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The bubble is close to bursting: warnings on water from world economic forum report


• Report: World facing “water bankruptcy” in many places, if current use trends continue
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Davos-Klosters, Switzerland − Water is the nexus linking together a web of food, energy, climate, economic growth and human security; the world simply cannot manage water in the future in the same way as in the past or the economic web will collapse. This is the stark warning of a forecast released today by the World Economic Forum. The report is available here.

In examining different scenarios of what would happen if current water use trends continue, the report shows that, as the world economy expands, demand for water will rise and continue to outpace population growth. The report finds that water has been consistently under-priced in many places around the world and, as a result, has been wasted and overused. The report goes on to say that many places in the world are on the verge of “water bankruptcy” following a series of regional water “bubbles” over the past 50 years that fuelled economic growth.
This leads to a structural problem in the way water is managed across the global economy.

Some of the startling highlights of the forecast include:
• Agriculture: By 2025, water scarcity could affect annual global crop yield to the equivalent of losing the entire grain crops of India and the US combined (30% of global cereal consumption). Yet, food demand is expected to grow 70-90% by 2050.
• Energy: Energy production accounts for about 39% of all water withdrawals in the US and 31% of water withdrawals in the EU. While only 3% is actually consumed, the competition for access to water between energy and other sectors will intensify over the next two decades. Water requirements for energy production are expected to grow by as much as 165% in the US and 130% in the EU. This means water for agriculture will be squeezed at the same time as the demand for agricultural production sharply increases.
• Environment: Glaciers act as huge water banks. The glaciers of the Himalayas and Tibet alone feed seven of the world’s greatest rivers, providing water to more than 2 billion people. These glacial banks are disappearing at an accelerating rate. Most analyses suggest the majority of them will disappear by 2100 under current trends. Further, 70 major rivers around the world are close to being totally drained in order to supply water for irrigation systems and reservoirs. Extensive environmental damage is occurring as a result.
• Finance and economics: Within two decades, water will become a mainstream theme for investors; for many, water is already a better “pick” than oil. With good regulation, this will enable much more financing to be mobilized to invest in water infrastructure and technology. With poor regulation, innovative investment funds in water could expand.

Speaking earlier today at the World Economic Forum Annual Meeting, UN Secretary General Ban Ki-moon commented: “The water problem is broad and systemic. Our work to deal with it must be so as well. The World Economic Forum’s effort to develop the economic and geopolitical forecast on water is essential. For the first time, all the different perspectives and expertise required to define the full dimension of the problem and propose solutions are brought together.”

Dominic Waughray, Senior Director and Head of Environmental Initiatives of the World Economic Forum, and lead author of the report said: “A core theme emerging from today’s discussions on water here today was a strong call from all sides for sustained political, expert, civil society and business engagement to tackle the problem. The current economic downturn offers an opportunity to start addressing the emerging water crisis. Management of future water needs stands out as an urgent, tangible and fully resolvable issue for multiple stakeholders to engage in.”

For more information about the Water Initiative visit:

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.

Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests (


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