Circular economy solutions for global water stress offer the potential to save 400 billion m3 of water yearly, equivalent to 11% of global water demand and almost the entire water consumption in the US, according to a new report.

The report, Less is more: circular economy solutions to water shortages, by Dutch bank ING and Netherlands-based independent water knowledge institute Deltares, sets out a circular model for water usage which replaces the ‘take, make and waste approach’ with a ‘reduce, re-use and retention’ approach.

Global fresh water demand is expected to grow by 2% yearly in the next decades. Based on the assumption that water supply will remain relatively stable, demand growth is expected to lead to serious water stress.

Industrial water demand in particular is expected to grow fast. If no changes are made, global water demand is forecasted to outpace the sustainable water supply in 2040 by 35%. The World Economic Forum has identified water shortages as the biggest risk facing the planet.

This largely due to stress coming from a linear model of water use in which it gets more polluted and wasted as it travels through the system, shortening the water cycle, according to the report.

Linear design of water systems is root cause of problem

The report refers to a widely held view  that water stress problems are the result of a linear model of water use in which water becomes more polluted and wasted as it travels through the system. For example, untreated water from many industrial processes cannot be used for agriculture or municipal use.

In many countries the water cycle is extremely short and lasts only one to three cycles because the usability of water is lost as the quality deteriorates too quickly. For example, waste water from factories is often too polluted for any form of re-use. Without treatment facilities the factories simply discharge the waste water and use fresh water for their production.

The circular economy aims to close the loop and make the water system regenerative by design so water retains its quality and can be used for multiple cycles.

In the report, ING and Deltares analyse the circular potential in six regions: Northern India, California, Ghana, United Arab Emirates, Bangladesh and The Netherlands. The report finds that, while the circular economy is not able to fully eliminate water shortages, it has the potential to save 400 billion m3 of water yearly, which is equivalent to 11% of global water demand and almost the entire water consumption in the US.

 Key regional findings include:

• In California, the circular economy has the potential to almost half the number of years with anticipated water shortages. For the years where shortages remain, these are reduced by over 90%. The circular economy could provide an alternative for desalination projects that come with high environmental and social costs.
• Northern India is a very water stressed region and has a large water intensive agriculture sector. The region is expected to experience water shortages in every year up to 2050. However, the circular economy can reduce these water shortages by one third and save around 350 billion m3 yearly. This equates to 10% of the water used globally.
• Bangladesh is expected to experience water shortages in every year up to 2050. However, the circular economy has the potential to almost half the water shortages which saves 20 billion m3 annually.
• The United Arab Emirates ranks among the most water stressed countries in the world. While it is expected to experience yearly water shortages up to 2050, the circular economy has the potential to reduce water shortages by around 16% in all years bar one in this period (in which the circular economy is expected to completely eliminate shortages).
• Ghana: Up to 2050 Ghana is expected to experience water shortages in 15 out of the 34 years on a country level. The circular economy will only eliminate shortages in one of these years, but has the potential to reduce water shortages by about 2/3rd in the remaining years which equals 117 million m3 annually.
• In The Netherlands, water shortages in the agriculture sector can be reduced by up to a quarter with circular economy measures.

Circular economy offers wide range of business opportunities

The report concludes that applying the principles of a circular economy in the global water sector offers businesses across the whole water supply chain with a wide range of opportunities, from research and consulting activities, through to engineering and construction activities.

However, the report says that without a qualified workforce the transition to circular water systems will be a difficult one that is highly dependent on imported technology and knowledge. In making water systems more circular, it is not only the water situation that needs addressing but also knowledge shortages

Gerben Hieminga at ING Economics Department and author of the report commented:

“As our findings demonstrate, circular water measures certainly have high potential to reduce water stress. Applying the principals of the circular economy requires transformative change of current linear water systems, which in turn also presents businesses with a range of opportunities throughout the supply chain.”

 “Nonetheless, we must be cognisant of the fact that these measures cannot be implemented in isolation. Barriers to progress, such as costs of implementation, regulatory control and free water rights, as well as the entire water cycle from supply, demand and behaviour, need to be improved before a circular water solution can be as effective in achieving such positive results.”

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