simon zadek

Muhtar Kent leads a breakfast discussion about the global challenge of water, leveraging a report launched entitled Charting Our Water Future prepared by McKinsey with numerous other folks. “The global needs of Coca Cola is the equivalent of 8 months use across Mexico City”, we are told alongside Coke’s commitment to become a ‘zero water take’ company.

“We cannot stay as we are, we need to look for another approach…there is a way to deal with the growing gap…today withdrawals are growing at 2% a year, there is a gap of 40% by 2030 between demand (7000 billion cubic meters) and supply…productivity improvements will only deal with 20% of the overall gap, and there is a further 20% of the gap that can be closed by increasing supply in historic ways…that leaves a 60% gap where ‘something different’ needs to be done to address.”

McKinsey has applied the ‘cost curve’ methodology to water and brought crystallized data to the discussion at a high level (see Project Catalyst for how this method has been applied to carbon mitigation).

“Looking at India, the analysis suggests that the water gap ‘can be solved’, that the vast majority of the solutions lie in water productivity improvements in agriculture, and that the net costs are about US$6 billion per annum, ‘not a huge cost for a country like India’…”.

“South Africa is facing a gap by 2030 of 3 cubic kilometers (without taking climate change into account, with this factored in, goes up at least a third)…there are many things that can be done…the ‘new way’ is to take the least cost solution and it can be dealt with, at a cost of US$300 million a year, but the ‘new cost’ given that saving arise would offset all these costs at a national, aggregate level…many countries face a crossroads, this least cost solution approach is how we all need to go if it is to be affordable”.

“Water is a social not an economic good”, explains a South African Minister, “we do understand that water is finite, but we have to take account of the socialist nature of our society…we have to develop an approach sensitively”… “there have to be other ways to incentivise better use of water, not just economic pricing”, argues an Indian chief executive… “pricing comes second, first is knowledge, we know how to do far better before pricing becomes the problem…we need a campaign to achieve best practice”, asserts a German water expert… “we have seen successes, also in the poorest communities in South Africa, “where we can get people to value water without charging them…this message has to be understood at the national level”…. “we do need to price water in agriculture, but we cannot leave this to market forces, water is key for food security, addressing poverty and other policy goals”, says a gentleman from the national federation of agricultural producers.