Water security (whether it be the challenge of too little water over long periods of time, or too much water all at once) is one of the most tangible and fastest-growing social, political and economic challenges faced today. It is also a fast-unfolding environmental crisis. In every sector, the demand for water is expected to increase and analysis suggests that the world will face a 40% global shortfall between forecast demand and available supply by 2030.

This outlook bears potential for crisis and conflict since water lies at the heart of everything that is important for human life: food, sanitation, energy, production of goods, transport and the biosphere as such; water ensures not only mere survival of humans, but also social well-being and economic growth. In addition, water is a renewable yet not inexhaustible resource – it cannot withstand constant over-extraction and being depleted faster than being renewed. What is more, water cannot be substituted.

Local Water Crises - a Global Issue

Furthermore, and because of the interlinked global economy, accelerating stress on the world’s water will affect food and energy systems around the world. Within the next 15-20 years, the worsening water security situation risks triggering a global food crisis, with shortfalls of up to 30% in cereal production.

Water resources are local, but with this scenario, water shortages turn into a global issue. At the same time, fast-growing regions such as in Asia will need to access much more freshwater for their energy sectors. Annual water withdrawals must be brought back to what is naturally renewed over the same period. Without a marked change in how available water resources are managed, these trade-offs create an impossible demand-supply conundrum for governments to resolve.

While the government must be the ultimate custodian of the national water resources and plays the key role in setting frameworks and strategies, many other stakeholders also have a role to play in delivering solutions. Proper coordination within government-set strategies requires sound facts and an approach that supports cost-effective solutions. The resulting need for multistakeholder engagement means that coalitions are required; public-private-civil society coalitions focused collectively on addressing the water security issue, each leveraging its own comparative advantage towards meeting the challenge within a common policy framework.

ACT: Analysis - Convening -Transformation

Recognizing these needs, a concept to align the fact-based analytical toolkit developed by the Water Resources Group with the multistakeholder convening power of the World Economic Forum Water Initiative was presented, discussed and agreed upon last year at the World Economic Forum Annual Meeting 2010. 

The goal of the alignment is to build a demand-driven public-private platform to support governments that want to engage in water sector reforms by pursuing the ACT-Process.

In short, the ACT-Process can be described as undertaking analysis to help convene and build coalitions to develop transformational policies and programmes as well as public-private projects and partnerships in the water sector. The innovative ACT-Model is now underway in India, Mexico, Jordan, China and South Africa.

The objective of WRG Phase 2 is to illustrate by the end of 2011 through these country examples that the ACT-Model can work and is endorsed by governments.

This “proof of concept” will help the design and launch of a new public-private entity to undertake such work in the long run. Furthermore, learning from the country-level engagement, a database that can provide global as well as regional, country-based and even river-basin specific catalogues of best practice, networks and good ideas shall be driven forward.

Country-level Work and Engaging Governments

The work of the WRG Phase 2 aims to create proof points from the countries and regions where the ACT-Process has already started providing evidence that such a coordinated multistakeholder approach can work. The first proof points can now be presented from five pilot countries:

• India: WRG Phase 2 commenced work in the Indian State of Karnataka in December 2010, building on the WRG Phase 2 supported India Water Dialogue hosted by the Confederation of Indian Industry (CII) and the Council on Energy, Environment and Water. The objective of WRG Phase 2 engagement in Karnataka is to help the government develop a water action plan for the transition from an agricultural to an industrial economy. As water security in Karnataka is closely linked to food production, water efficiency in irrigation and productivity of agriculture has to be increased. At the same time, demand management and water use efficiency in the municipal and industrial sectors have to be improved.
• Jordan: In Jordan, WRG Phase 2 is working with the Government of Jordan and development agencies to analyse the water scarcity challenge as well as the economic and technical choices available to increase water productivity and supply along with their implications for economic, social and sustainability objectives. The initial phase of work focused on water supply and agricultural and municipal demand in four governorates that account for over 60% of Jordan’s water consumption. Analysis reveals that a water-enabled growth pathway is possible, even in a severely water-constrained context. The next stage of WRG Phase 2 work in Jordan will develop a more complete picture of the water supply-demand gap, the range of economic choices and priority measures at the national and governorate levels.
• Mexico: In Mexico, WRG Phase 2 has been working with the national water commission, CONAGUA, to develop a fact base on a sustainable water pathway for Mexico that is robust in the face of climate change and additive to the adaptation agenda. This pathway includes a range of transformation levers: infrastructure investment, technical measures or process optimization, behavioural change and risk transfer for those extreme (and rare) weather events for which the cost of prevention would be prohibitive. Mexico has recognized the challenge that it faces and recently launched an ambitious transformation programme. The next stage is to develop a project pipeline and ensure financing for critical projects, shape regulations and adapt institutions to the challenge.
• South Africa: In South Africa, a workshop was convened in cooperation with the UN Global Compact CEO Water Mandate to raise the awareness of the immediate water challenges based on existing WRG and South African analysis and identify the opportunities to build water economic resilience. A programme of activities is now being developed with the Ministry of Water and Environmental Affairs.
• China: Some activity is in development in China, following its meeting in Tianjin. A China proof point could be ready to start in spring 2011 if mandated. Findings will be ready for discussion at the World Economic Forum Annual Meeting 2011.

Water Security: The Water-Food-Energy-Climate Nexus

To continue raising the awareness on the water security issue, the Forum Water Initiative launched a book entitled Water Security: The Water-Food-Energy-Climate Nexus at the Annual Meeting 2011 in collaboration with its strategic industry partners, academic experts and religious leaders in order to provide insight to the crucial nexus which spans the issue of water and to explore innovative solutions to the water scarcity challenge ahead. The UN Secretary-General Ban Ki-moon praises the book: “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 are brought together.”

The book collects for the first time the perspectives of government leaders, religious groups, business, NGOs, academics, entrepreneurs, financial experts, journalists, trade specialists and many others on the common water challenges faced around the world. Issue by issue, including agriculture, trade, national security, business and innovative water partnerships, they present the imperative of overhauling the management of freshwater to meet future social and economic needs.

Water Security: The Water-Food-Energy-Climate Nexus is not meant to be the last word on the water security issue. Instead, by drawing on a range of different viewpoints and based on the multistakeholder ethos that lies at the heart of the World Economic Forum, the intent of this book is simply to set out the following for the reader:

• Through a selection of expert perspectives, an exposition of the complex set of challenges faced across the economy in managing future water needs when looking at the next two decades
• What the implications might be of the challenges to the social, political and economic well-being if there is failure to act, based on the best and current thinking on forecasts and growth trends
• Including an introduction to a major initiative being undertaken by the World Economic Forum in alignment with many other actors, explore breakthroughs in the development of a new economic fact base on water for governments, and experiences in developing public-private-expert coalitions that can work with governments to take action on water. 

This is an important and comprehensive book that seeks to deepen the awareness and understanding of the nexus that spans the issue of water and to explore solutions to the water scarcity challenge ahead.

A note about the 2030 Water Resources Group

The 2030 Water Resources Group (WRG) was formed in 2008 to contribute new insights to the increasingly critical issue of water resource scarcity. Members include McKinsey & Company and the World Bank Group (led by the International Finance Corporation – IFC) with a consortium of business partners: The Barilla Group, The Coca-Cola Company, Nestlé, New Holland Agriculture, SABMiller, Standard Chartered and Syngenta International. Veolia Environnement joined the group for the second stage. 

In October 2009, WRG published a landmark report, Charting our Water Future, which analyses the global water supply-demand gap to 2030 and economic options to close the gap. Detailed case studies considered in the report include China, India, South Africa, Mexico and the state of São Paulo in Brazil. 

For further information on the 2030 Water Resources Group, click here.