The economic value of water in the world – estimates and risks

On October 16, we celebrated World Food Day. On this occasion, the WWF published an alarming report on the water crisis threatening the planet. The stakes are high, as the economic value of water and freshwater ecosystems has been estimated at $58 trillion. That’s as much as 60 percent. global GDP!

The economic value of water – the high cost of cheap water

The WWF report calls water the world’s most precious yet undervalued resource. More than_1/3 of global food production directly depends on rivers. They play a key role in maintaining freshwater fisheries, crop irrigation and soil fertility within the deltas. Natural freshwater ecosystems also present tremendous yet neglected value for people and wildlife. The filtering of pollutants through wetlands, the absorptive capacity of floodplains or the performance of river springs in increasing drought resistance also translate into tangible benefits.

Global economic value of freshwater – how to calculate it?

WWF experts decided to explore how the importance of water to society, the economy and ecosystems can be quantified financially. Their calculation was based on three key elements: use value, non-use value and option value.

The usable economic value of global water resources is primarily the concrete, tangible benefits of water use in households, agriculture and industry. It was estimated at $7.5 trillion. – is as much as the annual GDP of France and Germany combined. As much as 70 percent. of this total is attributable to the agricultural sector, particularly irrigation. The manufacturing and mining industries use up to 600 billion^{cubic meters of} water annually, generating profits of $5.1 trillion. annually. Benefits from indirect use of ecosystems, such as for water purification, flood control and carbon sequestration, were also included in the same category, with a total estimated at $50 trillion.

The non-utilitarian economic value of water includes benefits unrelated to the active use of ecosystems. We’re talking, for example, about improving mental health or the satisfaction of passing on clean rivers and lakes to the next generation. The optional value, on the other hand, refers to potential uses that may arise in the future.

Key threats to freshwater ecosystems

The authors of the WWF report stress that global water wealth is under direct threat. Over the past 50 years, we have lost_{one-third of} wetlands, and populations of species inhabiting freshwater ecosystems have declined by an average of 83 percent. Drained and destroyed peatlands are responsible for 4 percent. anthropogenic carbon dioxide emissions on a global scale. Rivers and lakes are drying up, while other areas are being impoverished by flood disasters. The economic value of water and freshwater ecosystems is subject to enormous risk due to numerous factors shaping it.

The report includes case studies from different parts of the world. The Mekong Delta conditions 50 percent. Vietnam’s rice production and provides_1/4 of all freshwater fish caught in the world. However, it is threatened by dam construction and sand mining. Every year, 600 hectares of coastal areas disappear due to erosion, and 1,808 houses were submerged in 2018-2020 alone.

In turn, the economic value of the Amazon basin is threatened by mercury contamination from local gold mines. Every year, 185 tons of heavy metal is released into the river, with disastrous consequences for dolphins, jaguars and humans. Already today, 21 percent. fish sold in the Brazilian Amazon contain dangerous levels of mercury.

The Rio Grande/Rio Bravo River supplies water to 6 million Americans and 10 million Mexicans. However, its current is seriously threatened and is already periodically drying up due to climate change or dam construction. By 2050. can be reduced by another 25 percent.

Investment needed – not just in infrastructure

As a result of improper water management and the destruction of freshwater ecosystems, billions of people around the world do not have access to clean water. Economic risks for companies and entire countries are also growing. Mobilization of governments, business and financial institutions is needed to prevent the worst. However, it’s not just about building new hydrological infrastructure, but first and foremost about protecting and restoring endangered freshwater ecosystems that generate enormous economic value.

The Freshwater Challenge program implemented under the auspices of the WWF in 6 African countries is cited as an example of good practice. Its goal is to restore 350 million hectares of wetlands and 300,000. km of rivers by 2030 – that’s as much as 30 percent. All degraded ecosystems in the region.