Diana Mejia 1181469
Luis Suárez 1212573
Water Scarcity, Tomorrow’s Problem
Water Scarcity, Tomorrow’s Problem
Water scarcity currently affects many regions of the world. Without asigniﬁcant reversal of economic and social trends, it will become more acute over time. Although water is considered a renewable resource, in many parts of the world, water resources have become so depleted or contaminated that they are unable to meet ever-increasing demands. The challenges are more acutely felt in developing countries where 95% of the world’s new population is born each year.This has become a major factor impeding economic development, and also business operations.
The challenges associated with water scarcity are becoming an emerging risk of strategic importance to businesses and their ﬁnancial backers around the world. This is seemly more important with rapid globalization within the business supply chain. Therefore, abusiness case for strategically addressing water challenges is getting stronger.
We can say that there is a business case for improving risk management tools, which can speciﬁcally be related to the risks borne by water scarcity. While each organization must relate to water in its own capacity, the business case for the ﬁnancial sector comes from acknowledging the potentialrisks associated with water scarcity and seeking possible opportunities for mitigating these risks.
Because water has been relatively abundant thoughout our existence on earth, we have come to take it for granted. Water is an essential resource for life and good health. A lack of water to meet daily needs is a reality today for one in three peoplearound the world. Globally, the problem is getting worse as cities and populations grow, and the needs for water increase in agriculture, industry and households. Water use has been growing at more than twice the rate of population increase in the last century, and, although there is no global water scarcity as such, an increasing number of regions are chronically short of water. By 2025, 1 800million people will be living in countries or regions with absolute water scarcity, and two-thirds of the world population could be under stress conditions.
Currently one third of the population lives in countries where there isnt enough water or its quality has been compromised but by 2025 it is expected to rise two thirds.
The amount of water on our planet is fixed but very little of it isavailable for us to use:
- 2.5% fresh water 97.5% saltwater
- 68.9 locked in glaciers
- 30.8 % groundwater
- .3% lakes and rivers
There are two types of water scarcity physical water scarcity this occurs when there is not enough water to meet our needs, the other type of water scarcity is known as Economic Water Scarcity.. this occurs when human, institucional and financial capitallimit access to water even though water in nature is available for human needs.
There Could be three major type of ﬁnancial risks that a project/facility might experience due to water scarcity:
* Financial losses due to disruption of operations
* Increased ﬁnancial investments due to required water treatment, either for water use, orwastewater treatment;
* Loss of an anticipated revenue base due to cancelled or delayed growth and expansion in a region due to quality, quantity, or stakeholder considerations.
As a result, ﬁnancial institutions, which deal with those companies/projects, whether as bankers, investors or development aid organizations, face a variety of potential water...