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Water Is Life, Economy and Society

“Water is a vital enabler of sustainable development and a resource under growing stress. Taking action to improve water security will yield multiple development benefits, including food security, energy security and public health. It’s the most powerful investment of time and energy we can make.”

Jeff Seabright, The Coca-Cola Company

Chair, Global Agenda Council on Water Security

Entering 2012, the Global Agenda Council on Water Security remains convinced that the case for action to address water security is more urgent than ever. While awareness has grown over the last several years, our collective capacity to respond to water security risks remains in doubt.  Existing institutions and policies at almost all levels remain siloed and ill equipped to accommodate informed debates around water use and conservation.

Meeting the resource needs around the nexus of water, food and energy presents a particular challenge for societies as these sectors are highly interlinked and often compete for the same resources. In addition, demand in these sectors individually is projected to grow between 30-50% by 2050. Addressing these requires systemic thinking, trusted information and integrated policy reform. It also demands comprehensive solutions that consider specific local conditions and diverse industries and stakeholders, which often lack effective incentives and institutional structures for joint cooperation. Placing water at the center of economic planning – a green economy or otherwise – requires critical thinking about a water secure economy.

 The Role of the Global Agenda Council on Water Security

Since its inception, the Global Agenda Council on Water Security has supported the World Economic Forum in raising awareness and fostering greater understanding around the looming water crisis we face. It is a strong Council, with committed members who have brought the water, food, energy nexus to the global agenda. The Council’s collective impact has led to the development of globally significant, solutions-based responses to water challenges, particularly in the corporate sectors.

Advances that the Forum or Council Members have guided or participated in include: new tools for risk assessment, new methodology for measuring cost-benefit, and building non-traditional coalitions across business, civil society and policy.  Highlights include:

  •  Davos: The Water Security private meeting at Davos drew less than a dozen to its first meeting in 2008. By 2012, it had become an annual fixture in Davos, attended by more than 100 Heads of State, leaders in policy and CEOs.
  •  Publication: “Water Security: The Water-Food-Energy-Climate Nexus”, published in 2011, has been distributed widely and has helped catalyse systemic thinking around the nexus. Representing the collective thinking of the Council and other contributors, this publication was instrumental is seeding the concept of the “nexus” among policy-makers and thought leaders around the world.
  •  Network of Global Agenda Councils:  The Council on Water Security has reached out to engage with other Global Agenda Councils – especially Climate Change; Food Security; Energy Security; Design Innovation; Global Trade System, Media, Entertainment & Information; and Population Growth, as well as regional councils – to leverage this momentum and integrate a common message around the nexus.
  •  Link to action initiatives: The Council supported the incubation of the Water Resources Group; integration of water through other Forum programmes, including Foresights and the Risk Response Network, as well as creating a higher profile for Technology Pioneers who have created innovative tools for tracking and managing water resources; and other tools for monitoring risk, including Aqueduct from the World Resources Institute and the Water Risk Filter from World Wildlife Fund.
  •  Events and programmes: Individually, Water Council Members have had audiences with global leaders, crafted persuasive opinion pieces, led influential forums, developed new research and thinking, and effectively taken the water message beyond the “usual suspects”. These new audiences include investors, risk assessment officers, food and energy convenings, CEOs and government ministries.

Members have collectively or individually lent support to special events, including the Bonn Water-Energy-Food Conference 2011, World Food Prize 2011, Choke Point: China briefings about the water-energy collision in China, University of Alberta Water Initiative, World Bank and International Finance Corporation engagements, World Water Week, International Water Week, World Water Forum, Asian Development Bank, Rio+20 agenda development, the National Council on Science and the Environment, and special projects and publications such as the population-nexus briefing for the World Economic Forum Annual Meeting 2012.

The Bonn Water-Energy-Food Conference in 2011 was the first major convening exclusively devoted to systemic thinking around the water-food-energy nexus, an idea pioneered and developed significantly by the Council. The visibility and high-level participation has led to greater understanding and receptivity to cross-disciplinary thinking.

At the invitation of the Government of Brazil, the Chair of the 2012 Rio+20 Earth Summit, the Council Members provided informal discussion papers on water security and sanitation. The papers highlight the imminent risks of inaction and how innovative public-private partnerships can be key vehicles to help governments deliver solutions quickly and at scale.

The Crossroads of Choice

The world is increasingly aware of the importance of water. Governments understand better how water links to their economies; businesses monitor it as an important risk and increasingly manage it beyond their fences and across their supply chains; more people around the world have access to water over the last few years; and slowly but surely the environmental flows and water withdrawals are better managed due to inter-sectoral partnerships.

As the Council looks to the next stage of its work, many paths lie ahead. In a tailored survey that the Council Members filled out at the end of their term, a few clusters of opportunity emerged as listed below.

Paradox of Value

As Adam Smith pointed out, the paradox of value (also known as the diamond-water paradox) shows that although water is on the whole more useful in terms of survival than diamonds, diamonds command a higher price in the market. While the apparent value is visible, the economic case is not clear. With somewhat conflicting positions and ideologies on water and its use, academics, civil society organizations, environmentalists, governments, businesses and international organizations working in the water sector have made minimal progress in the debate concerning the value of water.

The Council could hold a set of conversations and develop specific tools that can help decision-makers understand the economic value of water. In the absence of pricing, the Council can explore the role of allocation, entitlements and other shadow pricing mechanisms that can be used to manage the resource. It can also explore the potential viability of water markets that can be politically and socially acceptable. By engaging experts from Australia, Chile, California and the United Kingdom where these mechanisms are being tested, the tools can be made available to decision-makers in the BRICS and other Organisation for Economic Co-operation and Development countries.

The Nexus in Action

The World Economic Forum, through its leadership position and its international influence could continue to emphasize the fast-emerging ramifications of the nexus. The Council can develop a compendium of best practices to address the nexus or create and deploy a good practice building strategy to appeal to knowledge institutions that can share best practices on the nexus. This information can then be shared with key decision-makers. The Forum can continue to include discussions on nexus in sessions on resources, supply chains, economic security, sustainability, catastrophic risk, green technology, geopolitics and human rights.

Focus on Water-sector Issues – One at a Time

The Council can also focus on the various issues unique to the water sector. Some such areas to work on and develop include:

  • Focus on water for food: Agriculture is the biggest water user in terms of volume of water used and farmers around the world hold the key to water sector transformation.
  • Water and urbanization: It is important to explore the integration of water, food and energy in contexts of urbanization and watershed/water management, as well as focus on ageing major city water infrastructure.
  • Wastewater technology and water reuse: These technologies represent new sources of water and they should also be used to provide sanitation.
  • Emphasize the importance of water and the access to safe drinking water.
  • Create a framework for an open and politically independent virtual water trade.

Water Security Evangelists on Crosscutting Themes

  • Clarifying water debates: There is still a lot of confusion over water debates (WATSAN vs. agricultural water, bottled water vs. water from taps, water as a human right vs. privatization). The Council could help to clear the “minefield” by providing a fact-based conversation and various perspectives.
  • A series of Council exploration papers: The Council can write leading thought pieces on ways forward on tough issues such as water pricing, trading schemes, water and international trade, ‘water neutrality’ models, etc. Clearly, the Council cannot resolve these and will not reach a consensus view, but these discussions will not go away. The discussions need to move beyond the somewhat polarized views that are presented in the international debate and focus on some thoughtful explorations of potential ways forward and a framework for thinking and organizing key topics:
  • Spur innovation: The Council can lead a short initiative to catalyse innovation on technology and delivery models for coping with scarcity.
  • Strengthen data: The Council can create links with new and innovative groups like Knoema to help strengthen water information and dissemination.

 How Can the Global Agenda Council on Water Security Help?

No matter which issue area of work is chosen, the Council can frame the issue, elevate it on the global agenda and integrate key messages into delivery platforms from around the world. The composition of the Council needs to reflect a good mix of decision-makers, actors who can implement, practitioners, academics and the voice of citizens to take the Council’s work further.

Based on the various conversations that the Council has had, there is a strong desire to move the needle on the paradox of water’s value. With its multistakeholder networks, neutrality, and its mission to improve the state of the world, the World Economic Forum can rise to the occasion and offer to convene a truly unique group of experts to make progress on this key paradox of understanding the economic value of water. With some constructive debate, awareness raising, tool building and partnership with governments, the new Water Security Council can make a difference and can make significant progress in exploring the economic value of water. This in turn can shape key policies and catalyse the much-needed funding into the water sector, while improving water management decisions that benefit society, environment and the economy.

In addition to focusing on the economics of water as the primary area of work, the Forum can explore the other issues raised by the Council internally and externally. It can do so internally by activating the goals through other internal channels, including the Water Initiative, the Risk Response Network and the Foresights Programme. Externally, the Forum can promote the Council’s goals at high-level conferences such as the Clinton Global Initiative and the World Food Prize, as well as through its civil society and business networks.

Disclaimer

The opinions expressed here are those of the individual members of the Council and not of the World Economic Forum or any institutions to which they are affiliated.