Tapping industrial ingenuity
AL FRY and WALTER RAST
assess the part that industry can play
in safeguarding water resources into
the next century
Industry currently accounts for only about one-fifth of human water use. Agriculture, by comparison, accounts for about two-thirds. But with industrial output projected to increase four- to five-fold before 2050, its freshwater requirements are also bound to increase.
Water is a basic component of many products desired by humans, a component for which there are seldom substitutes. Water is also usually the most convenient and cost-effective means of removing wastes and by-products from manufacturing processes.
Water availability was seldom a problem for industry in the past. If there was not enough water, industry was prepared to pay higher prices to get it. In fact, for most industries, water has been a relatively minor cost.
However, the situation is now changing. By 2050, a total population of 8 to 10 billion will require more food, goods and services, all of which will require water. Some 2 to 4 billion more people than today will need water to drink, bathe and cook. As a result, in some places, water for industrial expansion may not be available at any price.
The world's water supply is constantly recycled in a solar-driven process of evaporation of water from rivers, lakes and the oceans, as well
as from plants, and its subsequent precipitation back on to the Earth's surface. Rain, snow and sleet return about 45,000 cubic kilometres of freshwater per year, but the reality is that the world's freshwater supply is finite and relatively constant. Further, water is used and re-used many times by humans along many rivers before it flows back into the sea.
The issue, then, is not whether water is recycled or reused, but
rather how soon, where and in what condition it is available to other human users?
It is clear, though, that the world can expect increasing shortages of freshwater. Many arid areas already suffer continuous shortages; droughts sporadically affect other regions; groundwater is withdrawn faster than nature can renew it; pollution reduces usable supplies; and salt water intrusion makes much freshwater undrinkable.
Sustainable development demands that we use our finite freshwater resources more intelligently and effectively. This will have to include forward planning and action which can specifically address both the existing and emerging human and environmental problems.
Industry, with its technology and management skills, has much to offer in the important process of helping society manage and use its finite freshwater resources. But it is only one player in a complex equation. It cannot do it all. In partnerships with governments, farmers, non-governmental groups and the public, industry can make major contributions to identifying, assessing and solving the world's water problems as we move into the 21st century.
First it needs to put its own house in order. If governments, and particularly local ones, then establish the correct framework, the private sector can unleash its economic and technical power to address some of the most pressing issues.
This includes setting the price of water at a level which turns it into a valued commodity, one worth conserving, and one in which industry would be willing to invest its time, talent and cash. This is consistent
with a fundamental statement in Comprehensive Assessment of the Freshwater Resources of the World,
a report prepared in 1997 for the United Nations Commission on Sustainable Development. It stated that: 'Water is an economic good. Its economic values should be given due attention when appropriating scarce water resources among competing uses, without infringing on the basic rights to water services of all people at affordable prices.'
If local authorities set up appropriate water policies, and provide the commercial, political and legal stability necessary to cover the investment risks, industry can help fill the investment gap by providing the finance and expertise for 'bankable' projects. This implies that the projects must generate sufficient cash flow to repay the original investment and generate a profit.
In return, industry must be held accountable for its actions. It should be required to meet specific performance standards (delivery of safe water to designated service areas; increasing the period during which water service is available; eliminating water leaks by targeted amounts; meeting specified quality parameters). Water supply and treatment companies should also provide full monitoring and reporting to the public, and meet specific targets for the delivery of their services.
Who needs it?
Increasing demand for water is exerting unsustainable pressure in four key areas affecting both developed and developing countries:
- Human needs (drinking water, sanitation).
- Agricultural needs (irrigation, etc.).
- Environmental needs (protection of natural ecosystems, biodiversity, etc.).
- Industrial needs (providing goods and services for growing populations).
The world's rapidly growing population and continued urbanization will fundamentally influence future freshwater demand. Ninety per cent of the growth will be in developing countries and this, in turn, will result in more megacities (cities with a population of 10 million or more). Rapid urban growth combined with poor economic development can be expected to create enormous environmental and health problems.
Industry can play a substantial role here. There is always a demand for research and development into efficient infrastructure for urban water supply, as well as new technology for re-using urban wastewater. In many cases the technology already exists, and the real need is to prompt public and government commitment and find creative financing mechanisms. And this represents a monumental challenge which can be judged from the following figures: the provision of rudimentary sanitation for 2 billion people currently without any service, as well as the 5 billion additional people expected by 2050, requires supplying sewerage facilities to 383,000 new customers every day for the next 50 years.
This is by far the largest water user as, in much of the world, irrigation is essential for producing food. However, this water use is not uniform. For example, Europe, with abundant natural rainfall, requires relatively little water for irrigated agriculture. Agriculture is also the largest polluter of water in most developed and developing countries as a result of poor land management practices. These include unwise use of pesticides and fertilizers and inefficient irrigation. In addition, unrealistically low and/or subsidized water costs also encourage wasteful water practices.
In this area industry can promote improved environmental practices including fertilizer and pesticide management. It can also support research and development into more effective irrigation technology. The issue of economic pricing of water, however, needs urgent government attention in relation to agricultural water use. The authors of Comprehensive Assessment of the Freshwater Resources of the World suggest that self-sufficiency in food, a traditional nation-state response, may no longer be the most rational or logical policy for water-scarce countries. Rather, it may be more effective, in terms of sustainable use, for some countries to generate income through industrial exports, and import a higher percentage of food.
The allocation of water for environmental needs has long been neglected. The natural environment requires water of sufficient quantity and quality to maintain a diverse array of ecosystem functions and biodiversity resources. But the environment is not just a sectoral user of water. Those charged with protecting the environment have to consider maintaining the quality and supply of water resources for use by other sectors.
This has considerable economic implications on a global scale. A paper published in Nature in 1997, 'The value of the world's ecosystem services and natural capital', placed an annual value of services provided by wetlands as high as $14,800 per hectare and that of rivers and lakes at $8,500 per hectare. Thus it is sound business practice to use freshwater resources efficiently.
Possible roles for industry in this area include supporting catchment management networks, and promoting the effective environmental management of water and land resources. This is of particular interest to companies in the natural resource sectors such as mining, forest products, paper, and oil and gas extraction, which operate near important natural ecosystems. The chemical and fertilizer sectors have important roles, too, in safeguarding environmental amenities and ecosystems.
Many industries, primarily in countries of the Organisation for Economic Cooperation and Development (OECD), have made significant progress in water conservation and it is likely that this trend will continue. It is clear that industry must continue to adjust and develop its water management strategies.
However, industry can play a larger role than just protecting its access to water. It also brings the technological capability to move and treat water, and manage water supplies. Industry can be involved in developing new water technologies and strategies for providing clean drinking water and removing wastes, thus improving the living conditions of millions in developing countries. In fact industry has a unique opportunity to participate in providing sustainable solutions for water management, not only for itself, but also for its neighbours, local farmers and natural ecosystems.
When industry invests in a country and improves its basic health infrastructure by providing safe drinking water and sanitation, it creates employment and stimulates economic growth. This, in turn, creates more affluent customers for goods and services.
Industry is often perceived as the worst polluter of water. Producing goods for consumers does generate a wide range of water pollutants, and there remain serious examples of industrial pollution. But in terms of total pollutant loads, pollution from agricultural and urban runoff constitute more widespread problems on a global scale.
In addition, pollution control regulations and wastewater charges
in many countries have encouraged industrial compliance with ever more stringent limitations. Increased concern among business managers and their stakeholders (including customers), and the introduction of more effective environmental management systems have all contributed to this positive trend. And many industries make a positive contribution to water quality by pre-treating intake water from public rivers, lakes and aquifers because it does not meet the quality standards required for their processes, examples being the food processing, pharmaceutical and electronics sectors.
The actions of industrial enterprises will have an impact on all their neighbours, as well as on the soil, water, air, plants and animals that
make up the natural resources in each particular drainage basin. Some of the most important environmental management innovations in the coming decades will take place at the drainage basin level, and the role of industry is likely to be critical to many endeavours. Since increased regulation is likely in the future, industry has to decide whether it wishes to play a fundamental role in helping frame new regulations.
The World Business Council for Sustainable Development in Geneva, Switzerland, has been a strong advocate of 'eco-efficiency', a concept which implies that industry should concern itself not just with economic performance, but also with ecological performance. Industry does not necessarily oppose government regulation. In fact, it needs clear and consistent guidelines, as well as intelligent regulation that rewards innovation and creativity. Indeed, if industry is to meet the needs of 8 to 10 billion people in future years, it must be encouraged to find creative solutions that produce more with less, and to protect and conserve the natural resource base, including freshwater, that maintains it.
As industry finds new and innovative ways of preventing waste, producing more with less, and discharging less wastewater, there will be an inevitable decrease in water consumption. Each unit of production will require less water, and the water that is returned to the natural cycle will be cleaner. Goals such as these are at the core of sustainable development, and provide a fundamental basis for industry, society, governments and the environment to co-exist in harmony with each other.
Al Fry is a Consultant with the World Business Council for Sustainable Development. Walter Rast is Deputy Director of UNEP's Water Branch.