In a Parched World, We Have to Value Every Drop

A rapidly growing population, too many competing demands, and climate change impacts are creating a water availability emergency that the World Economic Forum recently ranked as the world’s “top global risk.”

The fact that more than one billion people already live in water-stressed regions – and that this number is expected to double or triple by 2025, according to the UN – is just one dimension of this colossal threat.

There’s also social and economic disruption.  California is now in the fourth year of a devastating drought that left a half-million acres of farmland unplanted last year, causing more than $1.5 billion of economic losses.  Water-deprived Texas is riding the wave of a hydraulic fracturing boom, but it’s leaving less water for farmers and communities.  Meanwhile, China’s water problems are already costing the country about 2.3 percent of its annual GDP.

“So much of life is affected by what happens with water,” said Robert Sandford, a leading thinker on water in Canada, speaking at this year’s World Economic Forum.  “We didn’t realize until recently how much our economy and society relied on hydrologic stability.”

Tackling these global water challenges will require a major shift in how freshwater is managed, allocated, priced, litigated and, ultimately, used.  It means finding regulatory and market mechanisms that ensure water’s true worth — to human life, ecosystems as well as economic well-being — is appropriately valued.

Re-thinking how we value water is a critical first step.  Water is a finite and precious resource, but our economic systems treat it as limitless and of little value.  For many companies and other water users, their water bills are so small that it hardly seems worthwhile to conserve. The result is unsustainable water use across much of our global economy — from industry to agriculture to homeowners.

Ceres is bringing unique capital market solutions to these challenges.  Through cutting-edge research and direct engagement with the business community, we are pushing to change the way that companies and public entities manage water, and the way that investors consider water availability and water quality risks in their investment decisions.  One of our key pillars for working with the business sector is the Ceres Aqua Gauge, which provides an easy and efficient way for companies to assess and improve their water risk management strategies.

In the United States, we are focused on three key sectors that use the vast majority of the country’s water — public water utilities, the energy sector and agriculture.  Taken together, these sectors are responsible for more than 90 percent of the nation’s water consumption.  By improving their water practices, we can build an economy that protects freshwater for future generations.

Read more at In a Parched World, We Have to Value Every Drop