Water Supply
Climate-Driven Water Scarcity Could Hit Economic Growth
by Up to 6 Percent in Some Regions, Says World Bank
Water scarcity is now considered one of the greatest risks facing the planet,
according to the World Economic Forum’s Global Risks 2016 report
Water scarcity, exacerbated by climate change, could
cost some regions up to 6 percent of their GDP, spur
migration, and spark conflict, according to a new World
Bank report released today.*
High and Dry: Climate Change, Water and the Economy, says the
combined effects of growing populations, rising incomes,
and expanding cities will see demand for water rising
exponentially, while supply becomes more erratic and
uncertain.
Unless action is taken soon, the report says, water will
become scarce in regions where it is currently abundant
- such as Central Africa and East Asia - and scarcity will
greatly worsen in regions where water is already in short
supply - such as the Middle East and the Sahel in Africa.
These regions could see their growth rates decline by as
much as 6 percent of GDP by 2050 due to water related
impacts on agriculture, health, and incomes.
The report also warns that reduced freshwater availability
and competition from other uses - such as energy and
agriculture - could reduce water availability in cities by as
much as two thirds by 2050, compared to 2015 levels.
Water insecurity could multiply the risk of conflict,
the report adds. Food price spikes caused by droughts
can inflame latent conflicts and drive migration. Where
economic growth is impacted by rainfall, episodes of
droughts and floods have generated waves of migration
and spikes in violence within countries, it says.
“Water scarcity is a major threat to economic growth and
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Africa Water, Sanitation & Hygiene • May - June 2016
stability around the world, and
climate change is making the
problem worse,” said World
Bank President Jim Yong Kim.
“If countries do not take action
to better manage water resource,
our analysis shows that some
regions with large populations
could be living with long
Dr . Jim Yong Kim
periods of negative economic
growth. But countries can enact policies now that will help
them manage water sustainably for the years ahead.”
The negative impacts of climate change on water could
be neutralized with better policy decisions, the report says,
with some regions standing to improve their growth rates
by up to 6 percent with better water resource management.
“There is a silver lining,”said the report’s author and a
World Bank Lead Economist Richard Damania. “When
governments respond to water shortages by boosting
efficiency and allocating even 25 percent of water to
more highly-valued uses, losses decline dramatically
and for some regions may even vanish. Improved water
stewardship pays high economic dividends.”
In the world’s extremely dry
regions, more far-reaching
policies are needed to avoid
inefficient water use. Stronger
policies and reforms are needed
to cope with deepening climate
stresses, the report says.
It outlines policies and
investments that can help
Richard Damania
lead countries to more water
secure and climate-resilient economies. This includes
better planning for water resource allocation, adoption of
incentives to increase water efficiency, and investments in
infrastructure for more secure water availability.
The report follows the appointment last month of 10
heads of government to a High Level Panel chaired by the UN
and World Bank to mobilize effective action to accelerate
the implementation of Sustainable Development Goal 6,
which focuses on ensuring the availability and sustainable
management of water and sanitation for everyone.