Water economics

Water economics: Scarcest critical resource

Nepal imported about Rs. 107 billion of petroleum products last year. To facilitate the import of petroleum products India is building a long pipeline up to Amlekhganj by which Nepal will be getting a stream of oil. Imagine just the opposite, huge pipelines exporting fresh Himalayan water from Nepal to India and the third world. Not only have we high potential for fresh drinking water, we have high hydroelectricity potential and can grow special agricultural products that will need more water. By engineering improved retention capacity of our green (rainwater) and blue (surface) water, using advanced technologies to generate more green energy and managing better distribution systems we can change our destiny by trading water which is our abundant, cheapest resource. Hunger is increasing demanding more food which in turn needs more water. All industrial countries need large amounts of freshwater for their industries. The value of green energy from hydroelectricity is increasing. River basins were the epicenters of medieval civilizations like the civilization of Nile, Danube and Ganges. The famous civilization of Mesopotamia that means “between the rivers” was along the Tigris and Euphrates rivers in the Middle East. Flowing water facilitates urbanization and transportation. Water system is necessary for agriculture, manufacturing, electricity, thermal power generation (coal plants) and domestic use. Nepal is lucky that despite being untouched by seawater it has enormous high-altitude water storage system that flows vibrantly opening several economic possibilities of making a prosperous country. Think about Qatar,which is the highest per capita income generating country, from what it earns from petroleum productions it is importing fresh water from icebergs of Chile. The World Resource Institute has listed 36 countries that are facing extremely high water stress among which are most Gulf countries which are one of the richest regions of the world earning from their non-renewable petroleum but have no fresh water. Water is a vital human need – for drinking and for other basic requirements. According to UN World Water Report, currently more than 2 billion people have no access of safe drinking water that accounts for about 29% of the total world population. Local tensions, violence and increased regional tensions can occur over water issues that are likely to increase. According to UNESCO, in 2030, 47% of the world population will be living in areas of high water stress. Just as wars over oil played a major role in the 20th-century, water is surpassing oil as the world’s scarcest critical resource. In his book ‘The Epic Struggle for Wealth, Power and Civilization’ journalist Steven Solomon argues with many convincing cases that many 21st century conflicts will be fought over water. Water is not being traded economically. The concept of ‘virtual water trade’ was coined by economists like John Allan of King’s College, London. It means the volume of water consumed by agriculture or industry which is imported to other countries. By consuming water in one country to produce a product that is traded to another country, water is virtually transferred to the importing country. We can commercialize high water absorbing cash crops such as cardamom, raspberry, banana or cotton and can operate industries that needs more water – as water trade. The total volume of fresh water on earth is about 1000 BCM. Nepal is rich in such resources with about 6000 rivers, 3252 glaciers and 2323 glacial lakes. According to ICIMOD, the surface water available in Nepal is about 225 BCM/yr out of which only 15 BCM is in use. Despite the abundance, we are unable to use this resource. Only about 72% of the country’s population has access to basic water supply and only 25% of the whole population has sanitation facilities. The revised hydropower potential of Nepal is 45,610 Megawatts from the identified 114 economically feasible projects, but currently we produce only 632 Megawatts of electricity.In Nepal, although basically an agriculture based country, only 17% of the cultivated area has year-round irrigation that uses less than 8% of the country’s total potential. Management of flood water is also a problem. Every year large numbers of human lives are threatened from the monsoon floods and hundreds of acres of cultivated land are wear-away in the country and crossing the borders. To convert water into wealth, Nepal must have many large reservoirs in the mid hills. Such reservoirs can be used primarily for electricity generation. We are now blindly chasing for ‘run of the river’ plants which is not profitable for Nepal where monsoon rain brings flood and long dry seasons have lean flow. We must concentrate on the ‘reservoir’ system that can produce energy consistently in the dry and wet seasons. One single reservoir can be reused as in Kulekhani. Such reservoirs can be used for supply of drinking water, irrigation, industrial requirements and recreation. We need to utilize and protect our water. If we fail to take proper legal protection to our water it will evoke regional or international conflicts. As, water in India is becoming highly needed for its enormously large thirsty population and for its huge industrial setups our slackness to manage and protect our resource has already started knocking discord at our doorsteps.

One single reservoir can be reused as in Kulekhani. Such reservoirs can be used -for supply of drinking water, irrigation, -industrial requirements and recreation. We need to utilize and protect our water. If we fail to take proper legal protection to our water it will evoke conflicts