Posted on January 21, 2010 by Stephen E. Herrmann
According to Bloomberg News, the worldwide scarcity of usable water worldwide already has made water more valuable than oil. The Bloomberg World Water Index, which tracks 11 utilities, has returned more to investors every year since 2003 than oil and gas stocks or the Standard & Poor’s 500 Index.
When you want to spot emerging trends, follow the money. Today, many of the world’s leading companies and investors are making big bets on water. Why — there simply is not enough freshwater to go around, and the situation is expected to get worse before it gets better.
The most essential commodity in the world today is not oil, not natural gas, not even some type of renewable energy. It’s water — clean, safe, fresh water.
In 1992, the United Nations General Assembly designated March 22 as World Water Day. Every year on that date, people worldwide participate in events and programs to raise public awareness about what many believe to be the world’s most serious health issue — unsafe and inadequate water supplies — and to promote the conservation and development of global water resources.
More than a billion people — almost one-fifth of the world’s population — lack access to safe drinking water, and 40 percent lack access to basic sanitation, according to the 2nd UN World Water Development Report.
The United Nations estimates that by 2050 more than two billion people in 48 countries will lack sufficient water. Approximately 97 percent to 98 percent of the water on planet Earth is saltwater (the estimates vary slightly depending on the source). Much of the remaining freshwater is frozen in glaciers or the polar ice caps. Lakes, rivers and groundwater account for about 1 percent of the world’s potentially usable freshwater.
According to the United Nations, which has declared 2005-2015 the “Water for Life” decade, 95 percent of the world’s cities still dump raw sewage into their water supplies. Thus it should come as no surprise to know that 80 percent of all the health maladies in developing countries can be traced back to unsanitary water. The global water crisis is the leading cause of death and disease in the world, taking the lives of more than 14,000 people each day, 11,000 of them children under age 5.
If global warming continues to melt glaciers in the polar regions, as expected, the supply of freshwater may actually decrease. First, freshwater from the melting glaciers will mingle with saltwater in the oceans and become too salty to drink. Second, the increased ocean volume will cause sea levels to rise, contaminating freshwater sources along coastal regions with seawater.
Sandra Postel, author of the 1998 book, Last Oasis: Facing Water Scarcity, predicts big water availability problems as populations of so-called “water-stressed” countries jump perhaps six fold over the next 30 years. “It raises tons of issues about water and agriculture, growing enough food, providing for all the material needs that people demand as incomes increase, and providing drinking water,” says Postel.
Developed countries are not immune to freshwater problems either. Researchers found a six-fold increase in water use for only a two-fold increase in population size in the United States since 1900. Such a trend reflects the connection between higher living standards and increased water usage, and underscores the need for more sustainable management and use of water supplies even in more developed societies. Further evidence of the coming issue with water is that while China is home to 20 percent of the world’s people, only 7 percent of the planet’s freshwater supply is located there.
With world population expected to pass nine billion by mid-century, solutions to water scarcity problems are not going to come easy. Some have suggested that technology — such as large-scale saltwater desalination plants — could generate more freshwater for the world to use. But environmentalists argue that depleting ocean water is no answer and will only create other serious problems.
The cost of water is usually set by government agencies and local regulators. Water is not traded on commodity exchanges, but many utilities stocks are publicly traded. Meanwhile, investments in companies that provide desalinization, and other processes and technologies that may increase the world’s supply of freshwater, are growing rapidly. General Electric Chairman Jeffrey Immelt said the scarcity of clean water around the world will more than double GE’s revenue from water purification and treatment by 2010 — to a total of $5 billion. GE’s strategy is for its water division to invest in desalinization and purification in countries that have a shortage of freshwater. Research and development into improving desalination technologies is ongoing, especially in Saudi Arabia, Israel and Japan. And already an estimated 11,000 desalination plants exist in some 120 countries around the world.
As individuals, we can all reign in our own water use to help conserve what is becoming an ever more precious resource. We can hold off on watering our lawns in times of drought. And when it does rain, we can gather gutter water in barrels to feed garden hoses and sprinklers. We can turn off the faucet while we brush our teeth or shave, and take shorter showers. As Sandra Postel concludes, “Doing more with less is the first and easiest step along the path toward water security.”