The warning that global water demand could vastly exceed supply by 2030 is the background to a new report from the International Resource Panel, a group of natural resources experts hosted by the United Nations Environment Programme.

The report 'Measuring Water Use in a Green Economy' argues that while the world faces serious water problems, their causes are often economic, social and political in nature, rather than bio-physical. These problems can be solved by balancing water use and needs between different sectors and ecosystems.

The report is the first of a triumvirate of assessments by the International Resource Panel on the issue of water supply and is seen as an important contribution to the Sustainable Development Goals which could emerge from the Rio+20 global summit in June 2012.

The lead author of the report, Jacqueline McGlade, Executive Director of the European Environment Agency (EEA), said:

"Many parts of the world could face a water crisis in the future, not because they do not have enough water, but because they are not using it smartly enough. Accurate water accounts quantifying the amount of water we can safely use can help us use this resource both wisely and fairly."

According to the Resource Panel, the growing demands placed on water supply are not only the result of population growth, but also a result of the way in which our economies develop. Since 1900, humanity's water consumption has grown at twice the rate of population growth, jumping from 600 billion cubic metres in 1900 to 4,500 billion cubic metres in 2010.

People are not the only water users – environmental systems also need water to function. Maintaining these 'ecosystem services' should be seen as vitally important, as they form the basis of the European economy, the report argues.

Water accounting is a crucial tool for the purpose of water management and making economic assessments, alongside GDP growth and other economy-wide indicators such as greenhouse gas emissions. Ecosystem services should be considered within such resource accounting schemes to establish the links between resource efficiency, biodiversity and ecosystem services.

The private sector is showing increasing interest in taking water resources into account when considering future business. For public bodies to determine water balances, the report states that it is important to produce quantitative estimates of stocks and flows. Water accounts should also include other information, such as analysis of the impact of fluctuations and uncertainties associated with the global hydrological cycle, water licences, access rights and water quality.