Scarcity of water will have major impact on economies, World Bank warns

Economies across large swathes of the globe could shrink dramatically by mid-century as fresh water grows scarce due to climate change, the World Bank has reported. The Middle East could be hardest hit, with its gross domestic product slipping as much as 14% by 2050 unless measures are taken to reallocate water significantly, the Washington-based institution said in a report. Such measures include efficiency efforts and investment in technologies such as desalination and water recycling, it said.

When we look at any of the major impacts of climate change, they one way or the other come through water, whether it’s drought, floods, storms, sea level rise.

Richard Damania, World Bank lead economist

Global warming can cause extreme floods and droughts and can mean snowfall is replaced by rain, with higher evaporation rates, experts say. It also can reduce mountain snow pack that provides water, and the melting of inland glaciers can deplete the source of runoff, they say. Also, a rise in sea level can lead to saltwater contaminating groundwater. Fresh water shortages could take a toll on sectors from agriculture to energy, the World Bank said. Water scarcity would not have the same impact worldwide, and Western Europe and North American economies would likely be spared, according to the World Bank models. But rising economies such as China and India could be hard hit, it said.

If you’re making money out of water, particularly if you’re using a lot of water as a commercial user, then it’s reasonable to suggest that you pay minimally enough to cover the cost of providing you with that water.

Richard Damania