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Nickel and Diming: How Budgeting Water, and Not Just Money, Can Change the World

By and - Sep 24 2014

Water smallYou can’t fuel your car with it or pressurize it into a precious stone, but severe droughts this summer remind us that though we seldom think of water as precious, it’s precious indeed. Even in Latin America and the Caribbean (LAC), home to one third of the world’s fresh water resources, water shortages are felt far, wide, and deeply. Last month, one such shortage affected many of Sao Paulo’s 20 million residents, with some subject to formal water rationing and others left without running water for days at a time.  At the same time, Guatemala’s government declared a state of emergency in 16 of its 22 provinces and suffered crop losses as high as 70 percent. Nicaraguan ranchers lost thousands of cattle, and across Central America the price of dietary staples like corn and beans quadrupled. Low water levels threatened to slow commerce in the Panama Canal, while the worst drought experienced in thirty years erupted in 47,000 forest fires in Bolivia alone. These stories prove that even where water is abundant, shortages take a serious toll, sure. But is there anything we can do about this mismatch between supply and demand?

Luckily, there is. Like money, water can be budgeted, as PepsiCo’s Dan Bena and the IDB’s Dr.  Fernando Miralles-Wilhelm explained to Forbes in a recent op-ed. Though a view to watersheds around the world proves mankind still has poor management over the water on which it relies, improved technologies can help decision makers monitor water influx and allocation in a much more efficient way.

Enter Hydro-BID, an integrated suite of water resource modelling tools  meant to empower decision makers – including water agencies, farmers, NGOs, municipalities and corporations – to better predict water supply shortfalls, design monitoring and irrigation programs, and make more informed decisions about water allocation. Unveiled together with PepsiCo during World Water Week, Hydro-BID is a product of the IDB-managed AquaFund, a multi-donor effort to improve access to water and sanitation throughout the region.

A testament to the innovation that can spring from public-private partnerships, Hydro-BID was made possible by AquaFund donors PepsiCo Foundation, the Swiss Agency for Development and Cooperation (SDC), the Swiss State Secretariat for Economic Affairs (SECO), and the Austrian Federal Ministry of Finance (BMF). The first major leap toward effective water budgeting anywhere, Hydro-BID was purposely made applicable to water resource contexts across the globe. It has massive opportunity for scale, and has the potential to serve governments, and their constituents, around the world.

Through Hydro-BID, governments will be able to prepare for a drought months before it strikes, tapping into decades of data and hydrologic analysis to estimate freshwater availability at the regional, basin and sub-basin levels. Currently piloted in Argentina, Haiti, and Peru with plans for additional tests in Brazil, the tool is expected to impact more than three million people across the LAC region by 2017. Plans are currently in the works to incorporate an economic analysis component, which can help decision makers estimate water-related costs and benefits, and can serve to guide the design of water infrastructure and policy.

Albert Imre Szent-Gyorgy, the 1937 winner of the Nobel Prize for Physiology or Medicine, once remarked that “water is life’s mater and matrix, mother and medium. There is no life without water.” Nearly eight decades later, his words have never been more significant. There is no life without water, yet this understanding has brought little improvement in water budgeting. Until now. An innovation with the potential of revolutionizing how we manage this precious resource, Hydro-BID is a leap in the right direction in water and sanitation efforts, one that holds great promise for protecting our world from the dire consequences of going without it. It is with Mr. Szent-Gyorgy’s words in mind that we will work to apply Hydro-BID’s approach to water contexts across the region, in hopes of eventually spreading this budgeting methodology around the world.

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