India to face serious water shortage by 2030

Updated November 25, 2009 20:33:25

India's Prime Minister Manmohan Singh has been visiting the United States, where he signed a deal with President Obama to strengthen cooperation on climate change. India is already the world's fourth largest greenhouse gas emitter, and that's expected to grow as its economy continues to expand. But a new report puts India at the forefront of another serious challenge - a scarcity of water. It warns that without concerted action, the subcontinent won't be able to meet half its water needs by 2030. In neighbouring China, demand will outstrip supply by 25 per cent. While these problems are already well known, the report differs in having been written largely by multi-national companies, who've offered a range of solutions.

Presenter: Karon Snowdon
Speakers: Guilio Boccaletti, Associate Principal, McKinsey and Company; Usha Rao-Monari, Senior Manger, International Finance Corporation

SNOWDON: After years of drought Australians are among those that don't need to be told. There's an urgent need to deal with looming water shortages around the globe. According to a new report if no action is taken the global demand for water by 2030 will outstrip supply by 40 per cent, a social and environmental disaster. The greater shortages will be in India and China. This particular report is notable for the involvement of multinational companies.

RAO-MONARI: If you take a country like India where many of the solutions we found were on the sort of agricultural sector side and all about agricultural efficiency, irrigation efficiency and so on, part of that would be addressed by government, but part of it interestingly could be addressed by the private sector.

SNOWDON: Usha Rao-Monari is a senior manager with the IFC, the International Finance Corporation. It's part of the World Bank. The IFC collaborated with a range of large companies, including Coca Cola, Nestle, Standard Chartered Bank and the brewer, Miller, among others. The report, charting our water future says the worst affected areas will be in developing countries where a third of the population lives. Only half their water needs will be met with a business as usual approach. One of the reports' authors, Guilio Boccaletti from the McKinsey Group, says there's no one size fits all solution and each country will respond differently to the challenge. But he adds it's everybody's problem and needs new government policies and investment, the involvement of the private sector, efficiency measures, research and education, the cost between 50 and 60 billion US dollars a year. India should spend about 19 billion annually, and with regulation China could actually save money.

BOCCALETTI: A number of the solutions that we've identified actually pay for themselves. For example we found in China the solution that we described actually result in net gains of about 20 billion per annum. So it's not always the case it's a net cost to society. In some cases it's actually a net gain.

SNOWDON: What about the responsibility of say the big industrial water users, including some of the companies that have contributed to this report, like Nestle and Coca Cola for example, what are they going to do specifically in their factories for example to conserve or invest in water?

RAO-MONARI: Many of our clients, large water users, some of them absolutely are collaborating with us on this report. The first thing that they're thinking about and worrying about and taking measures to address is saving water. Even if they're using less water or they're treating waste water and using that for their production process and leaving fresh water for consumption for example by surrounding communities. There is really, we were quite surprised that there's much broader recognition of this in all part of the world than we had initially thought when we first started working on this report.

SNOWDON: The report focuses on two other countries; Brazil and South Africa as well as India and China. Australia's creation of water rights and a market for the Murray Darling Basin is used as one example where the capacity exists to regulate users. In others, micro-finance might be used to improve irrigation. Guilio Boccaletti again:

BOCCALETTI: The point we're trying to make there I think is that there exists a number of ways, a number of policy levers to try and adopt and help implement a program of sustainable water use to get to water security.