by Elliott Morss, Morss Global Finance
This is the second in a three-part series on global water problems. The third part to follow shortly will suggest investment opportunities in the water sector. See Part 1 (Analysis) and Part 3 (Investing). In the first article in the series, data and analysis were used to highlight the primary problems. I came to three conclusions:
- In the aggregate, there is plenty of fresh water. And unlike oil and other valuable materials, water is not “used up” but instead almost immediately recycled.
- Agriculture is by far the largest consumer of water. And many water shortage problems are caused by charging far less for water than its “re-use” cost. Charging more for water would result in less being used and the movement of users to where water was more plentiful. It would also result in higher food prices, especially for foods that require large amounts of water such as meat from cattle.
- The number one water problem in the world is dirty water. The UN estimates this problem that could be remedied for $20 billion a year (just under 0.03% of global GDP).
Interview with Jim Thebaut
Jim is an environmental planner, journalist, producer of documentaries, educator, and a public policy expert. He has written and produced numerous documentaries on water, most recently, “Running Dry, Beyond the Brink“. He has been affiliated and produced for CBS, ABC News, HBO, The Arts & Entertainment Network, and Public Television. Jim Thebaut holds an MS degree from the University of California at Los Angeles, a BA degree from California State University at San Francisco and Bachelors in Landscape Architecture (BLA) from the University of Washington.
In what follows, I interview Jim as EM and Jim responds as JT.
EM: Jim, it appears that from a global perspective, the world has plenty of water.
JT: It does. Water problems are always local. I believe the central issues are now more comprehensive than just water scarcity and/or availability. In the coming years we need to focus on water scarcity, climate change/drought and its connection to public health, absence of sanitation, epidemics and disease, poverty, environmental degradation, lack of education for both boys and especially young girls, energy scarceness, agriculture and lack of food supply and ultimately population growth…..The UN recently projected that the population for 2050 could be as high as 10.9 billion. Furthermore, these conditions already create local violence with illegal arms. Worse, present circumstances will likely spawn nuclear arms proliferation in these regions which are only seeking to secure access to scarce resources. This reality opens the door to potential global conflict and profound international security concern. Currently there are no public policies or strategies in place to confront this unfolding global emergency.
EM: Ouch! Many problems.
JT: Yes, and they are all connected. I am in the process of putting together a documentary – “Beyond the Brink” – that demonstrates their linkages. It is currently in development and I have high expectations it will be in production shortly.
Let me offer a couple of examples of the connections. One of the reasons girls in Africa get less education than boys is that there are no toilets in the schools. Another example – Growing tensions between India and Pakistan over water rights: Despite the Indus Water Treaty, things could get out of hand – so here we have two large countries, both with nuclear weapons. And India by itself – a walking time bomb with ineffective governance. The most recent UN estimates suggest India’s population could grow to will grow to 1.9 billion by 2050.
EM: I note that you talk about climate change rather than global warming.
JT: While I strongly believe human activity contributes to global warming, there is little point in getting caught up in that debate. We need to confront the issue on two fronts. First, we should implement a “full court” global strategy to dramatically reduce greenhouse gasses, such as burning fossil fuels such as coal and oil which has increased the concentration of atmospheric carbon dioxide. Equally important, we need to develop new life styles and generate infrastructure in order to adapt to its reality: with carbon dioxide emissions likely to increase dramatically in the next few years, weather extremes are likely to increase.
EM: What gives you hope for the future?
JT: Certain types of research and technological change. In part as a result of new technologies, significant progress has been made on the UN’s Millennium Development Goals. Consider that in the past, it was very difficult to help people living in isolated rural areas. But now, consider the rural poor living in India: implementation of Inclusive Innovation and other far reaching programs will help the impoverished people to uplift their lives. These people should be empowered to acquire and understand new technologies such as cell phones and the Internet. This will allow them to communicate, compete and prosper in the marketplace. Things like this have great potential.
EM: Jim, thanks for this.
Interview with Zhu Jia-Ming
Dr. Zhu Jia-Ming was born in Beijing. During Mao’s Cultural Revolution, he worked in the rural areas of several Chinese provinces, including Tibet. He received a Ph.D. in Economics from the Chinese Academy of Social Science and later an MBA from the Sloan School of Management, at MIT. While is China, he held senior positions in the China International Trust & Investment Corporation (CITIC) and the Center for Social, Economic, and Technological Development under the State Council. Together, Jia-Ming and I established “Green China“, a non-profit with the aim of increasing the dialogue in China on the trade-offs between economic growth and environmental preservation. We later established a for-profit British Virgin Island company with Chinese partners to make investments in China, Cambodia, and Myanmar. He currently teaches economics at the University of Vienna in Austria.
In the following interview, Dr. Zhu’s quotes will be identified as JM.
EM: It appears that as a country, China does not have a water shortage. In Part 1 of this series, I estimated that China uses only 20% annually of its available fresh water. And that is quite low by international standards. Annual water withdrawal per capita is 410 m3 versus a global average of 555 m3.
JM: That is correct. China’s water shortages are regional. This is easily seen by looking at the following map. In the southwest, the water run-off from the Himalayas provides abundant water to the region. Yunnan Province where Kunming is the capital has more water than any other province in China. The Himalayan run-off is also carried by rivers into eastern China and south into Indochina. But the north of China is mostly desert. There are recurrent water shortages up and down the entire eastern coast. There are water shortages almost every year in 52 cities of 11 provinces in the east coastal area.
Over the last few decades, Chinese authorities implemented one of the largest water re-location projects the world has ever known. Called “The South-North Water Transfer Project”, it has diverted water from the southwest to the eastern cities. More specifically, water from the Yangtze River, Yellow River and Han River has been diverted to the East Coast. Before it is finished (if it ever is), its costs will exceed $100 billion. So far, the water diversion to coastal cities has resulted in water shortages in the Changsha/Wuhan area.
EM: The coastal water shortage problem could probably be solved by a series of desalinization plants.
JM: That is a possibility, and as we have seen with other infrastructure investments, the Chinese government is not hesitant, once it has made up its mind, to make large-scale investments. But desalinization plants use a tremendous amount of energy to operate. China has a large and growing energy deficit, so the government wants to make sure it has exhausted less energy-intensive alternatives first.
But the China water problem is not limited to cities. About 65% of China’s water is used in agriculture and the problems are severe here.
EM: I note that only 12% China’s land is “arable” (suitable for growing crops). That is incredibly low – India’s arable land is 53%, and this could in large part be because of water shortages in certain parts of China.
JM: Yes. And because of this, China is forced to import a tremendous amount of food. But for anyone visiting China for the first time, the most striking water problem will probably be the lack of clean drinking water. Recent studies suggest that only 11% of “drinking water” meets the country’s hygienic standards. The rapid expansion of manufacturing over the last 25 years has taken its toll: an estimated 65% of its fresh water has been polluted by industry.
EM: When I visited China about 20 back for Green China, I remember meetings with officials from NEPA, the country’s environmental protection agency. They appeared to be well trained and informed on the country’s problems.
JM: Yes, but the tremendous manufacturing expansion completely overwhelmed them. And the resulting pollution will take years to clean up.
But there is another interesting water story in China: its use in generating electricity. As Table 1 shows, 89% of China’s electricity is generated from coal. That is very high.
By 2020, China wants to nearly triple its hydropower capacity, to 300 gigawatts. To ease its addiction to coal, China wants 15 percent of the country’s energy consumption to come from renewable sources by 2020, compared with 7.5 percent today. We have all heard of the Three Gorges Dam Project. This dam is projected as an anchor in a string of hydropower “mega-bases” planned for the middle and upper reaches of the Yangtze River. Three Gorges alone is projected to generate 3% of China’s hydropower.
EM: Are there other water issues China is facing?
JM: Yes. In the southwest where there is plenty of water, China constructed a number of dams for hydropower. This has created problems with neighboring countries that depend on water from rivers starting in China – India to the west and the countries of Indo-China to the south.
EM: Jia-Ming. Thanks for this.
Statement of Dr. William Turner
After getting an M.S. degree from Pennsylvania State University in Geology-Geochemistry, Dr. Turner earned a Ph.D. from the University of New Mexico in 1971. After serving in the Peace Corps in Cyprus, Dr. Turner has worked domestically and all over the world in water-related consulting assignments. Dr. Turner is also a trustee or principal in more than 20 water-related organizations.
Dr. Turner was also asked to be interviewed but because of time constraints, that was not possible. However, he did offer the following statement after reading the first article in this series:
Yesterday’s news compiled by academics. Interesting news for the hoi polloi. May provide data for those writing grants to support redundant research and more conferences giving publicly employed planners and technocrats’ excuses to travel to far away and exotic places to share small talk and dinner at sumptuous venues. I have been there and done that and quit. Did the water decade lead to anything? I worked through it as a consultant and troubleshooter for U.S.A.I.D. and can tell you it led nowhere. Where has all of Peter Gleick’s great work led? Nowhere. I am more action oriented. I could tell you how to solve the world water problems and with the money and authority, I could do it. Democracies are least able to solve it. Too many vested interests at all levels of government. About a year ago, I attended a conference in my backyard on Rio Grande water quality problems. The technical session lasted about 45 minutes. Wrangling over the following year’s funding by academicians and government technocrats lasted the rest of the afternoon. Even the technical sessions were disappointing demonstrating that the technocrats were unaware of the most powerful technical methods. I was asked on Friday last to give a paper in a high power conference on how to expand water availability. Another nonsense conference which I turned down. I have already spent $100s of thousands on this quest and have been slammed by the bureaucracy and the technically ignorant and politically motivated courts. Crooked courts have been the bane of New Mexico for more than 100 years. Our fist Territorial Engineer was indicted by the Federal Government on October 24, 1906 for land fraud. His bail was paid by a business partner whose application for a large amount of water was approved by him on January 29, 1906 and who was also indicted for land fraud by the federal government in 1911. I could go on. So I concentrate on those matters I can solve and I get paid well for it by those who are serious. I have been involved in this work for 50+ years.
Oceans, Glaciers, and Water Levels
I close this article with an interesting statistical water question. In my first article in this series, I posted the following table:
My question: oceans constitute 1,340 million kms3 while glaciers are only 24 million kms3. How is an addition of only 1.5% to the oceans going to cause them to rise 3-4 feet? And that 1.5% assumes all glaciers melt – highly unlikely.
I put these questions to an engineer friend: George Raymond, an MIT grad who spent most of his career in the private sector:
The total volume of water in the oceans is irrelevant. The percent of water locked up in land based glaciers as a percentage of the total is also irrelevant. Instead, we need to figure out what volume of new water, in the form of future glacier melting, is required to raise the sea water level one meter (3.28 feet).
To avoid trying to define what I mean by “a shell”, I will instead create two concentric spheres one slightly larger than the other. The first sphere is coincident with the sphere formed by the earth’s surface at sea level. It has a radius of 6,371 km. The second sphere has a radius one meter larger than the first sphere. Between the two spheres is a hollow cavity one meter in thickness. That’s the cavity we want to fill with water. First we calculate the surface area of the first sphere. That is 510 million km2. We then calculate the volume of the cavity by multiplying the area by one meter expressed as km:
One meter = 10-3; 510 x 106 x 10-3 = 510 x 103 km3.
Then, in order to take into account the fact that the oceans only cover 70% of the earth’s surface, we multiply the result by 0.7: .7 x 510 x 103 = 357 x 103 km3 = 0.357 million km3.
Compare this result to 24 million km3 locked up as land based glaciers. If it all melts that will raise the sea level by 67 meters!
Elliott, you probably know this: If floating ice melts it does not raise sea level. Of course melting of floating ice can cause the water to absorb a lot more solar energy which accelerates global warming. That’s happening now in the Arctic.
EM: “I probably know this“? I am an economist.