Water shortages to damage growth and stoke international tensions: Maplecroft

22 Mar 2011 (BusinessGreen) – Water scarcity could undermine the rapidly growing industrial sectors of China and India, while Europe remains far from immune to water shortage threats, according to new research published to support World Water Day. A quarter of the world’s largest companies are thought to be at risk from water shortages already, but whole economies are at risk of disruption as a result of increasingly scarce water supplies, says a report published today by risk analysts Maplecroft. In particular, the report warns that the fast-expanding economies of China and India are already having to address concerns over water supply, and the situation in the Middle East and North Africa is even more pressing. Poor levels of water security in the region could lead to further increases in global oil prices and heightened political tensions, the report says, noting that any shortages could severely disrupt supplies as water is commonly used to force oil out of wells. The report rates six of the 12 Organisation of the Petroleum Exporting Countries (OPEC) members – Algeria, Iraq, Kuwait, Libya, Saudi Arabia and the UAE – in the highest risk category, while Qatar and Iran are also listed as being at high risk of water shortages. Maplecroft said that these countries together accounted for about 30 per cent of global oil production in 2009, while all the countries listed in the report as extreme and high risk collectively accounted for 45 per cent of oil output. Professor Alyson Warhurst, chief executive of Maplecroft, added that control of water sources was likely to exacerbate cross-border disputes in the region as countries take potentially provocative measures to safeguard their supplies. … The World Bank estimates that $180bn of water infrastructure investment is needed each year until 2030 to meet demand for fresh water. In response, the European Commission is preparing a Water Blueprint for 2012 to address the problem of water efficiency.

Report: Water shortages to damage growth and stoke international tensions