Economic risks hidden in local water pollution and global markets: A retrospective analysis (1995–2010) and future perspectives on sustainable development goal 6

Elsevier, Water Research, Volume 252, 15 March 2024
Yang J., Li J., van Vliet M.T.H., Jones E.R., Huang Z., Liu M. et al.

Pollution from untreated wastewater discharges depletes clean water supply for humans and the environment. It poses adverse economic impacts by determining agricultural yields, manufacturing productivity, and ecosystem functionality. Current studies mainly focus on quantity-related water scarcity assessment. It is unknown how low water quality amplifies local water stress and induces cascading economic risks globally. In this study, we estimated both quality and quantity-related water scarcity index (WSI), local economic water scarcity risk (WSR), and cascading virtual WSR evident in global trade markets across 40 major economies from 1995 to 2010. We find developing countries, e.g., India and China, witnessed fast growth in both quantity and quality-related WSI. Major developed economies, e.g., the US and Germany, experienced a modest increase in water stress but alleviated quality-related risks. Local economic risk (WSR) grew from $116B to $380B, with quality-related risks rising from 20 % to 30 %. Virtual economic WSR in global supply chains increased from $39B to $160B, with quality-related risks increasing from 19 % to 27 %. China became the top exporter of economic WSR, ranked above the US, France, and Japan, and the second-largest position as an importer, trailing only the US. We finally conducted scenario modeling by 2030, assuming different progresses on SDG 6 targets. The findings suggest that only the most ambitious progress in both water quality enhancement and efficiency improvement helps to alleviate ∼20 % economic WSR globally. Our findings underscore the necessity for strategies that integrate management of untreated wastewater flows, improved water use efficiency, and diversification of supply chain networks to enhance global economic resilience to water challenges in the future.