No Water, No Growth – Does Asia Have Enough Water To Develop?

By China Water Risk 21 September, 2018

The report highlights the importance of the Hindu Kush Himalayas for the future of Asia's economy

The Hindu Kush Himalayas is the source of 10 rivers that supply water to 16 countries which represent 40% of Asia's population & USD4trn of GDP
'Business unusual' is the way forward as temperature rise will exacerbate the water scarcity; China & India must lead the Water-nomics conversations
Asia is facing triple threats – not enough water to develop, climate change and clustered assets along vulnerable rivers; we must act now & fast

China, India and other countries in Asia face urgent water challenges and won’t have sufficient water to develop further while ensuring food and energy security, according to a new report we launched on 18 September 2018.

The Hindu Kush Himalayas (HKH) is the source region for the 10 major rivers that supply 40% of Asia’s population across 16 countries. With climate change already threatening the upper watersheds and river flow, governments should be looking at less water-intensive and pollution-free development, according to the report “No Water, No Growth – Does Asia have enough water to develop?”

1 in every 2.5 Asians, or 1.77bn people, live along the rivers that have their source in the HKH

“One in every 2.5 Asians, or 1.77 billion people, live along the rivers that have their source in the HKH,” said Debra Tan, director of CWR, a Hong Kong based think tank. “Over USD4 trillion of GDP is generated in the 10 river basins, which provide one-third of the 16 countries’ surface water, yet there is almost no conversation right now on the threats to Asia’s glaciers from climate change, the water they hold or the consequent risks faced by these rivers.”

Water from the 10 rivers is vital to the social and economic development of Asia, which has been following an unsustainable water-intensive and highly polluting export-led consumption growth model in recent decades, the report argues.

To achieve a per capita GDP of over USD50,000, the US uses at least 1,543m³ of water per person per year, which is only 16% of its total annual renewable water resources of 9,538m³ per person. Yet China and India are only endowed with total annual renewable water resources of 2,018m³ per person and 1,458m³ per person respectively, the report says. Two of the worlds’ most populous countries will thus be faced with no choice but to create a new development paradigm if they want a future with water.

The need to shift to “business unusual” is becoming more urgent as increases in temperature will double across 6 out of the 10 basins in the next 50 years

The need to shift to “business unusual” is becoming more urgent as temperatures will continue to rise, exacerbating Asia’s water challenges. Increases in temperatures will double across six of the 10 basins in the next 50 years compared to the past 50 years, according to the report. At the same time, snowfall will continue to decline with future losses likely more than doubling for the Indus, Tarim and Ganges.

While four out of the 10 rivers will see a reduction in river flow by 2055, more people will be flocking to the basins as many of the continent’s major cities and important economic hubs are located there.

“For such an important area, we still lack enough response and action” said Professor Shaofeng Jia, the Deputy Director of the Center for Water Resources of the Chinese Academy of Sciences (CAS-IGSNRR), who provided technical support to the report, including the data collection, estimations and climate scenario modelling for the 10 river basins.

“Agriculture and energy play key roles as the two largest water users,” said Feng Hu, CWR’s Waternomics lead and co-author of the report. “We need a new paradigm of ‘business unusual’ and circular economies in Asia where there is less waste, better efficiencies in resource use and curbed demand.”

Shifting away from a largely agri and export-led driven growth model will likely cause global disruptions

The report says, however, that balancing food and energy security and shifting away from a largely agri and export-led driven growth model will likely cause disruptions with material implications for businesses and trade, not just for Asia, but globally. The impact is far-reaching.

Getting perspective is important, said Tan “if you emptied out the entire annual flow of the Ganges River Basin, it would not even fill up Lake Erie, the smallest of the Great Lakes in North America but yet that basin supports a population almost twice that of the US.” The clustering of people and thus the economy mean that a third of India’s GDP is generated along the Ganges. She urged policy makers, businesses and investors to assess these clustered risks. “We must consider basins risks from mountain-to-the ocean if we are to waterproof our assets.”

8 out of 10 HKH Rivers are transboundary

But this could be easier said than done as eight of the 10 HKH Rivers are transboundary. The 10 major rivers analysed in the report are: the Amu Darya, Brahmaputra, Ganges, Indus, Irrawaddy, Mekong, Salween, Tarim, Yangtze and Yellow Rivers.

These flow through 16 countries, namely Afghanistan, Bangladesh, Bhutan, Cambodia, China, India, Kyrgyzstan, Laos, Myanmar, Nepal, Pakistan Tajikistan, Thailand, Turkmenistan, Uzbekistan and Vietnam. Decisions made by upper riparian countries will affect the others but bilateral/ multilateral agreements to ensure equitable use of shared water resources are still lacking.

China & India must take the lead in Water-nomics conversation on regional economic cooperation & transboundary water issues

Still, the report suggests that China and India, which largely control the HKH headwaters, must take the lead in the Water-nomics conversation on regional economic cooperation and transboundary water issues. It’s time to move the conversation on water from ‘access to clean water’ to ‘Water-nomics’. Indeed, China has started transitioning its water-intensive and polluting industries toward a circular economy, promoting Made in China 2025 and trade through the ambitious Belt & Road Initiative.

“Through their analysis, CWR makes a powerful case for policy makers, water managers, businesses and project financiers to address interdependencies surrounding water” said water laureate Jeremy Bird, the former Director General of the International Water Management Institute, who also chaired the Mekong River Commission.

“We must not fail, for water is the only resource we cannot survive without”

“The future of Asia is at stake,” Tan said. “We face a triple threat – not enough water to develop, climate change and clustered assets along vulnerable rivers. Hundreds of millions of lives and trillions of dollars are at risk. We must understand our real liquidity constraint so that we make better policy, investment and business decisions today for a water and economic secure tomorrow. We must not fail, for water is the only resource we cannot survive without.”


Further Reading

  • India’s Thermal Power Plants Threatened By Water Shortages – Water shortages are negatively impacting India’s ability to produce power. World Resources Institute’s Tianyi Luo updates us on water stress exposure, risks & opportunities for India’s power sector
  • Water Trading: Shiyang River Basin Case – Successes in the Shiyang River Basin and other pilots have motivated the Chinese government to push a nation-wide water rights & water market system. Tsinghua University’s Professor Jianshi Zhao expands
  • Kazakhstan Focuses On Water Saving To Ease Tensions With China – Kazakhstan & China have a history of tension over the Ili river but with changing waterscapes Kazakhstan is restructuring its water management. See more on why & how it is doing this from Dr. Lei Xie & Professor Shaofeng Jia from the Chinese Academy of Science
  • Can Nepali Coffee Survive The Impacts Of Climate Change? – Coffee growers in Nepal’s hills are facing a double whammy; climate change and pests, which are also interlinked. Abhyaya Raj Joshi expands on the impacts so far & challenges to continue to produce
  • 2018 World Water Week: Key Takeaways – World Water Week 2018 saw exciting issues discussed from financing nature-based solutions to advancing water stewardship & valuing water. Check out more in our key takeaways from China Water Risk’s Woody Chan & Yuanchao Xu
  • Water-nomics: Trade-offs Along The Yangtze – With significant economic, water use and pollution disparities along the Yangtze River, China Water Risk & the Foreign Economic Cooperation Office of the Ministry of Environmental Protection, publish a joint brief to explore strategies to find the right development mix. Check out some of the key findings in this review
  • Water As Leverage For Resilient Cities – Water represents man’s most challenging & complex risk but it can be leveraged for catalytic change. China Water Risk asks Henk Ovink, the first Special Envoy for Water in the world, how this can be achieved
  • How To Solve The Global Water Crisis – Most of the world’s water woes can be solved with enough money and willpower. The real challenges are thus not technical but political and ethical. Check out why World Bank’s Scott Moore thinks so
  • Rising To The Water Challenge – Barclays analyst Zachary Sadow shares key findings from their report with the Columbia Water Center on how US energy companies and public utilities can help alleviate water shortages through new tech and practices
  • New Tech & Policy For Climate Resilience: 3 Takeaways – Experts say new tech needs policy support at an interdisciplinary forum for climate resilient urban water systems, hosted by the Centre for Water Technology & Policy of the University of Hong Kong. Check out three key takeaways from China Water Risk’s Chien Tat Low and Woody Chan

China Water Risk
Author: China Water Risk
We believe regardless of whether we care for the environment that water risks affect us all – as investors, businesses and individuals. Water risks are fundamental to future decision making and growth patterns in global economies. Water scarcity has emerged as a critical sustainability issue for China's economy and since water powers the economy, we aim to highlight these risks inherent in each sector. In addition, we write about current trends in the global water industry, analyze changes occurring both regionally and globally, as well as providing explanations on the new technologies that are revolutionizing this industry.
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