0.18 Natural capital: water

Water

We begin this Chapter with the disturbing statement that world supplies of fresh water are in jeopardy, not only in the U.S., but in China, India and other large economies. Water is becoming the most abused natural resource. The threat to fresh water is of two types:

Quantity

Diminishing quantities from underground aquifers, owing to growing depletion arising from both industrialization and population growth: The 2014 London World Water Summit projected that world water consumption will double between 2014 and 2025.

Widespread contamination and pollution of all water on the planet, only 1.5 percent constitutes fresh water. 97 percent is saltwater in oceans. Water usage is heavily concentrated in agriculture. 93 percent of water consumption occurs in agriculture, mainly for irrigation. (Note: the figures are for water consumed : water that becomes unavailable for other uses).

Of total water consumption, only 7% is for household and industrial use.

Quality

Sanitation challenges affecting water resources continue to mount. To illustrate, contaminated water worldwide is a leading cause of infant mortality from diarrhea and related gastric problems (2 million children a year die). Contaminated water in many areas has led to widespread cancers of the digestive tract.

This experience of China is illustrative concerning problems both water of availability and water quality. Water is relatively plentiful in South China; but very scarce in North China (see Table 18-2). And chemical water pollution as we will see is widespread (if we considered also bacterial pollutants, the problems are even worse).

Chinese rivers are disappearing. 1990s, China had 50,000 rivers with catchment areas of over 100 square km or more. Now, the numbers of such rivers is down to 23,000 : 27,000 rivers have disappeared as rivers in 60 years.

Moreover, 80% of the rivers flowing through China are heavily polluted. Even worse, research reported in the November 11, 2011 issue of Science shows that fully 90% of Chinese shallow groundwater is polluted. 37% of this water is so polluted that it cannot even be treated for use as drinking water. The costs to China yearly from water pollution issues are estimated at 2.3% of GDP. And 70% of Chinese get their drinking water from underground.

In many villages in China, water from contaminated rivers or groundwater is the only source of water available. Every year about 190 million Chinese (15% of the population) become ill from bad water. Every year 60,000 Chinese die because of water pollution. This has happened for two main reasons:

• In China’s very rapid economic growth experience after 1990 environmental issues were decidedly secondary – incentives were to maximize output, even at heavy costs to air and water quality.
• China does not have laws on groundwater contamination. This is a striking example of the importance of institutions in economic development (see Chapter___).