In their January 2024 report The Future of Growth, World Economic Forum states: “The key question for this pivotal moment is not whether the world still needs economic growth, but rather how that growth is achieved and whether it is aligned with other important national and global priorities.”
The report qualifies economic growth against four pillars: innovativeness, inclusiveness, sustainability, and resilience, underlining that a conventional GDP growth picture is incomplete without a deeper understanding of the underlying nature and quality of growth. Understanding water in terms of this framework would address one of the water’s biggest challenges, which is its undervaluing, leading to unsustainable water use and pollution.
This approach is in line with the work of the Global Commission on the Economics of Water, whose preliminary findings, presented in the 2023 UN Water Conference, call for the global water cycle to be managed “as a global common good, to be protected collectively and in the interests of all”, for which the multilateral governance of water must be reshaped.
Can we afford not to invest in water?
Various bodies have come up with estimations of the economic value of water, all presenting enormous figures. In the 2023 report The High Cost of Cheap Water, WWF estimates that the water crisis costs “at least” USD 58 trillion, although with the caveat that even that huge amount might be an underestimation.
Instead of asking whether we can afford to invest more in water, we should probably start considering if we can afford not to. Indeed, a 2020 study by CDP, based on the 500 companies that reported to them on water, showed that the cost of inaction on water security is five times higher than the cost of action.
Understanding water in terms of the 4 pillars of the 'Future of Growth' Framework
The Future of Growth Framework adopts a multi-dimensional approach, focusing on “the quality, balance and alignment of growth with broader global and national priorities.” The dimensions are meant to complement and qualify traditional measures of growth and are as such helpful in contributing to a broader understanding of the real value of investing in a common good such as water.
- Innovativeness: The extent to which an economy’s trajectory can absorb and evolve in response to new technological, social, institutional and organisational developments to improve the longer-term quality of growth.
- Inclusiveness: The extent to which an economy’s trajectory includes all stakeholders in the benefits and opportunities it creates.
- Sustainability: The extent to which an economy’s trajectory can keep its ecological footprint within finite environmental boundaries.
- Resilience: The extent to which an economy’s trajectory can withstand and bounce back from shocks.
“Viewing the value of water solely from an economic perspective reduces water to a commodity, and ignores the many other values that water has, for society and the environment, as well as often disregarding water’s indirect contribution to the economy” says Colin Herron, Senior Water Resources Management Specialist at the Global Water Partnership (GWP). “Water is irreplaceable, and every single human activity is contingent on the availability of water in sufficient quality and quantity. We should value it as the precious, limited resource that it is.”
He points to the work that GWP is doing to surface the multiple values of water from different stakeholders, leading to better decisions impacting water, as a tangible example of how growth needs to be more inclusive in order to be sustainable. He also notes that the four pillars of growth mentioned in the report are embedded in GWP’s approach and deployed throughout its portfolio, underscoring the relevance of integrating water in broader efforts aiming to achieve sustainable growth.