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OECD Water Outlook to 2050: Managing Water Risks & seizing GREEN Growth Opportunities. CNI Sustainability: Water Opportunities and Challenges for Development in Brazil Rio de Janeiro, 24 October 2013. Kathleen Dominique, Environmental Economist. Water demand to increase by 55% by 2050. - PowerPoint PPT Presentation
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OECD WATER OUTLOOK TO 2050:
MANAGING WATER RISKS & SEIZING GREEN GROWTH
OPPORTUNITIES
CNI Sustainability: Water Opportunities and Challenges for Development in BrazilRio de Janeiro, 24 October 2013
Kathleen Dominique, Environmental Economist
Water demand to increase by 55% by 2050
2
Global water demand, baseline 2000 and 2050
Rapidly growing
water demand from
cities, industry and
energy suppliers
will challenge water
for irrigation to
2050.
Source: OECD (2012), OECD Environmental Outlook to 2050; output from IMAGE
3
Almost 40%
of people in 2050
(3.9 billion) will live
in severely water-
stressed regions
Change in annual temperature from 1990-2050
Human and economic costs of a changing climate: uncertain future for freshwater
Source: OECD (2012), OECD Environmental Outlook to 2050; output from IMAGE
Number of people living in water-stressed river basins
2000 2050 2000 2050 2000 2050 2000 2050OECD BRIICS RoW World
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000no water stress low water stress medium water stress severe water stress
Milli
ons
of p
eopl
e
Source: OECD (2012), OECD Environmental Outlook to 2050; output from IMAGE
Water pollution from urban sewageto increase 3-fold
5
Nitrogen effluents from wastewater: baseline 1970 to 2050
Source: OECD (2012), OECD Environmental Outlook to 2050; output from IMAGE
Population lacking access to an improved water source or basic sanitation 1990-2050
0
100
200
300
400
500
600
700
800
900
1 000
1 100
1990 2010 2030 2050 1990 2010 2030 2050
Urban Rural
mill
ions
of p
eopl
e
OECD BRIICS RoW
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
1990 2010 2030 2050 1990 2010 2030 2050
Urban Rural
mill
ions
of p
eopl
e
OECD BRIICS ROW
240 million people
without access to
water supply in 2050 1.4 billion people
without access to
sanitation in 2050
Source: OECD (2012), OECD Environmental Outlook to 2050; output from IMAGE
City Average Annual Losses (US$ mill)
Average Annual Losses (% of
GDP)1 Guangzhou 687 1.32%2 Miami 672 0.30%3 New York – Newark 628 0.08%4 New Orleans 507 1.21%5 Mumbai 284 0.47%6 Nagoya 260 0.26%7 Tampa – St
Petersburg244 0.26%
8 Boston 237 0.13%9 Shenzen 169 0.38%10 Osaka - Kobe 120 0.03%
Source: Stephane Hallegatte, Colin Green, Robert J. Nicholls and Jan Corfee-Morlot: “Future flood losses in major coastal cities” in nature climate change, 18 August 2013.
7
Ranking of coastal cities at risk from future flood losses, 2005
Costs of global flood damage could rise from USD 6 billion to USD 1 trillion p.a. by 2050.
Water security risks
Drought in Brazil 2012 caused significant drop in production of food and raw materials and strained energy production. Government emergency credit fund of R$2.4 billion.2011 floods in Thailand slashed 4th quarter GDP growth by 12%.
Costs of water insecurity
“Know”, “target” and “manage” risks
The future is uncertain. The risk approach encourages thinking systematically about uncertainty.
The level of assessment and governance should be proportional to the risk faced.
11
What is acceptable?
Balance between economic, social and environmental consequences and the cost of improvement.
For business community, help to secure social license to operate.
• Improve incentives for managing risk – Robust water resource allocation (efficient, flexible, equitable risk
sharing)– Remove environmentally-harmful subsidies (e.g. under pricing water,
production-linked agricultural subsidies)– Water pricing, abstraction charges, pollution charges, insurance
schemes
• Encourage green innovation– Change the economics: make pollution and wasteful production &
consumption more expensive– Reduce barriers to uptake and diffusion of innovative water technologies
and techniques
12
Policy action: managing water risks and seizing green growth opportunities
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
80
90
100
110
120
130
140
150
160 GDP Irrigation PopulationPublic supply Total water abstraction
0-
Source: OECD Environmental Data 13
Decoupling water use from growth
Over 1/3 of
OECD
countries have
reduced their
total water
abstractions
since 1990
OECD freshwater abstraction by major use and GDP (1990=100)
14
Water pricing - reducing demand
20% less water use in households that pay for their water
Source: OECD (2011), Greening Household Behaviour: The Role of Public Policy
% Ownership against fee structure
• Improve information and data – Better “knowing” the risks, including perceptions
• Invest in infrastructure (“grey” and “green”) – Financing needs considerable:
• 0.35-1.2% of GDP over next 20 years in OECD countries
• Developing countries: USD 54 billion to maintain systems, another USD 17 billion to meet MDGs (per year, estimates vary widely)
– Sources: 3 T’s (tariffs, taxes, transfers)
– Principles: beneficiary pays, polluter pays, equity and coherence
– Combine “grey” and “green” to improve scalability and flexibility to adjust to change
• Making water reform happen– National Policy Dialogues
15
Policy action: managing water risks and seizing green growth opportunities
