Water Scarcity: A Lesson in Trickle Down Economics

Since water covers more than 70 percent of the Earth’s surface, we can perhaps be forgiven for taking it for granted. Yet fresh, drinkable water comprises only 2.5 percent of our total supply, and nearly 80 percent of that drinkable water is locked away in the polar ice caps and glaciers. Groundwater represents another 20 percent, which means that only 1 percent of fresh water (or 0.000008 percent of the Earth’s total water supply) is easily accessible.

Water is a unique substance. It is essential for life, it has no substitutes, and it is finite. It is also renewable, meaning that it can be purified and recycled but, to borrow Will Rogers’ famous observation about land, “God ain’t making any more of the stuff.”

Today, the water supply situation may not seem that dire. The majority of the world’s population, approximately 90 percent, enjoys relative water sufficiency, as defined as an adequate amount of fresh water per person for all purposes, including agriculture, industry, and household use. Five percent of the world experiences water scarcity, meaning there is insufficient water to satisfy these normal requirements. Another 5 percent of the world is suffering from “water stress,” a situation in which water supply problems are chronic and widespread, and there is mounting competition among water’s various users.

Looking ahead to 2050, however, the situation is far more alarming. Because of growing populations, industrial growth in emerging markets, and continuing environmental degradation, some form of water scarcity will affect almost half of the people in the world.3 These populations will not have sufficient water resources to maintain their current level of per capita food production. To sustain their needs, water may have to be transferred out of agriculture into other sectors, making certain countries or regions increasingly dependent on imported food.

Already, there are more water refugees—people who have left their homes in Mexico, Somalia, northern China, Nigeria, and Iran to find water—than there are war refugees in the world. Among the countries expected to experience water stress or scarcity in the coming decades are India, Turkey, Nigeria, Poland, the United Kingdom, parts of China, and the western United States.

The Evolution of Water Scarcity

The causes of water scarcity are varied. Population growth is certainly a key factor, not just because more people need water to drink—household consumption represents only a small percentage of water use—but because of rising demands for food. Approximately 1000 tons of water are required to grow one ton of grain. The amount of water required to grow a single ounce of rice is equivalent to the amount needed to do a load of laundry in a typical washing machine.

Also, as living standards rise around the world, diets are changing to include more meat. Few economic endeavors are as water-intensive as meat production. Grain-fed beef production consumes around 12,000 gallons of water for every pound of meat, while grain-fed chicken requires about 420 gallons of water per pound.

Agriculture accounts for some 70 percent of all fresh water use, and in some areas of the developing world—North Africa, South Asia, and West Asia—agriculture accounts for between 85 and 95 percent of total water consumption. Many agricultural systems throughout the world are extremely inefficient: An estimated 60 percent of the water used for irrigation never reaches the crops it is intended for and is instead lost to runoff and evaporation. Farmers have little incentive to adopt more efficient techniques, such as drip irrigation, whereby water is slowly applied to the soil surface through small, low-discharge emitters, owing to generous government subsidies that artificially lower water prices. In the western United States, for example, total water subsidies are between $2 and $2.5 billion per year. Farmers in arid Tunisia get their water at oneseventh of its actual cost.

Various industrial sectors—including manufacturing, iron and steel, computer hardware, chemicals, food and beverage, paper, and textiles— also utilize extensive amounts of clean water. At present, industry accounts for 22 percent of fresh water use, although that number can be as high as 59 percent in some advanced economies.8 An automobile coming off the assembly line will have consumed 31,700 gallons of water.

It takes a lot of water to make everyday products in the United States. It requires as much as 14,400 gallons of water to produce one ton of whiskey and up to 38,000 gallons to produce one ton of paper. The average facility that manufactures silicon chips generates around one million gallons per day of wastewater, due to the multiple washings that each wafer must undergo to remove residue. As a result, Philips Semiconductors, Motorola, and Intel are among the manufacturers that have begun to implement water conservation technologies. By installing a water purification process, improving chip washing and rinsing techniques, and using water-efficient landscaping, an Intel facility in Albuquerque, New Mexico has reduced water use by 47 percent since 1994.