Earth in hot water
The economics of the water cycle
A new report out from the Global Commission on the Economics of Water is an education-and-a-half, particularly when we’re encountering more and more stories about disrupted water cycles.
NYT: An Alarming Glimpse Into a Future of Historic Droughts - Record dry conditions in South America have led to wildfires, power cuts and water rationing. The world’s largest river system, the Amazon, which sustains some 30 million people across eight countries, is drying up.
Per the organization’s name, the report seeks to place water within an economic model so as to price its value and costs and impacts. The economics of water is a complex subject that encompasses the management, allocation, and sustainability of water resources. As global demand for fresh water increases due to population growth, urbanization, and climate change, it becomes crucial to understand the economic implications because those will be our primary motivations for change and action.
From the Preface:
We need a sea change in how we understand and act on water. The purpose is clear: bring back stability to the global water cycle, deliver on the human right to safe water, achieve food security and development that works for all, and keep our planet safe for generations to come.
In keeping with the whole Anthropocene vibe, the report notes that, for the first time in human history, our planet’s water cycle is out of balance.
An·thro·po·cene
/ˈanTHrəpəˌsēn/
adjective
adjective: Anthropocene
relating to or denoting the current geological age, viewed as the period during which human activity has been the dominant influence on climate and the environment.
"we've become a major force of nature in this new Anthropocene epoch"
noun
noun: Anthropocene
the current geological age, viewed as the period during which human activity has been the dominant influence on climate and the environment.
"some geologists argue that the Anthropocene began with the Industrial Revolution"
While the North’s nuclear powers busy themselves with developing new weaponry and updating old stockpiles, doesn’t this seem like a more pertinent global crisis worth addressing?
The report’s answer:
The water cycle must therefore be governed as a global common good: recognizing, first, our interdependence through both blue and green water flows; second, the wicked interaction between the water crisis, climate change, and the loss of the planet’s natural capital; and third, how water flows through all our 17 [UN] Sustainable Development Goals. A destabilized water cycle is a large-scale collective and systemic problem, which can only be fixed through concerted action in every country and collaboration across boundaries and cultures.
Three of our five superpowers will be decidedly stressed:
High-population density hotspots, including northwestern India, northeastern China and south and eastern Europe, are particularly vulnerable.
The US, like China, will see its southern most lands and much of its West seriously stressed. My Middle Earth band of 30 degrees north and south of the equator captures our southern border tier states.
Per the NYT story cited above, it encompasses all of Brazil.
But, most intimidatingly, upwards of 80% of humans live within that band. With all that environmental stress leading to all that economic pain leading to all that political instability, where do you think all those people are going to go?
Say we come together in the North to do whatever it takes to keep 75 percent of them sustainably in place (and let’s admit that that is a hugely ambitious goal), then who’s left to head north? In a world population of 10 billion mid-century, 1/4 of 80% is two billion.
Let’s say that’s a crazy, fear-mongering projection because half of them will move just one country over, that still leaves a billion.
From the International Migration Outlook 2023 report:
Permanent-type migration to OECD [Organization for Economic Cooperation and Development, otherwise known as the rich, advanced West] countries reached an all-time record in 2022 at 6.1 million new permanent immigrants. This represents a 26% year-on-year increase and a 14% increase compared to 2019. Most of the increase was driven by the increase in humanitarian migration (excluding Ukrainian refugees) and labour migration.
In many OECD countries, permanent-type migration was higher in 2022 than in any of the previous 15 years. This was the case in Canada and New Zealand, and in many OECD European countries (e.g. Belgium, Denmark, Finland, France, Ireland, Luxembourg, the Netherlands, Spain, Switzerland and the United Kingdom).
Let’s say that less-crazy projection of 1 billion souls migrating north unfolds evenly between now and 2075 — half a century. That’s still about 20m a year, or three times the current flow that’s freaking OECD nations out now.
Let’s be hugely generous and say that half of them head to warmed-up Russia — a vast territory that is stunningly underpopulated. That would still be close to a doubling of the current flow that is driving us collectively nuts across the OECD.
The dark blue are current members; the light blue are those seeking entry. Notice how most of the latter fall within my Middle Earth band, where I am projecting, based on scientific studies, that roughly two Australias’ worth of good land is going to “disappear” in terms of livability and magically “reappear” across the New North (upper quarter of the planet’s latitudes).
If Trump is re-elected, per all the deep analysis and his own stated logic, he will win primarily on the basis of this crisis today: the sense that we are being “overrun” by darker people from the south.
Imagine doubling that northward pressure for decades and tell me what kind of political leadership becomes acceptable to the American public?
Not a pleasant thing to contemplate, is it?
Hence the urgency of reports and projections like this. Water determines sustainability — pure and simple.
From the report:
Water is often taken for granted as an abundant gift from nature, when in fact it is scarce and costly to provide to users. Economic modelling tells us adjusting water tariffs to account for water scarcity and its externalities can drive significant GDP gains, particularly in water-scarce, low- and middle-income countries. Proper pricing reduces wastage, promotes more productive use, and ensures that water is treated as the valuable resource that it is.
You cannot improve what you cannot measure, and we don’t measure water all that effectively.
For governments, water data is key to sustainable water management at every scale – from river basin to inter-basin to sensitive evaporation sheds. Robust water metrics allow governments to estimate externalities and hold polluters accountable for the harm they cause. They also support early warning systems for climate and water extremities.
For private entities, data is essential for mitigating water and climate risks in their operations and supply chains, and steering investment towards practices that are just and sustainable and do not destabilize the hydrological cycle.
For citizens, access to good water data empowers them to engage in water-related decision-making and contribute to the development of locally relevant solutions. It also enables consumers to make informed choices, which could influence corporate decisions.
The water data landscape today is highly fragmented and has large gaps. Alarmingly, data collection, quality and comparability have declined in recent years.
The goal is a comprehensive global approach to a comprehensive global issue:
The ultimate ambition for global water governance should be the establishment of a Global Water Pact. It should recognise that water is both a local and global issue, and the hydrological cycle, encompassing both blue and green water is a collective and systemic challenge. The Pact shouldset clear and measurable goals to stabilise the hydrological cycle and safeguard the world’s water resources for a sustainable and just water future. However, the path to such a Pact requires a careful and multi-stakeholder approach, identifying intermediate milestones and enhancing existingconventions both in water and related sectors, building on the three Rio conventions – the convention on Biological Diversity (CBD), the United Nations Convention to Combat Desertification (UNCCD), and the United Nations Framework Convention on Climate Change (UNFCCC), as well as the Ramsar Convention on Wetlands.
Report contains about a dozen and a half logical recommendations.
I have long presented the food trade as a virtual water trade without using that term as it is defined here:
The virtual water trade
Virtual water trade refers to the exchange of goods and services based on their virtual water content (VWC), defined as the amount of water required to produce each good and service including all steps involved in its production. Virtual water has become important in assessing global trade dynamics. Approximately 1.6 trillion cubic metres of water is traded in this way. When the price of water does not reflect its value and scarcity, trade can accentuate water depletion. For instance, it takes 12 litres of water to grow a single almond, and around 80% of almonds grown in the arid United States (US) state of California are exported. Notably, Californian production and export of almonds doubled during a period that coincided with droughts and land subsidence due to over-extraction of groundwater. Similarly, production of cotton in Uzbekistan has been linked to depletion of the Aral Sea.
These examples underscore how trade can intensify water overuse and depletion. However, trade can also mitigate water-related pressures
by enabling countries with abundant hydrological resources to specialise in producing water- intensive goods for export to water-scarce nations.
So, that’s the logic I employed across these two graphics from America’s New Map:
Pretty simply logic: show me parts of the world that have a higher percentage share of water relative to a population share. You see here that the West Hemisphere is blessed, Asia is decidedly stressed, and the center slice of Europe and Africa are in-between those extremes.
So, no surprise about who has food left over for export (West Hem) and who needs imports (East Hem):
This is the current situation, but it will change on a global scale due to climate change:
Climate change and total water storage imbalances are poised to disrupt global trade by altering the costs of producing water-intensive goods. As climate change and declining total water storage trends drive up the implicit cost of water, the price of water-intensive goods rises relative to other commodities, diminishing the volume of virtual water traded. This affects agricultural production directly, leading to a global decline in the volume of agricultural commodities traded, with effects across all economic activities.
Understand that the weather is always taking water from one place and moving it to another:
Take that dynamic and you can see which regions/states “export” water and which “import” it:
The key is to understand that water-driven global economy, price things accordingly, and, on that basis, exploit the planet’s water cycle more efficiently.
And here’s the deal, as Uncle Joe would say:
Keep reading with a 7-day free trial
Subscribe to Thomas P.M. Barnett’s Global Throughlines to keep reading this post and get 7 days of free access to the full post archives.