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Water Tight 3.0

Proper governance and pricing are just two of the factors that can help solve the global crisis

Water Tight 3.0

Water is our most precious resource and securing water supply is an important consideration for each country. The world’s population is not distributed according to the availability of water, and there are regions where water scarcity is and will remain critical. The global water sector’s future will likely be characterized by efforts to manage demand and increase supply. Appropriate water governance, more effective water pricing, a better understanding of the relationship between water, energy and food, and technology advances will all play an important role in these efforts. The below highlights some of the top issues in the global water sector.

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1. Growing demand for a limited resource

The supply of available fresh water is limited, and, in many watersheds, less than 0.3% of the world’s water is available for human and animal use in the form of fresh surface and groundwater. But scarcity of supply is not the only challenge: the decline in water quality is also a growing problem in many watersheds.1 Although the problems are global, the solutions are local. Therefore, governments, businesses, NGOs, and the public need to collaborate to help ensure safe and clean water supplies.

2. Climate change: Adapting to uncertainty in water resources management

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Climate change has direct impacts on water supply and water quality globally, increasing uncertainty and unpredictability. Unpredictable weather and changing climate also adversely affect the functioning of water assets and make planning and investment in water infrastructure more expensive, placing particular stress on vulnerable populations and expanding social equity gaps. Utilities must reduce their vulnerabilities and develop contingency plans based on various climate scenarios. The need to adapt provides opportunities for innovations, from technological improvements in modelling and water planning to innovative approaches to water conservation. Utilities and policymakers must work together to address this critical issue.

3. Managing demand: The era of low-cost water is over

Both utilities and governments are coming under pressure to safeguard water as a precious resource and to incentivize customers to manage their water consumption and further conservation. A clearer pricing of water will be important, to further incentivize household, business, and industrial users as well as to recover costs of water services provided by utilities.

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4. Resource efficiency: Technology in the driver’s seat

The water sector could benefit enormously from closer integration with technology to promote effective water usage and water reusability. Leveraging technology can facilitate future mobilization of financial resources, improve diplomatic engagement, and strengthen public-private partnerships (PPPs). Smart meters, accelerometers, pollutant detectors, cost-efficient desalination, and many other innovations can become essential tools in easing supply-side constraints. The water industry has grown globally to accommodate technology solutions to help mitigate the costs of water loss, degradation, or misuse climbing daily.

5. Integrated thinking: The water, energy, and food nexus

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The water-energy-food nexus offers an innovative perspective for understanding the complex interdependent nature of the three systems and to inform resource management. Increased agricultural activity will help drive both water and energy demand, while energy production itself can be water intensive. Increased water demand, especially in areas of scarcity, may lead to higher energy demand related to additional pumping and treatment requirements. There is an urgent need for closer collaboration between these sectors; an integrated approach to solving key issues between these sectors can also lead to lower carbon emissions while benefiting ecosystems.

6. Addressing the infrastructure finance gap

To meet future demand, trillions of dollars will be needed on a global level to upgrade ageing infrastructure and expand water-related assets.2 With government funding and borrowing capabilities constrained, the private sector is likely to play a larger role in the sector’s future. More water suppliers may embark on some form of private sector participation, and it may be necessary to find mechanisms that allow more complete cost recovery from customers.

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David Spira is a managing director; Hoai Huynh is a specialist leader; and Anna Schaffer is a manager with Deloitte Consulting LLP, Government & Public Service’s Water and Sanitation Practice. You can read Deloitte’s full publication, Water Tight 3.0 here. If you would like to learn more about Deloitte’s Government & Public Services (GPS) work in sustainability and infrastructure practice, please visit here.

Sources: 1. National Ground Water Association; 2. World Bank.
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