A summary of the 2024 Economics of Water report, highlighting global water challenges, solutions, and urgent actions needed.
The Global Commission on the Economics of Water, led by prominent global figures such as Tharman Shanmugaratnam (President of Singapore), Ngozi Okonjo-Iweala (Director-General of the World Trade Organization), Mariana Mazzucato (Professor at University College London), and Johan Rockström (Director of the Potsdam Institute for Climate Impact Research), has published a groundbreaking report in October 2024.
This influential group brings together leading experts from across fields to propose a radical rethinking of how we value and manage water. The report calls for a shift in perspective, treating water as a global common good, and emphasizes the importance of justice, equity, and environmental sustainability in water governance.
A Global Water Crisis
The report reveals a critical global water crisis, driven by unprecedented pressures on the hydrological cycle. Experts, including Richard Damania (Chief Economist, World Bank) and Joyeeta Gupta (Professor, University of Amsterdam), warn that water scarcity is affecting nearly half of the global population, and this crisis is further intensified by climate change, deforestation, and biodiversity loss. These disruptions are pushing the hydrological cycle out of balance, causing more frequent droughts, floods, and damage to ecosystems.
Water as a Global Common Good
At the core of the report is the concept of water as a global common good, a theme strongly endorsed by Henk Ovink, the report’s Executive Director, and María Fernanda Espinosa (CEO of GWL Voices and former President of the UN General Assembly). Instead of treating water as a local resource, the report advocates for global cooperation. It highlights the crucial role of green water—water stored in soil and vegetation—which is often overlooked in traditional water management approaches. The report calls for a collective, boundary-transcending strategy to restore and manage the hydrological cycle sustainably.
The Five Critical Missions
The report outlines five key missions, emphasizing that each one addresses essential components of water management and global sustainability. The team, which includes experts such as Yvonne Aki-Sawyerr (Mayor of Freetown) and Aromar Revi (Director, Indian Institute for Human Settlements), presents these missions as essential to tackling the water crisis:
Revolutionize Food Systems: With agriculture consuming the majority of global water, experts like Daniel Esty (Yale University) argue for transforming food production to enhance water efficiency. This mission includes adopting micro-irrigation, climate-resilient crops, and more sustainable farming practices.
Conserve and Restore Natural Habitats: Naoko Ishii (Director, University of Tokyo) advocates for restoring at least 30% of the world’s degraded ecosystems by 2030. Protecting wetlands, forests, and watersheds is key to stabilizing the hydrological cycle and ensuring sustainable water supplies.
Establish a Circular Water Economy: This mission is about reducing water waste and improving water reuse systems. Ma Jun (Founder, Institute of Public & Environmental Affairs, China) emphasizes the need to build circular systems that recycle water and reduce industrial water use.
Enable a Clean Energy Future with Low Water Intensity: With the global shift towards renewable energy, the report stresses the importance of minimizing water use in energy production. Innovators like Jo Tyndall (Director, OECD Environment Directorate) suggest water-efficient cooling technologies for data centers and power plants as essential steps.
Ensure Access to Safe Water for All: Led by Mamphela Ramphele (Co-Founder of Reimagine SA), this mission calls for universal access to clean water and sanitation by 2030, particularly in vulnerable and underserved communities. It emphasizes scalable, decentralized water treatment solutions.
The Economics of Water: Pricing for Sustainability
The report, building on the work of economists like Abebe Selassie (Director, IMF’s Africa Department), stresses the need to properly price water. Current water pricing systems often fail to reflect its scarcity, leading to overuse and waste. The commission advocates for the elimination of harmful subsidies in water-intensive sectors and encourages governments to adopt policies that reflect the true value of both blue and green water. Proper pricing will incentivize sustainable water use, drive innovation, and ensure that industries and agriculture contribute to conserving water.
The Cost of Inaction
Prominent experts, including Ismail Serageldin (Founding Director, Bibliotheca Alexandrina), warn that failure to act on water management will have catastrophic economic consequences, particularly for low-income countries. The report estimates that water scarcity could shrink the GDPs of water-stressed regions by up to 8% by 2050. Water scarcity will not only lead to economic losses but also contribute to food insecurity, increased migration, and heightened social inequality.
Global Cooperation and Innovative Governance
The report calls for global partnerships and innovative water governance frameworks. Usha Rao-Monari (former UNDP Under-Secretary-General) emphasizes the need for public-private partnerships that promote sustainable water practices and hold industries accountable. The report recommends adopting a mission-oriented approach that brings together governments, businesses, and civil society to tackle the interconnected challenges of water scarcity, climate change, and biodiversity loss.
Conclusion: A Path to a Sustainable Water Future
The Economics of Water report, driven by insights from leading global thinkers, provides a roadmap for radically transforming how we manage water. It calls on governments, corporations, and individuals to treat the hydrological cycle as a global common good, implementing policies that integrate efficiency, equity, and sustainability. The report makes it clear that water is not just a local or national issue—it is a global challenge that requires collective action to ensure a just and sustainable future for all.
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