losses due to floods (USD 11 billion) and storms (USD 10 billion).
Agriculture is expected to face increasing water risks in the future which will undermine the productivity of rain-fed and irrigated crops, as well as livestock activities in certain countries and regions.
Known as water risk hotspots, Northeast China, Northwest India and the Southwest United States are projected to be among the most severely affected regions, with the potential to further impact markets, trade and broader food security.
The world is not on track to meet its water goals
With 2.1 billion people lacking access to safe water services and over 4.4 billion without access to safe sanitation, the world is not on track to meet its global commitments on water. And the situation will likely worsen due to rapid population growth, urbanisation and increasing pressure from agriculture, industry, the energy sector, and climate change.
Most OECD countries already provide access to drinking water and sanitation services to virtually all their residents (targets 6.1 and 6.2) but 1 in 10 is far from reaching water quality and waste management targets (targets 6.3).
Some OECD countries have lost over 10% of their surface water since the mid-1980s due to drought and wasteful irrigation methods. While water-use efficiency (target 6.4) has seen significant improvements in the past two decades, the pace of progress is only sufficient to reach 2030 targets in a few countries. Finally, 7 in 10 OECD countries are far from achieving target 6.6 on the protection of aquatic ecosystems.
Valuing water is key to solving water challenges
Valuing water is one tool that can be used to protect the human right to water while acknowledging that water provides an economic benefit that should have a cost. But it is also a politically charged issue with numerous economic implications.
Pricing mechanisms provide important signals and incentives for water-wise decisions, as well as a vital means for providing revenue streams.
Yet tariffs are still too often fixed at a level well below what is needed to recover the costs of operations and maintenance.
Moreover, to achieve universal and equitable access to safe and affordable drinking water for all by 2030, current investment will need to increase threefold to about USD 1.7 trillion in order to cope with emerging challenges.
Since pricing instruments may disproportionately affect vulnerable people, mechanisms will need to be established such that affordability constraints are taken into account through redistribution and prioritisation of water uses.
