Blog Water Shortages Sting, But Can Be Managed

Water Shortages Sting, But Can Be Managed
Global water shortages represent a more urgent challenge than climate change, but can be solved with better management, said Peter Brabeck-Letmathe, Chairman of Nestlé S.A.

The world may be awash in oil, but growing middle-class populations are putting more pressure on water supplies.

“We will be running out of water long before we are running out of oil,” Brabeck-Letmathe said.

The Nestle Chairman has been sounding the alarm over water challenges for years, but most global leaders have taken notice only recently. In the latest Global Risks Report from the World Economic Forum, water crises were listed as the biggest risk for the first time - ahead of weapons of mass destruction, climate change, and financial crises.

A big part of the problem is a gap in water infrastructure investment – things like security, supply, sanitation, and irrigation systems. While those items are increasingly finding their way onto government agendas - annual investment of about USD500 billion still falls short of the minimum needed, which Brabeck-Letmathe puts at USD770 billion.

“Infrastructure is falling apart wherever we looking,” he said. “We have enough water. The problem is we have this lousy, inefficient management.”

Households use only about 13 percent of water produced around the globe, well behind agricultural and industrial usage. But the growth in population in China and elsewhere, means more demand for meat, which is far more water intensive than crop production.

“The multiplying effect is absolutely stunning,” said Brabeck-Letmathe. “The world is thirsty because we are hungry.”

In an odd twist, climate change could actually help ease pressure on water supplies, by opening up more arable land in northern nations like Russia and Canada, where water is abundant.

Water subsidization leads to waste in many nations, which could be remedied through pricing that reflects its actual value. Agriculture, golf courses and industry would adopt more efficient practices, if given more incentive, Brabeck-Letmathe said.

Pricing schemes should protect what the Nestle Chairman calls a “human right” to water by making the daily personal need of 25 - 30 liters per day available for free, and adding progressively higher prices on major water users.

“It should have a negative economy of scale. The less you use, the less you should pay,” he said.

The world has enough water to not only provide for the 7.2 billion people alive today, but also the 9.6 billion expected to inhabit the earth by 2050, without resorting to extreme alternatives like desalination, or shipping icebergs from Antarctica to the desert, Brabeck-Letmathe said.

“We know that we don’t need this if we just manage the water in a more responsible manner,” he added.