Water Stress – Current Trends and Potential Outcomes

Water stress is a key term to fully understand the spectrum of water today and into the future. While there are a lot of complex factors that go into the concept of water stress, the underlying principle is a simple equation:

Water Demand > Usable Water Supply = Water Stress

In other words, water stress is a way of talking about the relationship between the water that’s available to us (locally) and the water that we want or need to use.

The CEO Water Mandate describes it as “the ability, or lack thereof, to meet human and ecological demand for freshwater.” It’s a more applicable and tactical term than water scarcity, which simply refers to the actual quantity of water available, or lack thereof. Water stress takes human factors into account, such as population growth and increased demand for water resources.

Furthermore, water stress can introduce uncertainty into business models and supply chains in the form of water risk. This post explores how water risk impacts people and businesses – and the steps that can be taken to achieve better outcomes and ensure a more reliable water supply for years to come.

The Equation of Water Stress

The American Geophysical Union reports that “Population growth and climate change will combine to pose substantial challenges for water management in the United States. Projections of water supply and demand over the 21st century show that in the absence of further adaptation efforts, serious water shortages are likely in some regions.”

Because the basic concept of water stress is straightforward (demand > usable water supply = water stress), the root causes of water stress can be simplified if viewed as variables in its equation. 

Population Growth

Population growth is one of the key drivers of water stress. Nature.com points out that “The strain on the water system will grow by 2050 when the world population will reach between 9.4 and 10.2 billion, a 22 to 34% increase. The strain will be aggravated by unequal population growth in different areas unrelated to local resources.”

The amount of water used by urban users is smaller than the amount of water used in agriculture; the Washington Post estimates that, in California, irrigated agriculture uses four times as much water as municipal users. Still, an increased number of residents in the state’s urban centers is likely to put further pressure on the region’s dwindling water resources.

Climate Change

The impact of climate change on water stress can’t be overstated, and in many ways, is a compounding factor when it comes to other variables. The primary influence of climate change on water stress will be a disruption to seasonal weather patterns. For example, the AGU writes that “the effect of climate change on streamflow… will vary by season, possibly increasing streamflow in some seasons while lowering it in others.”

– Drought

Many U.S. states are already in a drought, and climate change will exacerbate the problem. While droughts are difficult to predict, their impact can be reduced by implementing drought mitigation plans, investing in more water storage infrastructure, and planting less water-intensive crops.

– Reduced Snowpack

Another side effect of climate change is reduced snowpack in many agricultural regions that rely on it. Mountain snowpack acts as a natural water storage and irrigation system, by gradually releasing water into nearby watersheds over the growing season. The slow release of snowpack in the form of snowmelt gives agriculture and communities resilience to drought.

As National Geographic explains, “Oregon relies on the snow that starts to melt in the spring and supplies water through the summer.” As warmer weather results in smaller snowpacks, there isn’t enough water to get through the year, increasing competition among growers for scarce water resources and disrupting planting schedules.

– Wet Droughts

Wet droughts are becoming more common in some regions of the U.S., particularly in the Pacific Northwest. In this scenario, precipitation may be above average overall, but it falls at the wrong time of year. Only a few degrees of warming can result in reduced snowpack or in early snowmelt, with streams drying up much earlier in the year.

Water Management

The next variable relates to human management of water resources, including farming practices, conservation measures, and infrastructure development. These are variables that people have control over, especially as science learns more about changing weather patterns and have access to better water data. Additionally, methods for conserving water can be improved.

– Overallocation of Water

In most Western U.S. states, a complex system of water rights determines how much water an individual grower can use, based on seniority or historical water use. But the L.A. Times reports that California “has handed out rights to five times more surface water than our rivers produce even in a normal year…. On the San Joaquin River itself, people have rights to nearly nine times more water than flows down from the Sierra.”

Legislation like SGMA, and comparable regulations in other states, aim to address this disparity, but overallocation still remains a concern in many basins.

– Degradation of Farmland

Land management practices can also have a substantial impact on water stress. As the World Wildlife Fund explains, “degraded lands are … often less able to hold onto water, which can worsen flooding.” This can lead to increased runoff, which drains nutrients from the soil or and can introduce pesticides and other contaminants into the water supply.

– Infrastructure Issues

Finally, insufficient infrastructure is contributing to water stress in many regions. Aging dams and canals can leak or break, leaking as much as 10 percent of their water on a regular basis. More water storage infrastructure will be needed in regions that rely on snowpack, replacing these natural reservoirs with man-made alternatives.

Why Water Stress Trends Matter

Water stress is a global issue that affects a variety of industries that may not seem to be water-related. Even major investment institutes like BlackRock have argued that water risk is “an understated risk” that impacts the resilience of investment portfolios.

On the one hand, agriculture is often the first sector in which the impacts of water stress reveal themselves. Water is the lifeblood of agriculture. Without it, even the most valuable farmland could not turn a profit. Once the agricultural sector is disrupted, entire supply chains are affected, driving up the cost of food and other goods.

In the long run, water stress makes it harder for growers to obtain water rights, reduces their ability to produce a return on their crops or livestock, and decreases the longevity of agricultural land. Agricultural loans and investments will also be impacted.

Resilience Can Be Reinforced with Data

While the impacts of water stress are harsh, businesses and people do have the power to change some of these variables – especially when incorporating accurate, up-to-date water data. 

Water data can help agricultural professionals to better identify, understand, monitor, and mitigate water risk, and prepare for a more water-scarce future. AQUAOSO can help ag professionals with our Water Security Platform, which aggregates water data from multiple sources to present an accurate, real-time picture of water risk.

From researching the boundaries of watershed basins, to investigating water rights on a parcel-by-parcel basis, AQUAOSO aims to help growers, investors, lenders, and other stakeholders make better sense of water data. 

What must be present is an in-depth, truthful understanding of water risk situations as that risk pertains to business and financial risk. Having access to the right tools can give us an edge in navigating water stress and altering the variables that contribute to it.

Read more about current water trends in AQUAOSO’s Water Trends Guide.

The Bottom Line

Water stress is a simple equation (water demand > usable water supply = water stress) that contains a lot of variables. Some of these variables can be controlled and many can be influenced through climate action.

From investing in water infrastructure to expanding water conservation practices, stakeholders at all levels can work together to reduce demand and ensure a more sustainable water supply.

AQUAOSO can help ag professionals take the next step by assessing and monitoring water risk in relation to land deals and agricultural investments. Browse our resources page to learn more, or contact us directly to request a free demo of our platform.

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