Confronting the climate crisis: Water as a lever for climate action

We are fast approaching critical tipping points where climate impacts could become irreversible. How we manage the earth’s water has the potential to either propel us closer to these thresholds or pull us back from the brink. A meta-analysis of the World Bank’s Country Climate and Development Reports shows that across the globe, water-related climate risks threaten the very systems that sustain us—our food, health, energy, economies, and the ecological networks that support life on Earth.

Unchecked, climate-driven changes in water availability and quality will carry severe economic costs. Regions facing water scarcity could see significant drops in growth due to effects on agriculture, health, and incomes. Under a hot/dry scenario, the Dominican Republic could lose up to 16.7% of its GDP, while a 10% reduction in water supply in Türkiye could shrink GDP by 6%. In Malawi, droughts increase poverty risk by 14%, underscoring how water shortages deepen inequality, particularly in areas lacking water infrastructure. Wide variability in water projections—such as potential 5-10% crop revenue drops in Sahel countries under a hot/dry scenario versus increased livestock yields under a wet scenario—adds uncertainty to economic planning. Effective water management can help navigate these uncertainties and avert the worst outcomes, transforming water from a climate risk into a driver of resilience.

Water: An Untapped Climate Mitigator

The water sector’s potential to reduce greenhouse gas emissions is often overlooked—yet it shouldn’t be. Currently, it contributes around 10% of global emissions, with water utilities alone responsible for around 2%— on par with the global shipping industry. Yet existing technologies could cut up to 50% of energy-related wastewater emissions at zero or even negative cost. By adopting these solutions, water utilities can reduce emissions, improve efficiency, and even generate revenue, transforming the water sector from an emissions source to a climate solution.

Water as an Adaptation Accelerator

Because climate impacts manifest largely through the water cycle, and water is essential across all sectors, investments in water management are crucial for climate adaptation, especially in high-impact sectors like agriculture, health, and energy.

In agriculture, especially rainfed systems, climate variability presents major risks. In Argentina, rainfed agriculture incurs estimated annual losses of $2.1 billion due to fluctuating water availability. Even irrigated crops face risks: in Lebanon, climate change could reduce yields by 3.5-7.5% for rainfed crops and 0.3-8.7% for irrigated ones, with potential annual losses of $250 million. Climate-smart agriculture, including water-efficient irrigation, can achieve triple benefits: higher agricultural productivity that can also boost farmer incomes; reduced greenhouse gas emissions; and increased resilience. 

In health, access to safe water and sanitation remains a challenge. Despite progress, in 2022, 2.2 billion people still lacked safely managed drinking water, and 3.5 billion lacked safe sanitation. Improved water and sanitation infrastructure reduces disease, promotes better health and education outcomes, improves labor productivity, and builds resilience to climate impacts. Following floods in Bangladesh, improved sanitation systems reduced cholera outbreaks, underscoring the role of water infrastructure in public health adaptation.

Water is also important for the renewable energy transition. Hydropower, which relies on stable water supplies, is vulnerable to climate impacts. Reduced river flows could cut Ghana’s hydropower output by 8-30% by 2040. Co-locating water-based energy storage solutions, like pumped hydro and reservoirs, with other renewables, as seen in Angola and Jordan, enhances grid stability and stores surplus energy, supporting the green energy transition. 

Innovation and Technology in Water-Climate Adaptation

Across all sectors, innovation and technology are enhancing water’s role in climate adaptation. Digital financial services expand access to credit for investments in irrigation systems and sanitation facilities. Extending digital connectivity empowers vulnerable populations to better prepare for and respond to climate shocks. Innovative financing is also facilitating investments in desalination and wastewater reuse technologies, helping to expand water supplies and reduce emissions. Green hydrogen initiatives, pursued in regions from Brazil to Türkiye, are proving a key building block in the energy transition. 

The adaptation benefits of water investments are substantial. Globally, an estimated $1.8 trillion invested in water-related adaptation measures could yield $7.1 trillion in net benefits by 2030, underscoring the impact of water-focused resilience.

Bridging the Investment Gap

Meeting the water supply and sanitation Sustainable Development Goals requires $131–$140 billion annually, a figure almost two times the current level of public funding. Private sector investment is essential, but clear governance, transparent policies, and robust financial models are needed to attract it. Blended financing—combining public and concessional funds—can de-risk private investments, drawing capital to essential water projects. Pricing incentives that reflect water’s true value can also promote conservation and efficiency.

COP29 Call to Action: Advocate, Align, Accelerate

As COP29 brings together global leaders to address the climate crisis, water stands out as both a critical vulnerability and an unparalleled opportunity. It is essential to elevate water as a priority on the global agenda. We must advocate for water resilience as a cornerstone of climate resilience, ensuring that commitments translate into actions. Second, aligning efforts across the water sector is crucial—by unifying our approach, we can steer toward impactful, cohesive solutions. Finally, acceleration is key: moving beyond business as usual, we need partnerships that drive scalable water solutions, creating a resilient foundation for sustainable development. The upcoming 2026 UN Water Conference will be a pivotal moment to align these efforts, bolster commitments, and build on the progress made at COP29. Investing in water isn’t just an economic necessity; it’s essential for reducing climate risks, accelerating adaptation, and building resilience across sectors. Action on water is action on climate.

Source: blogs.worldbank.org