Water: The Epic Struggle for Wealth, Power, and Civilization - Steven Solomon (2010)

Part IV. The Age of Scarcity

Chapter 17. Opportunity from Scarcity: The New Politics of Water in the Industrial Democracies

The headline scarcity crises among the world’s demographically stressed, water poor overshadows one tantalizing, emerging trend in the relatively water-wealthy, industrial democracies—an unprecedented, sharp productivity gain in the use of existing freshwater supplies. This new development is being driven by the growing engagement of market forces as fresh, clean water resources run short and pollution regulations firm up. It offers an alternative, beacon path for alleviating the water crisis—and a pathway for the Western-led market democracies to relaunch their global leadership. Generations of water resource underpricing and inefficient political management have led to colossal waste in every society’s use of water—and therefore created correspondingly huge opportunities to increase effective total water supply by using those current resources more productively. For example, each North American uses two and a half times more renewable freshwater than the world average—and could unleash a proportionately prodigious new supply to productive uses simply by adopting readily available, high-efficiency practices and technologies. Tapping such already available supplies, moreover, comes at a lower environmental cost than any incremental new supply that can be extracted from nature or reallocated among river basins.

The democracies born in ancient Greece and Western traditions enjoy greater leeway to pursue improved efficiency solutions to their water shortages because, in the main, they have more favorable water profiles, competent governing mechanisms, and many fewer demographic burdens on their resources than the world’s water Have-Nots. Most have renewable water supplies that are ample, available year-round on a predictable basis, and fairly easily accessible. Rain-fed agriculture is widespread and provides a reliable natural food base. While America’s groundwater use is large and growing in some major regions, the nation is not excessively dependent upon it for irrigation to feed itself as are India, Pakistan, China, and countries in the Middle East. Water infrastructures, while in many cases obsolete, leaky, and in need of overhaul, are comprehensive and functional. Industrial and urban water pollution is regulated and monitored. Although the industrial democracies’ overall relative population size is shrinking to only one-ninth of humanity, their comparative hydrological resource advantages help put them in a good position to make the breakthrough innovations to meet the era’s defining challenge of augmenting the productive supply of freshwater in an environmentally sustainable and economically vibrant manner. As with other water breakthroughs in history, doing so would leverage their wealth and influence in the new century’s global order.

Indeed, by aggressively reallocating its current supplies using existing technologies, America is well positioned to not only remain the world’s leading food exporter, but also to free up water resources to boost its energy output, accelerate industrial production, and maintain robust growth in its services and urban economies. The comparative impact upon a world economy and political order constrained by water resource scarcity is potentially akin to the advantages gained from the early, large discoveries and production of oil in the twentieth century.

The remarkable increase in water productivity under way in the advanced industrial democracies represents a startling historic break in the correlation between absolute water withdrawals and economic and population growth. After three centuries of increasing twice as fast as world population, average water withdrawals per person are declining in many advanced democracies without any slowdown in economic growth. American water withdrawals peaked in 1980, and declined about 10 percent by 2000; in the same period, the nation’s population expanded by 25 percent and the economy continued on its long-term growth trajectory. From 1900 to 1970, U.S. water productivity per cubic meter withdrawn had remained relatively constant at about $6.50 of gross domestic product; by 2000 it had soared toward $15. Japan’s economic productivity per unit of water increased fourfold between 1965 and 1989. The pattern was similar in much of Europe and Australia.

The sudden upsurge in water productivity is a market response to the economic incentives created by the combination of growing water shortages and water pollution regulations that came into force from the 1970s with the environmental movement. The environmental golden rule of thumb is that users have to discharge water to the ecosystem in the same pristine condition as they have taken it from nature. Led by thermal electric power plants, industry, and cities, large water users soon realized that they could save money on pollution cleanup by using less water overall through more efficient conservation and recycling technologies.

Gradually, the first generation of government environmental rules are being refined into a subtler, soft-path efficiency approach more attuned to ecosystem needs and services. In messy, pluralistic Western democratic style, government officials, market participants, and environmentalists are often working together as constituent representatives in devising solutions tailored to specific user needs and conditions, including appropriate scaling. Small-scale, ecosystem-friendly solutions are preferred when feasible. The European Union’s Framework Directive on water policy (2000), for instance, expressly discouraged new dams where economically and environmentally viable alternatives existed; dams are also starting to be removed and replaced by wetlands restoration and reforestation in America. Legislatures and courts for the first time are granting ecosystems a legal entitlement to a sustainable share of contested water supplies. Creative concepts of valuing provision of ecosystem services are also being devised so that environmental regulations can be fulfilled and exchanged in a more flexible, market-oriented manner. Greater attention is being focused on suppler efficiency measures, such as water consumption—that is, water that is used and lost for other purposes such as irrigation water—instead of simpler, gross withdrawals, which fail to capture the productivity of recycling water for multiple uses or treated releases that are reused again by others downstream. Intermediation mechanisms are being launched, often supported by governments, to help users sell their annual water rights at premiums to other, presumably more efficient, users.

As water grows scarce and soft-path regulatory approaches take form, a market price and a marketplace for water services are coming into existence. A few businesses are pioneering measurements of their water-use “footprints,” a parallel of the carbon footprint tool gaining traction to help each entity reduce its contribution to global warming. Business enterprises are making major investments in water to compete for market share and profits. In vague outline is the embryonic contour of an artificially grafted, long-missing Invisible Green Hand mechanism that fully prices in the cost of utilizing and restoring water resources and that can enlist the historically prodigious forces of private market wealth creation in the provision of a sustainable environment. It is still early days. Large, crucial sectors, notably agriculture, remain heavily subsidized, lightly regulated for pollution, and insulated from market forces. Development is occurring locally, and sporadically, in response to needs as they arise. The change faces strong entrenched and ideological opposition on all sides. Hard-path approaches to moving, storing, draining, and cleaning water still prevail overall within the slow-changing governing water bureaucracy. At the same time, traditional environmentalists remain suspicious of any treatment of water as an economic good. They fear it may lead to its being governed solely as a profane commodity, according to dictates of market forces with inequitable outcomes and without regard to its inherently priceless and sacred value to nature and human life. But between these two poles, something novel is taking hold.

One place where the combination of water shortage, ecosystem protection, and market responses has been catalyzing a more productive use of existing freshwater is in America’s arid Southwest. At the dawn of each new era of water history, societies face the classic transitional problem of how to reallocate water resources from old uses to newer, more productive ones. By the end of the twentieth century, America’s Southwest water productivity gap had become enormous between its privileged farming businesses that were still guzzling from the trough of socialized irrigation water from the bygone age of government dams and the modern West of dynamic cities and high-tech industries. The same volume of water—250 million gallons per year—could support 10 agricultural workers or 100,000 high-tech jobs; California’s agribusinesses were using 80 percent of the state’s scarce available freshwater but producing just 3 percent of its economic output. Within agriculture, too, water was being inefficiently consumed in one region by water-thirsty, low-value crops like rice and alfalfa, while high-value fruit and nut trees were being cut back in another place for lack of water. The essential problem, even in the arid Southwest, is not that absolute water availability is too scarce to sustain robust economic growth, but rather that regulated water is both too cheap and vested in less efficient users and thus impedes the simple market price incentive mechanism that would otherwise reallocate it toward more productive uses.

In few places was the disparity greater than among the 400 farm agribusiness descendants of Southern California’s Imperial Valley water district who consumed 70 percent of California’s 4.4 million acre-foot allocation of Colorado River water under the 1922 compact at the delivery cost of only about $15 an acre-foot, and the 17 million thirsty Southern California coastal dwellers who were paying 15 to 20 times more to meet their much more modest needs. Imperial Valley’s water surfeit, furthermore, encouraged particularly profligate farming practices, including the desert planting of water-thirsty crops, and the consumption of twice as much water per acre as other California farmers.

Such an enormous disparity between the farm and city price of water and the formation of a political alliance of city, industrial, and environmentalist interests with the clout to offset the farmers’ historical dominance within California’s hardball water politics, did not escape the notice of the billionaire Bass brothers, scion investors of one of Texas’s oil empires. In the early 1990s, the Basses invested about $80 million of their $7 billion fortune to buy up 40,000 acres of Imperial Valley farmland—and the water rights that were conferred with it. Reminiscent of William Mulholland’s deception in purchasing Owens Valley land to gain access to its river water in the infamous Los Angeles water grab earlier in the century, they avowed to farmers wary of losing their water rights that they wanted the land merely to raise cattle and not to speculate on water.

Soon enough, though, the Basses managed to persuade the cooperatively owned Imperial Valley water district that its best interest lay in selling San Diego 200,000 acre-feet of its 3.1 million acre-feet entitlement each year starting at $233 per acre-foot—a markup of nearly 20 times its own subsidized effective cost—for an immense, cumulative profit of more than $3 billion over seventy-five years. The plan, moreover, called for Imperial Valley to invest a slice of these profits in water efficiency improvements intended to save at least as much water as it was selling to the city, so that in practice it wouldn’t lose any of its precious Colorado River water at all. Despite the farmers’ exorbitant profit, San Diego liked the deal because it provided an independent water source and a one-third savings over what it was then being forced to pay to the powerful, Los Angeles–dominated Southern California water authority.

Although applauded by federal and state regulators, environmentalists, and most nonfarm participants because it finally began the transfer of water from agriculture to the cities, the deal got bogged down in the internecine battles between California water authorities and other interests. As the millennium approached, the proposed water sale became engulfed entirely in the larger regional crisis on the Colorado: Diminished by drought, full allocation draws by fast-growing Arizona and Nevada, and the fact that the river’s average annual volume was less than the 1922 compact had estimated, the Colorado basin was fast running out of enough total water to supply everyone’s existing needs. Storage in Lake Mead was dwindling to alarmingly low levels. Without major modifications, the iconic Hoover Dam and other Colorado water infrastructure, would have sufficed for less than a single century.

In late 1999, U.S. secretary of the interior Bruce Babbitt, backed by the other Colorado basin states, issued the first-ever ultimatum to California to end its decades of river overdrafts, then running about 800,000 acre-feet per year, and to live within its compact limit of 4.4 million acre-feet. California was given until year-end of 2002 to come up with a plan to wean itself off its Colorado overdraw by 2016. The regulators also insisted that the plan include the transfer of water from Imperial Valley to the coastal cities and to protect existing water ecosystems. Failure to devise an acceptable program, the interior secretary warned, would lead to the immediate cutoff of the excess flows.

Imperial Valley agribusinessmen furiously resisted being forced to accept the terms of a deal that they correctly foresaw would be the start of a slippery—even if lavishly gilded—slope to losing control of the virtually free irrigation water, which American taxpayers had granted their forbearers for settling the barren desert long ago. In particular, they bridled at the demands that they allocate some of their water to preserve the ecosystem health of the Salton Sea, the inland lake that had formed when the Colorado River flooded its levees in 1905, and that was replenished only by the runoff from the valley’s 82-mile All-American Canal and 1,700 miles of irrigation ditches.

When the December 31, 2002, deadline passed without an acceptable plan, the unthinkable happened: At 8:00 a.m. on New Year’s Day 2003, the new interior secretary, Gale Norton, stood by the pledge of her predecessor from the opposition Democratic administration, and switched off three of the eight pumps controlling the flow from the Colorado into the 242-mile-long aqueduct to Southern California. At the turn of the spigot, Imperial Valley lost as much water as it was to have sold to the cities—without any compensation. Still the farmers did not buckle. Then, in August 2003, the Interior Department’s Bureau of Reclamation increased the pressure by releasing a study that concluded that in response to the drought the government could cut off water to Imperial Valley because farmers were using it wastefully—the whispered amount of the waste was 30 percent. Playing “good cop” to the Fed’s “bad cop,” the California state government stepped forward and offered to share some of the water and infrastructure cost burden to preserve the Salton Sea.

Within two months, in October 2003, the agribusinessmen of Imperial Valley capitulated. The ceremonial signing of the landmark agreement to transfer Colorado River water to San Diego and other cities was held at the Hoover Dam. In all, 500,000 acre-feet per year, or one-sixth of Imperial Valley’s water, would be reallocated. An estimated 30 million acre-feet—some two years’ annual flow of the Colorado River—would move from primarily agricultural to urban uses over seventy-five years. No one doubted that further calls on agricultural water lay ahead as the New West continued to rise.

Despite the multibillions of dollars of profit they would receive for selling a fraction of their taxpayer-subsidized water, some bitter Imperial Valley farmers felt cheated. “They should pay $800 an acre-foot versus $250,” complained farmer Mike Morgan. “The greatest water heist ever is going on right under your feet.” Others, however, promptly got over their grievances and moved forward to recoup much of the water lost to the sale by improving existing water productivity through investments in repairing leaky irrigation networks and in new technologies, such as high-tech satellite sensors to monitor crop and soil moisture and activate precision watering devices. In fact, the only big losers from the Imperial Valley water deal were Mexican farmers, who for decades had been pumping up groundwater that had leaked from the irrigation ditches on the American side of the border. They now suddenly found their wells running dry due to the Californians’ more-efficient irrigation methods. Ever lucky, Imperial Valley soon stumbled upon another potential bonanza under the Salton Sea’s southwest corner—a large geothermal field that could significantly boost California’s renewable electricity production.

By breaking the political logjam over the Colorado, the landmark agreement with Imperial Valley paved the way in late 2007 for a second breakthrough accord—an emergency plan among the Colorado River compact states about how to allocate scarce water among themselves should the river flow fall below the 7.5 million acre-feet promised to the lower basin. Given the downward revision in the Colorado’s long-term average flow to only 14 million acre-feet per year, and with Lake Mead only half full because of a severe drought, such an emergency was likely to occur; moreover, with climate change models forecasting a 20 percent decline in rainfall compared to most of the twentieth century, and shrinking annual mountain snowpacks exacerbating summer shortfalls, the emergency seemed likely to strike sooner rather than later. The shared sense of impending crisis spurred unusual, proactive efforts to improve the productive use of existing water supplies before the crisis threshold was crossed.

The 2007 emergency accord included innovative market and ecosystem-management arrangements that stimulated interstate water trades and consumption reductions by allowing users to bank their savings in Lake Mead or aquifers for later use. Fast-growing, desert-bound Las Vegas, for instance, offered to pay for new water storage facilities or desalinization plants in California in exchange for an extra draw on California’s Colorado River allotment. Las Vegas was already one of the most conservation efficient cities. Every drop of its sewage wastewater is treated and released into Lake Mead, where it is further purified by dilution and pumped back to the city’s taps. Even with its growing population, water use has fallen from its peak in 2002 thanks to various conservation methods, including promotion of low-flow toilets and appliances, paying residents to replace water-thirsty lawns with natural desert flora, and higher consumer prices. In the eastern Rockies, the city of Aurora, Colorado, was creating a recycling loop even more elaborate than Las Vegas’s. It was buying agricultural land downstream along the South Platte River so it could draw water that had been naturally filtered by the sandy riverbanks through a series of adjacent wells. The water was then to be pumped to the city in a 34-mile-long pipeline, purified, used, treated, discharged back into the river, and then recaptured in the riverbank wells to start a new circuit. Each round-trip took forty-five to sixty days and recycled half of every drop.

Spurred by continuing drought, California introduced a state water bank that allowed northern California farmers to sell their seasonal water rights on fallowed land to farmers using more efficient farming techniques and growing more valuable crops. In 2009, the state-set price for watering parts of California’s fertile, but naturally arid and badly overpumped Central Valley, was $500 an acre-foot—nearly three times the price of 2008, but still far below what the free-market price would likely have fetched. Coastal Southern California has also been turning to wastewater recycling to supplement drinking supplies because all available local and aqueduct-delivered natural water supplies had been exhausted. The Colorado River had maxed out. Mountain snowmelt and reservoir levels were diminishing with drought and global warming. Even long-distance freshwater piped from northern California was being curtailed, as court rulings and federal restoration for the Central Valley elevated the priority of conserving water to improve the health of the fish and wildlife of the depleted ecosystem of the San Joaquin–Sacramento River delta estuary and San Francisco Bay. With population growth forecasts still rising, Los Angeles and San Diego, as a last resort, were turning to large-scale recycling and purification of sewer wastewater—long used for irrigation and lawn watering—to augment urban drinking supplies.

The disparaging name critics label such projects—“toilet to tap”—is a misnomer. Not only is the wastewater intensively cleansed to a level that can be purer than naturally derived tap water; it does not go straight to the tap, either. Instead it is injected into the ground to be further filtered by natural aquifers before being drawn into public drinking supplies. There is little novelty in the concept. For decades, cities across the United States routinely discharged their treated sewage, or effluent, into local rivers such as the Colorado, the Mississippi, and the Potomac, where in diluted form it was taken into the drinking supply of cities downstream. The same principle had been followed by London in building its sanitary system in response to the mid-nineteenth-century Great Stink. The Southern California recycling projects differ in using slow-moving groundwater instead of surface river flows to do the additional natural filtering. The pioneering prototype was the facility that opened in January 2008 in Orange County, California, which has a capacity of 70 million gallons per day. Its labyrinth of tubes and tanks take in dark brown treated sewage water, then remove solids with microfilters and smaller residue through high-pressure reverse osmosis before a final cleansing with peroxide and ultraviolet light. The final product, as pure as distilled water, is injected into the aquifer for natural filtering before entering the public drinking supply. Water managers in water-stressed southern Florida, Texas, and San Jose, California, have been contemplating similar projects to help meet their future needs. Only one major city in the world—Windhoek, in Africa’s arid Namibia—actually recycles water on a large scale from treatment plant directly to the drinking tap. Yet aside from the revolting idea of the source of such water, there is no technological, or cost-efficiency obstacle to believe that such truly closed, recycled infrastructure loops will not become more commonplace as the age of water scarcity advances.

Water shortage is also propelling Southern California’s leadership in a modest global movement toward state-of-the-art desalinization technologies. Desal costs in California had fallen from $1.60 to 63 cents per cubic meter between 1990 and 2002, putting it on par with large, efficient reverse osmosis plants built in water-starved Israel, Cyprus, and Singapore. By 2006, there were enough proposals for new seawater desal plants to increase California’s capacity a hundredfold, and supply up to 7 percent of the entire state’s urban water use. The first major test of desal’s mass production capabilities in California was joined in 2009 with a decision to build a giant, reverse osmosis plant near San Diego that was projected to produce 50 million gallons of drinking water daily from the ocean by 2011—10 percent of northern San Diego’s requirements. While total desalinization capacity is still very small, California’s sheer size and its special, water trendsetting status makes it a potential catalytic tipping point—especially if coupled with breakthroughs whereby solar or wind power can substitute for nonreplenishing and polluting fossil fuel energy—for the long hoped for takeoff of water desalinization.

A half century earlier, President John Kennedy had expressed mankind’s age-old dream of desalination. “If we could ever competitively—at a cheap rate—get fresh water from salt water,” he mused, “that would be in the long-range interest of humanity, and would really dwarf any other scientific accomplishment.” Ever since man first took to the seven seas, sailors had dreamed of desalting seawater. Long-distance European mariners in the Age of Discovery pioneered the installation of primitive desalting equipment for emergencies. Crude, large-scale water desalting was enabled by advancements in the distillation process made in the mid-nineteenth century by the sugar refining industry. Modern desalinization, however, was brought to fruition by the U.S. Navy, which developed it during World War II to provide water to American soldiers fighting on desolate, South Pacific islands. By the 1950s, a thermal-desalinization process based on steam-pressure-induced evaporation was developed; although very expensive, it was adopted on a fairly large scale in Saudi Arabia and other oil rich, waterless coastal nations of the Middle East. Also in the 1950s, the American government supported university research for a better desalinization technique—the reverse osmosis process was invented during Kennedy’s presidency and was put into action on a small scale using brackish water in 1965. With the development of a much-improved membrane in the late 1970s, reverse osmosis desalinization plants for seawater became possible. Since they required enormous amounts of energy and the water they produced was so costly compared to water obtained by other means, it was unsurprising that the first big city desal plant was opened in Jedda, Saudi Arabia, in 1980, where energy was cheap and water pricelessly scarce.

Major improvements in energy recovery techniques and membrane technologies occurred with such speed from the 1990s that by 2003 desal costs had fallen by two-thirds, and desal was becoming a viable component of the diverse portfolio of water supply solutions being adopted in water-famished, coastal regions where supply was abundant and expensive long-distance water pumping unnecessary. Perth, Australia, for instance, got nearly one-fifth of its water from desalinization. Israel’s desal share was poised to rise rapidly and desal offered hope of quenching some of the mounting thirst in the Muslim Middle East and North Africa. Reverse osmosis membrane technologies at the heart of desalinization were also being applied in recycling wastewater in Orange County’s pioneering plant and in Singapore, where it helped replenish local reservoirs. With growth stirring in desal, major corporations were gearing up to win market share in order to earn large profits as the market developed. Projections of market growth in the decade to 2015 ranged widely, from a trebling to a septupling of the $4 billion spent in 2005.

On its most optimistic projections, however, desalinization cannot be the panacea technology to solve the world’s water crisis in the short term. Installed desal capacity is simply too tiny—a mere 3/1,000ths of 1 percent of the world’s total freshwater use. Even if costs plunged, there are unsolved environmental problems about how to dispose of the briny waste; inland regions cannot be reached without expensive pumping and building long aqueducts. In the most likely, best case scenario, desal will become one of a portfolio of freshwater supply techniques that help countries muddle through their scarcity crises.

In the rainy, temperate eastern half of America, New York City, the nation’s urban trendsetter in long-distance water storage and delivery systems, is also in the vanguard of the new soft-path movement. One of its most closely watched experiments is to exploit the natural, cleansing services of forested watersheds to improve the wholesomeness of its drinking water—and simultaneously save billions of dollars for the region’s 9 million inhabitants. Ever since its gravity-fed Croton water system opened in 1842, New York had routinely extended its aqueducts and reservoirs farther and farther upstate into the Catskill Mountains and the upper reaches of the Delaware River to obtain more clean freshwater. By the 1990s New York City’s water network featured three distinct water systems with one and a quarter year’s storage capacity that delivered 1.2 billion gallons per day from 18 collecting reservoirs and three lakes in upstate New York. But a serious problem of deteriorating water quality had been building as the pristine rural, forested countryside surrounding the reservoirs degraded with modern development and farming. As a result, half the city’s reservoirs were chronically choked with poisonous phosphate and nitrogen runoff from dairy farm pastures and over 100 sewage treatment plants that depleted oxygen levels and produced foul, algae blooms, as in China’s Lake Tai, that killed cleansing biological life. When U.S. fresh drinking water standards were toughened in the late 1980s, New York City faced an ultimatum: build a state-of-the-art filtration plant—at a staggering cost of $6 to $8 billion, exclusive of the huge operating expenses of the energy-intensive filtration facility—or devise an alternative method to protect the quality of the city’s water.

New York’s innovative response was a $1 billion plan to improve the upstate forests and soils surrounding the reservoirs so that they conserved more water and filtered out more of the pollutants in a natural way—in effect, New York was enhancing the natural watershed ecosystem and putting a market value on its antipollution services in place of far more expensive, traditional, artificial cleansing infrastructures. Also remarkable was that New York’s ecoservices project was forged by a new, politically inclusive consensus among city and state officials, environmentalists, and rural community representatives. Their multiyear negotiation was formalized in a 1,500-page, three-volume agreement signed in January 1997.

At the heart of the plan, New York City would spend $260 million to purchase some 355,000 acres—nearly twice the geographic area of the city itself—of water sensitive land from voluntary sellers to buffer the reservoirs. Some of the new city-owned land would be open to the public for recreational fishing, hunting and boating, and leased to private interests for environmentally controlled commercial activities such as growing hay, logging and production of maple syrup. Up to $35 million more would be spent to clean up and modernize several hundred dairy farms—including reducing their water consumption in milk production by up to 80 percent—to help them compete against the encroachment of concrete road polluting and waste-producing subdivisions. To mollify local communities still resentful of the city’s imperious, historical use of compulsory sales to acquire watershed land for its reservoirs, the city agreed to spend another $70 million for sundry infrastructure repairs and environmentally friendly economic development. A new environmental division was created within the city’s century-old watershed police force; armed with chemistry kits and looking for leaky septic tanks and rivulets of frothy, toxic discharges, they patrolled the countryside and subdivisions to protect the reservoirs. In effect, New York City has created a market price for the ecosystem services provided by its watershed. A decade later, it took another step toward marrying ecosystem sustainability and market economics by negotiating a complicated land swap with a big resort developer whereby a public forest acquired watershed-protective mountainside real estate in exchange for a smaller resort project on a less environmentally sensitive side of the mountain. The developer also agreed not to build on runoff-prone steep slopes or use chemical fertilizers on its golf courses.

The early results of New York City’s watershed experiment are auspicious. Environmentalist watchdogs gave New York City good grades for drinking-water quality in 2008—a year after the city had won a further conditional ten-year filtration plant exemption from the U.S. Environmental Protection Agency. In economic terms the program had saved the city up to $7 billion in unnecessary construction, expanded recreational revenues, and augmented the long-term sustainability of New York’s water supply. With continued success, it offered a potential template for the next generation of urban water development. Indeed, other American cities, and some abroad including Cape Town, South Africa; Colombo, Sri Lanka; and Quito, Ecuador, also adopted variants of New York–style ecosystem service valuations to help solve their local challenges.

With echoes of both New York and Southern California, Florida’s governor Charlie Crist launched in 2008 a novel initiative to revive a moribund restoration plan for the state’s famous wetlands, the dying Everglades. For nearly a decade, a joint federal-state plan had been held hostage by the political grip of the state’s water-guzzling, phosphate-polluting, and price-subsidized big sugarcane farmers. Deprived of clean water, half the Everglades had already dried up. By spending $1.34 billion in state funds to buy 181,000 acres of land from the giant U.S. Sugar Corporation, Crist opened the way for a land swap with other agribusinesses that would open channels to renew the historic flow of fresh, clean water to the Everglades from Lake Okeechobee.

In addition to enhancing its upstate watersheds to improve the quality of the water entering its reservoirs and aqueducts, New York City also embarked on a showcase water conservation program in the early 1990s aimed at trimming the system’s total demand, thus reducing the absolute volume that had to be supplied and subjected to expensive purification and wastewater treatment. First, water and sewerage rates were raised sharply toward market levels to discourage wasteful use. A highly publicized, $250 million toilet rebate program for poorer families was also launched to jump-start a citywide trade-in of old 5- and 6-gallon toilets for newer toilets that consumed only 1.5 gallons per flush. Toilets are by far the biggest single water consumer in the household—accounting for about a third of consumption—and in 1992 the government mandated a gradual national conversion to low-flow models. By 1997 the toilet replacements, higher prices, and other measures, including comprehensive metering and leak detection, helped New York’s daily water consumption to plunge dramatically to 164 gallons per person from nearly 204 gallons in 1988—a 20 percent savings, or 273 million gallons per day. As a result, New York officials projected that the city would not need any additional water supply for another half century, while incalculable millions of dollars were saved on sewage treatment and pumping. The replication of New York’s conservation methods by cities across the United States has been one of the driving forces behind the unprecedented increase in America’s water productivity since the 1980s.

New York City faced one other gargantuan challenge, however, for which it had no low-cost, water-productivity-enhancing alternative to old-fashioned, large government expenditure—the decrepit, leaky and potentially failing state of vital components of its aging water infrastructure. Significant leaks had sprung below ground in the original aqueducts that conveyed water from its upstate reservoirs, beneath the Hudson, to a final storage reservoir on the city’s outskirts in Yonkers. More threatening still, New York’s two, leaky urban distribution tunnels, completed in 1917 and 1936, respectively, which conducted water from the Yonkers reservoir throughout the city, hadn’t been shut down for inspection for over half a century for fear they might fail catastrophically—forcing the evacuation of large portions of New York. From 1970, New York tunnel crews had been laboriously drilling through the solid bedrock 600 feet underground—some 15 times below the depth of the subway—to construct a modern, third tunnel that would enable the original two to be shut down and rehabilitated. The $6 billion Tunnel Number 3 was the largest construction work in New York City’s history and one of the most monumental, although invisible and virtually unknown, civil engineering feats of the era—a subterranean descendant of the Brooklyn Bridge and Panama Canal. Until the day it was finished and ready for service, around 2012, New York would continue to live in a slow-motion race against time and potential disaster.

The status of any society’s waterworks network is both a bellwether and a foundational element of its economic and cultural dynamism. Many metropolises in America and Europe that industrialized early face the formidable challenge of modernizing their original domestic water systems. Although the quest for an era defining water innovation captures the headlines, maintaining good infrastructures for all the four main historical uses of water—domestic, economic, power generation, and transportation—is also a necessary condition of the industrial West’s ability to fully exploit its comparative, global freshwater advantage. The failure to do so imperceptibly erodes efficiency and resiliency, and makes society more prone to shocks, such as the levee failures and flooding of New Orleans during Hurricane Katrina in the summer of 2005. Yet the engineering complexities, and the low political reward of supporting costly repairs, pose enormous obstacles. Often the work involves difficult, subterranean construction, amid intense atmospheric pressures and large, fast-moving volumes of water that cannot be shut off, and in systems that had not been designed with future renovations prominently in mind.

Following revelations from Riverkeeper, the private Hudson River environmental watchdog group and a major player in the watershed program, New York authorities in 2000 admitted publicly for the first time that a branch of the Delaware Aqueduct, the city’s largest, had been leaking significantly for a decade. When first detected in the early 1990s, the tunnel’s leakage had been about 15 to 20 million gallons per day; by the early 2000s, the leakage had swelled to 35 million gallons. While that totaled only 4 percent of the aqueduct’s overall capacity, the leaks had to be fixed before they got worse and eventually the tunnel’s structure gave way. The last inspection in 1958 had been done by driving through the drained, 13-foot-diameter tunnel in a modified jeep. But with all the cracks the tunnel could no longer be shut down for fear of structural damage from the change in water pressure. So in 2003, in an unprecedented action, the city sent an unmanned, remote-controlled, torpedo-shaped, minisubmersible, with protruding, catfish-whisker-like titanium probes that had been specially designed by the sea experts at the Woods Hole Oceanographic Institution, on a 16-hour data gathering mission through the dark, watery 45-mile-long tunnel. After studying the results for four years, the city decided upon the first phase of the complicated repair, which would cost $239 million. A team of deep-sea repair divers, working round the clock for nearly a month in a sealed, pressurized environment, were lowered 700 feet to perform the preparatory inspections and measurements amid the tunnel’s currents in winter 2008.

New York’s struggle to plug its twenty-year-old aqueduct leaks paled in degree of difficulty and urgency, however, to completing Tunnel Number 3. The project’s genesis went back to 1954 when New York engineers descended a city shaft several hundred feet to the main control site for Tunnel Number 1 to prepare a long-overdue inspection. Their intent was to shut off the water flow so cracks could be found and repaired by welders from inside the tunnel. But when they began to yank on the old, rotating wheel and long bronze stem at the bottom of the shaft that controlled the six foot diameter open and shut gate inside the tunnel, it began to quake from intense pressure. Terrified that the brittle handle might break—or worse that the inside gate might shut permanently in the closed position and cut off all the water flowing to lower Manhattan, downtown Brooklyn, and part of the Bronx—they dared not continue. They returned to the surface. From that day onward, New Yorkers had lived in ignorant bliss that no one could repair the two badly leaking, antiquated distribution tunnels providing all the water for their homes, hospitals, fire hydrants, and 6,000 miles of sewage pipes—or even know if a structural weakness was building to a critical threshold that would cause the tunnel to rupture and collapse in a sudden apocalypse. Some believed that only the outward force of water pressure was maintaining the tunnels’ integrity. “Look, if one of those tunnels goes, this city will be completely shut down,” said James Ryan, a veteran tunnel worker. “In some places there won’t be water for anything…It would make September 11 look like nothing.”

It took sixteen years before city officials were able to break ground on the elaborately planned remedy. Tunnel Number 3 was to be a redundant, citywide water network with many branches and a state-of-the-art central control facility. Once operative, it would allow flows to be easily turned off and repairs made anywhere in the city. The project’s problems were time, immense cost—in its early years the project was delayed by New York’s 1970s financial crisis—and the arduous, dangerous work of blasting and drilling through bedrock in tunnels that were as deep as some of New York’s tallest skyscrapers. The work was done by a specialized, grizzled, close community of urban miners, known as sandhogs. Sandhogs had built virtually every notable New York tunnel system from subways to utility shafts; in the 1870s they worked inside high atmospheric pressure caissons, excavating the foundations of the Brooklyn Bridge, where they were the first workers to encounter the agonizing chest pains, nose bleeds, and other symptoms of the bends. Many were killed. Two dozen had died digging Tunnel Number 3 alone. Because of the danger, they were well paid. Sandhog jobs tended to be passed down from father to son; many sandhogs were of Irish and West Indian descent.

The excavation work on Tunnel Number 3 was all the more difficult because the sandhogs knew they were digging against doomsday if Tunnels Number 1 or 2 collapsed before they finished. Usually they could advance no more than 25 to 40 feet per day, chiseling, dynamiting, removing endless tons of rubble. Their methods were modern-age equivalents of the fire and water rock-cracking technique used by ancient Rome’s aqueduct builders and Li Bing’s Chinese tunnelers along the Min River. Progress accelerated when a new mayor, Michael Bloomberg, set a high priority on improving water facilities citywide and invested an additional $4 billion toward finishing Tunnel Number 3. The excavation rate more than doubled with the introduction of a new 70-foot-long boring machine—called the mole—with 27 rotating steel cutters, each weighing 350 pounds. Donning a hard hat in August 2006, Mayor Bloomberg descended into the tunnels and took a seat at the mole’s controls to bore through the final foot of rock to complete excavation of the second, and most crucial, of Tunnel Number 3’s four stages. The work, however, was not finished. At least six more years of work lay ahead to line the tunnel with concrete, fit it with instruments, and sterilize it so it could carry water. By then, it would be linked up with the water system’s space age, electronically regulated, new central command center—featuring 34 precision stainless steel control valves, specially fabricated in Japan under constant, two-year vigil of New York city engineers, housed inside 17 giant cylinders weighing 35 tons. The control chamber itself was 25 stories beneath the Bronx’s Van Cortlandt Park in a domed vault three stories tall and the length of two football fields. Nothing aboveground, save a small guard tower and door leading into the grassy hillside indicated that it was the entrance to one of New York’s most critical infrastructures.

Throughout the industrialized democracies, localities are facing infrastructure challenges similar in kind, if usually smaller in scale, to New York’s. Estimates for upgrading America’s 700,000 miles of aging water pipes and wastewater, filtration, and other facilities at the core of its domestic water systems range from $275 billion to $1 trillion over the next two decades. Global water infrastructure needs are several quantum orders of magnitude greater. Many major world cities have notorious leaks; possibly up to half of drinking water entering cities worldwide is lost before reaching residents.

Regions that fail to improve their efficient use of existing water resources are more prone to water shocks, slower economic growth, and to become enmeshed in political clashes over water with neighbors. The state of Georgia’s unwillingness to invest to upgrade fast-growing Atlanta’s water supply system, for example, caught up with it in 2007 when a prolonged drought caused the city’s water reserves to dwindle to only four months. The governor’s only immediate recourse was to impose emergency measures and to try to wrest a greater share of water from the Apalachicola-Chattahoochee-Flint river system away from downriver neighbors Alabama and Florida, which depended upon the flow to keep its own electric power plants and factories running, and to sustain the Gulf coast ecosystem for its shellfish industry. Implementing simple efficiency measures, Georgia reckoned retrospectively, could have alleviated its water crisis by reducing water demand by 30 percent.

Relentless regional freshwater demand and diminished ice cover due to warming temperatures is also taking a costly toll in the north by lowering normal water levels in the immense Great Lakes. Every inch of lost water depth forces the lakes’ fleet of 63 transport ships to lighten their annual cargo load by 8,000 tons to avoid grounding mishaps. This adds another cost to the global competitiveness burdens already faced by America’s aging industrial belt of steelmakers and heavy manufacturers situated on the lakes’ edges for its cheap transport and industrial water. Seaports that don’t keep pace with the modifications required by the new generation of giant, ocean cargo supercontainers, some as long as a 70-story skyscraper and traveling halfway around the world between ports of call, likewise risk losing out on global shipping business. Extensive port restructuring helped New York recover some of its historical greatness as a harbor with renewed Asian trade following a prolonged loss of business in the second half of the twentieth century to more modern ports in America’s southern and western coasts. With Great Lakes states ever fearful of schemes to siphon their water to dry parts of America, the U.S. Congress in 2008 passed a new legal compact governing lake water that provided strict conservation measures and banned the export of the lakes’ water out of their basins.

The Great Lakes conservation measure was disappointing news to some in Texas, which had designs on its water dating back many decades. Although oil had built Texas, the state’s future prospects—its economic prosperity and its outsized leverage on American national politics—rested chiefly upon whether it could rationalize its water use to sustain its large cities and industries. In the absence of a comprehensive program that increased effective water supply through efficiency and conservation, Texas seemed set to live through an accelerated reprise of Southern California’s history of water grabs and speculations. Billionaire water speculators, including oil magnate T. Boone Pickens and Qwest Communications cofounder Philip Anschutz, for years had been exploiting a Texas law to acquire unrestricted water rights through land purchases and lobbying government officials to fulfill their ambitious plans to pump and sell nonrenewable Ogallala Aquifer water through multibillion-dollar pipelines hundreds of miles to thirsty cities such as Dallas, San Antonio, and El Paso. At $1,000 an acre-foot, their profit potential was spectacular and Texas’s good fortunes could be extended for a while—until the Ogallala fossil water itself gave out. Yet even as certain regions declined, the industrial democracies enjoyed an enormous advantage in the water infrastructure-building challenge facing the world, thanks to the existence of a competitive industry of large and small companies seeking to profit from the growing thirst and capable of expeditiously delivering solutions.

While cities are learning to use their existing water more efficiently, industry has been the largest single contributor to the unprecedented surge in water productivity. Across the industrial spectrum, water is a major input of production. Alone, five giant global food and beverage corporations—Nestlé, Danone, Unilever, Anheuser-Busch, and Coca-Cola—consume enough water to meet the daily domestic needs of every person on the planet.

Superior water productivity is one of Western industry’s competitive advantages in the global economy, helping to offset the low wages and laxer environmental standards of industries based in poorer nations. American companies began to treat water as an economic good with both a market price for acquisition and a cost of cleanup before discharge in response to federal pollution control legislation in the 1970s. With characteristic business responsiveness wherever operating rules were clear and predictable, they sought ways to do more with the water they had and to innovate in their industrial processes so that they needed to use less overall. The results were startlingly instructive of the enormous, untapped productive potential in conservation.

No industrial sector uses more water than thermoelectric power plants. Huge amounts—two-fifths of all U.S. water withdrawals—are sucked out of rivers and other water sources as coolant, even though overall net consumption is low because the water is returned to its source a few minutes later. Galvanized by federal regulations requiring that the quality of the discharged water be as pure and cool as it was when withdrawn, the power plants increased recycling and converted their once-through systems to more efficient cooling technologies. By 2000 some 60 percent of all thermoelectric power capacity was using modern systems; the amount of water needed to produce one kilowatt-hour had plunged to only 21 gallons from 63 gallons in 1950.

Manufacturers, likewise, responded impressively to the water pollution regulations. Chemicals and pharmaceutical companies, primary metals and petroleum producers, automakers, pulp and paper mills, textile firms, food processors, canners, brewers, and other large water users increased recycling and adopted water-saving processes. In just the fifteen years from 1985 to 2000, American industry’s total withdrawals were trimmed by a quarter. Pre–World War II American steel mills that needed 60 to 100 tons of water for every steel ton produced were superseded by modern mills using only six tons by the turn of the twenty-first century. Similarly, water-intensive semiconductor silicon wafer makers reduced their intake of ultrapure freshwater by three-quarters between 1997 and 2003, and recycled much of the discharge for use in irrigation. In the decade from 1995, Dow Chemical cut its water usage per ton produced by over a third. Europe’s Nestlé nearly doubled its food production while consuming 29 percent less water from 1997 to 2006. In a scheme reminiscent of New York City’s landmark ecosystem services plan, bottled water company Perrier Vittel invested in reforesting some heavily farmed watersheds, and paid farmers to adopt more modern methods, in order to protect the quality of its mineral water sources.

For years water had scarcely commanded a line item in corporate budgets or more than cursory attention from top planning executives. In the age of scarcity, more and more water-conscious companies were treating water as a key strategic economic input, like oil, with clearly reported accounting and future target goals. The most forward-looking and global-minded analyzed water risks facing their key suppliers around the world, and helping insulate the vulnerable by helping them adopt conservation and ecologically sustainable practices. Unilever’s technical and economic support, for example, enabled its Brazilian tomato farmers to adopt drip irrigation that trimmed water use by 30 percent and reduced water-contaminating pesticide and fungicide runoff. Brewer Anheuser-Busch became acutely aware of the importance of its water supply chain when it was whipsawed by a drought in America’s Pacific Northwest. Water shortages for crops pushed up the price of a key beer-making ingredient, barley, while diminished dam flows elevated hydroelectric prices and with it the cost of producing aluminum beer cans. Environmentalists, too, have been getting on board with collaborative efforts: for instance, the Nature Conservancy has been developing a plan to award good standing certificates to companies who use water efficiently.

Improved industrial water productivity not only enhances competitiveness directly. It also creates economic benefits by freeing water and lowering its cost for other productive uses. Yet the potential scale of its benefit pales next to the boon that can accrue from water productivity breakthroughs in the least efficient, most subsidized, and heaviest polluting sector of society—agriculture. That is because agriculture is still by far the greatest user of freshwater, often consuming over three-quarters of usage. As much as half of all irrigation water is simply lost due to inefficient flood techniques without ever reaching the crop’s roots. Cutting irrigation consumption by one-quarter roughly doubled the water availability for all other productive activities in the region, including industry, power generation, urban use, or recharging groundwater and wetlands. Moreover, proven technologies to multiply agricultural productivity already existed. Microirrigation systems, such as drip and microsprinklers, and laser levels of fields to cause water to distribute more uniformly, were widely successful in reducing water consumption by 30 to 70 percent and increasing yields by 20 to 90 percent in venues around the world, including Israel, India, Jordan, Spain, and America. In the long run these and other methods are necessary elements to meeting the growing challenge of global food shortages. The problem, at bottom, is political—how to promote rapid adoption and how to level the subsidized playing field so that the most efficient farmers reap a proportionate bounty of the market profits they deserve.

American irrigation agribusinesses—led by those in water-poor California—have slowly been making investments to migrate from flooding fields to sprinklers and microirrigation systems. Yet still mostly protected from the discipline of full-market costs by price supports, tariffs, and exemptions from cleaning up all the pollution runoff they caused, politically entrenched agribusinesses lack sufficient incentives to move faster. The result is more than a missed opportunity for the United States to boost its overall economic growth and competitiveness through more efficient allocation of water. There are increasing negative economic, environmental, and equity costs, too. Inevitably, American irrigators are becoming more and more reliant on mining groundwater aquifers beyond replenishable rates to produce America’s crops. Over two-fifths of all U.S. irrigation came from groundwater by 2000, nearly twice as much as a half century earlier.

Both from irrigated and rain-fed farmland, vital water ecosystems are also being damaged from the runoff of artificial fertilizers and pesticides. Since it is hard to pinpoint the runoff to a single source, American farm pollution still is not adequately regulated. The pollutants that seep into slow-moving groundwater, wetlands, and rivers are poisoning drinking water and coastal fisheries near and far away. The Mississippi River carries so much nitrogen-rich nutrients from fertilizer runoff that an expanding, biological dead zone without fish life as large as the state of Massachusetts now rings its mouth in the Gulf of Mexico. Similar dead zones around the world have doubled in size since the 1960s and are a major contributor to the alarming collapse of ocean fisheries. It is a classic tragedy of the unmanaged commons, where the producer of an environmental problem is exempted from bearing the full responsibility of its costs and thus of any incentive to rectify it—and, in the age of water scarcity, as well, one of the growing, hidden inequities between water Haves and Have-Nots.

The most intriguing models of improved agricultural water productivity, however, are developing far from America in smaller, water scarce industrial democracies, like Israel and Australia, where necessity is again acting as the mother of innovation. Australia faces the industrial world’s harshest hydrological environment: The continent-nation suffers acute aridity, erratic rainfall patterns, exceptionally nutrient-poor, aged soils, and lacks long internal waterway transport routes across its vast expanses. As a result, its population of only 20 million, on a land as large as the lower 48 states of America, is concentrated in the river basin of the southeastern Murray-Darling, which also produces 85 percent of the nation’s irrigation, and two-fifths of its food.

Australia developed along an economic model with many similarities to the American West—dammed rivers, subsidized irrigation, and profligate water use by farmers. By the early 1990s, the damage to river ecosystems became too great to ignore. Over three-quarters of the Murray-Darling’s average annual flow was consumed by human activity. As on other overused rivers, the mouth was silting up. Water in the lower reaches became so saline that it was poisoning the municipal water supply of downriver Adelaide. Fertilizer runoff was triggering deadly algae blooms along a languid 625-mile stretch of the Darling.

The government’s response to the Murray-Darling’s ecosystem crisis was to radically restructure its water policies by emphasizing market pricing and trading, and ecological sustainability. The new governing principles ended irrigation subsidies, required farmers to pay for maintaining dams and canals, and, of critical importance, established a scientist-calculated baseline of how much water had to be left in the river to ensure the health of its ecosystem. To facilitate independent water trading, water rights were clearly separated from private property. Governance was managed by a new basin commission.

In little more than a decade, water trading between farmers, farmers and cities, and across state lines, had taken off. There were two computerized water exchanges; farmers were even accustomed to trading over mobile phones. A kindred scheme, akin to America’s cap and trade in greenhouse gas emissions, enabled irrigation farmers, who added salt to the soil and into the river basin, to buy “transpiration credits” from owners of forests, whose trees removed salinity by sucking water up through their roots.

Just as its architects had hoped, Australia’s water reforms are facilitating the transfer of irrigation water from salty soil to more fertile regions, from use on lower value to higher value crops, and generally from less to more productive methods. Soil salinization has fallen sharply. River fish populations are reviving. Overall water productivity is soaring. Australia’s water reforms were implemented none too soon. In the early 2000s, the continent was enduring its worst drought in a century, reviving internecine political rivalries between states and vested interests that could have torn the democracy apart without a preexisting plan. Sheep farms in the arid outback are now being bought by the government to conserve the water the animals had consumed in order to replenish the basin. Water is being more tightly rationed and the government is stepping in to pay the highest price to obtain sufficient water for the priority need of recharging wetlands and safeguarding other components of ecosystem health. Climate change, too, stalks the political struggle over Australia’s freshwater—scientists predict a decline in the Murray’s flow by 5 percent to 15 percent in coming decades.

As Americans feel about their own bygone, settler frontier, Australians are nostalgic, uneasy, and sometimes despairing at the prospective decline of its individualistic family farm homesteads and livestock and sheep ranches, which alone consume half the nation’s agriculture water. But the reality of water scarcity imposes tough, new choices upon modern societies about how to most productively allocate its precious resources. The hard truth is that less than 1 percent of Australia’s agricultural land produces 80 percent of its agricultural profits—the vast majority of the rest are marginal enterprises that lived off resource-depleting farm subsidies. In effect, they are cultural relics, worthy perhaps of preservation for social and political reasons but carried along at the expense of some of Australia’s competitiveness in the twenty-first-century global economy.

America and other leading industrial democracies have not yet fully awakened to the era’s defining water challenge—or to their own strategic advantages in a world order being recast by water scarcity and ecosystem depletion. While the soft-path response emphasizing improved existing water productivity has been gaining ground, it has been doing so only fitfully. No coherent, national policy is helping nurture its embryonic development into an automatic invisible green hand mechanism with the potential to marshal water’s full catalytic potency and possibly deliver a transformational, era-defining breakthrough.

Inertia and long-rooted institutional forces are formidable impediments to innovative change at any given moment of history. So it is today. Powerful water bureaucracies cling unimaginatively to approaches forged in previous eras; the U.S. Army Corps of Engineers, for example, is still scoping plans for giant, river interbasin transfers between the Colorado and the Mississippi. Farm subsidies and protective tariffs are so firmly entrenched in the political landscape that Congress has been concentrating on how to extend them to biofuels like corn ethanol, even though doing so will divert water from food production and add to greenhouse gas emissions and global warming. Despite the success of thirty-five years of clean water legislation in improving water quality and stimulating dramatic water productivity gains among private enterprises, the Bush administration’s Environmental Protection Agency unsettled the regulatory environment and reopened the door to special interest lobbying by reflexively dropping 400 cases against illegal industrial discharges after a split 2006 Supreme Court decision muddied the terms under which seasonal or remote wetlands and streams deserved 1972 Clean Water Act protections. Similarly, most environmental groups continued to view the world through the original regulatory prism of simple top-down government prohibitions and remain highly suspicious of any market-oriented, soft-path innovations. In short, the jury is still out on whether the water sufficient industrial democracies will fully grasp their leadership opportunity to achieve the water breakthroughs that could trigger another dynamic cycle of creative destruction within market economies or whether its trend toward improved water productivity will merely become a modest way to slim down from an abundant water diet without seriously confronting the underlying, politically entrenched and outdated practices.

Momentous innovations in water history only become clear in hindsight, after they have meandered and permeated through society’s many layers, catalyzing chain reactions in technologies, organizations, and spirit that sometimes combine in new alignments to foment changes transformational enough to alter the trajectory and destinies of societies and civilizations. The way James Watt’s steam engine, for instance, interacted with the nascent factory system, canal craze, coal mining and iron casting boom, Britain’s growing imperial reach and the nation’s new capital accumulation and entrepreneurship-friendly political economic atmosphere, to help launch the Industrial Revolution would have defied prediction at the time. Yet at times it is possible to foresee at least some of the channels through which a great water breakthrough might multiply its effects.

One such channel visible on today’s horizon is through water’s interaction with three other global challenges—food shortages, energy shortages, and climate change—that together are likely to profoundly influence the outcome of civilization’s overarching challenge of learning how to sustainably manage the planet’s total environment. While not always perceived as such, the four are so inextricably interdependent that a profound change in any one alters the fundamental conditions and prospects of the others. Irrigation, for example, depends not just on water to nourish crops but also on prodigious energy to pump water from underground aquifers, transport it long distances over hilly landscapes, and drive the sprinklers and other methods that deliver it to plant roots. Artificial fertilizer, too, a mainstay of large-scale irrigated agriculture, requires great energy to produce, and its runoff from cropland has significant impacts on water quality and nourishing ecosystems. Clearing grasslands, rain forests, and wetlands for agriculture, meanwhile, worsens global warming on at least two counts—by adding greenhouse gasses to the atmosphere directly through burning and plowing, and by removing nature’s sponges that absorb carbon emissions. A zero-sum conundrum of using water either to grow fuel or food to meet shortages is inherent in the decision over biofuels like corn ethanol. The growing, interoceanic shipping trade in virtual water crops vital to alleviating impending food famines depends upon burning expensive, fossil fuel to power the world’s supercontainer fleets. Near the end of the production chain, processing and canning food products are both extremely water and energy intensive processes.

Ever since the age of waterwheels, water and energy have been coupled in power generation. Today, they are wed on a mass scale through hydroelectricity and in the cooling process of fossil fuel thermoelectric plants; indeed, one of the main constraints on adding more power plants is insufficient volumes of river water to cool them. Filtering, treating, and pumping water for cities also consumes vast amounts of energy. To gauge some idea of the scale of the water-energy nexus, nearly 20 percent of all California’s electricity and 30 percent of its natural gas are used by its water infrastructure alone.

Energy crises often became water crises, and vice versa. During the great northeastern U.S. power failure of August 2003, Cleveland mayor Jane Campbell soon discovered she had an even bigger crisis than darkness and a flustered White House wanting her to reassure the public that the cause was a local power grid failure and not international terrorism, when four electric water pumping stations shut down, and threatened to contaminate the city’s drinking water with sewage; to stave off a public health catastrophe, she had to launch a second emergency action to warn citizens to boil their water, a practice that continued for two days after the lights returned. The causality of crisis transmission also frequently works in reverse, with drought-induced electrical power shortages diminishing drinking water supplies, irrigation, industrial operations, and shipping. With the river Po 24 feet below its normal level during Italy’s severe drought in 2003, power stations shut down from lack of water to cool turbines, and electricity was curtailed to homes and factories. Likewise, hydroelectricity output was halved and shipping reduced on the Tennessee River when it shrank to record levels during America’s 2007 southeastern drought.

High energy costs are also one of the major constraints on many approaches to easing water scarcity. A third to a half of desalinization costs are energy, mainly fossil fuels—indeed, any large-scale takeoff of desal seems to be contingent upon a cost breakthrough in some renewable energy source. Likewise, the amount of weighty water that can be lifted from deep aquifers, or transported great distances through interriver basin pipelines like China’s South-to-North Water Diversion Project is limited chiefly by the expenditure of energy for pumping such a heavy, hard to manage liquid.

Energy generated from fossil fuels, of course, worsens the mounting global warming crisis. When James Watt invented his steam engine in the late eighteenth century, carbon dioxide in the atmosphere was 280 parts per million; after two centuries of industrialization, the levels had risen by a third to over 380 parts—the highest level in 420,000 years and rapidly approaching the catastrophic threshold of 400 to 500 parts per million that scientists calculate could trigger the irreversible disintegration of the Antarctic or Greenland ice sheets.

The main feedback loops of warming-induced climate change are, in fact, also water related—an increase in what forecasting scientists call “extreme precipitation events”: more prolonged droughts and evaporation, heavier flooding and landslides in wet seasons, more intense storms like hurricanes that need minimum temperatures to form, melting polar ice caps and rising sea levels, and, most widely felt of all, a disruptive alteration in historical seasonal precipitation patterns. Due to global warming more spring precipitation is falling as rain instead of snow, intensifying spring flooding and mudslides, and diminishing summertime mountain snowpack melt that normally arrives just in time to replenish dry cropland. Since the world’s dam and water storage infrastructure had been designed to accommodate traditional patterns, climate change is rendering that infrastructure increasingly “wrong-sized”—dam reservoirs can no longer capture and store all the available spring precipitation runoff, while its summertime irrigation and hydropower turbine output dwindles from reduced snowmelt. Food and energy output suffers, potentially tipping fragile, water scarce conditions to full-blown water famine. At the very least, a massive rebuilding of infrastructure looms to accommodate the change in climate.

Leading the way is one of history’s stellar water engineering nations, Holland, whose society’s very physical and democratic political foundations derive from extensive, ongoing water and land reclamation management in a low-lying, heavily flood-prone region. Following a giant 1916 flood, the Dutch accomplished one of the great engineering feats of the first half of the twentieth century. By closing off the Zuider Zee inlet from the North Sea with a giant dike, they created a Los Angeles–sized, artificial freshwater lake and a new water supply source near Amsterdam, known as the Ijsselmeer, or IJ. More recently, Dutch water engineers created a sophisticated combination of water pumps in winter and the natural phenomenon of planting trees—each of whose roots can suck up to 80 gallons a day—to help maintain drainage on reclaimed lowlands. But as rainfall and sea levels have been rising with early climate change, the Dutch have begun to pioneer what may become a new trend in the struggle to sustainably manage water ecosystems—the government is buying reclaimed land so that it can be flooded, thus diverting the rising water from cities and other invaluable societal infrastructure. Among those seeking to learn from the Dutch experience are state leaders from low-lying Louisiana, which is still recovering from the devastating floods of Hurricane Katrina.

In water poor, monsoonal, subsistence countries that lack modern infrastructure buffers from water’s destructive extremes, however, the impacts are likely to be reckoned by increased deadliness: Traditional, hand-built mud dams that aren’t washed away in the intensified flooding often run dry of their precious, captured, seasonal flow during the prolonged drought that follows, withering crops and killing livestock. For the hundreds of millions who live daily in this precarious, impoverished condition, the consequences are often famine, disease, misery, and death. Worse lies ahead: Climate models predict that the harshest effects of global warming are likely to fall disproportionately on regions with the scarcest water; the temperate zones, inhabited by mostly water-wealthy nations, are expected to suffer the mildest initial effects. Yet in the end, no one will be spared if, as some models predict, the alarmingly rapid melting polar ice caps raise sea levels by 15 to 35 feet and inundate shorelines, and ultimately change the salinity and temperature mix of the North Atlantic enough to halt the interoceanic conveyor belt to bring a frosty, ice age ending to human civilization’s brief reign during Earth’s unusual 12,000-year stable and warm interlude.

More optimistically, the same relationships work in converse—any important innovation that alleviates water scarcity is likely to multiply the upside benefits to help societies meet their food, energy, and climate change challenges. Genetically modified crops that require less water, or breakthroughs in diffusing microirrigation and remote-sensing systems, would help feed the world’s soon-to-be 9 billion and save fossil fuel burning energy now used to overpump groundwater for irrigation. Breakthroughs in desalinization could help provide water for crops and cities in coastal areas. Free standing, small water turbines, another promising innovation, could generate renewable electricity in fast-running streams and rivers around the world, producing inexpensive local electrical power, facilitating the removal of ecosystem-injuring dams and providing a clean alternative for communities, possibly augmenting their autonomy over the means to produce wealth and with it, their democratic voice in society. Much-ballyhooed fuel cells, which might get their hydrogen from water and yield water vapor as a by-product, could provide widely available clean renewable energy that liberates resources for food, water, and ecosystem health. But at least as important as any extraordinary new technologies—indeed, likely much more so—is the gradual, humdrum accumulation of low-tech and organizational advancements in the productive use of water supply already available to man in the form of more efficient existing waterworks, increased small-scale, decentralized capture and storage of existing precipitation, and smarter exploitation of nature’s own cleansing and ecosystem renewal cycles. By one estimate, statewide application of existing efficiency techniques could reduce California’s total municipal water consumption—with commensurately reduced energy costs—by one third. Water savings in profligate agriculture would be far greater.

With no technological panacea in view comparable to the giant dams and Green Revolution in the last century, the winning responses to the world’s water crisis are most likely to emerge fitfully out of a messy, muddling-through process of competitive winnowing and trial and error experimentation with diverse technologies, scales and modes of organization, as each locality and nation seeks to find solutions tailored to meet its particular conditions. Uncertainty, multiplicity, and fluidity are likely to characterize the landscape until clear trends emerge. Historically, Western democracies’ market economies have excelled at innovating and creating growth in just this sort of environment—indeed it is one of their main claims to fame. Centrally managed economies and authoritarian states, on the other hand, have tended to do best where technological trends are clear and the main challenge has been to apply them effectively. Thus the Western model enjoys a built-in organizational, as well as water resource, advantage in the unfolding global competition to find the most effective responses to the novel challenges of water scarcity.

Yet history also bears witness that the West’s great water advances have been often brought forth by special leadership at key moments. Teddy Roosevelt’s visionary commitment at the turn of the twentieth century to exploit the undeveloped potential of America’s Far West by launching a new federal institution to promote irrigation and by building the Panama Canal stood out. Similarly, so did Franklin Roosevelt’s Depression-era commitment to swiftly multiply the benefits of the Hoover Dam by erecting similar government-built giant, multipurpose dams elsewhere in the country, and De Witt Clinton’s use of New York State financing for the Erie Canal early in the nation’s history to fulfill the founding fathers’ vision of opening a route through the Appalachians to the Mississippi Valley. By creating in each case a coherent environment with clear goals and reliable rules, these leaders inspired confidence among individuals and private enterprises whose participation was necessary for the achievement of their purpose. It is precisely such galvanizing, visionary leadership and reliable commitment to principles that is yet to arise today. Albeit, given the awareness and means in today’s world to resist the social and economic displacements often attenuating to such bold, society-changing projects, doing so is comparatively harder. Nevertheless, until it does, the full potential of the organizational innovation of enlisting market forces in the delivery of a sustainable environment—an invisible green hand mechanism that improves water productivity, allocation and ecosystem health through an automatic market price signal for water that reflects the full cost of water supply, delivery, cleansing and ecosystem maintenance—is likely to be impeded by embedded vested interests, incomplete frameworks, and rules of the game that are too uncertain to fully engage private market participants.

Without any imminent solutions to the deepening global water scarcity crisis, water rich nations are likely to be buffeted by a growing number of unfamiliar foreign water shocks, much as they had been from oil in the latter twentieth century. Diplomatic standoffs, water violence, and possibly even water wars are likely to occur in overpopulated regions of extreme scarcity, such as the Middle East. Soaring world food prices, famines, and environmental spillover from the global quantum jump in resource consumption and waste generated by fast-growing Asian giants like China and India threatens to destabilize poor countries dependent upon good imports. When grain prices were spiking in the spring of 2008, World Bank president Robert Zoellick warned that without a new Green Revolution some 33 countries faced social unrest.

The smooth functioning of the integrated global economy and the critical trade in oil and food also depends upon some nation, or group of nations, stepping forward to commit their navies to guarantee unimpeded supercontainer sea passage through nearly a dozen strategic straits and canals that are potential choke points if closed. Feasible threats include terrorists or pirates sinking an oil supertanker in the narrow, pirate-infested Strait of Malacca, a war that closes oil flows through the Strait of Hormuz at the mouth of the Persian Gulf, or a blockage of the Red Sea’s southern strait at Bab el Mandeb.

Foreign policies are likely to be realigned and influenced by water-driven alliances, just as they were in the last century by oil. Saudi leasing of cropland in friendly nearby states; a similar, but ultimately unsuccessful effort by South Korea to secure the fruits of Madagascar’s potential farmland; and China’s provision of work crews and dams, bridges, and other water infrastructure to resource-rich African nations are possible harbingers of the formation of new virtual water and other resource-security and diplomatic blocs within the larger world order that could prove more bonding and outflank the defense umbrellas currently provided by the West. Indeed, water-based alliances could emerge as one of the new international paradigms of the post–Cold War order. New, nontraditional foreign policy thinking is required. Strategic alliances with other regional water Haves, for example, could offer many avenues for exerting increased leverage in many parts of the world. Turkey was already exerting its influence as the Middle East’s water superpower to act as broker—and presumptive water enforcer—of peace talks between Syria and Israel. Over four-fifths of fresh river water flowing to oil-rich Arab lands originates in non-Arab states. Under more dire and polarized political conditions as water grows scarcer, it is conceivable as a thought experiment—however highly unlikely in practice—to imagine the formation of a water bloc among Ethiopia on the headwaters of the Nile, Turkey on the Tigris-Euphrates, and Israel on the tiny Jordan, perhaps in league with a cartel among international exporters of food—virtual water—as a diplomatic countermeasure should Middle Eastern oil suppliers turn extremist and try to take excessive advantage of their disproportionate oil power. Similar considerations could apply in central Asia, where the currently dysfunctional state of Tajikistan has potential control over 40 percent of the region’s water sources and, through a program of giant dam-building, could deliver badly needed hydropower to nearby Afghanistan and Pakistan. Forward-looking Western foreign policy makers also have to be cognizant of the enormous leverage China’s control of Tibet gives it over the mountain sources of the great rivers, and therefore the economic and political fate, of Southeast Asia.

Endless foreign policy challenges are also likely to emanate from the world’s abject water poor, roughly calculated as the one-fifth of humanity without access to enough clean water for their basic domestic needs of drinking, cooking and cleaning, the two in five without adequate sanitation, including simple pit latrines, and the 2 billion more whose lives are devastated every decade by their exposure to recurring water shocks like floods, landslides, and droughts. For the most part they live in Africa and Asia, both in failing states and poor, usually rural regions of developing ones. For them, progress is not primarily measured in terms of harnessing hydrological resources to enhance their productive society but in terms of brutal survival against the natural ravages of unmanaged water and the prevention of catastrophes stemming from the collapse of aging and often poorly built waterworks. As world population soars, so too will the absolute number of abject water poor and international spillover to the richer parts of the world. From India to Africa, hundreds of thousands of climate migrants are already on the march from unbuffered water shocks, shortages and infrastructure failures—there is no reason to expect that they will politely stop at their national or regional borders to quench their driving thirst for survival.

On the hopeful side, a Western breakthrough in exportable techniques that dramatically increases existing water use productivity, improves sustainable water ecosystems, and enhances international food export supplies, of course, would quickly become a powerful lever to helping other nations and individual communities cope with their water scarcity challenges. Abundant production of internationally traded food could help strengthen the existing world political economic order by reassuring water-poor countries that their best interests lay in relying upon the liberal, free-trade region to provide, at fair prices, the food they need to import. They could yield extensive diplomatic goodwill for Western interests and promote indigenous democratic development in other parts of the world as well.

But any such water-driven democratic development would likely require imaginative, flexible, and conditional solutions beyond solely large-scale, national government-ministry-directed projects of the twentieth-century variety, including a willingness to build upon and help revive traditional, small-scale water management practices from the precolonial era. In rural parts of India and central Asia where British colonialism did not penetrate with its centralized, modern water techniques, for example, some such traditional methods and local governing mechanisms have remained intact. Village built and managed water tanks in India offer small, local, partial, but helpful solutions to the nation’s great water storage shortages. In rural Afghanistan and eastern Iran, highly respected village mirabs, or water foremen, are still selected annually among local orchard growers and farmers who share a water source to set watering schedules and amounts and to settle disputes so that wellhead and upstream farmers do not consume more than their fair share before it flows to users at the bottom. The mirab system is remarkably reminiscent of the Dutch water parliaments that became a prototype for the founders of the Dutch Republic’s democracy, as well as of democratically functioning local institutions like Valencia’s public water court. It does not require too great a leap of thinking to imagine how expanding the power base of such long-established, local water institutions and practices might become one of the building blocks to rebuilding failed, or never fully formed, states that otherwise menace the world order.

Although the water crisis of the world’s poorest has been on the international agenda and the subject of numerous, high-level meetings among serious-minded people since the 1970s, and the U.N. Millennium Development Goals, endorsed by world leaders at the second Earth Summit at Johannesburg in 2002, included a specific target of halving the proportion of people without access to clean water and basic sanitation by 2015, the truth is that the legions of the world’s water disenfranchised are continuing to swell. The familiar dynamics of ruthless indifference among those far away and diffused political power are at perpetual play. Moreover, one perverse, unintentional effect of the multilateral campaign for clean drinking and sanitary water has been to divert increased investment away from also badly needed food production infrastructure. Without a pressing crisis to rivet all world leaders’ serious attention, there is not nearly enough financial commitment from rich countries, nor even sufficient political will from government leaders of many suffering, water poor ones. In a changing global order without a single dominating world power to set the agenda, the task of rallying action is chiefly being left to an amorphous international process led by weak, multilateral institutions and diverse nongovernmental entities. If only a small fraction of the debate and study they have committed over the years had been translated into concrete action, the water crisis might have been solved many times over.

Several promising principles have been enunciated. These include striking a balance between the “3 E’s”: Environmentally sustainable use of water; Equitable access by the world’s poor to fulfill their basic water needs and for communities to share in the benefits of local water resources with the poor; Efficient use of existing resources, including recognition of water’s value as an economic good. Yet no galvanizing consensus has emerged on how to practically realize these or other principles. As a result, the small army of jet-setting, water conference-goers often resemble the proverbial endless talking shop, issuing declarations of broad good intentions but disagreeing too much to get on board with concrete paths proposed to achieve them. This was illustrated at the third triennial World Water Forum held in Japan’s historic capital of Kyoto in 2003, impressively attended by 24,000. Conference-goers became embroiled in a furor over a report of a high-profile committee headed by former IMF managing director Michel Camdessus that proposed specific financial means to achieve the Millennium Development Goals for water. Citing the staggering investment sums needed—on the order of $180 billion globally per year—for water infrastructure, and recognizing the paltry commitments industrialized governments were willing to make, the Camdessus report strongly endorsed private sector participation; adding fuel to a controversial suggestion, it cited large-scale, centralized waterworks like dams as potential targets for private financing that are an anathema to activists who had fought against them on the World Commission on Dams. Protests erupted at the session where the Camdessus report was launched. Angry anti-private-market water activists, NGO representatives, and union members marched through the venue, and unfurled a banner that read, “Water for People, Not for Profits.”

On current dynamics and trajectories, not only will the U.N.’s self-declared International Decade for Action “Water for Life” (2005–2015) likely expire without achieving the Millennium targets, but the massive dry shift in the global water continuum of Haves and Have-Nots will continue to lurch toward deepening scarcity. Countries with scarcity are likely to veer toward famine; countries already in water famine face greater human catastrophes and political upheavals. Overtaxed water ecosystems are likely to grow more and more depleted and less and less capable of sustaining their societies. As the gulf between those with sufficient water and those without deepens as a source of grievance, inequity and conflict, the new politics of scarcity in mankind’s most indispensable resource is becoming an increasingly pivotal fulcrum in shaping the history and environmental destiny of the twenty-first century.