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The High Cost of Cheap Water
The annual economic value of water and freshwater ecosystems is estimated to be USD 58 trillion – equivalent to 60 per cent of global Gross Domestic Product (GDP). But the world’s freshwater ecosystems are in a downward spiral, posing an ever growing risk to these values, according to the report The High Cost of Cheap Water, published in October 2023 by the World Wildlife Fund (WWF).
Since 1970, the world has lost one-third of its remaining wetlands, while freshwater wildlife populations have, on average, dropped by 83 per cent. This disastrous trend has contributed to growing numbers of people facing water shortages and food insecurity, as rivers and lakes have dried up, pollution has increased and food sources, such as freshwater fisheries, have dwindled. It is also exacerbating economic pressures and undermining global efforts to reverse nature loss and adapt to the worsening impacts of climate change, from devastating droughts and extreme floods to sea-level rise.
Degradation of freshwater systems
The report finds that direct economic benefits, such as water consumption for households, irrigated agriculture and industries, amount to a minimum of 7.5 trillion US dollars annually. It also estimates that the unseen benefits – which include purifying water, enhancing soil health, storing carbon, and protecting communities from extreme floods and droughts – are seven times higher at around USD 50 trillion annually.
However, the degradation of rivers, lakes, wetlands and groundwater aquifers is threatening these values as well as undermining action on climate and nature and progress towards the UN Sustainable Development Goals. Extracting unsustainable amounts of water, harmful subsidies, alterations to river flows, pollution and climate change-related impacts are endangering freshwater ecosystems. Shockingly, two-thirds of the world's largest rivers are no longer free-flowing, while wetlands are continuing to be lost three times as fast as forests.
Combined with poor water management, the destruction of freshwater ecosystems has left billions of people world-wide lacking access to clean water and sanitation, while water risks to businesses and economies are growing. By 2050, around 46 per cent of global GDP could come from areas facing high-water risk – up from 10 per cent today.
Addressing the global water crisis
To address the global water crisis, WWF calls for governments, businesses and financial institutions to urgently increase investment in sustainable water infrastructure. However, it cautions that outdated thinking, which focuses solely on more built infrastructure and ignores the source of the problem, degraded rivers, lakes, wetlands and aquifers, will not solve the water crisis, especially in the era of climate disruption.
The key lies in reversing the ongoing loss of freshwater ecosystems. Governments, for example, should join the Freshwater Challenge, a country-led initiative that aims to restore 300,000 km of degraded rivers and 350 million hectares of degraded wetlands globally by 2030 and protect intact freshwater ecosystems. Meanwhile, businesses must transform their approach to water and scale up collective action to build more resilient river basins.
Read more and download the report on the WWF website