"Almost everything we do on earth we could do with less water"

The above quote is from Peter Gleick, co-founder and President of the Pacific Institute for Studies in Development, Environment, and Security. It zeroes in on the essence of the world's rapidly escalating water crisis.

Virtually everywhere you turn these days, water is in the news and the news, unfortunately is grim. A few weeks ago the New York Times ran a three-part series by Somini Sengupta on India's water crisis where "A soaring population, the warp-speed sprawl of cities, and a vast and thirsty farm belt have all put new strains on a feeble, and ill-kept public water and sanitation network."

Michael Specter sees India's problems as symptomatic of a larger global water crisis. His article "The Last Drop" appears in the October 23, 2006 issue of The New Yorker. Specter observes that "There is no standard for how much water a person needs each day, but experts usually put the minimum at fifty litres. The government of India promises (but rarely provides) forty. Americans consume between four hundred and six hundred litres of water each day, more than any other people on earth. Most Europeans use less than half that." Meanwhile "Nearly half the people in the world don't have the kind of clean water and sanitation services that were available two thousand years ago to the citizens of ancient Rome."

A few more of his eye-opening observations:

• More than a billion people lack access to drinking water.
  
• At least a half billion people have never seen a toilet.
• Half the hospital beds on earth are occupied by people with an easily preventable waterborne disease.
• In the past decade, more children have died from diarrhea than people have been killed in all armed conflicts since the Second World War.
• Simply providing access to clean water could save two million lives each year.
  

There is actually reason to be hopeful in light of all this. As Jeffrey Sachs points out in his book "The End of Poverty" addressing the majority of the problems like those outlined above do not require new and/or expensive technologies or medicines. Existing and, for the most part, relatively inexpensive solutions (compared to ill-advised dams or desalination plants) --centered around conservation -- will do the trick. As Sachs and others have noted, the most important missing piece is political will.

For example, water continues to be undervalued throughout the world. Specter writes: "Philosophers and economists since Copernicus have noted that, although no substance is more valuable than water, none is more likely to be free. In 'The Wealth of Nations,' Adam Smith called this the 'diamond-water paradox': although water is essential for life, and the value of diamonds is mostly aesthetic, the price of water has always been far less than that of diamonds. Economists often argue that water should be considered a commodity like housing or food."

However, we know it's not quite THAT simple.

"But water possesses an intangible, even mystical quality that transcends the principles of economics; people simply don't think about it the way they think about transportation or clothing -- and they never have." concludes Specter.

The Food and Agricultural Organization (FAO) of the United Nations grapples with the issue of valuing water in a report issued a couple of years ago. (GW)

What's Water Worth?
FAO
Agriculture 21 Magazine

Purely economic valuation of water often overlooks two important dimensions: environmental values, such as the role of water flows in maintaining ecosystem integrity, and social values - such as using water to grow food to eat...

When reminded that about 60% of the human body is water, all would agree that water is a truly "valuable resource". But what is the value of the estimated 3 000 litres of water used to grow the food that the average person consumes each day? That would have been an academic question just 15 years ago, when water was still viewed largely as a free, or at least low-cost, public good. Today, amid growing water scarcities, increasing competition from industrial and domestic users, and alarm over the degradation of ecosystems, the economic valuation of water use in agriculture is rapidly emerging as a key issue in water resources management.

Of all the sectors that use freshwater, agriculture - which claims 70% of global withdrawals from natural sources - shows the lowest overall economic return. That fact has led some proponents of water valuation to champion unregulated "water markets" which, by treating water as an economic commodity, redirect it from low-value to high-value uses - typically from irrigated agriculture to higher value horticulture and from rural areas in general to the industrial and urban sectors. The reasoning is that, since demand outstrips supply when water is treated as a free good, the market will "bring supply and demand into balance" and, in some cases, mitigate the environmentally detrimental effects of overexploitation.

A "triple bottom line". But a new report from FAO says indiscriminate use of the economic approach risks overemphasizing "monetary expressions of value" at the expense of two other important dimensions: environmental values, such as the role of water flows in maintaining biodiversity and ecosystem integrity, and social values - which, at its most basic, can mean simply using water to grow food to eat. Needed, the study says, are water valuation frameworks that recognize a "triple bottom line" giving equal value to water's economic, social and environmental uses.

The report argues that a sound valuation of water can only be done through a process involving all stakeholders in water use. To explore stakeholder-oriented approaches, it presents cases from Cambodia, Sri Lanka and Tanzania where valuation tools and methods were imbedded in "real-world" water resources management. "We found that the concept of value is inherently subjective," says FAO's Leon Hermans, who co-authored the report. "In the end, value is really what the stakeholders can agree on. That's why we see valuation mainly as a practical means of helping stakeholders express the values that water-related goods and services represent and supporting them in reconciling their water demands."

Click here to read more about FAO's program on the value of water.