A Look at the Impending Global Water Deficit

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The scarcity of water is not a theoretical issue that may impact future generations—it is a present day reality. In 2006, 1.2 billion people, nearly 20 percent of the world’s population, lived in areas where there was a scarcity of water. At the same time, 1.6 billion people experience water shortage because they lack the infrastructure necessary to obtain it from local sources. The UN projects that by 2025, 1.8 billion people will grapple with water scarcity, and nearly 67 percent of all people will live under water-stressed conditions. In January of this year, the World Economic Forum (WEF) ranked water crises as a top-ten most likely “global risk” which would have the greatest impact on society in the next decade.

Following the 1977 UN Conference on Water, efforts to increase worldwide access to potable drinking water made significant strides. Beginning in 2003, the agency UN-Water has helped member countries meet the Millennium Development Goal of increasing the amount of people with access to safe drinking water to above 88 percent. However, this recent progress in increasing accessibility to clean drinking water has overshadowed the more challenging task of expanding the sheer volume of available water.

Overall water withdrawals, or the amount of water that will be consumed as either a good or as an input, are expected to increase by 50 percent in developing countries and 18 percent in developed countries from 2013-2025. Agriculture is by far the most water-intense industry, accounting for 70 percent of all global water withdrawals. Industrial and domestic uses account for 20 and 10 percent, respectively.

To put this into perspective, the average person drinks two to four liters of water per day, yet consumes 2,000-5,000 liters of “virtual water” via food, defined as the amount of water that was necessary for the food’s production. Given forecasts of a global population of 9.6 billion people by 2050 and the 70 percent more food that will need to be produced to feed this population, it is clear that overall water withdrawal will only continue to increase as we progress through the 21st century.

California mandates

California is home to the Salinas Valley, one of the most productive agricultural regions in the world. The state is a massive consumer of water for agricultural use, but since 2011, California has been experiencing an unprecedented drought.

Just a few weeks ago, California Governor Jerry Brown made history by taking executive action as a response to the severe drought conditions. The governor ordered the State Water Resources Control Board to enforce a 25 percent reduction in consumption from each of the state’s 400 local supply agencies, and any individual or entity violating the restrictions could face punishment. Justifying this measure, which affects over 90 percent of the state’s residents, the governor insisted, “people must realize we are in a new era.” According to a recent study, the drought is the most extreme to occur in the region in the last 1,200 years. Despite the severity of this drought, the governor’s mandate has sparked heated debates.

Globally, agriculture is responsible for approximately 70 percent of all water withdrawals, and the figure is similar in California. However, this calculation ignores the water that goes to environmental use—which refers to water that is protected either by federal or state law; water that supports wetlands within preserves; water required to maintain stream ecosystems; or water needed to maintain water quality. When such environmental-use water is included, agriculture’s demand on water drops to closer to 40 percent. Agriculture is certainly a major consumer of water, but the way it is currently being framed and discussed in California fails to acknowledge this extra layer of complexity.

The governor defended farmers’ water reduction exemptions, saying that farmers “are not watering their lawns or taking long showers; they’re providing most of the fruits and vegetables of America.” However, Governor Brown has indicated that current water regulations, which date back to 1914, are “archaic” and in need of reevaluation. These water laws stipulate that in times of shortage, those with older, more senior permits have priority over the water resources than those with newer permits. Those with senior rights can buy water more cheaply than those with junior rights—meaning that these junior rights holders are under more pressure in times of drought, as they are forced to source the water they need through alternative means should the more senior holders deplete supply.

Governor Brown’s actions set an interesting precedent for future environmental dilemmas. While agriculture is one of the largest consumers of water in California, the industry generated just two percent of the state’s gross domestic product (GDP). California’s farming industry is one of the most productive in the world, generating $100 billion in annual economic activity. Its nearly 81,000 farms and ranches provide the US with a significant portion of its dairy products and much of its fruit and nut supply. Produce prices have not risen much in reaction to the drought. But if the drought continues, it is very likely to begin impacting prices. California’s drought in 2000 resulted in higher produce prices by 2005, and it took more than a year after the drought had ended for prices to normalize.

Climate change ensures that more regions will soon be in California’s shoes, and policymakers will need to maintain an unwavering support for the agricultural industry in the face of mounting pressure. While maintaining their support for agriculture, however, policymakers should encourage and support the adoption of technologies that allow for the efficient use of water. But if drought conditions become the norm, it may be up to policymakers to more strongly encourage increasingly drastic, permanent changes in production practices. California is a major producer of almonds, rice ,and alfalfa hay, which are among the world’s most water-intensive crops. If the drought becomes more than something temporary, it may require farmers to begin cultivating less water-intensive crops.

California receives most of its precipitation during the winter, so mountain snowpack is vital to water reservoirs, normally providing about one-third of the water used by both urban and rural communities each year. A statewide survey completed on April 1, 2015 revealed this year’s snowpack to be the lowest on record at only five percent of the average. The previous record low, set in 1977 and again in 2014, was 25 percent of average. Alarmingly, current climate change projections indicate that by 2050, California’s snowpack will decrease by 25 to 40 percent of the average. By 2100, snowpack is expected to shrink by 50 to 75 percent of the average.

Chile’s water market

While Chile only stretches 217 miles at its widest point, its length spans an enormous 2,670 miles from north to south—roughly the width of the United States. Its topography is exceptionally diverse. The Southern climate supports lush terrain, and in the North lies the Atacama Desert, one of the driest regions of the world. The exceptionally diverse topography means that a wide variety of crops are cultivated across the country. In similar fashion to California, Chile’s central valley is the heart of the region’s diverse agricultural landscape.

Though Chile has an extensive history of drought, experiencing dozens in the past century alone, the current drought which traces back to 2007 has proven to be one of the worst. The central valley has two contributors to its highly variable rainfall. In addition to being at the mercy of broad atmospheric patterns like El Niño which can drastically reduce rainfall by creating unfavorable moisture-blocking patterns, the region is also exceptionally cloudless. These clear skies mean that the central valley observes unusually high incoming solar radiation and as a result, experiences high diurnal temperature variation. In other words, the days can get very hot while the nights become very cold, and the rate of temperature change peaks shortly after sunset and sunrise. These conditions translate into higher vegetation evapotranspiration rates and greater crop water requirements. As with any commodity, water is held by the balance of supply and demand, and the coupling of crops’ high demand for water with the high rate of radiation and a low physical supply of water amplifies the effects of the drought.

Located in and alongside the Andes Mountains, both rural and urban Chilean communities depend heavily on snowpack water. Unfortunately, like its North American counterpart, Chile’s snow cover is decreasing at a worrying rate. A continued drop will only further exacerbate the effects of water shortage.

While droughts are certainly not welcomed by any farmer, they are particularly hard on those operating on a small-scale. Larger farms have the ability to plant additional land in order to hedge their bets, and can plant a variety of crops, including those which fare better in dry conditions.

Chilean water regulations, in their laissez-faire nature, are starkly different than those of many other countries. Though the country adopted its first water law in 1951, the law experienced many changes through the remainder of the 20th century, particularly as the government changed hands. In 1981, Chile’s decade-old military government settled on a water-intensive crops stipulating that water was a public good for which individuals could obtain the right of private use. Under the new law, Chilean buyers of water rights did not have to state their intended use of the water, nor would their rights to the water be forfeited if they were not using it. Their water was much like any other type of property—it could be sold, was freely and fully tradable, and mortgaged. Furthermore, the reformed code greatly diminished the power of the governing authority of water, the Dirección General de Aguas (DGA), such that they could only exercise judgment on private water use during official drought emergencies.

While the rationale for the loose regulation was to encourage a free market where private industry would be incentivized to grow, a consequence of the lack of regulation has been over-expansion of land and over-productivity, as well as a vulnerability to monopolization and speculation. Large-scale farmers who can afford to aggressively obtain and exercise water rights have done so, while small-scale farmers who are unable to compete have been left in the dust. In 2005, Chilean law was updated to address one of these aforementioned irregularities. The law instituted a tax on owners who fail to utilize their water, and if an owner fails to pay the tax, these rights can be publicly auctioned.

Proponents of deregulation will argue the economic landscape is one of equality, as the government distributes the water rights for free. However, while holders are free to sell their rights to whomever they choose, the reselling of these rights has become big business. One quote from an auction near Copiapo had a right for one liter of water per second, which can only irrigate three acres of grapes, olives, or vegetables, sell for over $120,000. Clearly the economic playing field is far from equal.

In a statement made in March of this year, Chilean President Michelle Bachelet indicated that the government would be investing in improved irrigation systems as well as small-scale desalination plants capable of producing drinking water. She indicated that the drought situation was “here to stay”—a statement corroborated by climate change predictions—and that more permanent solutions would therefore be necessary.

Entrepreneurial efforts show promise

Although the recent water statistics published by the UN are troubling and the multi-year droughts in California and Chile are similarly alarming, innovative entrepreneurs are offering some hope. Two small up-and-coming American companies, Pulsepod and Tree-T-Pee, are producing thoughtful products that may be instrumental in managing a looming supply epidemic.

Founded by a team of Princeton University engineers, pulsepod is an ultra-low power environmental sensor and mobile transceiver that is placed on the ground in crop fields. Similar in size and shape to a standard circular home smoke alarm, one pulse pod has several portals which can be fitted with customizable sensors capable of observing a number of realities that impact agriculture. Each of these individual sensors can track a distinct phenomenon: precipitation, air temperature, relative humidity, barometric pressure, and a number of different types of solar radiation measures. From those fields a user can account for farm-level evapotranspiration, a critical driver of the growing water imbalance. The team has also developed additional sensors that can measure soil moisture, salinity, and pipe-flow, which can provide advanced knowledge on irrigation efforts and water penetration rates.

Pulsepods are relatively low-cost, and their simple hardware means that they can be used anywhere. In terms of water management, their impact could be substantial. The technology would help farmers have a better idea of how much to water, and when they might be over-watering. Governments would have access to better information on water usage, allowing them to better plan and allocate resources. Insurance companies could use the Pulsepod data to build weather-based index insurance products—an essential form of protection for farmers susceptible to the effects of drought.

Another venture that is providing quantifiable improvements in agricultural water usage, particularly for the citrus sector, is Tree-T-Pee . Tree-T-Pee is a small cone placed around the base of the tree that serves as a containment system, directing water flow precisely towards a tree’s roots. Founded by Johnny Georges, a generational citrus farmer from the state of Florida, Tree-T-Pee is a low-cost, low-technology innovation to maximize water efficiency in tree fruit production.

In 2009, a University of Florida study of the product showed trees which used Tree-T-Pee benefitted from a 93 percent reduction in water usage. Among citrus trees, which typically require watering three times per week, a Tree-T-Pee would save 24,200 gallons of water per year per tree, extend tree life by 37 percent, and be reusable for up to twenty years. While the product was originally distributed to only five counties in the central valley of California, a deal struck on the popular entrepreneur show, “Shark Tank”, opened farmers’ eyes across the US and the world.


A growing global population poses a threat to finite water supplies. Unfortunately this phenomenon is not happening in isolation, but alongside climate change which is making water supplies even more scarce in many parts of the world.

In California, severe drought has given way to a recent mandate which has sparked a debate between agriculturalists and non-agriculturalists over whether or not the industry should be exempt from statutory water use restrictions. The governor’s strong commitment to the state’s agricultural sector is a positive precedent for supportive water regulation.

In Chile, a free market water rights system has given small-scale farmers little buying power while allowing larger-scale farms and competing industries like mining to flourish. Though the country has been focused on agriculture’s potential as an export market, there are worrisome flaws in the weakened authority of the water regulatory body.

Despite these daunting obstacles, the demonstrated innovation of entrepreneurs refreshes hope in the ability to manage and mitigate these risks before they become permanent reality. Entrepreneurs at Pulsepod and Tree-T-Pee have been able to create low-cost, simple products that many different kinds of farmers around the world would find easy to adopt.

Farmers and policymakers alike should keep watch on new technology and stand ready to adapt and embrace alternatives to water distribution and conservation.

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