2030 Water Resources Group

Introduction

The 2030 Water Resources Group was formed in 2008. Its a collaboration of industrial users of water, the World Bank (mainly through its subdivision, the International Financial Corporation) and the Global Management Consultancy firm McKinsey and Company . With no 'independent' address and with all enquiries relating to the 2030 Water Resources Group directed to the e-mail address 2030WaterResourcesGroup@mckinsey.com one can deduce McKinsey and Company has been charged with the facilitation of this group, its outputs and the dissemination of these outputs.

Publications and Research

Charting Our Water Future Economic frameworks to inform decision-making appears to be the sole output of 2030 Water Resources Group.

The "study focuses on how, by 2030, competing demands for scarce water resources can be met and sustained. It is sponsored, written, and supported by a group of private sector companies and institutions who are concerned about water scarcity as an increasing business risk, a major economic threat that cannot be ignored, and a global priority that affects human well-being".

The Executive Summary can be accessed from Charting Our Water Future Economic frameworks to inform decision-making.

Content, Arguments and Recommendations

The report Charting Our Water Future Economic frameworks to inform decision-making sets out the analysis of the 2030 Water Resources Group concerning the issue of perceived water scarcity. The report evaluates four parts of the world with different pressures and issues regards water supply and demand: China, India, Sau Paulo in Brazil and South Africa. They set out the scale of the imbalance between actual capacity of supply, the gap between supply and current and future demand, 'technical' and economic instruments to assist reduced demand, opportunities or 'pathways' for various arms of the private sector to benefit from scarcity and the reiteration of assumptions entrenched in market environmentalist thought.

Water Scarcity is clearly of great concern to the companies involved in the 2030 Water Resources Group. Neither altruistic concerns to ensure universal provision of water and wastewater service or even-handedness in sharing water lies at the root of their intervention however. As they intimate, their motivation in initiating this research is borne from a concern water scarcity poses a risk to their business. While providing interesting instruments for business to measure water usage, which could in turn be used to help decrease their use of water many vital areas are overlooked in the report. Not least scarcity itself.

Mitchell and Kane wrote in 2008 how, "The concept of scarcity is one of the key fundamental economic variables in free market economics. It is important to understand, however, that scarcity is a relative concept. It is relative in the sense that it is measured not in terms of the absolute quantity of a good or service such as water, but rather by actual use and/or demand. For example, the state of California may have enough water to satisfy the basic water needs of their citizens (i.e. enough water for drinking, cooking, and washing etc.); however, there may not be adequate supplies when is comes filling swimming pools, washing cars, and watering golf courses and front and back gardens. Scarcity is affected, then, by socially-constructed wants and needs as well as unsustainable demands and levels of consumption" .

Nevertheless the report Charting Our Water Future Economic frameworks to inform decision-making provides useful information in setting out the imbalance between current and future supply and current and future demand. For instance, the demand predicted in 2030, hence the name of the group. They write "By 2030, under an average economic growth scenario and if no efficiency gains are assumed, global water requirements would grow from 4,500 billion m3 today (or 4.5thousand cubic kilometers) to 6,900 billion m3. As Exhibit 1 shows, this is a full 40 percent above current accessible, reliable supply (including return flows, and taking into account that a portion of supply should be reserved for environmental requirements). This global figure is really the aggregation of a very large number of local gaps, some of which show an even worse situation: one-third of the population, concentrated in developing countries, will live in basins where this deficit is larger than 50 percent. The quantity represented as accessible, reliable, environmentally sustainable supply—a much smaller quantity than the absolute raw water available in nature—is the amount that truly matters in sizing the water challenge"

The predicted imbalance between supply and future demand is predicated on predicted patterns of economic growth. Any notion towards a plateua or negation of growth with a corresponding redistribution of already exisitng assets and resources is not countenanced in this report.

The report discusses collaborations between the private sector, policy makers and civil society, however, unsurprisingly the onus is very much based on technical and market based solutions rather than forthright policy forcing legislative changes on users and providers of water. Moreover, the tone of the report itself is very much technical, however the predisposition of the report, towards marketisation and conducive regulation and institutional frameworks, is demonstrated in the following passage.

"In many cases large individual water users have a big role to play in managing demand. Government policy can help align industrial behavior with efficiency objectives, forming a key component of a reform program. It is critical to ensure incentive design emphasizes the value of water productivity—for example through clearer ownership rights, appropriate tariffs, quotas, pricing, and standards—and at the same time recognizes the impacts such incentives can have on the companies’ profitability. A fact base on the economics of adoption and on the real potential of efficiency measures in such sectors can help identify and prioritize the right regulatory tools for action" .