Source of picture: BBC
By John Richardson
By 2050, the world’s 10 biggest river basins by population are expected to produce a quarter of global GDP, according to a report commissioned by HSBC, which was released in June.
The figure is greater than the combined future economies of the US, Japan and Germany – and would a be sharp increase from a current contribution of a tenth,
Seven in 10 of these river basins face significant or severe water scarcity by 2050 without a considerable improvement in water resource management, the reports adds.
Respondents to the World Economic Forum’s latest Global Risks Survey consider a water supply crisis to be the most likely and most severe societal risk for the next ten years. Governments are increasingly acknowledging that unsustainable water usage constrains economic growth.
And In China, the World Bank estimates that water-related inefficiencies may already be curtailing GDP growth by over 2 percent.
As we discussed on Friday, guaranteeing sufficient water supply to maintain the health of the global economy is just one of several megatrends that present an opportunity, as well as a threat, for the chemicals industry.
The other megatrends are ensuring sufficient supply of food to maintain growth, the impact on economies and societies of changing demographics, such as ageing populations in the West and the impact of China’s one-child policy, and the need to reduce carbon footprints.
Commodity as well as speciality chemicals companies have an opportunity to tap into these megatrends and thus virtually dictate demand growth.
The alternative is to sit back and hope in vain for the world economy to return to where it was before the Babyboomers started to retire in record number, and before the growth in emerging markets, such as China, became a great deal more uncertain.
The companies need to also proactively develop new markets, often using chemicals and polymers that were invented many decades ago. New applications do not necessarily require new products.
In the case of water, cotton production alone accounts for more than 3 percent of all agricultural water use. Traditional cultivation processes such as field flooding are obvious targets for reducing water use.
This challenge has led to the development of a programme organised by the Better Cotton Initiative and including companies such as Levi Strauss, to provide technical know-how to Indian farmers.
Over three years, this has enabled a 32 percent drop in the use of water and pesticides. The farmers’ profits are 20 percent higher as a result, thus also helping to stimulate economic development.
The key is to use drip irrigation systems, essentially plastic veins that can direct water to each plant’s root system.
This not only spreads water and fertilisers more evenly than traditional pumping, but also means less water is available to encourage weed growth around the plants.
In addition, electricity consumption is reduced, as drip irrigation requires less pumping.
These plastic pipes, the demand for which could be huge, are made out of good old fashioned polyethylene (PE).