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Understanding Water Risks

About the blog

Alex Fernández Poulussen
Regional Director Good Stuff International in Spain. Integrated Water Resources Management, exploring and promoting ways for people to live the best possible life on Earth while caring for the natural environment and other people.
  • Understanding Water Risks
  • Understanding Water Risks
  • Understanding Water Risks

Recent news about Water Risk suggest that "One-quarter of the World's population face extremely high Water Stress", a worrying situation that turns on the alarm lights, especially for countries like Spain, identified as one of the countries with highest water stress levels.

These news show data and figures that provide important information, but they must be handled with care, not to fall into an alarmism or urgency that can lead to wrong decisions. Not all types of risk are equal. Within the same country or watershed, risk levels may be different and vary over time, and may affect differently depending on the activity. Therefore, it is essential to understand Water Risks, analyze them in detail and use them to trigger efficient actions to achieve a positive impact at all levels. Let's see how to do it.

It is essential to understand Water Risks, analyze them in detail and use them to trigger efficient actions

To begin with, we must understand that risk is the combination of threat + degree of vulnerability or exposure to a threat. When we talk about water, threats can be droughts, floods, overexploitation, climate change, pollution... They imply different forms of physical risk. In addition, the existence (or not) of water regulations and their level of enforcement imply different levels of regulatory risk, and issues related to water that have an effect in the environment or societies, and their cultural or media impact may pose a reputational risk.

Data sources; from global to local

One of the positive aspects of living in the information age is the ease of access to large amounts of data that support understanding on water risks. Globally, the World Resources Institute (WRI)'s "Aqueduct" water risk atlas has recently launched an updated database including 13 Water Risk Indicators per sub-basin for current and future scenarios. On the other hand, the WWF - Water Risk Filter tool provides a global water risk database, in this case composed of 32 indicators per sub-basin. At the end of 2018, its version 5.0 was launched, with new and updated datasets globally and high resolution versions for 7 countries. As an example, the high-resolution version for Spain incorporates a dataset developed by GSI and WWF for more than 5000 sub-basins including data from sources such as the Ministry of Environment, the National Drought Observatory, the different River Basin Management Plans or the media impact on iAgua (methodology can be found here).

Aggregated Water Risk level according to WRI Aquedust (left) and WWF Water Risk Filter (right)

These tools facilitate a quick visualization of Water Risk that can be interesting for users, companies, supply chains or investors to understand the water situation in a given area, or in different parts of the world where they have suppliers or interests. But for this data to lead to efficient actions, it is necessary to handle the topic carefully. Global tools, although very useful, have limitations. Basin delineations may be different from that used by local authorities, information on water quality or quantity is static and needs to be checked or updated, and some information related to groundwater or inter-basin transfers may not be reflected in global databases.

First, a process of data analysis and quality control is necessary before combining and integrating global datesets. At this point it is important to understand that the different types of risk must be analyzed separately. Sometimes it can happen that the scarcity risk level in a watershed is very high, and that of quality very low, or vice versa, obtaining an average risk level that doesn't seem to be relevant. If one looks only at an average result of different types of risk, serious issues in specific aspects can be overlooked.

Additionally, at the operational level it will be necessary to know the physical location and the origin of water used. For example, the irrigation water source of a farm may be in the same basin, but sometimes it is transported from a reservoir or other water source located in a different basin. This will allow to identify the relevant basins on which it will be necessary to deepen the understanding of risks and prioritize the action. Data analysis tools and Geographic Information Systems (GIS) facilitate this process.

Fictitious case: The basins delineation used by different global databases (A and B), houses different water risk indicators in each polygon. Through using Geographic Information Systems (GIS), they are spatially aggregated to the official basin delineation from the local authority (C), resulting in a combined water risks map, with data from different sources integrated in the official sub-basins delineation. Subsequently, producer locations are incorporated to identify the relevant sub-basins. The different types of risk, together with the number of producers or productive area in each sub-basin, are evaluated separately in order to prioritize specific actions in the locations of interest.

Once operational and water source locations are known, along with its different types of risk, we can prioritize the search for additional detailed data at the local level, such as evolution of groundwater levels, updated quality data or water flows from administrations or local organizations, climate data, water infrastructure, regulations or local water-related news or events. With this we will obtain a detailed risk profile and an understanding of what the different types of risk imply both at the business and at the basin level in a given location. Finally, it is important that these type of analyses "touch the ground", through a ground-truthing process, presenting and exchanging ideas with local water users (agricultural producers for example), who may sometimes have a different view from that shown in global or local datasets. This step is crucial in light of improving and validating results, create capacity and understanding at all levels in the supply chain, and build a collaborative atmosphere.

Understand Water Risks to take action

The final objective of the process is to trigger specific and concrete actions aimed at managing and reducing the risks encountered, both at the operational level, and "beyond the fence", facilitating the processes of collective action together with other stakeholders. This will support the development of a more resilient and sustainable business at the local level, but also for global supply chains, reducing vulnerability to risks, building capacity on water and protecting societies, water and associated ecosystems in river basins.

This blog post is based on the methodology developed by GSI's technical paper on "Water Risks in agricultural supply chains - Methodology for catchment prioritization to guide company action" and GSI's WaterData4Action approach.

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