Water scarcity may threaten half of global food production

Global water crisis could threaten over half of global food production by 2050, says the Global Commission on the Economics of Water.

As the global population continues to grow, the pressure on water resources intensifies, posing serious threats to food security. In a report, The Economics of Water: Valuing the Hydrological Cycle as a Global Common Good, the Global Commission on the Economics of Water has emphasised the urgency of addressing the water crisis.

The report warns that by 2050, the water crisis could jeopardise more than half of the world’s food production, emphasising the urgent need to treat water as a global common good.

According to a press statement, the water crisis could lead to an average GDP loss of 8 pc globally by 2050, with lower-income countries facing potential losses of up to 15 pc and even greater economic consequences beyond that.

It adds that weak economics, poor land use and ongoing mismanagement of water resources, combined with the worsening climate crisis, are placing unprecedented stress on the global water cycle.

The Commission says nearly three billion people and over half of global food production are in regions facing drying or unstable water availability, while many cities are sinking due to underground water loss.

The report says current approaches have contributed to the water crisis by neglecting the diverse values of water in economies and ecosystems. Widespread under-pricing encourages excessive use and promotes water-intensive crops and industries like data centres and coal-fired power plants in areas most vulnerable to water stress.

It adds that proper pricing, subsidies and other incentives are essential for ensuring water is used more efficiently across all sectors, equitably distributed among populations and sustainably managed for the future.

The Commission says current approaches focus mainly on visible “blue water” in rivers, lakes and aquifers, often neglecting “green water” the moisture in soils and plants that generates about half of the rainfall on land.

It adds that the water challenge intensifies when considering the daily needs for a dignified life. While 50 to 100 litres is essential for health and hygiene, at least 4,000 litres per person is necessary for adequate nutrition and consumption. Most regions cannot secure this locally and trade is hindered by misaligned policies and the water crisis.

The Commission says the crisis requires bolder, integrated thinking and a new economics of water, emphasising the need to govern the water cycle as a global common good. This requires collective action in every country, collaboration across boundaries and recognition of water’s scarcity and multiple benefits. Economies must be shaped to allocate and use water effectively from the outset, preventing issues like water pollution and other externalities.

It adds that the report calls for a fundamental shift in the role of water within economies, driven by a “mission-driven” approach. This requires participation from all stakeholders, local to global, to tackle the global water crisis. Such missions would promote innovation, capacity building, and investment, evaluated for their long-term, economy-wide benefits rather than short-term costs.

The report recommends five key missions to address the global water crisis, these include launching a food systems revolution to improve water productivity and promote plant-based diets, conserving and restoring 30 pc of forests and degraded ecosystems by 2030, establishing a circular water economy through wastewater reuse; enabling a low-water-intensity era driven by renewable energy and AI; and ensuring no child dies from unsafe water by 2030 by improving access to clean water in rural and hard-to-reach areas.

The Commission says critical enablers for the five missions are essential for governing water sustainably at national and international levels. These include forging symbiotic partnerships and addressing legacy water rights, shaping finance by tackling public and private underfunding and harmful subsidies, harnessing data to improve global water data infrastructure and promote corporate water footprint disclosure and establishing a multi-sectoral Global Water Pact to address green and blue water challenges and stabilise the hydrological cycle.

“Today, half of the world’s population faces water scarcity. As this vital resource becomes increasingly scarce, food security and human development are at risk  and we are allowing this to happen. For the first time in human history, we are pushing the global water cycle out of balance. Precipitation, the source of all freshwater, can no longer be relied upon due to human caused climate and land use change, undermining the basis for human wellbeing and the global economy,” says Johan Rockström, Director of the Potsdam Institute for Climate Impact Research (PIK) and one of the Commission’s four co-chairs.

“The global water crisis is a tragedy but is also an opportunity to transform the economics of water  and to start by valuing water properly so as to recognise its scarcity and the many benefits it delivers,” says Ngozi Okonjo-Iweala, Director General of the World Trade Organisation and a co-chair of the Commission.

“We must move beyond a reactive market-fixing approach toward a proactive market-shaping one that catalyses mission-oriented innovation and builds symbiotic partnerships around our biggest water challenges. Only with a new economic mindset can governments value, govern, and finance water in a way that drives the transformation we need,” says Mariana Mazzucato, Professor at University College London and one of the co-chairs of the Commission.

The report calls for governments across the world to deliver a “new course for water at every scale” and reinvigorate structures of international cooperation to address shared water challenges.

“We can only solve this crisis if we think in much broader terms about how we govern water. By recognising water’s interactions with climate change and biodiversity. By mobilising all our economic tools and both public and private finance, to innovate and invest in water. By thinking and acting multilaterally. So we not only save countless children’s lives and improve communities’ livelihoods today, but secure a much better and safer future everywhere,” says Tharman Shanmugaratnam, President of Singapore and one of the co-chairs of the Commission.