The Global Commission on the Economics of Water (GCEW) published The Economics of Water: Valuing the Hydrological Cycle as a Global Common Good (October 2024). The report was developed to advance new thinking and actions towards the global water agenda, including at the UN and country level. It is also intended to feed into collective, multi-sectoral action to meet the imperatives of the Paris Agreement and the Convention on Biological Diversity, grounded in human rights.
Human Level’s Take
- Water, water, water. Water is essential for both planetary health and human rights, serving as a critical component in the fight against climate change and biodiversity loss. Yet approximately three billion people and half of the world’s food production are at risk from declining water storage, threatening access to clean water and food. Vulnerable populations will be disproportionately affected, with dire consequences such as increased mortality rates from unsafe water and escalating migration and conflict due to water scarcity.
- To address these challenges, the Global Commission on the Economics of Water (GCEW) proposes five transformative missions that interconnect three E’s: environmental sustainability, social equity and economic efficiency: reforming food systems to improve water use, protecting “green water” sources (water in plants and soil), establishing a circular water economy, reducing water intensity in clean energy and AI sectors, and ensuring no child dies from unsafe water by 2030.
- Companies — especially water-intensive sectors like agriculture, food & beverage, manufacturing and mining — need to play a central role in the transformation of our global water economy.
- They can develop efficient water management systems that promote reuse and avoid taking more than their fair share. They can invest in innovations to conserve water in their operations and supply chains, like regenerative agriculture and closed-loop water systems in manufacturing processes. And they can prioritise sourcing business inputs like energy and data storage from water-efficient suppliers. Outside of their own value chains, they can also drive forward the movement for tracking and disclosure of corporate water footprints and support regulatory standards that ensure sustainable, human rights-based governance of water resources.
For Further Reading
- Water is critical for planetary health and for human rights: Water is a “victim of climate change” at the same time as degradation of freshwater ecosystems is driving climate change and biodiversity loss. Green water (water stored in soil and vegetation that is crucial for rainfall generation) sustains the natural systems that absorb more than a quarter of the carbon dioxide emitted by burning fossil fuels. As a result, losing green water to deforestation and losing soil moisture and wetlands means fewer carbon sinks and more warming. At the same time, rising temperatures cause loss of moisture, provoking desertification and wildfires that further damage ecosystems. The impacts to people from water loss will be immense. According to the report, around three billion people and half of the world’s food production are in places where total water storage is likely to decline. This will impact the right to clean water and the right to food. The most vulnerable populations will suffer the most; for example, currently over 1,000 children die every day from a lack of clean water and sanitation – a figure that would almost certainly rise with more limited water resources. Water stress is also triggering migration, conflict and economic losses that will undermine other basic human rights. And “no community or economy will be spared the consequences of a water cycle that is out of kilter.”
- Yet we are drastically undervaluing water: Long-term mismanagement and undervaluation of water have harmed freshwater and land ecosystems, including overuse of water reserves and ongoing contamination. Current strategies often focus on visible water resources (“blue water”), neglecting the economic drivers influencing the water cycle and overlooking "green water.” Moreover, these approaches tend to assume stable water supply patterns, which is increasingly inaccurate due to land-use changes and climate change destabilising the water cycle. Water challenges are interconnected globally, with blue water and atmospheric moisture travelling across continents, country borders and communities. Total water stored is declining where populations and economic activity are concentrated, and where crops are grown. As a result, we can no longer rely on freshwater availability for the future. The economic costs of inaction are significant. For example, the poorest 10% of the population gets more than 70% of annual precipitation from land-based sources (trees and plants) and will suffer significantly from the effects of deforestation. According to the report, if the rainfall from those sources disappears, economic growth could drop by 0.5% in Africa and 0.7% in South America. And regions relying significantly on irrigation for crops are losing more water storage, sometimes twice as fast as other regions. With the current trend, irrigation would become unfeasible, and we could see a 23% global reduction in cereal production. This shows that sectors like agriculture are both driving the water crisis and will suffer significantly from it. Over time, every industry will ultimately be impacted by water loss, especially because value chain goods and services like data centres and power generation rely significantly on water.
- Five missions to transform our approach to water: The Global Commission on the Economics of Water identifies a need to reframe the economics of water to recognise the interconnections between “three E’s”: environmental sustainability, social equity and economic efficiency. The three E’s are “interdependent, equally important, and best implemented together” through five missions:
- (1) Food system transformation to improve water use and conservation in agriculture and meet the food needs of a growing population. This can be done through scaling up access to micro-irrigation and climate-resilient seeds and cropping patterns for traditional farmers, and increasing regenerative agriculture. These changes will require the agricultural industry to collaborate on system-wide transformation, with backing and standards from policymakers.
- (2) Protection of green water sources through conservation and restoration of natural ecosystems. This would mean addressing deforestation driven by agricultural expansion and improving land use. Specifically we should aim to conserve 30% of the world’s forest and inland water ecosystems and restore 30% of degraded ecosystems by 2030, in line with the Global Biodiversity Framework. This must be done with the Free, Prior and Informed Consent of Indigenous Peoples who steward around 25% of all land globally and 40% of remaining natural land (land that has not been modified significantly by humans).
- (3) Establishing a circular water economy using industrial strategies and new technologies to reuse water. For this to be truly impactful, the water saved should be directed towards conservation instead of more intensive water use.
- (4) Lowering the water intensity of clean energy and AI to tackle both emissions and water use. Water-efficient clean energy solutions are emerging, including waterless cleaning of solar panels, second-generation biofuels and water-efficient cooling towers for nuclear and geothermal plants.
- (5) Ensuring that no child dies as a result of unsafe water by 2030, to meet both human rights imperatives and the Sustainable Development Goals. New technology is creating opportunities for better water treatment and sanitation systems in rural areas and hard-to-reach communities. Nature-based solutions like restoring and expanding wetlands and other natural water storage systems can also increase localised access to clean water.
- The critical enablers of change behind the five missions: The report identifies enablers of change that cut across sectors and actors. Below are some enablers that are important for companies:
- Better governance of the way we use water now, to value it accurately and enable better management by companies and governments of a communal, critical resource. This could include renegotiating existing contracts for water use, imposing certain conditions on new contracts, and ensuring that water is not commoditised and water rights do not become “quasi-property” rights that would hinder reallocation of a shared resource.
- Improving the quantity, quality and reliability of finance for good water management practices in every sector. This includes investments in better processes to conserve and recycle green and blue water, and investment in innovations for more efficient water use across high-use sectors like agriculture, manufacturing and mining.
- Capturing data that will transform how we value and govern water use. Companies need reliable data to mitigate their water risks and their climate risks across their operations and supply chain, and to focus investment on just and sustainable practices. Companies can also put their influence to work in catalysing a movement for market-based disclosure of corporate water footprints (along the lines of carbon disclosure) and regulatory standards for disclosure. Regulatory requirements could build on the concept of double materiality.
- Global water governance is needed to create a shared vision and approach for sustainable water management, for example in the form of a Global Water Pact grounded in human rights and just transition principles that sets clear and measurable goals to stabilise the water cycle. Companies can help drive this at both a global and local level, for example by pushing for regulatory standards and cross-industry initiatives that support sustainable, fair and human rights-based water management approaches.
