Navigating the water crisis

Water scarcity is a pressing global issue that poses significant challenges for cities around the world.

Executive Summary

• Regardless the country, the recurring themes around water scarcity are driven by climate change, high population density, failing infrastructure, and poor management.
• Water scarcity mitigation and management require significant financial resources for infrastructure development, maintenance, and operational costs.
• We need a societal approach to water management.
• A just transition for water requires a shift towards sustainable water management practices that prioritise social equity, environmental sustainability, and economic development.

Water scarcity is a pressing global issue that poses significant challenges for cities around the world. As populations grow, climate change impacts escalate, and water demands rise, the availability of freshwater resources becomes increasingly limited.

We live in a water scarce world

According to the World Resource Institute Aqueduct Water Risk Atlas, 25 nations (constituting a quarter of the global population) are living under water stress each year. This means they use up all their drinkable water and become reliant on rainfall for the year ahead. The natural ecosystem is under severe threat from climate change, with floods and the disappearance of wetlands becoming more prevalent. Shifting weather patterns and water-related conflicts are particularly pronounced in areas marked by political instability.

Water scarcity can be incredibly localised within countries, impacting specific regions or communities, even in countries with overall abundant water resources. For example, in 2018, after suffering successive severe droughts, the City of Cape Town in South Africa faced 'Day Zero' in 2018, the name given to when Cape Town would run out of municipal water. Fast forward to 2023 and the dams are now the fullest they have ever been. This brings into focus how water security is not something that can be taken as a given when considering so many external factors.

The Middle East and North Africa are currently the most water-stressed regions globally, with 83% of the population exposed to high levels of water scarcity. Rapid population growth, dense urban centres, and limited water resources are global themes, from Bangalore's depleting groundwater levels to the sinking cities of Jakarta and Mexico. Even Europe is not immune, with Spain, Italy, and the Mediterranean region facing significant water issues. The US is also experiencing water challenges. Regardless the country, the recurring themes around this issue are driven by climate change, high population density, failing infrastructure, and poor management further exacerbated by global conflicts.

South Africa, too, is not exempt from these issues. Our infrastructure is aging, and the cost of maintenance is steep. The balance between building new infrastructure and maintaining existing facilities is a delicate one. In addressing some of these challenges, automated meter infrastructure (AMI) is proving invaluable in detecting leakages and preventing costly damage. The adoption of AMI has largely been driven by water shortages and the importance of leakage detection and water preservation, customer billing and service requirements, detection of pipe faults and asset management. As economies recover from the pandemic, stakeholders are investing in digitalisation, and the global smart water meters market is expected to record significant growth of 7.7% between 2020 and 2026. While Industry forecasts expect investments in smart water metering to jump from $2.9 billion in 2020 to $4.6 billion by 2026. These costs can be a barrier for municipalities or water providers with limited budgets or resource constraints.

Addressing Funding Constraints

Water scarcity mitigation and management require significant financial resources for infrastructure development, maintenance, and operational costs. However, many municipalities struggle to generate sufficient revenue and face challenges in accessing additional funding sources. For utilities providers a shift in thinking is required.

In South Africa, municipalities are subject to various regulatory frameworks and legislation that require compliance in areas such as procurement, financial management, and infrastructure development. Meeting these requirements becomes a priority to avoid legal and financial repercussions, often at the expense of service delivery. The available budget is nowhere near sufficient to maintain our water infrastructure, necessitating innovative financing models and service delivery approaches. Restrictions on borrowing due to fiscal policies and legal frameworks further act as inhibitors for alternative financing, however municipalities can seek partnerships with development finance institutions that provide alternative financing options specifically targeted at public sector projects.

Addressing funding constraints requires a combination of efficient financial management, strategic planning, and collaboration among various stakeholders to ensure sustainable water management and meet the urgent needs of municipalities facing water scarcity. Investors and donor funders are ready to invest in green projects. but what is needed are bankable, viable projects for them to support. Municipalities must invest time and resources in developing these projects, demonstrating financial administration competency beyond just achieving clean audits.

A whole-of-society approach is needed

The harsh lessons from Cape Town’s Day Zero which had a significant economic impact, underscored the need for a whole-of-society approach to address water scarcity. Consumer access to real-time water consumption data empowers individuals to make informed decisions, fostering a societal approach to water management. We learned from Cape Town’s Day Zero how having visibility into their consumption could empower consumers to make informed decisions to reduce usage and implement conservation measures. The punitive measures implemented, including naming and shaming the highest water users, were crucial in driving behavioural change.

While we see a growing trend towards borehole and Jojo tank usage, indicating an awareness of water scarcity, not all South Africans are aware of the importance of sustainable water use. While businesses, particularly in the restaurant industry, are becoming more sustainability-conscious, globally the major water demand still comes from agriculture and industry. Reducing the impact of agriculture on water scarcity requires an integrated and collaborative approach involving farmers, policymakers, researchers, and other stakeholders to develop strategies that can help mitigate the impact of agriculture on water scarcity. These sectors must be held accountable for their water usage.

A Just Transition for Water

Water is central to meeting the world’s climate goals, feeding a growing population, and meeting people’s basic needs for survival but the world is failing to prioritise water issues. As countries push for a just transition away from fossil fuels, they must also transform how they manage water.

A just transition for water requires a shift towards sustainable water management practices that prioritise social equity, environmental sustainability, and economic development. It involves ensuring fair and equitable access to water resources, addressing the needs of marginalised communities, and minimising negative impacts on livelihoods and well-being.