Water Futures Mobilizing Multi Stakeholder Action for Resilience 2025

The critical role of water for energy production and the energy transition means that water is not only a private sector concern, but also a matter of national security.1.2 Balancing rising challenges with transformative solutions Business as usual shows current trajectories are unsustainable Current trajectories are expected to lead towards increased drought and water stress. By 2050, approximately 5 to 6 billion people, making up more than half the world’s population, are expected to live in water-stressed areas.29 Given current trends, 40% of global water demand will be unmet by 2030, according to the World Bank.30 Unpredictable and out-of-balance water cycles could also negatively impact businesses and the economy. Beyond the GDP impact previously mentioned, global insurance losses from water-driven events are expected to average $200 billion annually by 2034, with potential losses reaching $350 billion.31 There is a critical opportunity to shift from current water-use patterns by redesigning water systems to make them more efficient, resilient and ready to absorb future shocks and stresses. Transforming how we think and manage water today could pave the way for a more sustainable and water- abundant future. A cornerstone for the future of the energy transition Water is mission-critical for the energy transition, as it is essential for a number of its key drivers. Preliminary estimates have found that, by 2030, clean energy measures alone32 could require a total of approximately 900 cubic kilometres (km3) of water annually,33 in addition to regular consumption. For instance, biofuel production technologies require roughly 2,500L of water (including 820L of irrigation water) to produce 1L of liquid biofuel,34 which will likely play a key role in the electrification of the transport sector. In addition, producing 1kg of hydrogen requires approximately 33L of water, depending on the production pathway.35 The transition of other emission-intensive sectors, such as the built environment, will also require the deployment and implementation of water efficiency measures. Buildings have significant energy footprints, currently representing around 40% of carbon emissions globally.36 Lowering emissions from the building sector requires looking at the whole- life carbon emissions of buildings, which includes embodied37 and operational carbon, the latter driven by direct and indirect emissions from utility energy and water consumption38 for heating and cooling.39 The critical role of water for energy production and the energy transition means that water is not only a private sector concern, but also a matter of national security – one that requires collaboration and partnerships with state and non-state actors. Transforming water systems is an investment opportunity There is widespread consensus that transforming water systems requires significant amounts of investment and active participation by the private sector. While estimates of future investment needs for the water sector vary widely between organizations,40 the World Resources Institute (WRI) estimates that global sustainable water management41 could cost approximately $1.04 trillion annually up to 2030,42 with peaks in East Asia and Pacific (EAP) of around $250- $260 billion and in North America of around $180- $200 billion. This is mostly to address water scarcity, except in Sub-Saharan Africa, where access to sanitation remains the primary concern. The estimate is likely to be an underestimation, with costs being much larger when considering the full water-cycle. There are significant investment opportunities for the private sector in water-related technologies. Global Water Intelligence (GWI) and XPV Water Partners estimate that, given the needs, total capital deployed for water security is projected to increase threefold and exceed $13 trillion in the next decade (see Figure 2). The projected investment in water-related assets is expected to equal 17% of global GDP in 2034. Although the public sector today supplies 78% of the capital employed in delivering water security, approximately 55% of future capital is expected to come from private sources, with opportunities across multiple dimensions of water resilience.43 Water Futures: Mobilizing Multi-Stakeholder Action for Resilience 9