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India, China to be hardest hit by Asia’s $4 trillion water risk

New Delhi : India, China and several other Asian countries face urgent water challenges and won’t have sufficient water to develop further while ensuring food and energy security, a recent report by Hong Kong-based think tank China Water Risk (CWR) has said.

In fact, India and China, two of the worlds’ most populous countries, will be faced with no choice but to create a new development paradigm if they want a future with water.

The United States uses at least 1,543m3 of water per person per year to achieve a per capita GDP of over $50,000. The amount of water used in the US is only 16 per cent of its total annual renewable water resources of 9,538 m3 per person.

On the other hand, China and India are only endowed with total annual renewable water resources of 2,018 m3 per person and 1,458 m3 per person respectively, the report - 'No water, no growth – Does Asia have enough water to develop?' noted.

The Hindu Kush Himalayas (HKH) is the source region for the 10 major rivers that supply 40 per cent of Asia’s population across 16 countries. The 10 major rivers are the Amu Darya, Brahmaputra, Ganges, Indus, Irrawaddy, Mekong, Salween, Tarim, Yangtze and Yellow Rivers, and eight of these rivers are transboundary.

These rivers flow through 16 countries - Afghanistan, Bangladesh, Bhutan, Cambodia, China, India, Kyrgyzstan, Laos, Myanmar, Nepal, Pakistan, Tajikistan, Thailand, Turkmenistan, Uzbekistan and Vietnam.

Decisions made by upper riparian countries will affect the others but bilateral or multilateral agreements to ensure equitable use of shared water resources are still lacking, the report noted, adding that China and India, which largely control the HKH headwaters, must take the lead in the water-nomics conversation on regional economic cooperation and transboundary water issues.

According to the report, as much as $4 trillion of Asia's GDP could be at stake if the region cannot better manage these rivers that its economies depend on. India could be among those hit the hardest.

The water from the 10 rivers is vital to the social and economic development of Asia, which has been following an unsustainable water-intensive and highly polluting export-led consumption growth model in recent decades, the report states.

“One in every 2.5 Asians, or 1.77 billion people, live along the rivers that have their source in the HKH,” said CWR Director Debra Tan.

“Over $4 trillion of GDP is generated in the 10 river basins, which provide one-third of the 16 countries’ surface water, yet there is almost no conversation right now on the threats to Asia’s glaciers from climate change, the water they hold or the consequent risks faced by these rivers.”

The need to shift to “business unusual” is becoming more urgent as temperatures will continue to rise, exacerbating Asia’s water challenges. Increases in temperatures will double across six of the 10 basins in the next 50 years compared to the past 50 years, according to the report. At the same time, snowfall will continue to decline with future losses likely more than doubling for the Indus, Tarim and Ganges.

With climate change already threatening the upper watersheds and river flow, governments should be looking at less water-intensive and pollution-free development, the report said, adding that while four out of the 10 rivers will see a reduction in river flow by 2055, more people will be flocking to the basins as many of the continent’s major cities and important economic hubs are located there.

“Agriculture and energy play key roles as the two largest water users,” said Feng Hu, CWR’s Waternomics lead and co-author of the report. “We need a new paradigm of ‘business unusual’ and circular economies in Asia where there is less waste, better efficiencies in resource use and curbed demand.”

The report says, however, that balancing food and energy security and shifting away from a largely agri- and export-led driven growth model will likely cause disruptions with material implications for businesses and trade, not just for Asia, but globally. The impact is far-reaching.

Getting perspective is important, said Tan “if you emptied out the entire annual flow of the Ganges River Basin, it would not even fill up Lake Erie, the smallest of the Great Lakes in North America but yet that basin supports a population almost twice that of the US.”

The clustering of people and thus the economy mean that a third of India’s GDP is generated along the Ganges. She urged policy makers, businesses and investors to assess these clustered risks. “We must consider basins risks from mountain-to-the ocean if we are to waterproof our assets.”

“The future of Asia is at stake,” Tan said. “We face a triple threat - not enough water to develop, climate change and clustered assets along vulnerable rivers. Hundreds of millions of lives and trillions of dollars are at risk. We must understand our real liquidity constraint so that we make better policy, investment and business decisions today for a water and economic secure tomorrow. We must not fail, for water is the only resource we cannot survive without.”

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