The purpose of this current BERL initiative is to outline the water resource situation in New Zealand, to generate some ‘taxonomy’ structure to the range of uses, and identify uses for which water can be valued and/or charged. We can then later explore practical methods to estimate and negotiate a value for water in situations where a resource rental is warranted and charging is feasible. The first article posed the question whether water is a free good or valuable, and argued that in an economic sense in some cases that water is valuable. In that situation the resource owner, Crown or Treaty partner, should be paid a resource rental for the water.
This current article describes the big picture of what our annual water quota could be in the global context. We also provide a perspective of where New Zealand’s water endowment by land area and per person sits compared with water in other countries.
New Zealand freshwater resources in a global context
New Zealand has a relative abundance of water in its water cycle, coming from water evaporated from its surrounding major oceans then falling as precipitation in its hilly or mountainous interior. This then flows out to the lower land and the coasts in the rivers above ground and in the aquifers below.
Some resource researchers and others have formulated a planetary accounting matrix for assessing countries’ and the world’s impact on the planet’s survival. In the planetary accounting framework, with planetary boundaries, they propose a water quota or ‘net water footprint’ of 8,500 cubic kilometres per year for the planet. Doing the maths, with a world population of 7.7 billion people, this gives a world quota of 1,104 cubic metres per person per year.
New Zealand’s population is currently estimated at 4.93 million or about 0.06 percent of the global population. This 0.06 percent, comes down to about 173 cumecs (cubic metres per second) year round. A local perspective is that this is just 30 percent of the mean annual flow in the Clutha River, and is about half of the mean annual flow in each of the Waikato, Grey and Waitaki Rivers.
As New Zealand receives considerably more freshwater each year than 30 percent of the Clutha River, we receive ‘more than our share’ of freshwater which could bring with it the obligation to use it efficiently to the benefit of others on the planet. This may imply efficient food production, carbon sequestration in forests, or possibly just supplying bottled potable water.
New Zealand’s comparative renewable freshwater availability
The total volume of freshwater estimated to become available annually across the world has been estimated at about 42,810 billion cubic metres. This estimate is made by the United Nations agency Food and Agricultural Organisation (FAO) which has a data series AQUASTAT. The World Bank releases this data among a number of world development indicators for all countries which have data available. These data are obtained from a number of sources, mainly agencies of the United Nations. The FAO data includes total annual freshwater withdrawals as well as withdrawals by the domestic, agricultural; and industrial sectors. These series can in turn be related to World Bank Development Indicator data from other sources for countries’ populations, total land area, GDP etc.
New Zealand’s comparative renewable freshwater by land area
The availability of this freshwater in any particular place in the world depends upon the annual rainfall which goes to renew ground water levels. For countries that are land-locked, the internal river flows are important. The Food and Agricultural organisation of the United Nations (FAO) measures this water volume for nearly all countries and supplies the data to the World Bank. The World Bank publish it as one of their World Development Indicators, labelled renewable internal freshwater resources. They generally express this renewable freshwater availability in cubic metres per capita of the World Bank’s population estimates.
We have ‘bulked up’ the World Bank’s per capita data for each country to a country total, multiplying by the country’s population. For the current comparison, we then divide the country’s total renewable freshwater by the World Bank’s estimate of the country’s area.
This calculation provides an estimate of the cubic metres of renewable freshwater available annually per square kilometre of the country’s area. Out of the 220 countries listed, there were 182 that provided sufficient information to complete these calculations.
This analysis shows that of the 182 countries measured, the ‘driest’ countries, Libya and Mauritania are shown to receive annually just 420 to 440 cubic metres of renewable, internal freshwater per square kilometre of their area.
Among the ‘wettest’ of the 182 countries measured, Costa Rica and Sierra Leone are shown to receive annually 2.3 million to 2.4 million cubic metres of renewable freshwater per square km. On the same scale, New Zealand annually receives 1.3 million cubic metres of renewable freshwater per square kilometre. This level ranks New Zealand as the 162nd wettest out of the 182 countries measured. The chart shows the New Zealand freshwater resource on the land in comparison with some other comparator countries.
The chart indicates that New Zealand, and the reasonably comparable Norway have about twice the density of freshwater on its area than United Kingdom, and about four times that of China and the United States of America. In terms of comparator countries, Australia is the dry outlier, receiving an average of 68,000 cubic metres per square kilometre of area. On average New Zealand receives about twenty times the volume of freshwater per square kilometre of area than does Australia.
The countries receiving water rates similar to or higher than New Zealand are mainly those with high altitude land masses like Switzerland, Nepal, Chile, Ecuador, Peru and Colombia, or else like New Zealand they are relatively small archipelagos and land masses within a large ocean area including Indonesia, Japan, Philippines, Jamaica and Fiji. Finally, there are countries with relatively small land masses between two oceans, like Costa Rica, Panama, Malaysia and Papua New Guinea.
The average renewable freshwater received by all countries is about 350,000 cubic metres per square kilometre. New Zealand receives nearly four times this average rate.
The total amount of water is not very equitably shared amongst the 220 countries. In fact 50 percent of the water is received by just seven countries. The largest recipient, Brazil receives 14 percent of the total, then Canada, US and China each receive about seven percent, and Columbia, Indonesia and Peru each receive about five percent of the world total.
New Zealand’s comparative renewable freshwater per person
New Zealand and Norway have a moderate to high level of water received per square kilometre, and a relatively low population density – an average of about 15-20 people per square kilometre. This gives them a high level of about 75,000 cubic metres of renewable water per person per year.
The level of water received per person by some other countries indicates that New Zealand receives considerably greater quantities of water per person than is needed to support a population with a mixed economy and a relatively high standard of living as exemplified by, say, France. New Zealand receives over 24 times the amount of water per person than France.
Looking again at the seven countries that between them receive 50 percent of the freshwater. These countries support about 29 percent of the world’s population on about 32 percent of the world’s occupied area. As a group they appear to have a surplus of water, though some have strong rainforest production to assist the planet maintain some carbon in the sink. This is the case for Brazil, Colombia and Peru, and perhaps for Indonesia.
The resource endowment per square kilometre and per person confirms the indication from the planetary quota that we receive ‘more than our share’ of freshwater, and this could bring with it the obligation to use it efficiently to the benefit of others on the planet. For the benefit of New Zealand and New Zealanders, we should ensure that uses are logical, efficient, and in relevant cases a profitable use of our natural freshwater resource endowment leading to our greater wellbeing.
The total New Zealand freshwater withdrawals as measured in the World Bank data increased from just over one billion cubic metres per year in 1980 to over five billion cubic metres per year in 2010. In our next article we will look at the detail behind that increase. How the three main sectors, domestic, agricultural and industrial have changed the amount of their freshwater withdrawals from the freshwater available over the last 30-odd years.
We will later look in more detail at the various ways freshwater is used. We have identified about 20 types of use. Of these uses we think there are at least five types of uses or users which could or should reasonably be expected to pay a resource rental for their freshwater reflecting the value that is economically justified.
See also part one in this series: Freshwater in New Zealand – Free or valuable?