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The competition between water and energy needs represents a critical business, security, and environmental issue, but has not yet received the attention that it merits. Energy production consumes significant amounts of water; providing water, in turn, consumes energy. In a world where water scarcity is a major and growing challenge, meeting future energy needs depends on water availability –and meeting water needs depends on wise energy policy decisions.
As water tables decline, the Organization for Economic Cooperation and Development estimates that 2.8 billion people – nearly half of the world’s population -- live in areas of high water stress, rising to 3.9 billion by 2030 if present trends continue. As cities grow, municipal water demands will increase. As populations rise and increase their consumption of meat, agricultural competition for water will intensify.
In the United States, generating energy consumes 20% of the water not used by agriculture. Rising demand for energy -- both conventional and alternative -- has the potential to significantly increases water consumption. As energy producers and consumers seek to reduce carbon emissions, water consumption frequently rises because many cleaner forms of conventional and alternative energy are potentially more water-intensive technologies, which risks adding to demands on water resources.
Now – as new energy policies are emerging – is the window of opportunity to add water to the agenda.
Nations around the world are evaluating their energy options and developing policies that apply appropriate financial carrots and sticks to various technologies to encourage sustainable energy production. Water needs to be part of this debate, particularly how communities will manage the trade-offs between water and energy at the local, national, and cross-border levels. These decisions will impact businesses, investors, security, environment, justice, development, and sustainability. Policy makers, business leaders, investors, non-governmental organizations, and the public need sound, objective information to make the right choices. However, information about the water-energy nexus is often fragmented, weak and incomplete, difficult to compare, and filled with jargon. Inaccuracies in media reports are common because of gaps in understanding of the dynamics of the interaction between water and energy.
To enhance the quality of discussion and decision-making on the water-energy nexus as part of the process of developing better policies, the World Policy Institute seeks to provide the context needed to evaluate key tradeoffs. We have launched this project with a policy paper and panel discussion, and will follow up with additional events, discussions, research and policy recommendations.
The Water-Energy Nexus: A World Policy Paper (March 2011)