Usable water, not oil, will be next big challenge for global economy

Water is the new oil, say some experts, but others differ, pointing out that it's a renewable resource that needs to be better managed, writes Jonathan Gornall.

Here’s a question for your next quiz night. How many litres of water are there in a half-litre bottle of any sugar-based carbonated beverage?

This was the query that in 2010 attracted the attention of three scientists in the Water Centre at the University of Twente in the Netherlands.

The university, along with big international players including World Wildlife Fund and the World Bank, is a founding member of Water Footprint, dedicated to connecting and informing "diverse communities interested in sustainability, equitability and efficiency of water use".

In a paper published in the journal Water Resource Management in 2011, the scientists steered clear of naming names, but made clear that the hypothetical drink in question was "realistic".

Most companies, they noted, focused only on their own performance when assessing their water use. What they demonstrated, however, by examining every detail of the process in minute detail, from the growing, harvesting and transporting of the crops to the making of the drink, the plastic bottle it came in and its delivery to market, was that 99 per cent of the water use came from the supply chain.

And the astonishing fact is that producing a single half-litre bottle of fizzy pop consumes between 150 and 300 litres of water, depending on whether the sugar comes from beet grown in the Netherlands or cane produced in Pakistan or Cuba.

And right there in that insane number can be found the central source of the world's water problems: we depend upon it for our existence, but we neither understand nor care how finite a resource it is.

This year has been declared the Year of Water Co-operation by the United Nations and the increasingly fraught subject of H2O will be under the spotlight at numerous conferences and summits around the world.

Tellingly, water will take centre stage at Abu Dhabi's annual World Future Energy Summit, which starts on Tuesday.

On day one, a ministerial panel will discuss the "water-energy nexus", noting that "the global energy sector uses vast amounts of water for fuel production and power generation, accounting for an estimated eight per cent of all freshwater withdrawals [and that] there are already signs that water scarcity may be constraining energy production in many parts of the world".

It is no secret, of course, that the UAE and other countries along the Arabian Gulf are dependent upon desalination for their fresh water - a process that consumes large amounts of energy - and that those nations are developing at a rate that threatens to outpace their ability to generate either enough water or electricity.

Renewables, the panel will suggest, may offer some solutions. But the Earth's hydrological cycle is highly complex. Tinker with one part of the machine and another goes out of whack, and even renewables, while doubtless a partial solution to the world's energy crisis and an area of research and development in which Abu Dhabi is leading the world, pose their own problems.

Take biofuels, an alternative to fossil fuels, derived from crops such as soya, corn or sugarcane. Forget the thirst of fizzy pop: each litre, says the UN, costs an astonishing 2,500 litres of water to produce.

After Abu Dhabi comes Seville, Spain, and April's Global Water Summit. "Water risk," say the organisers, water industry analysts Global Water Intelligence, is "the most important challenge the global economy will face over the next decade", thanks to the triple whammy of climate change, increasing population-driven demand for food and energy and a lack of investment.

Over the next decade, they predict, each of us "will experience a water related event - a shortage, a flood, an infrastructure failure, an interruption to business, an economic disruption - which will have a bigger impact on our lives than we have ever experienced before".

One of the problems with water in the developed world, says Geoffrey Parker, a water specialist at Cambridge University's engineering department who lectures each spring at the American University in Sharjah and has advised utilities in the UAE, is precisely that it has no perceptible impact on our lives.

Throughout most of the developed world, including the UAE, water is "much more cheaply available than it has a right to be. People think and know water is important, on some sort of commonsense level, but we expect it to be in our houses, to be clean and taste good and at exactly the right temperature. There are distortions in the way we deliver and manage water as a society that doesn't always reflect the true cost or value of it."

The perception that water is a free and plentiful natural resource is hard to shake off - especially in the United Kingdom, perhaps, which has just endured its wettest year since 2000.

But water does not fall from the skies evenly. India depends on the rains that fall during its monsoon season, which last year was one of the driest since Independence, resulting in widespread drought. On average, rainfall was down 20 per cent, with some regions suffering a shortfall as high as 70 per cent.

How much water is necessary to support human life? It varies hugely, depending on what you are doing and where you are doing it. But it's a strictly academic question, because while many in the world's poor regions often struggle to find enough water to survive, the lifestyles of most of those in the developed world mean they consume far more than they need to keep body and soul together.

Last year, Arjen Hoekstra and Mesfin Mekonnen of Twente University estimated the total annual human water footprint at 9,087 billion cubic metres of water per year, with China (1.2bn), India (1.18bn) and the US (1.05bn) consuming the most.

But look at the same question in terms of national per-capita consumption - how much water is consumed by a nation when divided by the number of people in it - and a very different picture emerges. From 1996 to 2006, Mongolia was the worst culprit, consuming 3,775 cubic metres per person per year. In the UAE, in fifth place behind Niger, Bolivia and Brunei, the startling total was 3,136 cubic metres. That boils down to a daily consumption of 8,591 litres for every person.

Very little of that is being drunk; the rest is soaked up by everything from air-conditioning and energy production to watering golf courses and shipping in most of the food eaten here.

The average for the whole world is 1,385 cubic metres and there are 109 countries with above-average consumption.

The reality, says Parker, is that there is only so much water to go round and some of us are consuming more than our fair share. We are, after all, "using the same water as the Romans did". And we are not talking about a cycle of purely historical proportions: "Every drop of the Mississippi, for example, is shared by many people, from one end to the other."

It helps to focus the mind on the problem by looking at the Earth, and all the water that is on it, as two spheres, side by side, as the US Geological Survey has done. There is approximately 1.38bn cubic kilometres of water on the Earth - or, seen in spherical form, a ball of water about 1,385 kilometres in diameter. That sounds like a lot. But if the Earth is represented by a tennis ball, every drop of liquid water upon it - both fresh and saline - is a sphere with a diameter no bigger than the base of a Triple-A battery.

Isolate all the fresh water in the ground, lakes and rivers, and you are looking at a ball about the size of a pinhead.

An interesting analogy, says Dr Parker, is to think of the planet as a perpetually journeying spaceship which sets off on its travels with full water tanks.

It has a highly efficient water system, which recycles 100 per cent of all the water it carries in its tanks, but those tanks can never be topped up and, as the number of people carried on the spaceship increases, there is proportionately less water to go round.

Seen in this light, it is only a matter of time before water does, as many commentators have suggested it will, become the new oil - an increasingly scarce and valuable commodity corporations and countries will, by necessity, have to fight to control. In fact, water is far worse a threat to peace than oil. As Alex Prud'homme observed in his 2011 book The Ripple Effect, "we can live without oil, but not without water".

Water is a leading concern of the UN, whose Ban Ki-Moon travelled to Davos in 2008 to lecture business leaders about the "looming water crisis" (and to berate them for failing to sign up to the UN's CEO Water Mandate scheme).

But the UN, though well-intentioned, finds itself at a loss in the water plant of the spaceship, desperately throwing switches at random.

On the one hand it urges countries and corporations to act to head off the looming water crisis. On the other, it works tirelessly under its Development Programme to reduce poverty - a noble objective but one with potentially disastrous consequences for the world's limited supplies of water.

As people become wealthier they consume more goods and food that in turn consume more water. And as it is, agriculture already consumes about 80 per cent of all freshwater used on Earth.

Such excessive water consumption is, says Douglas Crawford-Brown, director of Cambridge University's Centre for Climate Change Mitigation Research, "partially driven by the globalisation of the food market. People in England think they ought to be allowed to have strawberries 24 hours a day, 365 days a year."

And take meat, which forms a larger proportion of the diet of those who can afford it. Research from the University of Twente last year demonstrated that the water footprint of any animal product was larger than the water footprint of a "wisely chosen crop product with equivalent nutritional value". In industrialised countries, they calculated, a vegetarian diet alone could reduce the food-related water footprint of people by 35 per cent.

The basic problem is that there are just too many of us - and counting.

Until just after the end of the Second World War, population grew at a fairly linear rate. But from the 2.5 billion people around in 1955, the population started to shoot up exponentially, adding an additional billion every decade or so and passing seven billion last year.

How many people can the Earth support? That was the question asked in 1995 by Joel Cohen, an American mathematical biologist. He examined 65 calculation-based predictions, made between 1679 and 1994, which ranged from fewer than 1 billion to in excess of 1 trillion, with a median figure of 12 billion - very close to the UN's upper projection for the world's population in 2050.

Clearly, he concluded, there was "no single right answer … How many people the Earth can support depends both on natural constraints, which are not fully understood, and on human choices."

We have our own ingenuity to thank for the population explosion, which has led to medical breakthroughs and improved living standards (including, ironically, wider access to clean drinking water) reducing infant mortality and lengthening lives.

But the extreme growth in human population, says the Population Media Center, which campaigns for population awareness, "is mortally taxing the Earth and its resources … As a result, the Earth is attempting to impose its own checks on human population … in the form of … the emergence of new disease strains, food and water shortages, poor harvests and violent and destructive weather".

And, as water becomes even scarcer, there is the very real prospect that humans could start imposing their own checks - on each other.

Last year, in the latest edition of its World Water Development Report, the UN predicted that, as demand for water increased at the same time as climate change reduced the availability of fresh water in many regions, these pressures would "exacerbate economic disparities between certain countries, as well as between sectors or regions within countries".

In the past, famine was frequently the trigger for riots throughout the world. But in the future, it may be a lack of water that drives people out onto the streets.

Since Ban Ki-Moon berated business leaders at Davos in 2004 for failing to act over water, self-interest has stirred many corporations to act, says Professor Crawford-Brown. Agriculture is the biggest consumer of fresh water - as much as 80 per cent of the total used on Earth, says the UN - "so any company that is having to rely on agricultural productivity is already acutely aware of the water shortage.

"I sit on sustainability panels for those sorts of companies and I think it would be fair to say that water is the biggest issue we talk about."

Companies such as Unilever, Pepsi and British American Tobacco "all have masses of people out in the field working with farmers in Africa, South America, Asia and so forth, teaching them to grow low-water-requirement crops".

So does that mean we can rely on big corporations to save Spaceship Earth from ultimate drought?

In 2011 the World Resources Institute, launched in 1982 as a centre for resource and environmental policy research and analysis, formed the Aqueduct Alliance, designed to provide an "unprecedented level of water risk information for business and government".

With partners including Coca-Cola, Dow Chemical Company and General Electric, the Alliance went on to unveil a freely available online water mapping resource, which in some quarters was greeted with deep suspicion. It sparked concerns, reported AlertNet (the "humanitarian news site" run by the Thomson Reuters Foundation), that, faced with mounting global water shortages, water-dependent corporations were set to embark on a "liquid gold rush".

It was, says Betty Otto, director of Aqueduct, "certainly not our intent" to assist companies to prioritise their water needs over those of the communities in which they operated.

"I don't think we are going to solve the world's water problems without involving everyone, all the important sectors and actors, and the first step is having people just understand the dimensions of water issues around the world," she says.

"What we lack right now is good information, frankly, and that's why we think Aqueduct is a really important information platform … [that] helps everybody, in civil society, government and the private sector, to understand the dimensions of water concerns."

Otto is loathe to see water as the new oil.

"If only water were so simple. Oil is a fungible commodity and you can move it around the world. A barrel of oil in one place is pretty much the same in another and that's not really true of water. It is much more challenging and complex and it is also a basic human need."

But will corporations plot to corner the market in it? Will nations go to war for a share of it?

She acknowledges the concern that water shortages will lead to conflict - "it makes sense, given that water is as precious as it is, and that demand is increasing". But she prefers the more optimistic view, "that it becomes the catalyst for more co-operation. There are places where there is other kind of conflict occurring and yet there is relatively good collaboration around management of water resources, because there is an understanding that there is a shared future associated with it."

Understanding problems and solving them are, however, two different things.

One of the fundamental problems with human consumption of water is its price-value disconnect - we see water as something that shouldn't have a price attached to it, and typically its price is far below its actual value to us.

Managing demand by pricing water at a realistic level is a fundamental problem facing governments everywhere, and nowhere more so than in the oil-rich, water-poor nations blossoming on the banks of the Arabian Gulf.

"It is very easy to say, 'Oh, can you put up tariffs to a more sustainable level?'," says Tom Scotney, the Middle East editor for Global Water Intelligence.

"But with the way politics are going in the Middle East at the moment, no government there is going to want to jack up water prices. The region as a whole is very used to high levels of subsidy and there's very little you can do with that.

"You've only got to look at Egypt. It is obvious they are sorely in need of financial changes there in the amount of money that's being spent on subsidy, but there is very little they can do about it without causing a lot of internal trouble."

Thanks to modern development, much of the world's water is in the wrong place - and, so far, at least, it is not considered economical to ship water in the same way as we ship oil.

Once upon a time, humans expanded only where there was a ready supply of water - this was why civilisation first sprang up in Mesopotamia, on the fertile plains between the Tigris and Euphrates rivers.

Likewise, it was not by chance that the Arabian shores of the Gulf remained only sparsely populated for millennia. It was only the discovery of oil, coupled with the human ingenuity that such wealth was able to purchase, that allowed the deserts to bloom and populations to spring up out of all proportion to what was naturally supportable.

"Both wealth and the technology that comes with wealth have allowed people to not pay any attention to the natural limits of the places where they live, which always through human history we did," says Professor Crawford-Brown.

The UAE relies on desalination for its water and in many ways is a world leader in the technology. But, he says, it knows it can't go on this way for ever.

"That's why we have the 2030 programme down there, to begin to understand what those limitations are. They do have the wealth to be able to push against natural resource limitations, but to their credit, starting from Sheikh Zayed and the royal family, they recognise this issue. They will not be a wealthy oil producing state at some point in time and they are already planning for what that is going to look like."

But the central, long-term issue lurking in the background, he says, is the one that will ultimately confront every expanding nation across the globe.

"They haven't yet settled on the idea that the solution is, well, we just won't grow any more, or we'll shrink back in size to the level that natural resources allow."

There is, says GWI's Scotney, "definitely a sense that things are starting to change in the Middle East, where they are looking at alternatives to throwing money and energy at this problem, and ways to curb and reduce the water usage rather than just increase the amount of water going in."

The key realisation dawning on governments and corporations alike, he says, is that water cannot be considered in isolation.

"It's all about the water-energy nexus; it takes water to generate energy, it takes energy to generate water. One thing that's going to be a very big issue, around the world and particularly in the Middle East, is looking at ways to make it a more sustainable cycle.

"In the Middle East desalination has been a hugely successful industry, but one that has thrived on the availability of very cheap energy to power energy-hungry desalination plants."

But energy is not the only issue with desalination. Once again, we return to the complex nature of the water cycle, where one interventional "solution" always seems to create another problem.

In the face of increasing water stress, desalination is an "emerging research space" around the world, says Professor Parker.

In some respects, he says, the UAE, with its four decades of experience, is at the forefront of desalination know-how, but he believes the technology may be self-limiting.

Most of the plants are on the west coast, close to the main population centres. As the number of plants increases, the fear is that the level of brine being pumped back into the sea will "perturb the local eco system to such a degree that you get this 'red tide', these harmful algal blooms that release toxins into the water.

"So at some point you may build another water salination plant to increase your water security and find that now you have decreased it."

That, he says, is the complex nature of all such systems: "You lean on one side a little too heavily and it has these unanticipated and paradoxical effects.

"We have started to realise that the running out of resources may be outstripping the rate at which we get to be terribly clever with our technologies."

In the end, in other words, our ingenuity will take us only so far. We can work tirelessly, as individuals and nations, to reduce our water footprint but even if we learn how to recycle every drop of water we use, continuing population growth will eventually outpace the Earth's ability to keep all of us alive.