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In an increasingly parched world, shared water resources are becoming an instrument of power, fostering competition within and between nations. The struggle is escalating political tensions and exacerbating effects on ecosystems. This week's Budapest World Water Summit is the latest initiative to search for ways to mitigate the pressing challenges.

Consider some sobering facts: Bottled water at the grocery store is more expensive than crude oil on the spot market. More people own or use a cellphone than have access to sanitation services.

Unclean water is the greatest killer on the globe, yet a fifth of humankind still lacks easy access to potable water. More than half of the global population lives under water stress – a figure projected to increase to two-thirds during the next decade.

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Access to natural resources has been a key factor, historically, in war and peace. Water, however, is very different from other natural resources. A person cannot live without water.

There are substitutes for many resources, including oil, but none for water. From distant lands, a country can import fossil fuels, mineral ores and resources originating in the biosphere, such as fish and timber. But not the most vital resource, water – at least not in a major or sustainable way. It's prohibitively expensive. Water is essentially local.

Scarcity of water generates conflict. Even the origin of the word "rival" is tied to water competition. It comes from the Latin rivalis – one who uses the same stream.

Water's paradox is that it is a life preserver, but it can also be a life destroyer when it becomes a carrier of deadly bacteria or comes in the deluge of a tsunami, a flash flood or a hurricane. Many of the greatest natural disasters of our time have been related to water. A recent example was the Fukushima disaster, which triggered a triple nuclear meltdown.

Because of global warming, potable water is set to come under increasing strain even as oceans rise and the intensity and frequency of storms and other extreme weather events increases.

Rapid economic and demographic expansion has already turned potable water into a major issue across large parts of the world. Lifestyle changes, for example, have spurred increasing per-capita water consumption in the form of industrial and agricultural products.

It is against this background that water wars, in a political and economic sense, are already being waged between competing states in several regions. Some build dams on international rivers or, if located downstream, resort to coercive diplomacy to prevent such construction. U.S. intelligence has warned that such water conflicts could turn into real wars.

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According to a report reflecting the joint judgment of U.S. intelligence agencies, the use of water as a weapon of war or a tool of terrorism appears more likely in the next decade in some regions. Meanwhile, the InterAction Council, comprising more than 30 former heads of state or government, has called for urgent action, saying that some countries battling severe water shortages risk failing. The U.S. State Department, for its part, has upgraded water to a "central" foreign-policy concern.

Water stress is also imposing mounting socioeconomic costs. For example, commercial or state decisions in many countries on where to set up new manufacturing or energy plants are increasingly being constrained by inadequate water availability.

The World Bank has estimated the economic cost of China's water problems at 2.3 per cent of its GDP. But China isn't even considered to be under water stress – a term internationally defined as the availability of less than 1,700 cubic metres of water per head per year. Economies that are already water-stressed, ranging from South Korea and India to Egypt and Morocco, are paying a higher price.

Water is a renewable but finite resource. Nature's fixed water-replenishment capacity limits the world's renewable freshwater resources to nearly 43,000 billion cubic metres per year. But the human population has almost doubled since 1970 alone, while the global economy has grown even faster.

Consumption growth has become the single biggest driver of water stress. Rising incomes, for example, have promoted richer diets, especially a greater intake of meat, whose production is notoriously water-intensive. For example, it is about 10 times more water-intensive to produce beef than to produce cereals.

In this light, water is becoming the world's next major security and economic challenge.

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Although no modern war has been fought just over water, it has been an underlying factor in several armed conflicts. With the era of cheap, bountiful water having been replaced by increasing supply and quality constraints, the risk of an overt water war is now increasing.

Avoiding such conflicts will require rules-based co-operation, water sharing and dispute-settlement mechanisms. However, there is still no international water law in force, and most of the regional agreements are toothless, lacking monitoring and enforcement rules and provisions formally dividing water among users. Worse still, unilateralist appropriation of shared resources is endemic in the parched world, especially where despots rule.

The international community thus confronts a problem more pressing than peak oil, economic slowdown and other oft-cited challenges. Indeed, this core problem holds the key to other challenges because of water's nexuses with global warming, energy, food supply, population, pollution, environmental issues, global epidemics and natural disasters.

Brahma Chellaney is a geostrategist and the author, most recently, of Water, Peace, and War.

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