80 FOOD, AGRICULTURE & WATER
Benedito Braga, President, World
Water Council
Recent droughts and floods in
different parts of the world are
highlighting the key role of water
security in reducing social and
economic risks. It is estimated
that the lack of water security can
impact global economic growth in
the order of 0.5%. In monetary terms
this represents an annual loss in the
order of US$500 billion , excluding
environmental risks. This, under
any circumstances, is a significant
economic opportunity.
At the same time the world is experiencing
its biggest infrastructure investment boom in
human history with some 8% of global GDP
devoted annually to mega projects such as the
Panama Canal expansion project. And yet water
is not visible in this infrastructure agenda.
In the last decade, water security has gained
increased attention in the global political
agenda. This need for greater water security
is due to hydrologic uncertainty, intensified
by climate change, and increasing demand
and competition for water. To meet these
challenges it is essential that we focus on
water infrastructure , and that this infrastructure
development considers the multiple uses of
water (human and industrial consumption,
hydropower, irrigation, navigation, recreation
and tourism). This will require improved
WATER SECURITY
DRIVES GROWTH
understanding on the capacity of water security
to leverage growth and economic opportunities,
and synergy between water security and
energy, transport, food, land use, and broader
environment policy.
Yet, despite the fact that financing for the
water sector can easily be justified by the
pressing need to adapt to global changes
including climate, population growth and
urbanization, investment in water infrastructure
is underdeveloped. We are simply not doing
enough. It is also clear that our current financing
models and approaches do not encourage the
kind of multi-purpose infrastructure that we need
now and in the future. While the sums involved
are typically large, some components may not
be financially attractive under strict market
conditions this is not a reason to avoid investing.
In addition, to economic considerations
governments should appreciate the social
benefits of water infrastructure when making
decisions.
Evidence shows that, in addition to existing
financial sources, newer funds are available
such as pension funds, insurance companies,
community microfinance, Sovereign Wealth
Funds, climate funds, and Green bonds. We
will need to deploy all of these if we are to meet
the 6.3 trillion euros of investment needed by
2050 for water supply and sanitation projects
alone. Again, under any circumstances, this is a
significant economic opportunity.
Progress in the field of water security requires
policy-makers to face up to difficult choices.
Making trade-offs is possible by sharing the
responsibilities and the consequences among
the involved sectors and stakeholders. It
must take into account the integrated social,
economic and environmental impacts. As with
any intervention in the natural environment there
are choices to be made, each with impacts
that may be both positive and negative, there
are costs and benefits. I firmly believe that the
positive impacts outweigh the costs.
The Group of Twenty sees massive infrastructure
investment as one of the “silver bullets” that can
sustain growth by boosting regional integration
and create millions of jobs. Investing in water
security has equal potential, as it underpins
health, energy, transport, food, tourism returns,
while mitigating the socio-economic impacts
of floods and droughts. In other words water
security is a genuine economic opportunity.
Adaptation to global changes trough water
should be the next chapter on the G20’s agenda
to meet sustainable growth. The technical
solutions already exist but economic incentives
and innovative financing models, along with
effective governance must be increased. To
achieve this requires policy makers to increase
the visibility of water and move water from
being a political problem to being an economic
opportunity. Q