Limits to freshwater could restrict economic growth by impacting society in four primary ways: (1) by increasing mortality and general misery as increasing numbers of people find difficulty filling basic and essential human needs related to drinking, bathing, and cooking; (2) by reducing agricultural output from currently irrigated farmland; (3) by compromising mining and manufacturing processes that require water as an input; and (4) by reducing energy production that requires water. As water becomes scarce, attempts to avert any one of these four impacts will likely make matters worse with regard to at least one of the other three.
There is now widespread concern among experts and responsible agencies that freshwater supplies around the world are being critically overused and degraded, so that water scarcity will increase dramatically as the century wears on. Rivers and streams are being overdrawn, aquifers are being depleted, both surface water and groundwater are being polluted, and sources of flowing surface water—snowpack and glaciers—are receding as a result of climate change.
According to the UN’s Global Environment Outlook 4 (2007), “by 2025, about 1.8 billion people will be living in countries or regions with absolute water scarcity, and two-thirds of the world population could be under conditions of water stress—the threshold for meeting the water requirements for agriculture, industry, domestic purposes, energy and the environment. . . .” 
A recent study by a team of researchers at the University of Utrecht and the International Groundwater Resources Assessment Center in Utrecht in the Netherlands estimates that groundwater depletion worldwide went from 99.7 million acre-feet (29.5 cubic miles) in 1960 to 229.4 million acre-feet (55 cubic miles) in 2000. When groundwater is withdrawn and used, it ultimately ends up in the world’s oceans, resulting in rising sea levels. However, the contribution of groundwater to sea-level rise will probably diminish in the decades ahead because, in the words of water expert Peter H. Gleick of the Pacific Institute, “as groundwater basins are depleted, there won’t be as much water left to send through rain clouds to the oceans.”
In the U.S., the Colorado River—which supplies water to cities such as Phoenix, Tucson, Los Angeles, Las Vegas, and San Diego, as well as providing most of the irrigation water for the Southwest—could be functionally dry within the decade if current trends continue. The snowpack in the headwaters of the Colorado River is decreasing due to climate change and is expected to be at 40 percent below normal in the coming years. Meanwhile, withdrawals of water continue to increase as population in the region grows.
It is important to distinguish between water withdrawal and water consumption. Water withdrawal represents the total water taken from a source while water consumption represents the amount of that water withdrawal that is not returned to the source, generally lost to evaporation. 
Three billion inhabitants of southern Asia (nearly half the world’s population) face a similar crisis: they depend for their water on the great river systems that flow from the melting glaciers and snow of the Himalayas—the Ganges, Indus, Brahmaputra, Yangtze, Mekong, Salween, Red River (Asia), Xunjiang, Chao Phraya, Irrawaddy, Amu Darya, Syr Darya, Tarim, and Yellow River. Here again, climate change is reducing the amount of snowpack and shrinking ancient glaciers, while growing populations and expanding economies are making ever-increasing demands on these key waterways.
Life-threatening water shortages have already erupted in parts of Africa. In 2009, Somaliland was gripped by a drought that left thousands of families and their livestock seriously weakened for lack of drinking water. Many water wells dried up altogether, and those that still had water had to serve very large populations, including about 100,000 people displaced by the drought.
Agricultural irrigation accounts for 31 percent of freshwater withdrawals in the U.S., according to the USGS. The impacts of increasing water shortages on agriculture are illustrated by the dilemma of farmers in California’s Central Valley, one of the most productive agricultural areas in America in terms of crop output value per acre. In 2009, in the throes of yet another punishing drought, farmers in Kern County (located in the southern portion of the Central Valley) received less than half their normal water allotment from Federal and state water projects. The local agriculture is highly water-intensive: for Kern County farmers to produce a single orange requires 55 gallons of water, while each peach takes 142 gallons. As a result of the drought, tens of thousands of acres of Kern County farmland were idled.
As snowpack disappears, farmers, ranchers, and cities make up for the loss of running surface water by pumping more from wells. But in many cases this just trades one long-term problem for another: depleting aquifers. The prime example of this trend is the Ogallala aquifer, a vast though shallow underground aquifer located beneath the Great Plains in the United States, which is being drained at an alarming rate. The Ogallala covers an area of approximately 174,000 square miles in portions of eight states (South Dakota, Nebraska, Wyoming, Colorado, Kansas, Oklahoma, New Mexico, and Texas), and supplies water to 27 percent of the irrigated land in the United States. The regions overlying the aquifer are used for ranching and for growing corn, wheat, and soybeans. The Ogallala also provides drinking water to 82 percent of the people who live within the aquifer boundary. Many farmers in the Texas High Plains are already turning away from irrigated agriculture as wells deepen. In most areas covering the aquifer the water table has dropped 10 to 50 feet since groundwater mining began, but drops of over 100 feet have been recorded in several regions.
In the U.S., only about five percent of freshwater withdrawal is for industrial uses. But these uses support industries that produce, among other things, metals, wood and paper products, chemicals, and gasoline. Industrial water is used for fabricating, processing, washing, diluting, cooling, or transporting products, or for sanitation procedures within manufacturing facilities. Virtually every manufactured product uses water during some part of its production process.
As water becomes scarce, more effort on the part of industry must go toward providing in some other way the same service as cheap water currently provides, almost always at a higher cost. This can mean redesigning industrial processes, or paying more for water brought from further distances.
But moving water takes energy. In California, for example, water pumps use 6.5 percent of the total electricity consumed in the state each year. Desalinating ocean water for industrial, agricultural, and home use also takes energy: the most efficient desalination plants, using reverse osmosis, consume about 2.5 to 3.5 kilowatt hours of energy per cubic meter of fresh water produced.
But if more energy must be used to obtain water as water becomes scarce, more water must be used to obtain energy as energy resources become scarce. Let’s return to our earlier example of Kern County, California. In addition to a vital agricultural economy, the county is also host to a $15 billion oil and gas industry—which likewise happens to be very water-intensive. The heavy oil extracted from Kern County oil wells can only flow into and up boreholes when drillers inject enormous amounts of water and steam—320 gallons for every barrel pumped to the surface. Farmers and oil companies must compete for the same dwindling water supplies.
Electricity production requires water, too. About 49 percent of the 410 billion gallons of water the U.S. withdraws daily (if saline water is included) go to cooling thermoelectric power plants, and most of that to cooling coal-burning plants. Nuclear power plants also need substantial amounts of water to cool their reactors. Even the manufacturing of photovoltaic solar panels requires water—in this case, water of exceptionally high purity (though of relatively very small amounts compared to other energy technologies). According to Circle of Blue, a network of journalists and scientists dedicated to water sustainability, “. . . the competition for water at every stage of the mining, processing, production, shipping and use of energy is growing more fierce, more complex and much more difficult to resolve.”
Most nations have been getting steadily more productive with water—that is, water use per unit of GDP has been going down. This is largely due to the shift from agricultural to industrial water use, and also to boosts in efficiency. There is much more that could be done in terms of the latter: water productivity in most sectors could easily double, triple, or more.
Still, across the world conflicts over scarce freshwater resources are multiplying and intensifying. There are many potential flashpoints; for example: A coalition of countries led by Ethiopia is currently challenging old agreements that allow Egypt to use more than half of the Nile’s flow. Without the river, all of Egypt would be desert. As users of water, and uses of water, compete for access to dwindling supplies, many nations will find continuing economic growth increasingly put at risk.
By itself, water scarcity is not likely to be an immediate limiting factor for economic growth for the U.S., at least for the next couple of decades. But it is already a serious problem in many other nations, including much of Africa and most of the Arab world. And water scarcity subtly tightens all the other constraints we are discussing.
1. United Nations Environment Program, Global Environment Outlook 4 (Malta: Progress Press Ltd., 2007).
2. Yoshihide Wada, et al., “Global Depletion of Groundwater Resources,” Geophysical Research Letters 37 (October 26, 2010).
3. Felicity Barringer, “Rising Seas and the Groundwater Equation,” Green: A Blog About Energy and the Environment, The New York Times, posted November 2, 2010.
4. Tim P. Barnett and David W. Pierce, “When Will Lake Mead Go Dry?” Water Resources Research 44 (March 29, 2008).
5. National Energy Technology Laboratory, Innovations for Existing Plants Program, “Water-Energy Interface,” http://www.netl.doe.gov/technologies/coalpower/ewr/water/power-gen.html.
6. “The United Nations Intergovernmental Panel on Climate Change famously predicted [the Himalayan glaciers] could disappear as soon as 2035. It turns out that guesstimate was based on misquoting a researcher in a 1999 news article—not a result from any kind of peer-reviewed scientific study. The incident reflects a breakdown in the IPCC process but it doesn’t undercut the reality that glacier loss, particularly in what are technically tropical regions such as the Andes and Himalayas, continues to accelerate in the 21st century. Though they likely won’t disappear entirely for centuries, losing the glaciers will eventually be bad news for the billions around the world who rely on meltwater to survive.” David Biello, “How Fast Are the Himalayan Glaciers Melting?” Scientific American podcast, posted January 21, 2010, http://www.scientificamerican.com/podcast/episode.cfm?id=how-fast-are-himalayan-glaciers-mel-10-01-21. Actual melt rates are a matter of ongoing study, but there is general agreement that, on the whole, the glaciers are retreating rapidly. In the Indian Himalaya, the Chhota Shigri Glacier has retreated 12 percent in the past 13 years and the iconic Gangotri Glacier, where the River Ganga originates, has retreated 12 percent in the past 16 years. See Richard S. Williams, Jr., and Jane G. Ferrigno, eds., Glaciers of Asia, U.S. Geological Survey Professional Paper 1386–F (Washington, DC: U.S. GPO, 2010), online at http://pubs.usgs.gov/pp/p1386f/.
7. “Desperate Water Shortage in Somaliland,” Inside Somalia, posted August 4, 2009.
8. Nancy L. Barber, “Summary of Estimated Water Use in the United States in 2005,” U.S. Geological Survey, 2009, http://water.usgs.gov/watuse/.
9. Kevin F. Dennehy, High Plains Regional Groundwater Study, U. S. Geological Survey Fact Sheet FS-091-00, 2000, http://co.water.usgs.gov/nawqa/hpgw/PUBS.html.
10. Paul D. Ryder, “High Plains Aquifer,” in Groundwater Atlas of the United States: Oklahoma, Texas, U.S. Geological Survey publication HA 730-E, 1996, http://pubs.usgs.gov/ha/ha730/index.html.
11. Barber, “Summary of Estimated Water Use in the United States in 2005.”
12.“Industrial-Agricultural Water End-Use Efficiency,” California Energy Commission website, http://www.energy.ca.gov/research/iaw/industry/water.html.
13. “Membrane Desalination Power Usage Put in Perspective,” American Membrane Technology Association, April 2009,
14. Jeremy Miller, “California Drought is No Problem for Kern County Oil Producers,” Circle of Blue, posted August 24, 2010.
15. Barber, “Summary of Estimated Water Use in the United States in 2005.”
16. Peter Boaz and Matthew O. Berger, “Rising Energy Demand Hits Water Scarcity ‘Choke Point’,” IPSNews.net, posted September 22, 2010, http://ipsnews.net/news.asp?idnews=52939.
17. “Ethiopia and Egypt Dispute the Nile,” BBC News, posted February 24, 2005.
18. Alistair Lyon, “ Arab World to Face Severe Water Scarcity By 2015,” Ottawa Citizen, November 4, 2010.
Water Droplet – chaim zvi/flickr; Crushed by the wheels of industry – Problemkind/flickr