admin A new report from the Global Commission on the Economics of Water warns that the worsening global water crisis could have severe consequences for both food production and the global economy by 2050. The report projects that more than half of the world’s food production could be jeopardised due to water scarcity, with the global economy potentially suffering an average loss of 8% in GDP. For lower-income countries, these losses could be even more devastating, reaching up to 15%. The combination of climate change, weak economic systems, destructive land use practices, and persistent mismanagement of water resources is putting unprecedented stress on the global water cycle.
The commission revealed that nearly three billion people and over half of global food production are already situated in areas with drying trends or unstable water availability. This situation is contributing to increasing concerns about food security and economic instability. In some regions, groundwater depletion has caused cities to sink, further highlighting the severity of the water crisis.
Economic Mismanagement and the Underpricing of Water
According to the report, current water management strategies have consistently fallen short by overlooking the multiple values of water across economies and its role in sustaining critical ecosystems. The failure to properly manage and price water resources has led to its overuse and misallocation, particularly in regions most vulnerable to water stress. Industries that are highly water-intensive, such as data centres and coal-fired power plants, are often located in areas that can least afford to lose water resources.
The commission argued that the global underpricing of water has encouraged excessive use, resulting in a misplacement of water-intensive activities and further exacerbating regional water shortages. It called for a comprehensive overhaul of water management policies, urging for better pricing mechanisms, subsidies, and incentives to ensure that water is used more efficiently, equitably, and sustainably across sectors.
The report also emphasised the importance of “green water,” the moisture stored in soil and plant life, which is critical for maintaining stable rainfall patterns and supporting carbon storage. Proper management of green water is essential to sustaining agricultural productivity, ecosystems, and climate mitigation efforts, further underscoring the need for urgent global action to address the water crisis.
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