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Binding Constraint

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Binding Constraint

24th June 2011

By: Terence Creamer
Creamer Media Editor

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In a recent address to the Cambridge Sustainability Leadership Programme Alumni Reunion, held in London, Royal Dutch Shell CEO Peter Voser warned that, based on current consumption trends, a 40% shortfall could arise between fresh water demand and supply within 20 years.

He argued, too, that water scarcity is not simply a local issue, with knock-on effects possible from the supply-side responses adopted. For instance, as a result of large-scale desalination of seawater by countries in the Gulf region, the Gulf itself had become saltier, which could have “disturbing effects” on ocean circulation and climate change over time.

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Voser’s statement comes as South Africa is also beginning to wake up to the fact that its future water security is far from certain and that the supply remedies are not only likely to be increasingly expensive, but could also have deleterious environmental consequences.

In fact, the recently released ‘Diagnostic Overview’ by the National Planning Commission frames the problem quite well.

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The document starts out by noting that South Africa is the 30th driest country in the world, and yet it has relatively intense consumption patterns – at 31% of the available yearly resource, consumption is “high by world standards” and “far greater than other countries in the region”.

The report also warns that, as water use approaches 40% of average yearly availability, South Africa will face a “binding water constraint”, while noting that there are already some regional deficits.

Then, there is the prospect that climate change could make parts of the country dryer and aggravate rainfall variability just as demand from communities and industry is set to rise strongly.

From this diagnosis, there is little question that South Africa has to begin engaging in an urgent and far-reaching conversation about water resource management and the country’s future water security.

This conversation can also not be confined to water specialists and practitioners. It has to include government, business, scientists from a range of disciplines, and civil society as a whole.

The initial focus should be on an improved water resource management regime – one that promotes more efficient municipal, agricultural and industrial use and protects the country’s scare water resources from pollution.

But various supply-side solutions should also be interrogated. I believe projects should be advanced through to a bankable feasibility stage and ranked according to their social, environmental and economic costs and benefits.

Much like the integrated resource plan for electricity, the country needs to agree on a water-supply road map for the coming 20 to 30 years.

This supply-side plan should seek to draw in the private sector capital to finance those projects considered critical to future economic growth and development. The tariff assigned to such projects must also be fully cost reflective so as to encourage demand management and more efficient use. In fact, it might even be worth considering premium tariffs for some water consuming sectors, which could be used to fund further projects, or to subsidise subeconomic water initiatives.

Indeed, given that water is essential for sustaining life, the principle of cost reflectivity might not be appropriate throughout society, and government will have to find ways to ensure that poor communities receive adequate quantities of good quality water.

It’s a complex problem. But it is also one that now deserves priority attention.

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