Water crises biggest risk worldwide - WEF

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Friday, January 16, 2015

Water crises constitute the biggest threat worldwide in terms of potential impact, according to the Global Risks 2015 report by the World Economic Forum (WEF).

For the first time in the report's 10-year existence, water has moved to the top of the impact table.

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Around a third of the world's population now lives in water-stressed areas, and nearly a billion people still live without access to safe drinking water, said Carl Ganter, a member of WEF's global agenda council on water.

Climate change will also profoundly affect water security in the coming years, according to the report.

"Droughts, floods, glacial melt, unpredictable precipitation, runoff, groundwater supplies and water quality will all reflect an increasing instability as long-standing rainfall patterns change and weather extremes increase," said Ganter.

The interconnecting risks regarding water, food, energy and climate change will be one of the overarching megatrends to shape the world in 2030, according to Ganter.

These findings were born out in Latin America in 2014, with the state of São Paulo in Brazil experiencing its most severe drought in eight decades last year.

In the first half of 2014, drought in Brazil was among the three most costly natural disasters worldwide, resulting in economic losses of US$4.30bn according to a report by global reinsurance broker Aon Benfield.

Aerial view of dry soil on the banks of the Atibainha river, in Nazare Paulista, during a drought affecting São Paulo state, Brazil on December 17, 2014.

Meanwhile, in an area of Central America now known as "the dry corridor," more than 1.40Mt of corn and beans was lost in 2014, according to global charity Oxfam.

The UN Economic Commission for Latin America and the Caribbean (Eclac) estimates that the economic costs of climate change will account for some 2.5% of Latin America's GDP in the event that temperatures rise 2.5 degrees Celsius above the historical average.

LATIN AMERICA UNPREPARED FOR INSTABILITY

In Latin America, profound social instability emerges as one of the main risks that the region is unprepared for, according to the WEF report.

The failure of urban planning was also cited as a major area where Latin American governments are unprepared, one which is also linked to the possibility of social stability.

"Urbanization is especially rapid and the failure of urban planning can lead to a wide range of catastrophic scenarios from social unrest to pandemic outbreak," said the WEF.