In this article, we look at the 15 most water-stressed countries in the world by 2040. You can skip our detailed analysis on the crisis and companies that are promoting water usage efficiency and head over directly to the 5 World’s Most Water-Stressed Countries in 2040.
The world’s population has increased from 1.6 billion in 1900 to nearly 8 billion in 2023 and is expected to reach 10 billion by 2050, with 27 African countries being in the top 30 countries that’ll contribute the most to the population levels in the coming decades. With an annual growth rate of close to 1%, demand for water, which is already scarce, is likely to surge in the coming decades as consumption by people, farms and corporations rise. As part of resource-depletion, water scarcity is one of the 10 biggest issues in the world.
Climate change is also making matters worse, causing extreme rainfall in some regions, while other regions experience droughts.
According to the World Resources Institute (WRI), 14 of the world’s 33 most water-stressed countries in 2040 will be in the Middle East. The region, which already faces severe water shortage and relies on groundwater and desalinated sea water, is projected to face further water-related challenges in the coming years. This spells grave danger for a region already embroiled in violence and political conflict. Water scarcity and drought significantly contributed to the unrest in Syria, and is also an important dimension in the conflict between Israel and Palestine as well.
Water-stress in the United States
The US was ranked as the 47th most water-stressed country in the world by the WRI in 2020, and is forecasted to remain in this position through 2040 as well. A 2019 study by Earth’s Future, titled, Adaptation to Future Water Shortages in the United States Caused by Population Growth and Climate Change, noted that by 2071, 96 of the 204 fresh water basins in the US could see their supply reduced by as much as a third. A report in 2020 by the National Geographic cited that 40 of the 50 states in the US are expected to experience water shortage in the years to come as precipitation decreases and population soars.
Conserving Water
Water efficiency is more important today than it ever was before. A number of companies in the US are leading the way in conserving this precious resource. Xylem Inc. (NYSE:XYL) is a water technology provider that offers products and services related to water and wastewater treatment, water reuse solutions, drought relief and desalination, to meet the specific needs of customers in public, residential, commercial, agricultural, and industrial segments.
This year in June, Xylem Inc. (NYSE:XYL) received the Frost & Sullivan award for its role in water waste management and efforts to ensure water safety for future generations. The company is finding recognition world over, and not just in the US. Below is an excerpt of what Sandy Rowland, Senior Advisor and former Chief Financial Office, shared in Xylem Inc. (NYSE:XYL) Q3 2023 Earnings Call:
The team has continued to deliver strong performance in Q3, exceeding expectations on growth, margin expansion, and earnings per share. For Xylem overall, total revenues grew 50%, while organic revenue rose 10%, led by particularly robust double-digit growth in the U.S. Western Europe grew a healthy 6% and emerging markets were down largely due to China, despite strengths in other parts of Asia and also in Africa.
Overall, demand remains resilient. Our backlog is now $5.2 billion, up 5% organically, and this includes a $1.3 billion contribution from Evoqua. Orders were up 3% in the quarter and book-to-bill for the company was approximately one. EBITDA margin was 19.8%, up 150 basis points from the prior year on higher volumes, productivity savings, and favorable price-cost dynamics. Our EPS in the quarter was $0.99, up 14% year-over-year.
On the other hand, other companies are trying to reduce their water consumption. A prime example is NIKE, Inc. (NYSE:NKE). The company has been working for years on strategies to reduce its freshwater footprint. In 2020, the company declared that it had cut the use of freshwater by 30%. NIKE, Inc. (NYSE:NKE) also announced that it was shifting its focus toward the use of recycled cotton because it bypasses the cotton growing phase completely which then comprised 69% of the company’s global water footprint.
In addition, NIKE, Inc. (NYSE:NKE) has also undertaken restoration program projects in its supply chain, which aim at reducing pesticides, improving soil health, and increasing access to safe and clean water for the local communities. The company completed two such programs in 2021; in Maharashtra, India, and Murray Darling, Australia.
Another corporation that is creating a positive impact on the global preservation of water is Ecolab Inc. (NYSE:ECL), which has for a long period been a market leader in water treatment. Through their services and technology offerings, customers are able to reduce water wastage, save energy and help protect the environment. Last week, a report in The Korea Times praised Ecolab Inc. (NYSE:ECL)’s ESG management practices which have aided several Korean companies from earning profits, while reducing water consumption and carbon emissions.
Ecolab Inc. (NYSE:ECL) also invests in providing clean water across the world. In March 2023, the company announced to contribute $10 million to WaterEquity Global Access Fund to provide clean water to five million people in different regions of the world.
Katoosha/Shutterstock.com
Methodology
World’s most water-stressed countries in 2040 are ranked based on forecasts by the World Resources Institute (WRI). Countries are listed in ascending order of WRI’s water-stress scores. The top eight countries on the list were categorized as joint first by WRI because they had the same scores. We have used water consumption levels in these countries as a tie-breaker to outrank some over others. Figures for water consumption have been obtained from various sources, including our recent article, Top 20 Countries with Highest Water Consumption, Worldometer, and other credible news agencies.
Let’s now head over to the list of the world’s most water-stressed countries in 2040.
15. Libya
WRI Score: 4.77
Libya is one of the world’s most water-stressed countries, and will remain so in 2040 as well. According to UNICEF, key drivers of water scarcity in the country include limited water resources, receiving low rainfall, a high population growth, and highly subsidized water tariffs.
14. Jordan
WRI Score: 4.86
According to the World Bank, there is only 97 cubic metera of water available per capita in Jordan, which is well below the absolute water scarcity level of 500 cubic meters. The situation has further been aggravated by rising population growth and influx of refugees. By 2040, per capita water availability is likely to further reduce by 30%.
13. Iran
WRI Score: 4.91
Iran is projected to be among the most water-stressed nations in 2040 due to drought and inefficiency in water management in the country. According to local press, more than 260 cities in Iran faced water shortage, as of August 2023.
12. Kyrgyzstan
WRI Score: 4.93
Kyrgyzstan is one of Central Asia’s most vulnerable countries to climate change, with the country facing severe water shortage in the agricultural, domestic, and industrial segments. A report by UNICEF in 2017 projected that about 600 million children, or one in four, will be living in areas facing extreme water shortage in Kyrgyzstan by 2040.
11. Lebanon
WRI Score: 4.97
Lebanon faces severe water scarcity, with bulk and uncertain water supply sources. According to the World Bank, groundwater exploitation is extreme and unsustainable, with an estimated 20,000 licensed private wells and about 60,000 illegal wells. Most of the coastal aquifers suffer from seawater intrusion. Surface water storage capacity is also very low at just 6% compared to the regional average of 85%.
10. Oman
WRI Score: 4.97
Oman will be one of the world’s most water-stressed countries in 2040 according to the WRI. The sultanate uses more than 80% of its renewable water supply for domestic, industry, livestock, and irrigation needs. To meet the growing need for water, Oman’s government has developed advanced desalination plants to convert seawater into fresh water. Oman is also making investments in dams and reservoirs to tackle the threat of water scarcity.
9. Saudi Arabia
WRI Score: 4.99
Saudi Arabia is among the most water-scarce places in the world, with only 89.5 cubic meters per capita available, whereas the global threshold for water scarcity level is 500 cubic meters per capita. Rural-to-urban migration, high population growth, hot temperatures, and poor water management have further exacerbated the situation. In 2016, the kingdom reversed its policy of self-sufficiency and decided to import all its wheat demand due to water shortage in the country.
8. San Marino
WRI Score: 5.00
San Marino is the only European country that faces water shortage, and by 2040, will be one of the most water-stressed countries in the world. The country relies on Italy for 90% of its water supplies and has an absence of autonomous water resources.
7. Singapore
WRI Score: 5.00
Singapore is heavily dependent on rainfall for its water due to a lack of natural resources, and limited land available in the city-state to construct water storage facilities on. As a result, the country faces high water scarcity with a WRI score of 5/5. According to Singapore’s Ministry of Sustainability and the Environment, about 141 liters of water per capita are consumed in Singapore.
6. Palestine
WRI Score: 5.00
Palestine is among the most water-stressed countries in the world. Even before the 2023 war involving Israel and Hamas started, Palestinians living in the West Bank and Gaza had access to only 80 liters of water per day. The crisis has further been exacerbated by the ongoing conflict. According to Reliefweb, 97% of the water in Gaza is now unfit for human consumption.
Click to continue reading and see the 5 World’s Most Water-Stressed Countries in 2040.
Suggested Articles:
- 11 Best Water Stocks To Buy
- 20 Top Selling Water Brands in the US
- 25 US Cities with Cleanest Air and Water
Disclosure: None. 15 World’s Most Water-Stressed Countries in 2040 is originally published on Insider Monkey.
Hedge Fund Resource Center