Water scarcity is one of the most significant components of the climate crisis. As per researchers, large Asian economies such as India and China are facing the most severe water shortages. Asia is an industrialization hub that is witnessing rapid urbanization, requiring a significant amount of water. Arunabha Ghosh, the CEO of the Council on Energy, Environment and Water, cautioned that water scarcity should not be considered a sectoral problem, but an issue that transcends the entire economy. Ghosh warned that global fresh water demand is expected to surpass supply by 40% to 50% by 2030.
Ghosh also emphasized that it is essential for Asian economies to understand that water scarcity is a regional common good and that it is in their own interest to mitigate the risks that come their way to prevent the economic shocks that severe water scarcity will impose. India, the world’s most populous nation, is already facing significant water scarcity. Despite having 18% of the world’s population, the country has enough water resources for only 4% of its people, making it the world’s most water-stressed country.
China’s Water Crisis
China, the world’s second-largest economy, has made progress in its transition to clean energy. However, its power system remains primarily dependent on coal. If water is scarce or unavailable for power generation, coal power plants become ineffective. Approximately 80% to 90% of China’s groundwater is unfit for consumption, while half of its aquifers are too polluted to be used for industry and farming. Fifty percent of its river water is also unfit for drinking, and half of that is not safe for agriculture either. Other developing countries in the region are in similar situations, but their water crises could be harder to resolve.
Water Scarcity and the Impact on Energy Transition and Agriculture
The lack of water could impede countries’ transition to net-zero, and economies that are heavily dependent on agriculture could also see a significant drop in output, with food security at further risk. The value of agricultural production in Australia is expected to fall by 14% to reach $79 billion in 2023 to 2024, according to Australia’s Department of Agriculture, Fisheries, and Forestry.
Water is also playing a significant role in the planned energy transition, with countries needing water supplies to be available for energy security. In 2022, China experienced its worst heatwave and drought in six decades. Blistering temperatures dried up areas of the Yangtze River, impeding its hydroelectricity capabilities, the country’s second-largest power source. To alleviate energy risks, China approved the highest number of new coal-fired plants since 2015 last year. Beijing authorized 106 gigawatts of new coal power capacity in 2022, four times higher than a year earlier and equivalent to 100 large-fired power plants.
According to Wang, a Singapore water business leader at sustainability consultancy Arup, many manufacturing industries require water to function, but water is not being used up and could be recycled. She added that businesses must think about how to close the loop and cannot take whatever is available in abundance for themselves.
Overall, there is a growing concern that water scarcity could impede economic growth in Asia, which is the growth engine of the world. Countries need to understand that water scarcity is a regional common good and work towards mitigating the risks that come their way. Water needs to be managed and used efficiently to ensure sustainable economic growth.
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