Davos hears calls for water economics to be 'turned on head' as world's resources fall

Amount of fresh water per capita has decreased by 20 per cent in the past two decades, UN says

A radical shift in the economics of water is needed to respond to increasing global demand in the face of falling resources, a panel of experts on Thursday told the World Economic Forum in Davos.

During a discussion titled “Water: the Bloodstream of our Earth System”, delegates fleshed out the changes needed to effectively address global challenges as they looked ahead to the UN Water Conference in March.

There were calls for an increase in political will, public awareness and private investment in technology, including artificial intelligence, to bring about greater water efficiency and security.

The amount of fresh water per capita has plummeted by 20 per cent in the past 20 years, according to UN data.

During the talk, moderated by The National’s Editor-in-Chief Mina Al-Oraibi, Peter Brabeck-Letmathe, vice chairman of the board of trustees at the World Economic Forum, called for a change in the way water is priced.

The Austrian businessman argued that such a valuable resource should not be paid for in the same way that customers buy goods.

“If you’re buying 1kg of sugar, it’s one price. If you buy 100kg of sugar, it’s a lower price [per unit]. If you buy a tonne, it’s a much lower price,” he said.

“We apply this to water. Absolutely wrong.

“You have to turn the [pricing model] around. The first water you’re using should be the cheapest one — that’s the one that is necessary for hydration.

“The more you’re using, the price of water should go up and up and up so that the person in Cape Town who is filling up his swimming pool is not paying for the swimming pool much less than the person in the downtown villages for his hydration.

“You have to turn this economic rule around.”

The panel event at Davos where water economics was discussed. Photo: World Economic Forum

He questioned why the water market could not be viewed in the same regard as others.

“Why do we all agree that CO2 should have a price and we cannot agree that water should have a price?” he asked. “It is simple.”

The Netherlands and Tajikistan will co-host the UN Water Conference in New York on March 22-24.

Dutch Foreign Minister Liesje Schreinemacher offered reason for hope at Davos, as she promoted her country’s soon-to-be-released joint report on water systems.

She said while there is political will in the Netherlands to bring about change, the government continues to work at trying to convince other nations to catch on to the trend.

“One of our focal points is when we talk about development co-operation, we really want to do what the Netherlands is good at, and that is water but also agriculture.”

If countries were to adopt changes to ensure farming is done in an efficient, responsible way in terms of water use, it would eliminate problems in other areas, she added.

Ms Schreinemacher said Dutch institutions are working with farmers in developing countries to help them save water and exploring different methods including AI, which she said “can really help in that respect”.

“So we are also engaging governments from developing countries to also have a different view on water,” she added.

“There's another way that we are hoping to engage other governments as well and that is to look at the economics of water.”

Looking ahead to release of her country's report, she said: “The report will be presented at the UN in March and it will give its best estimate of the costs and benefits of water action versus inaction.

“It will argue that the global water cycle needs to be managed as a global common good safeguarding through effective multilateralism, and it will propose shifts in governments and the use of policy instruments that will open up new opportunities for innovation as well as investment in more efficient, fair and sustainable use of water from a local to global scale.

“So these are some of the things that we will be discussing in March. But I think, looking at it from an economic perspective, perhaps we will persuade governments to have more political will when it comes to water.”

Global warming is leading to rising summer temperatures, which create higher demand for water resources, such as for crop irrigation.

Dutch Prime Minister Mark Rutte used his platform at a different panel discussion at Davos to urge leaders to take the contents of the coming report seriously.

Mr Rutte told delegates that the document will dive into the role of water in everyday life and industry and also “the role it has in the energy transition and in security”.

He said his country had chosen to collaborate with landlocked Tajikistan because of their polarities.

“We are a low-lying delta country, Tajikistan is a sort of Switzerland with mountains, etc, so together, we cover all the aspects of water,” he explained.

This session on the fourth day of the global gathering at the Swiss resort was developed in collaboration with The National and is directly linked to the Global Water Initiative of the World Economic Forum.