Water Scarcity- The economic impacts focusing on Scotland: Seminar Sum-Ups

Historically water has been very important for the growth of civilisations including driving technology advances and agricultural production. Today every aspect of our modern economy utilises water and therefore any environmental changes that impact the hydrological cycle will bring global and regional challenges. Global population increase and diminishing water resources due to climate change is a serious hazard that could have consequences even for water rich countries such as Scotland. As water is vital for economic success it is therefore so important to understand the possible consequences of water scarcity in the future. 

A recent seminar I attended by Dr Scott J. McGrane focused on the regional economic impacts of a water scarce future for Scotland. Currently his work at Strathclyde University employs multi-disciplinary methods to improve environmental monitoring of climate dynamics and impacts for regional economic forecasts.

The economy is linked to water through agriculture, energy and manufacturing. As the population continues to grow the higher demand for food and products will apply more pressure on the quality and quantity of water alongside climate change. The energy sector especially renewables also relies on water to drive its processes especially for hydro power and steam-based cooling. For example, recently in Malawi blackouts have been induced by drought conditions failing to supply enough water to generate power. This is also a key reason Scotland may be targeted by water scarcity. There has been a big move to renewables recently in Scotland which has the advantage of a reduced carbon footprint but also results in an extremely high-water footprint.

Scotland: How could we lose Water?

Scotland is a water rich country (Figure 1), but population growth and climate change will apply pressure to this resource. The UKCP18 has forecast wetter winters, hot and dry summers and warming temperatures. The country could see an increase in rain but a reduction in snowfall. A decrease in seasonal snowpack has already been observed and has impacted those that rely on seasonal runoff for agriculture particularly in the highlands. 

Figure 2: Rainfall Mao of the United Kingdom 1980-2010 Average in millimetres, illustrating the drought conditions that frequent SE England and E Scotland, (Met Office UK).

Scotland: How will this impact the economy?

Scott explained that in general, the Scottish economy is fragile and frequented with fluctuations. Therefore, due to the vulnerability of the economy Scotland is susceptible to negative impacts from future changes like environmental strain.
Key parts of the Scottish economy like energy, agriculture, food and beverage industry all rely on water. In addition, tourism is highest during summer especially in Edinburgh however this is when the country is at its driest which applies a large seasonal pressure. If the food and beverage industry will be threatened by water scarcity this is so important as it is also Scotland’s most successful area.

Scott’s seminar gave examples of places which have experienced water scarcity to help us understand what could happen in Scotland’s future.

Examples: Cape Town and California

Cape Town represents an example of the damaging economic impact a loss of water can have. Due to extended drought conditions the South African economy dipped into recession. However, from years of drought in California the economy continued to grow. They relied heavily on extensive pumping of groundwater which has severely depleted aquifers. Despite the economic prosperity for California over pumping has led to saline intrusions and increasing arsenic concentrations in coastal areas so it is not a completely successful story.

Summer 2018 Europe

The unusually hot and dry conditions of Summer 2018 provide an excellent insight to the future as these extreme weather conditions are expected to increase and become more frequent. In Scotland this most notably impacted the Whisky industry. Whisky is a particularly water-intensive product  and uses around 61 billion litres of water every year. In summer 2018 many rivers reached an all-time low flow including the Spey (Figure 2) and the Dee. The Blair Atholl and Eradour distilleries had to halt production dur to insufficient water supply. Agriculture was also hit hard as farmers were unable to produce crops, this also meant farmers were unable to sustain cattle populations. On the other hand, the growing season was extended due to the hot weather and tourism numbers were very high, so some benefits were received.

Figure 2: River Spey in the NE of Scotland, appearing water rich and abundant and supplying Speyside distilleries. 

Scotland: What does the future hold?

Scotland’s economy is vulnerable and current political issues (Brexit, another independence referendum) bring lots of uncertainty. Water allows the whisky industry to grow and continue as 1.2 billion bottles per year are distributed globally. If just this sector had to change due to water shortages this would threaten 70,000 jobs which are crucial for rural populations. On the contrary we are a water abundant region and have the capability to accommodate new labour markets and industry with our own resources and we have shown recent advances in technology that provide economic growth with less water usage due to technological efficiency. 

Virtual Water

Scott’s final thoughts focused on the concept of virtual water. Scotland imports many products that would be costly to produce locally such as food, technology and cotton. These products that have high amounts of water embedded within them and often come from already water stressed areas. So the global supply chain could be heavily impacted by droughts and water scarcity. If more research into local manufacturing was done this could enhance regional water security and allow these other areas to support themselves.  

Wider Concepts

Despite the abundance of water in Scotland with future environmental change and population growth a damaging reduction in water supply could become a pressing issue. Extreme hot and dry conditions of 2018 presented a glimpse into the new normal summer conditions of the future. This one extreme event alone impacted agriculture and whisky production which are two vitally important sectors that keep the Scottish economy afloat and a dip in rural economy was observed. Looking to the future, Scott and his team are carrying out critical research that will help to forecast climate change impacts. They are focusing on regional water shortage and the economic problems and tensions that may arise. Their work applies a multi-disciplinary approach that could help to mitigate the catastrophic impacts of hydrological changes on not just a local but global scale.

Meg

Links you may be interested in:

Scott's published paper on water and the economy -

McGrane, S.J., Allan, G.J. and Roy, G., 2018. Water as an economic resource and the impacts of climate change on the hydrosphere, regional economies and Scotland. Fraser of Allander Economic Commentary, 42(4), pp.53-74.

Scott's Profile at Strathclyde University -
https://pureportal.strath.ac.uk/en/persons/scott-mcgrane

British Hydrological Society -
http://www.hydrology.org.uk/