Increased droughts and flooding are wreaking havoc on America and the world. While scientists and concerned individuals attempt to convince Congress that global warming is real and we should do something about it, we have another urgent task: dealing with water stress. If we’re not careful, we will be savagely fighting over water in California while losing livelihoods and resources to floods in Kentucky.
Here are 10 things to keep in mind:
1. According to UN Water, 47% of the world’s population will be living in areas of high water stress in 2030, with either no water or too much. The OECD says water use has been growing at more than twice the rate of population increase, and predicts that water demand will rise by 55% globally by 2050, due to manufacturing, electricity generation, and shifting agricultural demand. This data is collected in a new report by PwC called “Collaboration: Preserving water through partnering that works.”
2. According to waterfootprint.org, to produce 1 kg of beef you need 15,415 liters of water, compared with 1,608 liters for 1 kg of bread. A report by Hank Paulson’s think tank Risky Business, “Heat in the Heartland, Climate Change and Economic Risk in the Midwest,” concludes that rising temperatures in the Midwest pose serious threats to the corn and wheat we harvest there.
3. We are used to thinking that water is free for the grabbing. But when it becomes scarce, not everyone has the right to remove it from a river, suck up groundwater, or gather rainwater that otherwise would have seeped into the ground.
4. We can handle the water challenge, but we need to collaborate. “Let’s-work-together isn’t a novel idea,” says Lauren Kelley Koopman, a director of PwC’s Sustainable Business Solutions practice. “But sometimes it’s hard to put into action in practice.” She cites the UN Water Action Hub, an online matchmaking tool developed by the UN Global Compact’s CEO Water Mandate, as one tool for different members of a watershed to share information on what works and doesn’t work for water management.
5. Business needs to take a serious risk management approach to water usage. Map it, study it, disclose it, improve on it. Above all, partner with government and the community to create long-term solutions. PwC, together with Pacific Institute, the Carbon Disclosure Project, and the World Resources Institute, developed a set of corporate water disclosure guidelines to help companies address water issues. And in its most recent report, PwC proposes a 7-step approach for companies:
- Provide water, sanitation, and hygiene services in the workplace
- Measure and monitor water management practices
- Drive operational efficiency and reduce pollution
- Identify and understand water-stressed and high-risk basins
- Integrate water management into business strategy
- Leverage improved performance throughout the value chain
- Advance sustainable water management and engage in collective action.
This last point is the key to an orderly and equitable future, where the rich are not stealing water from the mouths of the poor.
6. It seems crazy to talk about reputation when the stakes are so high, but business does face a reputational risk and opportunity. In the worst case, a company locating a new plant in an area where it is forced to take scarce water from a thirsty community may be driven out. In less extreme cases, a company will receive low marks from sustainability-minded investors and customers if it does not report and mitigate water risk.
7. Water is undervalued. It needs a higher price if we are going to take it seriously, and pricing for water must be managed locally, watershed by watershed. “The water agencies in the state of California are reporting around a 30% increase in costs of water, expected to rise,” says Clinton Moloney, managing director at PwC’s Sustainable Business Solutions practice. “I think increasing the price would be a good signal, because it communicates that this water is, in fact, valuable.” Adds Koopman, “it’s not just the price of buying the water from the municipalities. You have to think about transporting it, treating it, how they are discharging it, having water to meet energy needs.”
8. California can be a test case, a laboratory to try to identify the best policies, partnerships and technologies. Water is a huge economic issue, and is already exacerbating tensions between haves and have-nots. California’s governor and mayors are trying water rationing, grants to remove lawns and switch to “xeriscaping” with stones, water conservation programs, desalination, water recycling and farm water conservation, as well as water tunnels to improve channeling of water from northern to southern California.
9. California and other water-stressed states should look abroad for experience and solutions. In Israel, for example, crops grow in the desert and 85% of household wastewater is purified and reused for agriculture.
10. And that leads us to innovation. Technological innovation of course will be key to managing both water scarcity and flood resilience. From solar-powered desalination units to wastewater purification to infrastructure changes, California can lead. As the state manages its crisis, the world is watching for a risk to turn into an opportunity.