If We Want Competitive Economies, We Must Manage Our Water Better
Itâs no accident that New York City, the largest economy in the United States, was built between two rivers, with access to water reservoirs, an ocean and eventually the Great Lakes via the Erie Canal. Reliable access to water has always been silently essential to strong economies for what it enables, from supply to transportation. Any country or industry that wants to stay competitive must properly manage its water to ensure a long-term supply and to avoid exposure to crises like Hurricane Sandy.
Companies around the world have been making this connection for a long time.Â Yet it’s only getting more difficult given greater societal demands, economic competition, population growth, climate fluctuations, competing needs and fiscal pressure.
Water-intensive companies making operation location decisions increasingly consider the reliability of local water management when determining long-term strategic investments. Water and its availability can singularly propel economic success or, as history has witnessed, establish certain doom.
Areas without reliable water supplies are naturally considered high-risk, and as this trend continues, the economic consequences of poor water management will become more severe. This point was boldly made by a survey by the World Economic Forum that ranked the growing water supply crises as the leading global risk when considering crisis likelihood and impact.
Policymakers: Take note. Proper water management will increasingly be seen as an important signal for attracting business investment, particularly in areas which are vulnerable to water scarcity, such as parts of the American Southwest. Industries that are water-intensive, such as beverage, agriculture or steel, will simply be unable to locate facilities in areas with poorly-managed supply or dwindling resources.
Businesses that arenât water intensive will also face pressures from water scarcity. Businesses require power, and power plants require a substantial amount of water to operate. Water shortages can delay the construction or operation of power plants. The EPA has cited 36 states as facing water shortages. Lack of water has stopped commercial or industrial projects not just in California, but in Georgia, Tennessee, South Carolina, Idaho, Arizona and Montana. The situation is even more apparent in water-scarce countries such as India. A recent report from the World Resources Institute notes that nearly 80 percent of Indiaâs future power plants will be located in water-scarce or water-stressed areas, forcing very difficult decisions on the allocation of water and sometimes causing water-related power outages.
At the same time that water scarcity is increasing, poor water management is making the problem worse. Many cities arenât properly maintaining their water systems, leading to wasted water supplies and energy. This creates a compounding problem for businesses, which must eventually help foot the cost for expensive repairs and replacement, or cope with declining production.
Regardless, the demands on our water systems have never been greater. Population growth is certainly an issue, but so are the ramifications of our hoped-for economic growth, including the agriculture sector. Climate change requires our water and wastewater systems to handle rapid swings in drought, but also function when heavy precipitation falls, often the result ofÂ extreme weather events.
A study commissioned by Veolia Water and the International Food Policy Research Institute (IFPRI), found that 22 percent of the worldâs GDP is currently produced in water-short areas. According to that analysis, if we continue on our present course of âbusiness-as-usualâ water management, 45 percent of the worldâs projected global GDP will be at risk. While these problems are particularly acute for rapidly-developing countries such as China and India, the United States is not immune. Already, a significant number of U.S. states are facing issues related to water shortages. In fact, a recent report by the National Intelligence Council forecasts a growing demand for water along with accompanying shortages.
Although that sounds dire, there is still time to minimize these problems through advanced water management. Effective solutions are on the table Â that will enable our economies to grow in a sustainable manner. Â This is what I prefer to call blue growth because it refers to achieving higher productivity levels while simultaneously ensuring that water remains an enabler of growth, and not a limitation. We can achieve this through implementing higher levels of water reuse, evolving our existing water and wastewater technology, pushing for ever greater levels of water efficiency and establishing proper watershed level water resource management. Data shows that proper water management will reduce childhood malnutrition levels by more than 20 percent, and will prevent roughly $17 trillion in GDP from being affected by water stress.
Will we grow blue? Or will we proceed on our present course? Smart water managers have already recognized the problem and started to take action to protect their water future and their economies. For example, Singapore now reclaims its wastewater, transforming it into 30 percent of the countryâs water supply, a solution very similar to Israel. At Veolia Water, we are currently utilizing a process that transforms wastewater into usable, biodegradable plastics, and have worked with cities such as Honolulu and Oklahoma City on water reuse programs. But these problems must be handled locally on a case-by-case basis.
Only a sustainable path in which we grow blue will support healthy economic growth and help manage social, environmental and economic risks. By wasting less, polluting less and becoming more efficient in the way we use water, we can achieve higher water productivity levels and reduce water stress. If we want to grow our economies and create jobs, we must properly manage our water now.
Laurent Auguste is president and CEO of Veolia Water Americas, leading Veolia Waterâs municipal and industrial business activities in both North and South America. He is an active board member of the US Water Alliance, the Milwaukee Water Council and the innovator behind www.growingblue.com. You can follow Veolia Water North America on Twitter here.
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