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Water resources are sources of water that are useful or potentially useful. Uses of water include agricultural, industrial, household, recreational and environmental activities. Virtually all of these human uses require fresh water.
97% of the water on the Earth is salt water. However, only three percent is fresh water; slightly over two thirds of this is frozen in glaciers and polar ice caps. The remaining unfrozen freshwater is found mainly as groundwater, with only a small fraction present above ground or in the air.
Fresh water is a renewable resource, yet the world's supply of clean, fresh water is steadily decreasing. Water demand already exceeds supply in many parts of the world and as the world population continues to rise, so too does the water demand. Awareness of the global importance of preserving water for ecosystem services has only recently emerged as, during the 20th century, more than half the world’s wetlands have been lost along with their valuable environmental services for Water Education. The framework for allocating water resources to water users (where such a framework exists) is known as water rights.
Some governments, including the Californian Government, have labelled golf course usage as agricultural in order to deflect environmentalists' charges of wasting water. However, using the above figures as a basis, the actual statistical effect of this reassignment is close to zero. In Arizona, an organized lobby has been established in the form of the Golf Industry Association, a group focused on educating the public on how golf impacts the environment.
Recreational usage may reduce the availability of water for other users at specific times and places. For example, water retained in a reservoir to allow boating in the late summer is not available to farmers during the spring planting season. Water released for whitewater rafting may not be available for hydroelectric generation during the time of peak electrical demand.
Explicit environmental water use is also a very small but growing percentage of total water use. Environmental water may include water stored in impoundments and released for environmental purposes (held environmental water), but more often is water retained in waterways through regulatory limits of abstraction. Environmental water usage includes watering of natural or artificial wetlands, artificial lakes intended to create wildlife habitat, fish ladders, and water releases from reservoirs timed to help fish spawn, or to restore more natural flow regimes
Like recreational usage, environmental usage is non-consumptive but may reduce the availability of water for other users at specific times and places. For example, water release from a reservoir to help fish spawn may not be available to farms upstream, and water retained in a river to maintain waterway health would not be available to water abstractors downstream.
The concept of water stress is relatively simple: According to the World Business Council for Sustainable Development, it applies to situations where there is not enough water for all uses, whether agricultural, industrial or domestic. Defining thresholds for stress in terms of available water per capita is more complex, however, entailing assumptions about water use and its efficiency. Nevertheless, it has been proposed that when annual per capita renewable freshwater availability is less than 1,700 cubic meters, countries begin to experience periodic or regular water stress. Below 1,000 cubic meters, water scarcity begins to hamper economic development and human health and well-being.
In 2000, the world population was 6.2 billion. The UN estimates that by 2050 there will be an additional 3.5 billion people with most of the growth in developing countries that already suffer water stress. Thus, water demand will increase unless there are corresponding increases in water conservation and recycling of this vital resource. In building on the data presented here by the UN, the World Bank goes on to explain that access to water for producing food will be one of the main challenges in the decades to come. Access to water will need to be balanced with the importance of managing water itself in a sustainable way while taking into account the impact of climate change, and other environmental and social variables.
Expansion of business activity
Business activity ranging from industrialization to services such as tourism and entertainment continues to expand rapidly. This expansion requires increased water services including both supply and sanitation, which can lead to more pressure on water resources and natural ecosystems.
The trend towards urbanization is accelerating. Small private wells and septic tanks that work well in low-density communities are not feasible within high-density urban areas. Urbanization requires significant investment in water infrastructure in order to deliver water to individuals and to process the concentrations of wastewater – both from individuals and from business. These polluted and contaminated waters must be treated or they pose unacceptable public health risks.
In 60% of European cities with more than 100,000 people, groundwater is being used at a faster rate than it can be replenished. Even if some water remains available, it costs more and more to capture it.
Climate change could have significant impacts on water resources around the world because of the close connections between the climate and hydrological cycle. Rising temperatures will increase evaporation and lead to increases in precipitation, though there will be regional variations in rainfall. Overall, the global supply of freshwater will increase. Both droughts and floods may become more frequent in different regions at different times, and dramatic changes in snowfall and snow melt are expected in mountainous areas. Higher temperatures will also affect water quality in ways that are not well understood. Possible impacts include increased eutrophication. Climate change could also mean an increase in demand for farm irrigation, garden sprinklers, and perhaps even swimming pools. There is now ample evidence that increased hydrologic variability and change in climate has and will continue have a profound impact on the water sector through the hydrologic cycle, water availability, water demand, and water allocation at the global, regional, basin, and local levels.
Depletion of aquifers
Due to the expanding human population, competition for water is growing such that many of the worlds major aquifers are becoming depleted. This is due both for direct human consumption as well as agricultural irrigation by groundwater. Millions of pumps of all sizes are currently extracting groundwater throughout the world. Irrigation in dry areas such as northern China and India is supplied by groundwater, and is being extracted at an unsustainable rate. Cities that have experienced aquifer drops between 10 to 50 meters include Mexico City, Bangkok, Manila, Beijing, Madras and Shanghai.
Pollution and water protection
Water pollution is one of the main concerns of the world today. The governments of numerous countries have striven to find solutions to reduce this problem. Many pollutants threaten water supplies, but the most widespread, especially in developing countries, is the discharge of raw sewage into natural waters; this method of sewage disposal is the most common method in underdeveloped countries, but also is prevalent in quasi-developed countries such as China, India and Iran. Sewage, sludge, garbage, and even toxic pollutants are all dumped into the water. Even if sewage is treated, problems still arise. Treated sewage forms sludge, which may be placed in landfills, spread out on land, incinerated or dumped at sea. In addition to sewage, nonpoint source pollution such as agricultural runoff is a significant source of pollution in some parts of the world, along with urban stormwater runoff and chemical wastes dumped by industries and governments.
Water and conflicts
Competition for water has widely increased, and it has become more difficult to conciliate the necessities for water supply for human consumption, food production, ecosystems and other uses. Water administration is frequently involved in contradictory and complex problems. Approximately 10% of the worldwide annual runoff is used for human necessities. Several areas of the world are flooded, while others have such low precipitations that human life is almost impossible. As population and development increase, raising water demand, the possibility of problems inside a certain country or region increases, as it happens with others outside the region.
Over the past 25 years, politicians, academics and journalists have frequently predicted that disputes over water would be a source of future wars. Commonly cited quotes include: that of former Egyptian Foreign Minister and former Secretary-General of the United Nations Boutrous Ghali, who forecast, “The next war in the Middle East will be fought over water, not politics”; his successor at the UN, Kofi Annan, who in 2001 said, “Fierce competition for fresh water may well become a source of conflict and wars in the future,” and the former Vice President of the World Bank, Ismail Serageldin, who said the wars of the next century will be over water unless significant changes in governance occurred. The water wars hypothesis had its roots in earlier research carried out on a small number of transboundary rivers such as the Indus, Jordan and Nile. These particular rivers became the focus because they had experienced water-related disputes. Specific events cited as evidence include Israel’s bombing of Syria’s attempts to divert the Jordan’s headwaters, and military threats by Egypt against any country building dams in the upstream waters of the Nile. However, while some links made between conflict and water were valid, they did not necessarily represent the norm.
The only known example of an actual inter-state conflict over water took place between 2500 and 2350 BC between the Sumerian states of Lagash and Umma. Water stress has most often led to conflicts at local and regional levels. Tensions arise most often within national borders, in the downstream areas of distressed river basins. Areas such as the lower regions of China's Yellow River or the Chao Phraya River in Thailand, for example, have already been experiencing water stress for several years. Water stress can also exacerbate conflicts and political tensions which are not directly caused by water. Gradual reductions over time in the quality and/or quantity of fresh water can add to the instability of a region by depleting the health of a population, obstructing economic development, and exacerbating larger conflicts.
World water supply and distribution
Food and water are two basic human needs. However, global coverage figures from 2002 indicate that, of every 10 people:
- roughly 5 have a connection to a piped water supply at home (in their dwelling, plot or yard);
- 3 make use of some other sort of improved water supply, such as a protected well or public standpipe;
- 2 are unserved;
- In addition, 4 out of every 10 people live without improved sanitation.
At Earth Summit 2002 governments approved a Plan of Action to:
- Halve by 2015 the proportion of people unable to reach or afford safe drinking water. The Global Water Supply and Sanitation Assessment 2000 Report (GWSSAR) defines "Reasonable access" to water as at least 20 liters per person per day from a source within one kilometer of the user’s home.
- Halve the proportion of people without access to basic sanitation. The GWSSR defines "Basic sanitation" as private or shared but not public disposal systems that separate waste from human contact.
As the picture shows, in 2025, water shortages will be more prevalent among poorer countries where resources are limited and population growth is rapid, such as the Middle East, Africa, and parts of Asia. By 2025, large urban and peri-urban areas will require new infrastructure to provide safe water and adequate sanitation. This suggests growing conflicts with agricultural water users, who currently consume the majority of the water used by humans.
Generally speaking the more developed countries of North America, Europe and Russia will not see a serious threat to water supply by the year 2025, not only because of their relative wealth, but more importantly their populations will be better aligned with available water resources. North Africa, the Middle East, South Africa and northern China will face very severe water shortages due to physical scarcity and a condition of overpopulation relative to their carrying capacity with respect to water supply. Most of South America, Sub-Saharan Africa, Southern China and India will face water supply shortages by 2025; for these latter regions the causes of scarcity will be economic constraints to developing safe drinking water, as well as excessive population growth.
1.6 billion people have gained access to a safe water source since 1990. The proportion of people in developing countries with access to safe water is calculated to have improved from 30 percent in 1970 to 71 percent in 1990, 79 percent in 2000 and 84 percent in 2004. This trend is projected to continue.
Water supply and sanitation require a huge amount of capital investment in infrastructure such as pipe networks, pumping stations and water treatment works. It is estimated that Organisation for Economic Co-operation and Development (OECD) nations need to invest at least USD 200 billion per year to replace aging water infrastructure to guarantee supply, reduce leakage rates and protect water quality.
International attention has focused upon the needs of the developing countries. To meet the Millennium Development Goals targets of halving the proportion of the population lacking access to safe drinking water and basic sanitation by 2015, current annual investment on the order of USD 10 to USD 15 billion would need to be roughly doubled. This does not include investments required for the maintenance of existing infrastructure.
Once infrastructure is in place, operating water supply and sanitation systems entails significant ongoing costs to cover personnel, energy, chemicals, maintenance and other expenses. The sources of money to meet these capital and operational costs are essentially either user fees, public funds or some combination of the two.
But this is where the economics of water management start to become extremely complex as they intersect with social and broader economic policy. Such policy questions are beyond the scope of this article, which has concentrated on basic information about water availability and water use. They are, nevertheless, highly relevant to understanding how critical water issues will affect business and industry in terms of both risks and opportunities.