Urgent Global Action Needed to Address Water Crisis, Experts Warn
8% GDP loss by 2050 foreseen due to world water crisis A major international report warns, threatening food production and economic stability.
In its new report, The Economics of Water: Valuing the Hydrological Cycle as a Global Common Good, the Global Commission on the Economics of Water outlines the potentially catastrophic impacts of a disrupted water cycle. By 2050, more than half of the world’s food production could be at risk, and countries around the world could face an 8% drop in GDP on average. Low-income countries could suffer even more, with GDP losses reaching up to 15%.
The Commission attributes the crisis to a combination of weak economic models, unsustainable land use, and the worsening effects of climate change, all of which are placing unprecedented pressure on the global water system.
A Global Water System on the Brink
Currently, nearly three billion people live in areas experiencing either severe drying or unpredictable shifts in water availability, the report finds. These regions also account for over half of the world’s food production. As the climate continues to change, the availability of reliable water sources is increasingly at risk.
“The water crisis is already here,” said Johan Rockström, Director of the Potsdam Institute for Climate Impact Research and one of the report’s co-chairs. “For the first time in human history, we are pushing the global water cycle out of balance. Precipitation, the source of all freshwater, can no longer be relied upon due to human-caused climate and land use change, undermining the basis for human wellbeing and the global economy.”
These disruptions are already having visible consequences. Many cities worldwide are sinking due to groundwater depletion, while unpredictable rainfall patterns are making food production less reliable. In Rockström’s view, these problems are symptoms of a deeper failure to recognise the full economic value of water.
The Need for a New Economic Approach
One of the core arguments of the report is that current economic models significantly undervalue water, leading to its unsustainable use across sectors. Water is often priced too low or even provided for free, which encourages its overuse. This is especially true in industries such as agriculture, data centres, and coal-fired power plants, which require significant water resources and are often located in areas already facing water stress.
Ngozi Okonjo-Iweala, Director General of the World Trade Organization and co-chair of the Commission, described the crisis as both a “tragedy” and an “opportunity” to transform the economics of water. “The global water crisis is a tragedy but is also an opportunity to transform the economics of water – and to start by valuing water properly so as to recognize its scarcity and the many benefits it delivers.”
The Commission also highlights the critical role of “green water”—the moisture in soil and plant life, which is crucial for maintaining stable rainfall patterns and supporting ecosystems. Unlike “blue water” in rivers and aquifers, green water is often overlooked by policymakers, despite its role in generating about half of the rainfall on land. The report emphasises that both types of water must be considered in any effort to address the crisis.
A Mission-Oriented Solution
The Global Commission on the Economics of Water recommends five key missions to tackle the water crisis:
- Transform food systems by improving water productivity, reducing fertiliser use, and promoting more plant-based diets.
- Restore natural habitats that regulate the water cycle by conserving 30% of forests and restoring 30% of degraded ecosystems by 2030.
- Adopt a circular water economy, where wastewater is treated and reused, and resources are recovered.
- Promote low-water innovations in renewable energy and AI, reducing the water intensity of new technologies.
- Ensure universal access to safe water, especially for children, with the goal of eliminating child deaths from unsafe water by 2030.
The report also calls for international cooperation to govern the global water cycle as a common good. This requires a collective approach, with countries working together to manage water resources sustainably and equitably. Mariana Mazzucato, professor at University College London and a co-chair of the Commission, noted that “we must move beyond a reactive market-fixing approach toward a proactive market-shaping one that catalyses mission-oriented innovation.”
A Call for Collaborative Action
The report’s call for a fundamental overhaul of water governance. The shift toward treating water as a global common good requires cooperation across scientific disciplines, sectors, and borders. Scientists and innovators are expected to be at the forefront of developing solutions—whether through improving water usage efficiency, enhancing agricultural sustainability, or developing technologies for a circular water economy.
Furthermore, the report highlights the need for robust data collection and analysis, underscoring the role of AI and advanced data modelling in predicting and managing water resources. For those involved in data science, environmental monitoring, and AI applications in climate research, this presents a critical area for future research and technological development.
The report concludes that a comprehensive, mission-driven approach is essential to stabilising the global water cycle. Only through collective action can the growing crisis be transformed into an opportunity for sustainable development.
