ICAEW.com works better with JavaScript enabled.

Energy & Natural Resources Community

The water crisis

Author: Fabiola Branz, Assistant Controller Europe, Xylem

Published: 09 Nov 2021

Exclusive content
Access to our exclusive resources is for specific groups of students, users, subscribers and members.

‘There is a water crisis today. But the crisis is not about having too little water to satisfy our needs. It is a crisis of managing water so badly that billions of people – and the environment – suffer badly.’ World Water Vision Report (World Water Council).

Water scarcity is a looming issue which has and will have huge implications for humankind, however it is not a much-discussed topic, or perhaps not discussed enough. Water scarcity currently affects a staggering 40% of the world's population and is expected to exacerbate as a result of climate change and population growth.

A few facts and figures around water are probably most suited to describe the level of urgency around the issue:

  • 2.3 billion people live in water-stressed countries; of these, 733 million live in high and critically water-stressed countries (UN-Water, 2021)
  • 3.2 billion people live in agricultural areas with high to very high water shortages or scarcity, of whom 1.2 billion people – roughly one-sixth of the world’s population – live in severely water-constrained agricultural areas (FAO, 2020)
  • Today, 1.42 billion people – including 450 million children – live in areas of high or extremely high-water vulnerability (UNICEF, 2021)
  • 700 million people worldwide could be displaced by intense water scarcity by 2030 (Global Water Institute)

What are the main causes of the water crisis?

Climate change is one of the main factors behind this phenomenon, contributing to the warming of the planet, reduction in rainfall, particularly in equatorial regions like sub-Saharan Africa, the Middle East and Central America, rising temperatures, and higher sea levels causing the contamination of freshwater sources. Moreover, changes in rainfall patterns and river flows can contribute to increased frequency and severity of droughts.

Population and income growth are also contributing to the global water scarcity problem as water demand increases. The world's population is projected to grow to 2.3 billion more people by 2050, and universal water demand is projected to increase by 20-30% per year by 2050 (World Resources Institute). Often population growth is concentrated in cities, and if rapid, can lead to the depletion and contamination of surrounding water resources. In less than 10 years, 45 major urban areas with more than 3 million people are projected to be under high or extremely high-water stress (UNICEF).

The current poor status of global water infrastructure for transport, treatment and disposal adds to the severity of the problem, as more fresh water is wasted or polluted. About 80% of the world's wastewater is discharged back into nature without any further treatment.

Furthermore, water as a natural resource is generally undervalued, and often the price does not reflect the total cost of its processing from extraction to disposal. The fact that overall water is not perceived as a scarce resource in the first place, leads to both low levels of efficiency and insufficient investment in infrastructure and technology.

Though water scarcity is a problem in many parts of the world, water insecurity is overwhelmingly an issue among the most vulnerable populations.

The Middle East and North Africa

The Middle East and North Africa is the region most affected by water scarcity in the world. According to a report by UNICEF (Running Dry: the impact of water scarcity on children in the Middle East and North Africa), nearly 66 million people in the region lack basic sanitation and most wastewater is not treated adequately. The region has some of the highest rates of population growth in the world, having more than doubled between 1970 and 2001, rising from 173 million people to 386 million people, and is expected to nearly double in 50 years. The region is also affected by ongoing disputes and conflicts which, by shifting patterns of water use, are putting further pressure on already limited resources. Another peculiarity of the region is that its countries share the same main source of fresh water – ten different countries share the Nile River and four the Jordan River – and are therefore much inter-dependent from transboundary waters such as lakes, rivers and groundwater.

Other more common factors contributing to water stress in this region include urbanisation, rising agricultural demand, poor water management, inadequate infrastructure, and government corruption. Moreover, climate change is causing longer dry seasons, hotter heatwaves and record-setting temperatures. Rainfall is expected to decline in the future, leaving farmers to dig more wells, draining aquifers and causing huge environmental damage. Agriculture accounts for the overwhelming share of freshwater taken from ground or surface water (80% in the Middle East and north Africa as per the World Bank). Crops depend entirely on irrigation in the arid region and governments heavily subsidise agriculture to both reduce rural migration and food dependency from abroad, and this includes allowing for cheap water prices which in turn lead to inefficiency and waste.

The detrimental effect of both water stress and climate change is mostly evident in the Tigris-Euphrates Basin. The basin originates in Turkey but most of its length lies in Iraq with Iran, Syria, Saudi Arabia and Jordan all sharing the river waters. Severe reductions in water flows in downstream countries have been recorded in recent years, primarily due to upstream dam construction and regional droughts. Based on images taken from satellites it appears that the region is losing groundwater faster than in any other region on the planet.


The combination of inefficient water management and widespread water pollution are the main drivers behind China’s inability to successfully supply enough fresh water in some provinces, and the problem is further exacerbated by increasing demand from urbanisation.

Again, climate change plays a key role in the water shortage crisis in the region. The waterflow of the main rivers Yangtze and Yellow Rivers originate from the glaciers of the Qinghai-Tibetan Plateau. However, due to global warming and rising temperatures, the ice mass has gradually decreased its supply of glacial melt with fresh snow and ice, and the atmospheric circulation has changed, often preventing humid summer monsoons to reach northern and internal regions, resulting in more unreliable rainfall patterns. Furthermore, the country is affected by an extremely unequal water distribution, with 80% of water being concentrated in the south, whereas the core of national development is taking place in the north, contributing to higher water demand there.

In order to secure water resilience, particularly after the water shortages that have affected the country in recent years, China has heavily invested in dams, flood-defense barriers and desalinisation plants. Those colossal water projects have caused a number of environmental, social and geopolitical challenges. The South-North Water Transfer Project (SNWTP) is one of the largest and most expensive water-engineering projects in the country, of which completion is expected by 2050. This construction work however is causing the destruction of natural landscapes and biodiversity and will change natural hydrology to an unprecedented degree.

North America

The effects of climate change and water scarcity are also being felt in North America, particularly across the west. Water scarcity is worsened in this region by both climate change, which is making the region hotter and drier, and population growth, as most of the fastest-growing American cities are located in the south-west.

The effects of the so-called Millennium Drought that has affected America West for the past 22 years, are most manifest in the shrinking of Lake Mead and Lake Powell, the main water reservoirs in the region, located along the Colorado River. Over the period the river’s annual flow has shrunk by almost 20% and the water levels of both lakes have dropped alarmingly. The main cause is once more climate change through warmer winters and reduced snow levels on the Rocky Mountains, together with a drying up soil which absorbs overflow water before it can reach both Mead and Powell. The implications of the water reduction in the region are overwhelming. An estimated 25 million people, including their businesses and farms, depend on the water from the lakes, and many of them rely on power from the Hoover Dam, whose performance is being threatened by the falling water supply.

The state of California, the most populous U.S. state, is also heavily affected by a shrinking Colorado River, together with rising temperatures and groundwater depletion, and will inevitably suffer from water shortages in the coming decades. Elevated temperatures lead to increased evaporation from reservoirs and intensify irrigation demands from agriculture. High temperatures and persistence of extreme conditions will continue to bring about droughts with more persistency. Increased reliance on groundwater has been an important mechanism by which California coped with water stress in the past. However, the groundwater resources of the state are more and more depleted, and reliance on these has become increasingly unsustainable.


Clearly, a number of factors have caused and are exacerbating the current global water crisis, one common driver being climate change and the ever-rising temperatures, together with increased demand from the growing population and incomes across the world. Water is still today an undervalued resource which is lacking the necessary investment and public attention that would be required to solve the problem. According to new progress updates launched by the UN-Water Integrated Monitoring Initiative for SDG 6 (IMI-SDG6) in March 2021, the world is off-track on its journey to ensure water and sanitation for all by 2030. Billions of people worldwide still live without safely managed drinking water and sanitation, even though both services have long been defined as human rights.

How to resolve the water crisis? This is a hard question to answer. However, a good start would be to firstly assign an appropriate value to a resource that is more and more scarce, followed by mobilising domestic and international funding towards investment in greater innovation and technology, and finally enhancing the current water management systems to boost water efficiency. And, of course, the fight to contain climate change will surely have a massive impact on freshwater availability too.

*The views expressed are the author’s and not ICAEW’s.