Water is connected to the world’s most severe problems

By Brett Walton, Circle of Blue

An annual survey of the world’s business, political, and scholarly elite reinforces a message that leaders are beginning to understand with greater depth and clarity: pay attention to water.

The World Economic Forum, whose membership includes heads of state, CEOs, and civic leaders, ranked water crises as the top global risk to industry and society over the next decade. Last year, water crises earned the top spot as the most damaging short-term risk. Along with water’s rise in the Paris climate talks, the rankings indicate that water, long the purview of engineers and lawyers, is now an urgent political matter.

Water has become a serious social issue.” — Erwann Michel-Kerjan, Wharton Risk Center

The 11th edition of the Global Risks Report, made public this week and viewed as a distillation of the concerns of the world’s most influential businesses and governments, is a warning signal for turbulent times. National economies, some slow to recover from the great recession, are still saddled with debt, unemployment, and slow growth, while facing technological disruptions that promise to upset entire industries. A morass in the Middle East draws countries with superior firepower into conflict with hateful groups whose murderous ideas inspire zealots abroad. The fall in oil prices is forcing petro-kingdoms to reel in fuel and resource subsidies. Most of these trends were noted in previous World Economic Forum assessments. They are now coming to pass.

Amid the economic turbulence, disquieting long-term ecological events also are revealing themselves more fully and destructively. Environmental stress, worsened a by warming planet and a growing population, is leading to tension, both within and between countries, over scarce land, food, and water. The global average temperature is expected in 2016 to be 1 degree Celsius above 1850 levels. A carbon-influenced climate blanket is causing ice sheets to melt, droughts to intensify, and rising seas to flood Miami, Dhaka, and other coastal cities with greater frequency. Ethiopia is at the brink of yet another famine. South Africa, traditionally a corn exporter, will import nearly half its domestic needs this year due to the country’s worst drought in 34 years.

Above all, the devastation of the Syrian civil war, touched off in part by a deep drought, has laid bare the tight weave between geopolitics, international security, migration, climate change, and water. These links will force leaders to adjust to interdependent, cascading consequences, argues Erwann Michel-Kerjan, executive director of the Wharton Risk Center at the University of Pennsylvania, who helped write the report since its inception.

“In the past four to five years, water has increased in importance,” Michel-Kerjan told Circle of Blue. “There’s more stress on the system combined with large unemployment and budget deficits in much of the world. Money that would have gone to address water issues has been spent elsewhere. Water has become a serious social issue.”

Water Is Top Long-term Risk

The goal of the report, a survey of nearly 750 members of the World Economic Forum, is to identify global risks, determine how they are connected, and assess the potential consequences. Global risks are those that affect multiple countries or industries. Only with a common understanding of the problems, the report argues, can collaborative solutions, the most effective means of addressing risks that span borders, can be pursued. For the survey, members are asked to rank 29 risks based on two criteria:

Impact, which is a measure of severity

Likelihood, which is the chance of the event occurring within 10 years

Water crises, which ranked first in 2015 for impact, fell to number three this year. They were ranked ninth for likelihood. Water crises, however, were deemed the risk of greatest concern over the next 10 years.

“Many decision makers thought that water problems are only in developing countries,” Michel-Kerjan said. “Now more developed countries are seeing the effects.” He noted the four-year California drought that cost the state an estimated $US 2.7 billion in 2015 and is steering local, state, and even national politics in the United States.