Water is scarce but it continues to be wasted excessively in many industrial states, warns a new study by the World Wide Fund for Nature (WWF), predicting that a global conflict over water resources could bring billions in losses for the German market. EURACTIV Germany reports.

Tomatoes from Spain, textiles from India, metals from South Africa, roses from Kenya; every year, Germany imports massive amounts of goods from around the world that would not be available without considerable water resources.

But water is becoming an increasingly scarce global resource. In many countries, it has become more and more difficult to supply the population with adequate drinking water and irrigation for crops.

Besides export-reliant countries with critical water resources, the effects of the shortage can be devastating for others as well.

According to the World Wide Fund for Nature (WWF), the worldwide water shortage will also impact industrialised European countries like Germany.

If German imports are cut off due to water shortages in producer states, German companies would be hard hit, said a WWF study released on Wednesday (27 August).

Philip Wagnitz, one of the authors of the study, said many German economic sectors are both responsible for and affected by the international water crisis, from the food sector to the auto and fashion industries.

In Germany itself, the Federal Environment Agency (UBA) has indicated sufficient water resources. The country’s annual water supply is estimated around 188 billion cubic metres.

But Wagnitz explained that the third largest importing country in the world is extremely dependent on foreign goods, which often require large quantities of water during production.

9,000 litres of water for one kilogram of cotton

WWF reported that annual cotton and textile imports from Pakistan to Germany, require twice as much water as the volume of Germany’s fifth largest lake, the Starnberger See, which holds three billion cubic metres of water.

Almost 9,000 litres of water are needed to produce one kilogram of cotton in Pakistan, primarily drawn from rivers in eastern parts of the country.

But even so, only around one third of the water even reaches the fields, the WWF study indicated. The rest evaporates or leaks out along the way in decrepit irrigation canals. As a result, many areas pump the water they need directly from the groundwater.

The effects of this type of water abstraction can be observed in areas such as the Aral Sea in Uzbekistan, WWF warned. There, the sea’s tributaries have been dried up by cotton production, causing the sea to shrink by almost 90%.

Companies slow to recognise risks

In extreme cases, growing water risks being brought on by these developments could create billions in losses for German companies, Wagnitz said. The affected firms would have to deal with image problems and site closures, he stated.

Still, many do not even realise their own exposure to hidden water scarcity risks, the WWF expert warned. They will only become aware of the issue once shortages start to materialise, Wagnitz explained.

This is precisely what happened in India recently, he said, when Coca-Cola was forced to close one of its bottling sites. Farmers in the area complained that water they needed was being wasted on soft drink production.

Wagnitz mentioned the apparel manufacturer H&M as another example: When cotton harvests in many parts of Pakistan were desolated by monsoon rains four years ago, prices for raw materials grew painfully high. In the worst case, the WWF expert said, flooding or droughts could cause billions in losses on the local market.

Water scarcity also affects Europe

And scarcities in local water resources are no longer a concern reserved for developing countries and desert regions.

A study by the European Environment Agency (EEA) in southern Europe, where water shortages are increasingly critical, showed 80% of water is used for agriculture.

In Spain, WWF warned that the threat of drought is particularly high, exacerbated by illegal irrigation. In 2013 alone, Germany imported about 180,000 tons of tomatoes valued at €250 million from Spain. Because the groundwater can no longer supply enough to irrigate fields, farmers have turned to desalinated seawater for several years now.

>>Read: Desalination: Solving water problems or creating a new one?

Nevertheless, worldwide water usage is on the rise. According to estimates in the latest UN World Water Development Report from 2012, the shortage threatens all Millennium Development Goals (MDGs) agreed on by the UN General Assembly in 2000.

Growing demand for water can mostly be traced to climate change and an increasing demand for food in a rapidly urbanising world, according to UNESCO secretary general Irina Bokova and the head of UN Water Michel Jarraud.

Industry and economy must be involved

To avoid escalating conflicts over water resources in the future, states must urgently develop plans and mechanisms for sustainable, cross-border water management, the authors of the WWF study wrote. They are convinced that such initiatives must involve both the economy and industry to be effective.

The agricultural sector, in particular, which accounts for 70% of the global demand for water, is obligated to do so, the authors argued. Still, the agricultural industry contributes significantly to pollution through its use of pesticides and fertilizers.