Latin America Advisor

A Daily Publication of The Dialogue

What Is Being Done About Water Stress in Latin America?

Shortages of water have worsened this year in locations including Mexico. // File Photo: Mexican Government. Shortages of water have worsened this year in locations including Mexico. // File Photo: Mexican Government.

Some 70 percent of Mexico was affected by the country’s long-term drought as of July, up from about 50 percent in December, according to Mexico’s federal water commission, or CONAGUA. Water shortages in Mexico have also worsened amid extreme heat that is blamed on climate change. Meanwhile, Brazil is suffering from its worst drought in nearly a century and recently saw unusually damaging freezing temperatures, leading to soaring prices from crops including coffee and sugar. What are governments and the private sector doing in order to mitigate the effects of droughts in Latin America? What more should they be doing–both in the short-term and the long-term? How well have multinational efforts, such as the Inter-American Development Bank’s Water Funds Partnership, functioned in order to strengthen water security in the hemisphere?

Devry Boughner Vorwerk, member of the Advisor board and CEO of DevryBV Sustainable Strategies: “While Brazil, Argentina, Paraguay and Mexico are experiencing the brunt of the current drought, the entire region is affected, and it will continue to be affected with the melting of glaciers in countries such as Peru and less runoff coming from the Andes. About 70 percent of the world’s fresh water comes from the mountains, which is a frightening statistic. According to a joint report this year by WHO and UNICEF, coverage of safely managed drinking water services varied widely across Latin America and the Caribbean, with Mexico at the bottom with 43 percent of the population using safely managed water resources and Brazil closer to the top with 86 percent. Government, citizens and industry must collectively develop a rationing mindset to weather the current drought. Also necessary is a long-term conservation, restoration and management mindset, which includes taking climate change seriously, and appropriately embracing alternative sources of energy beyond hydro. In addition, industry must voluntarily invest in water-saving technologies, and government should impose stricter requirements for companies’ water behaviors. In the long term, it would behoove governments to take a regional approach to water policy and agree to enact laws and regulations that require companies to disclose water usage and reduction metrics. Also, supporting institutions such as the Inter-American Development Bank, which is driving capital toward the issue with its AquaFund and other similar funds, is critical, as these funds are under-resourced. Most importantly, the practice of deforestation must end, lest we all suffer from the adverse effects of one continuous drought.”

Rebecca Keller, director of analysis for Stratfor’s geopolitical analysis team at RANE: “With the effects of climate change set to increase the magnitude and frequency of severe weather events, including droughts and large swings in temperature, water stress and scarcity impacts will remain. There is a renewed push from many governments and the private sector to increase not only climate awareness but also climate action. This includes increased government support for green initiatives as well as the climate impact and risk being considered for many investments and loans. However, many of these approaches are geared toward limiting future impacts of further climate change. Water stress around the world will increase because of climate change, but that will only compound existing stress brought on by overuse and overallocation of limited resources. In the short term, efforts to encourage limiting the use of water, be it through pricing changes or regulatory changes on allowed usage, may help. However, pricing or treating water like any other commodity has always been an uphill battle. Water rights remain a local political issue, so even though water sources cross borders, international management of water resources has always been and will remain extremely difficult and often ineffective.”

Thomas Rideg, president of M-Brain Americas Inc.: “It is winter now in Brazil, and this season almost always brings droughts and fires. The Paraná River basin, which drains rivers from the Southeast and Central-West regions of the country, was hit badly this year. The region has approximately 60 large reservoirs to supply one-third of the Brazilian population. These reservoirs are at their lowest level since 2001. A lack of rain, which is common in winter, is the main cause, and water supply will bounce back up in the coming months. However, the quantity of water seems to be gradually and continuously declining over the years. According to a recent study, Brazil lost 15 percent of its fresh water supply over a period of 36 years. Water consumption has accelerated at twice the pace of the population’s growth due to increased agricultural, industrial and household consumption (in that order). Brazil has the world’s largest supply of fresh water, but 75 percent of this water is in the Amazon, and 95 percent of Brazilians live outside of the Amazon region. That said, the water supply is often distant from the consumer. Urbanization combined with infrastructure is another cause for lack of access. Brazil has infrastructure, but not enough of it, and it is often distant from where it should be. Several initiatives have either been approved or are under consideration in Brazil to improve the water supply. Among them are increased investments in solar energy. Also, energy bills were increased by 52 percent in July as an ‘incentive’ to reduce consumption. Additionally, the Bolsonaro government made a big leap with water supply in the Northeast Region, which is Brazil’s driest and most impoverished region and has secular droughts. Bolsonaro resumed programs to link water from the São Francisco River to cities in the region via canals and dams. There aren’t enough formal initiatives around this topic. Brazil has huge infrastructure projects, but government management doesn’t seem to be very evident. The government also had a program called Interáguas, which had backing from the World Bank, but it was shut down last year.”

Patricia Urteaga Crovetto, director of the master’s in human rights program and principal professor in the Academic Department of Law at the Pontifical Catholic University of Peru: “The 2007 United Nations report on climate change attributed the consequences of climate change to the productive systems of the wealthiest countries, which mostly affect the poorest ones. Droughts, high temperatures and unpredictable precipitation inevitably affect agricultural systems. These earliest predictions have extended to most of the globe. In Peru, climate change and erratic government policies have worsened the pernicious effects of water scarcity. In 1982 and 1983, an extreme drought and desertification in the southern Andes hit Peru’s economy with losses amounting to $171 million, with half a million people affected. In spite of these climate occurrences, most dams and reservoirs are located in the coastal area. By means of hydraulic systems and water reservoirs, water access is guaranteed to the agroindustry in the coastal arid and semi-arid lands, yet the rural and urban poor lack full access to potable water. Within the framework of the Project for the Modernization of Water Resources Management, in 2014 the National Water Authority installed the National Observatory of Droughts with the support of the World Bank and the Inter-American Development Bank. This modern software started to operate in 2015 with the Climate Data Library of the International Research Institute for Climate and Society at Columbia University in the United States. We hope this is the first step in a long-term integrated plan to manage droughts and guarantee water access for all in the near future.”

Latin America Advisor logo.The Latin America Advisor features Q&A from leaders in politics, economics, and finance every business day. It is available to members of the Dialogue’s Corporate Program and others by subscription.

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