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August 23, 2006

THE CRUEL IRONY OF THE THIRSTY RICH

[Rachel's introduction: There's a cruel irony in a new report just
out from the World Wildlife Fund: Water crises, long seen as a
problem of only the poorest, are increasingly affecting some of the
world's wealthiest nations.]

by Joel Makower

There's a cruel irony in a new report just out from the World Wildlife
Fund: Water crises, long seen as a problem of only the poorest, are
increasingly affecting some of the world's wealthiest nations.

That's a far cry from the usual water-related enviro-screed, which
typically cites U.N. data pointing to the 1.1 billion people around
the world who lack access to improved water supplies and the 2.6
billion who lack access to improved sanitation. It's become chic to
say that, "In the 21st century, water will be the new oil."

All true, of course. But as the WWF report, Rich Countries, Poor Water
(2.6 Mbyte PDF), points out, a combination of climate change,
drought, and loss of wetlands that store water, along with poorly
thought out water infrastructure and resource mismanagement, will lead
to increasing water problems in countries such as Australia, Japan,
the U.K., and the U.S.

In Europe, countries on the Atlantic are suffering recurring droughts,
while water-intensive tourism and irrigated agriculture are
endangering water resources in the Mediterranean. In Australia, the
world's driest continent, salinity is a major threat to a large
proportion of its key agricultural areas. Despite high rainfall in
Japan, contamination of water supplies is an extremely serious issue
in many areas. In the United States, large areas are already using
substantially more water than can be naturally replenished. This
situation will only be exacerbated as climate change brings lower
rainfall, increased evaporation, and changed snowmelt patterns.

Says WWF:

"Some of the world's thirstiest cities, such as Houston and Sydney,
are using more water than can be replenished. In London, leakage and
loss is estimated at 300 Olympic-size swimming pools daily due to
ageing water mains. It is however notable that cities with less severe
water issues such as New York tend to have a longer tradition of
conserving catchment areas and expansive green areas within their
boundaries."

The implications for companies doing business in the industrialized
world are implicit if not explicit: access to water could easily
become a constraint to operations. In some cases, water-related
problems could lead to decreases in water allotments, more stringent
water-quality regulations, growing community activism, and increased
public scrutiny of water-related corporate activities. These may
impact site selection, license to operate, productivity, costs,
revenues, and, ultimately, profits and corporate viability. As the
Pacific Institute put it in a 2004 report detailing risks to the
private sector from inadequate freshwater resources: "Water-related
risks now pose a potential multi-billion-dollar threat to a wide
variety of businesses and investors."

(I've posted previously on this theme -- see, for example, this and
this.)

What to do? The WWF report suggests that we have to change "our
attitude toward water."

"It is clear that fresh water has long been an under-appreciated and
undervalued resource and the attitudes of developed country
governments, industries, and populations to water need urgent
revision."

Addressing this, says WWF, will involve the proper and equitable
pricing of water and the ecosystem services provided by freshwater
flows; the ending of subsidies that encourage wasteful use; ramping up
water conservation and recycling efforts; maintaining and restoring
aquatic ecosystems; and more.

That's just for starters. WWF says we'll also need to deal "openly and
accountably" with water. That includes accounting for the cumulative
impacts on human and natural water systems, "a factor often ignored in
one-off project impact assessments"; and adopting a precautionary
principle where knowledge of impacts or natural systems is inadequate.

The bottom line: Companies should expect to find water issues rising
to the level of awareness that energy conservation and efficiency has
seen in recent years. The good news is that companies that already
have implemented comprehensive energy efficiency and management
systems will have a jump on those that haven't. Addressing both energy
and water involve extremely similar processes: conducting audits and
establishing a current baseline; identifying cost-effective, low-
hanging fruit for making efficiency improvements; generating
organizational awareness of the issue through effective communication
and training; getting top-level buy-in to tackle the bigger, longer-
term, and more challenging issues, such as water-intensive
manufacturing processes; engaging suppliers, activists, and other
stakeholders; measuring and reporting; and on and on. You know the
drill.

And along the way, some leadership companies will establish themselves
with innovative technologies and practices, smart and effective
partnerships, and new business models and opportunities.

Even before that happens, customers, regulators, and activists will
likely be chiming in, inquiring about what companies are doing to
mitigate the risks of doing business in a world where access to water
is a constraint to productivity and profits.