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How Much is Water Worth?

An economic overview

In 1900, researchers estimated that 32 million people were experiencing severe water scarcity. By 2050, researchers forecast an estimated 3.1 billion people will be experiencing severe water scarcity. Water infrastructure has failed to deliver universal access to safe drinking water; already, 4 billion people are affected by water scarcity for at least one month per year with pollution compounding these risks.

Water touches every facet of development. Human life and economic activity are dependent on water. Therefore, the estimated trajectories of where we have been, where we are, and where we are going have significant implications on our economies, especially in developing countries. It is essential to demystify the close link between water and the economy so we can better support global prosperity.

The Cost of Action

Evaluating the costs and benefits of interventions are essential for resource allocation and studying the effectiveness of various techniques are in different locations. The cost of providing access to safe water and adequate sanitation vary from relatively expensive to substantially cheaper. No matter the expense, research indicates there are numerous economic benefits associated with improved water supply and sanitation.

Economic returns on improved water supply and sanitation interventions heavily depend on the location and the technology choice. A return on investment can range from 3 USD to 34 USD for every 1 USD invested. Interventions to improve water resources management can bring significant economic gains. An investment of 15-30 billion USD in enhanced water resource management in developing countries can have a direct annual income return of 60 billion USD.

Additionally, developing countries with improved access to clean water and sanitation services experienced GDP growth of 3.7 percent per year. In contrast, developing countries with the same per capita income, who did not improve access to clean water and sanitation services, experienced GDP growth of only 0.1 percent per year.

Acting with Intentional Investing

We must acknowledge investments in the global water sector for the benefits they generate. Investment in projects that expand water supply and availability is vital to a flourishing economy. This includes investments in water storage, water reuse and recycling, and desalination.

Keep in mind; if the goal is sustainable water infrastructure, interventions must be deliberate in creating equal support and ownership among women and men. Additionally, interventions must be in conjunction with policies and incentives that promote water efficiency and improve water allocation.

Investing in water is not only good for business, but smart investments in clean water and sanitation prevent needless deaths and transform lives. Healthier, empowered individuals become capable, contributing members of the economy and global sustainable development.

This article was written by Katy Thompson for the Page Family Foundation.

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