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MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

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Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster

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Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place
SuccessWealth Gap

Wealthy elites’ swimming pools and lush gardens are leading to water shortages for everyone else

By
Chloe Berger
Chloe Berger
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By
Chloe Berger
Chloe Berger
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April 15, 2023, 9:00 AM ET
Wealthier households tend to use more water than everyone else—and fare better during periods of drought.
Wealthier households tend to use more water than everyone else—and fare better during periods of drought.Thomas Barwick—Getty Images
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Across the globe, an imminent water crisis is brewing. 

A drought in the Colorado River Basin currently threatens the water supply of seven states, six of which agreed on a new water-sharing plan after a leaked email from a water manager noted in January that “We’re all headed to a very dark place.” Over in Delhi, India, an ongoing water shortage is set to worsen. And in Europe, Italy plans to appoint a special commissioner to address the country’s drought crisis. 

By 2025, “two-thirds of the world’s population may face water shortages,” according to WWF. Now, a new study sheds light on one of the factors pushing us in that direction: the wealthy who live in big cities. 

A recently published paper in Nature Sustainability highlighted how wealthier households’ consumption habits often drive water crises in cities. It used data to develop a model on how cities use water, looking at Cape Town as a case study for other urban centers given its severe drought from 2015 to 2017 and subsequent water restrictions (known as the Day Zero Crisis), as well as the city’s stark socioeconomic inequalities. Researchers found that the rich use more water than the rest of the population—and that they’re generally in better shape during a drought, effectively escaping the problems they exacerbate. 

Elite and upper-middle class groups represent 1.4% to 12.3% of Cape Town’s total population but use more than half of the city’s water (51%). On the other hand, lower-income households and “informal dwellers” who make up 61.5% of the city’s population use just 27.3% of the city’s water. 

The more well-off households, who the researchers found have access to both public and private water, use slightly more than 2,100 liters per household daily, typically for non-essential purposes like watering their gardens, washing their cars, or filling their swimming pools. On the other hand, everyone else’s water use is about meeting basic needs like staying hydrated and bathing. 

During Cape Town’s two-year drought, lower-income groups reduced their daily water consumption by 51%. While more privileged groups reduced their water usage to a greater extent (mainly by pausing those non-essential activities), that was from their already high consumption rates. 

“Drought-related restrictions can leave lower-income households without enough water to meet their basic water demands for bathing, laundry, cooking, and sustaining their livelihoods,” the researchers explain. Because the rich had access to private water resources such as bottled water or even rainwater harvesting systems, they were also quick to recover “from drought-related shocks.” 

The Cape Town model ultimately showed that the wealthy’s water habits more strongly impacted water availability than population changes or climate change related droughts. It can be applied to other cities across the globe, as 80 metropolitan cities experienced severe water shortages over the last 20 years. The researchers predict this could worsen as wealth inequality continues to grow unless we find more equitable ways to share water in cities. The pandemic has deepened the global wealth gap, with the richest 10% now accounting for 76% of the world’s wealth. 

Environmental damage has long been a socioeconomic issue. The rich and famous are often called out for taking a toll on the climate, between their private jets and superyachts. And major companies’ high CO2 production have also been criticized for damaging the environment.

But researchers point out that a water-related climate catastrophe won’t affect individuals unilaterally, as the households that are the greatest offenders will likely continue to be better-off. “Our analysis confirms that the only way to preserve available water resources is by altering privileged lifestyles, limiting water use for amenities, and redistributing income and water resources more equally,” they write.

The Fortune 500 Innovation Forum will convene Fortune 500 executives, U.S. policy officials, top founders, and thought leaders to help define what’s next for the American economy, Nov. 16-17 in Detroit. Apply here.
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