Towards a green economy
In some countries with high water stress, such as Jordan, Egypt, Tunisia, and Turkey, it has been estimated that unsustainable use of groundwater now already reduces GDP by 1-2 per cent (World Bank 2007). For these countries alone, this would imply a GDP loss of around US$ 10 billion. This report refrains from making extrapolations on a global scale owing to the strong regional character of the water gap problem. But since the physical water gap has to be closed, the question is how this can be done most cost-effectively.
The Water Resources Group (2009) has done probably the most comprehensive study globally into cost curves for measures that could close the water gap in four regions (China, India, South Africa and the Sao Paolo area in Brazil). Total costs of all measures (including in other sectors as industry) to close the water gap are US$ 5.9 billion in India, US$ 21.7 billion in China, US$ 0.3 billion in Sao Paulo and negative in South Africa. These numbers typically represent 0.5 per cent or less of GDP.
The measures to be taken in the industries examined in this chapter show a mixed picture. In India, measures to close the water gap have to be taken predominantly in agriculture and to a lesser extent in industry. Most water conservation measures technically possible in industry would yield a positive social benefit-cost ratio. However, their commercial profitability at the enterprise level depends upon water-pricing policies. In China, the paper and pulp, steel and textile industries are well positioned to enhance water efficiency at a profit for themselves, whereas the picture is unclear in South Africa. The findings for the textile industry in China are in conformity with anecdotic case studies Turkey, where industrial users also pay for water supply and treatment, revealing a payback period of 3-5 years (Kocabas et al., 2009). However, in South Africa such investment would not seem to be profitable for industry because users do not pay a sufficiently high percentage of the costs of water supply and treatment.
Steel production facilities are often situated close to the ocean for shipping purposes and can use seawater for cooling purposes. A subsidiary of Arcelor in Brazil uses seawater for 96 per cent of total water used for its steel manufacturing. In South Africa, the proximity of a RAMSAR wetland has caused Saldanha Steel to build a zero-effluent plant, showing that it is possible for the steel industry to achieve zero water pollution levels (Von Weizsaecker 2009).
Improved monitoring of water use through emerging water accounting methods is an area where manufacturing companies can learn from agrifood industries. The Waterfootprint Network has highlighted, however, that the diversity of industrial products, the complexity of manufacturing production chains and
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differences between countries and companies makes it more realistic to determine average amount of water used for industrial products per unit of value (e.g. 80 litres per US dollar) rather than per unit or by the weight of the product.7
Faced with unpredictable climate conditions,
manufacturing industries are starting to investigate this more closely. In a benchmark survey of reporting on water use by a hundred multinational corporations, CERES (2010) found that 10 of the 15 chemical companies examined disclosed market opportunities related to products intended to save water or improve water quality. Four companies disclosed new investments in research and development (R&D) to bring more water efficient products to the market. For example, Dow Chemicals reported on the construction of a new Water Technology Development Center to support its goal of driving a 35 per cent reduction in the cost of water reuse and desalination technologies by 2015.
4.3 Investing in a transition to green jobs
The industries analysed in this chapter employ more than 70 million workers8
sectors have exhibited differing employment
. During recent years these trends.
Iron and steel, chemicals, pulp and paper and cement sectors have observed stagnating or declining levels of employment. Conversely, electrical and electronic products and textiles have experienced an expansion in their employment levels.
The manufacturing industries face serious deficits in decent work. From shortcomings related to occupational health and safety to rising informality, various dimensions of decent work are compromised. For example, operations in the iron and steel industry may expose workers to a wide range of hazards or conditions that could cause incidents, injury, death, ill health or diseases. The ship-breaking industry in Asia, a major supplier of recycled steel, is illustrative of poor health and safety conditions. In the textile sector, the need for greater flexibility is the root cause of relocations, a greater reliance on sub-contracting arrangements and consequent instability of employment.
Greening the manufacturing sector entails changes in the level and composition of jobs. In the metals value chain, for instance, significant green job creation opportunities are expected from the use and recycling of valuable byproducts and scraps. On the other hand,
7. The Waterfootprint Network has calculated industrial water uses that range from nearly 100 litres per US$ in the USA to 20-25 litres per US$ in China and India, Available at
www.waterfootprint.org/
8. According to the ILO, the textiles industry employs 30 million workers; electric and electronic products 18 million; chemical industries 14 million, iron and steel 5 million, pulp and paper 4.3 million, aluminum 1 million, and cement 850,000. All figures are approximations.
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