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World Economic Forum Ranks Water Top Global Risk

by

Giulio Boccaletti

Chief Strategy Officer & Global Managing Director, Water, The Nature Conservancy

January 2015

Water treatment holding tanks at the water purification facility that supplies 50% of Sao Paulo's drinking water. Photo © Scott Warren
Water treatment holding tanks at the water purification facility that supplies 50% of Sao Paulo's drinking water. Photo © Scott Warren

This week, the World Economic Forum’s annual risk report ranked water crises as the top global risk by impact – as noted by nearly 1,000 leaders in politics, business and organizations around the world. While this may be surprising to some, it is not to me.

Here are three reasons why:

1. Global politics are shifting toward countries that are more vulnerable to water crises.

Bends in the upper Yangtze River, Yunnan Province, southwestern China. Photo © Ami Vitale
Bends in the upper Yangtze River, Yunnan Province, southwestern China. Photo © Ami Vitale

Economic development cannot happen without water. And world leaders of the fastest growing economies—such as China and India—are already in the midst of water crises: their unconstrained growth is out of sync with their limited resources. Their challenges are shifting the global agenda. It is telling that while water crises represent the risk with the highest potential for impact, the World Economic Forum rates interstate conflict as the risk with the highest likelihood. With some of the fastest growing economies dependent on the same rivers, the relationship between the two should not be underestimated.

2. Businesses are increasingly experiencing the impacts of limited water supply and poor water quality.

Companies located in areas plagued by drought or poor water quality are experiencing what could become the norm for years to come. They are waking up to the fact that adjusting their operations and investing in their water sources will be a matter of survival—both for the health of their businesses, as well as the health of the places in which they operate.

Dried river bed near the San Juan River, New Mexico. Photo © Erika Nortemann/TNC
Dried river bed near the San Juan River, New Mexico. Photo © Erika Nortemann/TNC

3. City leaders are realizing that traditional water systems will be too expensive for the long run.

Water treatment holding tanks at the water purification facility that supplies 50% of Sao Paulo’s drinking water. Photo © Scott Warren
Water treatment holding tanks at the water purification facility that supplies 50% of Sao Paulo’s drinking water. Photo © Scott Warren

Water costs a lot of money to manage, even more when it is managed poorly. As urban populations swell, and traditional funding for maintaining water systems continues to dry up, cities are realizing that they must find the most efficient investments possible to manage their water. If they do not, the income inequality that plagues many societies will be revealed in its most basic form by dividing those who have access to water because they can afford to, from those who don’t.

Bottom line: When it comes to water risks, the world still doesn’t quite know what it’s getting into. But this year’s top rankings of risks and trends reinforce that it could be extremely severe if we do not take action toward smarter development. We might be ready to have that conversation, and environmental organizations—as stewards of the underlying resources—need to be ready to offer solutions commensurate to the challenge.


Originally Posted on Conservancy Talk

January 20, 2015