Preparing India for water stress and climate resilience

With the India Meteorological Department (IMD) predicting a hotter summer and longer heat waves from April to June, India must also prepare for water stress. The challenge is that we are programmed to view acute stresses (heat, water or extreme weather) as temporary, and often treat them as emergency responses. We need to move away from panic reactions when disaster strikes (such as the water crisis in Bengaluru) and understand and respond to the chronic nature of the risks we face. Furthermore, climate action cannot be left to a few sectors or companies. Nor can environmental sustainability be reduced to plantations of saplings for a few days.

This Earth Day (April 22) should be a wake-up call. The climate is now the economy, and the economic production frontier will expand or shrink depending on how we understand the intersections between land, food, energy, and water.

India is home to 18% of the world’s population on 2.4% of the Earth’s surface and has only 4% of the world’s freshwater resources. Nearly half of the rivers are polluted, and 150 of the primary reservoirs are currently at just 38% of their total life-storing capacity. Moreover, it is the largest user of groundwater in the world. And three-quarters of India’s districts are hotspots for extreme climate events.

Against this backdrop, India has invested heavily in disaster preparedness, but the nature of climate shocks will continue to change. There will be both sudden shocks (heavy rainfall, rapid decline in water availability) and slow but periodic stresses (reduced water retention in soil, changes in rainfall trend lines). Seasonal disaster preparedness and responses are no longer sufficient to address climate risks.

Water flows through the economy

For a long time, we have ignored the many ways water flows through our economy, instead addressing water (and other natural resources) in silos. Water connects our hydrological, food and energy systems and impacts millions of people.

How does this connection work? Precipitation is the main source of soil moisture and water stored in vegetation (green water) and of the water available in rivers and aquifers (blue water). Both blue and green water affect the food we grow: it irrigates crops, influences harvests and is crucial to the economy. But this sector that provides the most employment is becoming increasingly climate vulnerable. The India Employment Report 2024 shows that agriculture continues to employ around 45% of the population and absorbs most of the country’s workforce. At the same time, a study by the Council on Energy, Environment and Water (CEEW) showed that monsoon rainfall is changing patterns in India, with 55% of ‘tehsils’ or sub-districts seeing a significant increase of more than 10% in the south-west monsoon. precipitation in the past decade, compared to the previous three. But this increased rainfall is often the result of short-lived, heavy rains, which affect sowing, irrigation and harvesting of crops. Making the agricultural sector more resilient to climate and water will put pressure on employment, growth and sustainability.

Water is also an important part of the world’s transition to clean energy. Green hydrogen, seen as a crucial pillar for the decarbonization of industry and long-haul transport sectors, is produced using water and electricity from renewable energy sources. Pumped storage hydropower – which acts as a natural battery and is essential to balance the load on the electricity grid – is an important part of a clean but reliable energy system.

Then there is the climate crisis and its impact on hydrometeorological disasters. According to the UN’s World Water Development Report 2020, almost 75% of natural disasters over the past two decades were water-related. According to the CEEW analysis, the number of flood-related events (such as landslides, thunderstorms and cloudbursts) increased up to 20 times in India between 1970 and 2019. Freshwater, one of the nine planetary boundaries, has been crossed (2023 study).

The ingredients of water safety

What India does to ensure domestic water supply, food security and the clean energy transition will matter for its economy. But the experiences will provide lessons for other developing countries and emerging economies facing water problems. Achieving this water security requires a mix of the right policies, wise use of water, including reuse of urban wastewater, and financing to adapt to a changing world.

First, effective water management needs policies that recognize its interactions with food and energy systems. However, analyzes by CEEW and the International Water Management Institute (IWMI) show that although India has adopted several policy measures, most do not recognize this link during the planning or implementation phase. For example, although the scaling up of green hydrogen is desirable, the link with the availability of water is not always taken into account. Similarly, the impact of scaling up solar irrigation pumps on groundwater levels needs to be analyzed to deploy the technology where there is an optimal mix of solar energy and higher groundwater levels. Policy must integrate the nexus between food, land and water through local evidence and community engagement.

Second, India needs to focus on the wise use of blue and green water through water accounting and efficient reuse. The National Water Mission aims to increase water use efficiency by 20% by 2025. Similarly, the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0 calls for reducing non-revenue water, which is lost before reaching the end user, to less than 20% in urban local bodies. However, these are not supported by a baseline that uses water accounting principles that will help quantify, say, “20 percent” change in freshwater use. For example, in the absence of water use data for the base year, it is difficult to quantify the potential water savings in one sector, such as agriculture, which can then be diverted to other sectors, such as industry or domestic purposes, thereby increasing India’s demand for stimulate water. Water accounting is essential for promoting water use efficiency and creating incentives for investments in the reuse of treated wastewater.

Third, use financial instruments to raise money for climate adaptation in the water sector. Following global trends, India’s climate action is largely focused on mitigation in the industrial, energy and transport sectors. Financial commitments for climate change adaptation in the water and agriculture sectors are still relatively small. In 2019-20, for which aggregate estimates are available, annual per capita expenditure on climate change mitigation was about ₹2,200, while on adaptation it was only ₹260. More financing is needed for adaptation-specific interventions, such as strengthening wastewater management, providing incentives to promote climate-resilient agricultural practices (micro-irrigation and crop diversification), and scaling up desalination plants as an alternative water source for thermal power plants and green hydrogen production. Market innovations such as India’s Green Credit Program have the potential to partially bridge the adaptation financing gap by encouraging investments in wastewater treatment, desalination plants and agricultural extension services. Looking at the investments in India under Corporate Social Responsibility (between 2014-15 and 2020-21), there is a potential to generate around ₹12,000 crore worth of investments annually.

The expectation that systemic change will occur overnight is unrealistic. But it is possible to make a start by pursuing greater coherence in water, energy and climate policies, by creating data-driven baselines to increase water savings, and by enabling new financial instruments and markets for adaptation investments . A water-secure economy is the first step towards a climate-proof economy.

Arunabha Ghosh is CEO of the Council on Energy, Environment and Water (CEEW) and commissioner of the Global Commission on the Economics of Water. Nitin Bassi is a senior program leader at the Council on Energy, Environment and Water (CEEW). The opinions expressed are personal