The world is already withdrawing freshwater at an unsustainable rate, which is projected to increase further. Avoiding crises means managing water geographically, but river basins tend to cross political boundaries, raising additional complexities. We need new ways of thinking about water: how can we reflect its value, whether in its price or some other way, without compromising on economic development and the human right to access water for basic needs? 

Discussions about water are often reduced to achieving tap water security for all. But this is only a small part of the many roles of water. Seventy per cent of all water withdrawn for human use goes towards growing food and 20% is used in industry, about half of which is for energy generation, mostly the cooling of thermal power plants. Only 10% is for households – and less than a quarter of that is for basic human needs. The rest is used in less essential ways, such as filling pools and watering lawns.

Water has always been required for economic growth and prosperity and is crucial for us at Nestlé – to grow our inputs, work our operations and for consumers to prepare our products. Over the last decade, we have brought withdrawals for our operations down from 4.5 to 1.5 litres per US dollar of sales – a volume dwarfed by some in other sectors, where usage can be as high as 200 or 300 litres per US dollar of sales. More important than the action taken within the company is our participation in multistakeholder initiatives.

Global annual water withdrawals for human use are continuing to increase. Population growth and spreading prosperity are increasing demand for water-intensive products such as beef and energy. Usage has increased from 600 km³ in 1900 to 1,400 km³ in 1950 and 4,500 km³ in 2010, and is projected to reach almost 7,000 km³ by 2030. However, the amount of water the world can sustainably use is estimated at just 4,200 km³ annually. 

Initially, water overuse was at the expense of the environment: drying lakes and rivers and falling groundwater tables from increasing withdrawal of fossil (and hence non-renewable) water. Increasingly, overuse will manifest itself as a chokepoint for economic development and will threaten household water supply and particularly, as the biggest water users, farms and food security – some scenarios project global cereal shortfalls of 30% by 2030 due to water shortages. 

Water’s value and increasing scarcity are not reflected in its price. Water’s status as a basic necessity, its social, political, environmental and often religious significance, and the fact that it was largely abundant until around the year 2000 all make its management particularly difficult. When people use water from an aquifer, they typically encounter no market or non-market signals that they are running into a problem. So each individual keeps withdrawing, even if they know they are contributing to destroying their own future livelihood, because no individual’s reduction in water use will make a significant difference to water tables without proper comprehensive management (the “tragedy of the commons”). 

Giving water a value, reflecting its increasing scarcity while still ensuring respect for the status of water as a basic survival right for all humans, how can we turn this into an opportunity for more prosperity? 

While global principles can give guidance, all strategies to address water overdraft must be local. Specifically, they must be based around river basins and set by governments. River basins often cross political borders, meaning it is possible for overuse of water in one country to reduce the amount available for its neighbours: the Colorado River, for example, often runs dry once it crosses the US-Mexico border.

How can global mechanisms, such as the Sustainable Development Goals, spur the action needed at various local levels to improve water management by bringing withdrawals back into line with sustainable supply? How can tools such as those proposed by the 2030 Water Resources Group stimulate cost-effective local action on supply and demand?

The potential for conflict as water shortages bite is obvious. Consider the Indus basin: currently, Indian farmers use subsidized energy to pump up water accumulated at the end of the last ice age, rather than using water from the river. These water tables have been falling by one metre per year; what will happen when Indian farmers inevitably need to step up their use of Indus water, which is now mainly at the disposal of Pakistan? 

Despite these concerns, “water is not the reason for war; it is only an excuse for war”. Those words, spoken at the World Economic Forum Annual Meeting 2005 in Davos-Klosters by Avishay Braverman, then President of the Ben-Gurion University of the Negev, remind us not to be fatalistic. Water management can be an opportunity for peaceful cooperation. The 1804 Rhine Agreement between then archenemies Germany and France is the oldest active intergovernmental treaty in Europe. 

What are the societal, political and institutional factors that can turn the tensions around a cross-border river basin or underground aquifer into an opportunity for cooperation?

The water challenge is complex, multifaceted and urgent. Decision-makers will need to respond to this challenge in the next 5 to 10 years.