Water Security Likely to Harm Businesses and Economies Over the Next Twenty to Thirty Years, According to New National Intelligence Council Report
The United States National Intelligence Council (NIC) warns water-related conflicts globally will increase over the next decades, as supply and demand constraints are exacerbated by climate change, affecting nations and businesses alike.
In the NIC report, delayed by nearly six months, and still not officially released, the Council warns that: “Reduced water security over the next 20 to 30 years is likely to harm businesses, industries, and the overall economic well being [sic] of many countries.”
The report went on to emphasize that “[w]ater is essential for creating and maintaining jobs, with at least half of the global workforce employed in water and natural-resource dependent industries, including agriculture, forestry, fisheries, energy, manufacturing, recycling, construction, and transportation.”
The release of the water security report is required by the National Defense Authorization Act, but was seemingly delayed by the Trump administration due to references to human-caused (anthropogenic) climate change.
While the report highlights some common themes when it comes to water security, such as threats in historically dry regions like the Middle East and Northern Africa, NIC also emphasized that regions around the globe will soon face supply-demand gaps as demographic changes and climate change continue to impact communities.
Latin America, East and Southeast Asia, and Central Africa, will all see water-related challenges over the next few decades. In addition, the report highlighted the failure to properly address COVID-19 in many developed countries as a sign of possible challenges ahead when it comes to dealing with multiple crises, warning that “some wealthier countries also lack adequate resilience mechanisms to manage multiple or cascading threats simultaneously, and thus remain vulnerable to systemic shocks.”
The report came on the heels of the Chicago Mercantile Exchange group officially launching their water futures index for California. The index, which is tied to the Nasdaq Veles California Water Index, allows traders to bet on the future price of water and should allow farmers and other agricultural sector entities to hedge on water supplies in the state.
Market solutions for water pricing may help some nations stay ahead of the economic effects of supply-demand gaps, but it’s unclear if these market-based schemes will help mitigate the long term effects of water scarcity. Vector Center’s own Perception Reality Analysis™ of these types of trade mechanisms, shows a hearty appetite for water futures among traders, but skepticism amongst policy wonks.
Basav Sen, climate justice project director at the Institute for Policy Studies, for example told Gizmodo, “What this represents is a cynical attempt at setting up what’s almost like a betting casino so some people can make money from others suffering…” adding, “As clean, useable water is becoming scarcer, the incentives in capitalism work to commodify it, and work to ensure that the scarcity is an opportunity to make money.”
The report can be read in its entirety here.
Lead image: Groundwater levels remain below average throughout the American west, as mapped by Vector Center from NASA Grace-FO data.
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Overallocation, outdated policies, increasing demand, and climate change have resulted in increasingly severe water crises that affect food supplies, energy production, and ultimately human wellbeing. Without access to and an understanding of the latest information, decisions are often made that perpetuate or exacerbate water issues, impacting geopolitical and economic stability, and causing harm to people and the environment.
J. Carl Ganter/Vector Center 
