Water economist Esther Crauser-Delbourg (E09) has been regularly interviewed in the French media since the droughts of 2022 and 2023. She gives her analysis of the global water crisis and her proposals for improving the situation. 

ESSEC Alumni: How did you become a water economist? 

Esther Crauser-Delbourg: I discovered the subject during my visit to the ESSEC Asia-Pacific campus in Singapore. I was struck by both the exemplary management of water in the area - the whole local economy depends on it - and the ignorance surrounding these issues in France and Europe, where they were mainly discussed as a humanitarian problem in developing countries. When I continued my studies with a Masters in Economics at the Paris School of Economics, I decided to focus my dissertation on potential water conflicts in the major African basins. I then went on to do a PhD in Economics at the École Polytechnique on the subject of the water footprint for the production of food and industrial goods. I carried out part of my work at Columbia University in the United States and once again noticed the difference with Europe: Anglo-Saxon universities were already well advanced in this field, with a multidisciplinary approach involving hydrologists, engineers, economists, climatologists and specialists in international relations, in conjunction with the major agri-food groups - the world's biggest consumers of water. That was when my desire to onboard large groups in the transformation of their water management policies was born. 

EA: In practical terms, what did you do to achieve this ambition? 

E. Crauser-Delbourg: It took a long time! I joined the corporate world in 2014: the method for calculating carbon footprints had just come out and CSR was just starting to develop. I started at AXA working on responsible insurance issues and on the Group's water and biodiversity strategy. Then I agreed to branch off and take up a position as Chief of Staff to a member of the Executive Committee, before joining the management team for the company's vineyards. However, wine was a way of gradually returning to water... And the heatwaves of 2022 and 2023 brought me back to the subject. Since then, I've been working with major groups on water resource management in all sectors. I help them to identify the right metrics for monitoring water and then calculate and optimise their water footprint in anticipation of increasingly strict regulations. I also train their staff on these issues, from management right through to the operational teams. As an extension of this activity, I’m also in the process of co-creating courses on water for a number of Grandes Ecoles, including ESSEC, and I give lectures on the subject. 

EA: What is your assessment of water management today? 

E. Crauser-Delbourg: Companies are at the same stage as they were with carbon ten years ago: although water is a crucial factor in production, it’s almost never considered in strategic decision-making. I still see major agri-food groups building factories in parts of the world where the water tables are virtually dry and local communities struggle to get what they need! We can predict from the outset that these infrastructures will be forced to close within 5 years, at enormous cost not only to the company but also to the public and the environment. And yet the data is there - and that’s what's most infuriating: the problem lies mainly in poor planning. 

EA: Do you see this among French companies only, or does it concern the entire business world? 

E. Crauser-Delbourg: The lack of understanding and resulting difficulties are very common, with points of tension of varying degrees of criticality, of course. For example, the United States has abundant water resources, but droughts deprive farmers of water between June and August in California, poorly controlled industrial pollution robs entire towns of quality drinking water, while excessive use of water to grow corn or generate electricity for cities like Las Vegas has drained large reservoirs like that of the Hoover Dam. India, meanwhile, has irrigated so much as a result of subsidies for the use of electricity that its water tables are visibly draining. Another example: Kenya is using up all its water to grow exotic flowers sold all over the world - in the same way as Peru and Mexico are for avocados. 

EA: You often say that we “eat” up to 5,000 litres of water a day... 

E. Crauser-Delbourg: When I say that, I hope to alert people to the fact that we also use water to grow cereals, fruit and vegetables and raise livestock, so that we are virtually "eating" large quantities of water with every meal. A single glass of wine requires between 70 and 120 litres of water! We’re also wearing several tens of thousands of litres of water, as the cultivation of cotton and other materials used in our textiles is particularly high in water consumption! This provides an interesting perspective: if you eat a piece of meat from Ireland, you are consuming that country's water resources. From this point of view, water is the most traded raw material in the world by volume.

EA: How did we get to this point?

E. Crauser-Delbourg: Through poor water use, mainly because it is essentially a free resource. We pay for the infrastructure needed to extract and transport it, but not for the scarcity of the resource. From this point of view, if we were to apply the discounted cash flow method to the management of water resources, we would get a score of zero... Because we behave as if we had an unlimited supply. 

EA: This is nonsensical not only in terms of economics, but also in terms of the climate...

E. Crauser-Delbourg: Of course. Firstly, the UN estimates that 90% of disasters attributable to climate change are water related. Secondly, without water, biodiversity will collapse. Thirdly, dry soil and dry trees can no longer capture CO2, while the IPCC estimates that soils and trees naturally capture 30% of our emissions. In other words, we need to solve the water problem before or alongside the CO2 problem.

EA: Are there any emerging or alternative models that we could learn from?

E. Crauser-Delbourg: Two states are often cited as examples: Singapore and Israel. With few resources but considerable financial means, both have established a strong water-management culture: every drop counts. In these states, you won’t see irrigation systems watering fields in the middle of a sunny day and, conversely, everyone is used to drinking beverages made with recycled wastewater. 

EA: What do you propose to improve the situation? 

E. Crauser-Delbourg: I have three main proposals. My first is: recognise water as an economic good. Worldwide, 10% of water resources are used for domestic purposes (drinking, washing, cooking), which are essential to our survival and human dignity. In this context, water is a "common good", but the remaining 90% of resources are used to manufacture consumer goods that are sold on the market with a financial margin. In this sense, 90% of our water is a factor of economic production, in the same way as other natural resources such as oil, gas or coal, as well as land, labour, capital, technology, etc. The fact that we do not recognise this status prevents us from regulating, measuring and allocating water and penalising offences when necessary. 

EA: Second proposal? 

E. Crauser-Delbourg: We need to strike a balance between local, regional and global water governance. Water is first and foremost a local issue: we drink water from nearby resources, benefit from the water services in our regions and suffer disasters such as floods and droughts that occur locally. But water is also a global issue when we take into account the billions of litres exported through international trade. We’ve begun to regulate our CO2 emissions, albeit imperfectly, now, we need to take a similar approach to water - starting with identifying the key organisations that must be mobilised: the UN, the World Bank, the World Trade Organisation, etc.? 

EA: Wouldn't this approach risk leading to the financialisation of water? 

E. Crauser-Delbourg: It all depends on how the system is designed - and, of course, we must be careful to avoid such abuses. That said, attempts to deregulate prices have already been made in some countries, the results of which are quite frankly discouraging. In California, for example, large farms with annual water quotas are allowed to sell their excess to each other if they do not use it up. The result is that in major drought years, the price of water rises to such levels that it becomes more attractive to sell water than to cultivate your land... My approach aims to have the opposite effect: I call for the scarcity of water to be valued as an incentive to adopt more responsible and reasonable behaviour, as well as to finance the large-scale investment that will be needed in the years ahead to improve water management. 

EA: And your third proposal? 

E. Crauser-Delbourg: We need to agree on a method for measuring water. Without quantified indicators, we can neither assess overconsumption nor optimise practices. Should we measure the rainwater that has enabled the grass to grow and the cows to graze, without which the farmer would have had to buy hay? Should we only count the scope 1 equivalent of water, or also scope 3? Should a food giant measure the water used by farmers at the start of its supply chain? Should a cosmetics brand measure the water consumption of its clients when using its products? 

EA: Before the situation improves on a systemic level, what can we do individually to help reduce the strain on water resources? 

E. Crauser-Delbourg: The French government's recent Water Plan calls for a 10% reduction in our domestic, industrial and agricultural consumption by 2030 - and the good news is that we can actually achieve a 20% to 30% reduction without cutting back on comfort or production. In economic terms, water productivity can be improved rapidly by storing rainwater, reusing wastewater (for example, by reinjecting a site’s washing water into its cooling system) or using more environmentally friendly irrigation techniques such as drip irrigation, which is more than sufficient for crops. 

EA: And on the domestic front?

E. Crauser-Delbourg: It’s estimated that the average French person uses 150 litres of water per day, compared with 380 litres in the United States and 85 litres in India. In this area, small gestures have a big impact: spend one minute less in the shower, and you'll save between 10 and 20 litres of water; use a dishwasher instead of washing by hand, and you'll use nearly 7 times less; flush the toilet less often, and you'll avoid wasting between 9 and 15 litres each time; clip water aerators onto your taps, and you'll reduce the flow by 60%.. Just by adding up one minute less of showering and one flush less per day, you can already achieve savings of between 10% and 23%, which is above the targets set out in the French Water Plan!

Interview by Louis Armengaud Wurmser (E10), Content Manager at ESSEC Alumni 

Do you like this content?  Join us now for more!