The Future of Water: Supply Cannot Keep Up with Demand

Posted by | November 2, 2012

A new report on challenges facing the world’s water supply offers a dire prediction that by 2030 we can expect a massive gap between the sustainable supply of water and the projected demand.

The compelling report, “Charting Our Water Future,” was written by the 2030 Water Resources Group, which represents a collaborative effort among multi-national corporations, non-profits, and consulting firms widely respected for their work in sustainability. The team’s year-long data gathering and analysis should serve as a wake-up call that more regions of the world, and a growing population, will continue to run out of water—and therefore food—compared to what we already are experiencing today.

The projected gap is a whopping 40% worldwide. That’s based on average economic and population growth trends and assumes that future gains in water use productivity track history. The raw numbers are mindboggling:  demand is projected to grow to 6900 million meters cubed by 2030. The report states that we will be able to sustainably withdraw 4200 million meters cubed of water annually in 2030.

The lion’s share of water use today is attributed to agriculture and food production—a stunning 70% or more of the total. Industrial and energy represent a combined 17% of all water use, and only about 14% is tied to residential consumption. So while taking quicker showers might make us feel better about doing our share to reduce water use, the more dramatic changes need to occur in food production and industrial activity.

Efforts to meet today’s growing demand for water varies by country and by region.  So far the classic response is fairly similar worldwide: tap more water through energy intensive means, such as desalinization or pumping it hundreds of miles through pipelines.  But pumping water is an energy hog.  Consider this: 12% of U.S. energy consumption goes to water use. That’s more power than we use to light the entire country annually.

Energy intensive sources of new water supply are not a sustainable solution to fix the anticipated future supply and demand gap.  Many will not be able to afford the cost of energy-intensive water sources. And the planet does not need the associated greenhouse gas and related environmental damage.

The solutions to more efficient water use will occur through better application of existing technology, new technology development, and tough policy decisions about who gets water.  The report estimates these efficiency and technology-oriented solutions will require about $60 billion in additional annual capital spending between now and 2030, or just over $1 trillion in total new investment in order to close the gap.

The report’s investment and capital requirement conclusions are generally in line with most of the research I have read on this matter. Furthermore, most reports warn it’s unlikely that the investments will be made uniformly as needed across the rich and poor regions of the world.

Supply and demand gaps are always closed, and this one will be too, in time.  The question is—how?  Will it occur through high water prices, restrictions on use, or a slowdown of economic development in some regions?  Or will dramatic change come through increased conflict, war or its avoidance by governments crafting sensible water use policies?  At Portfolio 21 Investments we would like to see a fair and equitable solution for all, but the reality is that solutions will be cobbled together through a variety of outcomes around the world. There will be winners and losers, in terms of companies, governments, and of course individuals.

Portfolio 21 Investments analyzes the natural resource use policy, practice, and procedures of every company we evaluate.  We have long recognized water as a critical resource for many businesses and we find real differences between the practices of different companies, even in the same industry.  As water becomes more difficult to access, companies that have developed the processes to operate with less water, to use water more efficiently, and that have a secure supply of water may have a better competitive position than those that have not.  We seek companies that are leaders in the efficient use of water across all industries.


John Streur is President of Portfolio 21 Investments. He has 25 years of experience in the field of investment management. 

Post categories: ecological limits, energy, risk, water

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