Global Effects of Water Shortages

By Nicki Mossavar-Rahmani, Staff Writer

Global estimates have been formed showing that water usage has increased by six times in the past 100 years and will double again by 2050, driven mainly by the demands of agriculture and an increase in living standards.

UNISEF

Today we are faced with not only population growth but also a rise in the middle class portion of societies.

If we consider the highly populated and fast-paced developing countries of India and China, we can recognize that a small change in their lifestyle can impact natural resources greatly.

With their growing economy, more and more lower class people are moving up to what is considered lower middle class.  An increase in the middle class portion of India and China could have a severe impact on the natural resource of freshwater.  As more people can afford to have showers and toilets in their place of residence, we will see an increase in demand for water supplies.  As consumer theory goes, when people can afford more, they will demand more.

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The water shortage in many developing countries is recognised as one of the most serious political and social issues of this time.  Lack of water is stopping development and, in many countries, the rural poor suffer as their water and other needs take second place to those of swelling cities and industry.  Meanwhile with a growing economy, there will be rise in demand for water by industries, which may lead to serious over-exploitation with less and less water available for consumers and farmers.

Just as we saw in France, when people were rioting due to a lack of jobs, the same will happen due to the lack of freshwater and food.  Local governments worldwide are increasingly distrusted over water allocation.  This may cause instability in these societies, protests and more crime, which may work to scare off foreign direct investment in these countries.

If growing demand for freshwater in China and India leads to its over-exploitation and decline in availability for domestic, agricultural, industrial and energy production use, this may lead to broad reduction in production.  Naturally, this would lead to an economic downturn.

The question is how can businesses address these challenges and still make a profit.

The businesses foresee growing civil unrest, boom and bust economic cycles in Asia and mass migrations to Europe.  But they also say scarcity will encourage the development of new water-saving technologies and better management of water by businesses.

By some estimates, a worldwide hydro economy will become developed by 2025.  This will arise as a result of vast new investments in recycling water and efforts made towards reducing the cost of desalination.  It has also been claimed (primarily by economists) that the water situation has occurred because of a lack of property rights and government regulations and subsidies in the water sector—causing prices to be too low and consumption too high.

If these arguments are proven true, there could be major changes in government policy that will regulate the usage of water appropriately.

Accordingly, the predictions of a higher demand on freshwater due to a rise in the middle class could also be prevented by unexpected technological progress.  In response to the doubling of water consumption in the next 40 years, York University’s economics professor Barry Smith said, “Even if we assume that is true, should we really expect all of this as things can move around, all you really need is technological progress.”

If we learn from history we know that prediction dates on food and oil shortages have come and gone, yet nothing more than people’s level of fear has changed.  Today, we have the existing technology, like desalination, to recycle ocean water to drinkable freshwater however (even if for now it is currently considered a very expensive procedure).  Although, if we reach the stage where water shortages become a pressing issue, then the incentive to use the technology available will become worth the expense.

ARB Team

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