Water Shortages: Turning Risks into Opportunities

by | Mar 14, 2016

In January of this year, the World Economic Forum released The Global Risks Report 2016, 11th edition. The report garnered some closer attention this year because many of the risks and warnings they have reported over the past decade are starting to manifest themselves. The Report surveys nearly 750 experts on the likelihood that specific risks will materialize within the next 10 years, and the impact these events could have on the world.

Major issues of concern anticipated within the next 18 months include such things as climate change, large scale involuntary migration, and what was termed “severe energy price shock”.  However, the big concern of these experts ten years hence is water.  While they do suggest floods and flooding will be a big concern, the focus was more on water shortages and droughts, as well as inefficient or non-existent water infrastructure to transport water to where it is needed.

Another report was also released in January of 2016. However, this one did not receive quite as much attention.  The Global Opportunity Report 2016 takes a bit different approach to world issues and problems.  A collaboration of three organizations, DNV GL, the UN Global Compact, and Monday Morning,* the group focuses not on the risks that may be expected to surface over the next 18 months or over the next decade, but rather looks at what doors of opportunity these risks and issues may open.

Because the Global Risk report indicated that water-related issues such as shortages and droughts were the biggest risk their experts foresaw over the next decade, it is not surprising that the Global Opportunity report found this risk also presented opportunities.  One key opportunity presented is what they entitled, “Smart Water Regulation,” which emphasizes such things as effective pricing mechanisms that will encourage all water users to use water more efficiently and responsibly.

This could have a very big impact in many parts of the world, including here in the U.S. In fact, smart water regulations may hold the key to helping Americans become much more water-consumption focused.

The reality is, here in U.S. water has been essentially considered a “right” for more than a century.  You build a house or an office building, someone connects some pipes, and voilà, you have all the potable water you need at a very low price.  There is little thought given to things such as where that water is coming from; how much is available; how it is treated; where it is stored; how it is delivered; and most especially, how much it really costs to treat, store, deliver, and then remove it from the house or office building.

The goal of instituting smart water regulations is to put much more light on these issues, believing that to do so serves the public good. And while a key part of the Global Opportunity strategy involves raising water rates, the result will be for the benefit of all.

For instance, perhaps water utility companies should levy fines and penalties for those water users that “misuse” water or institute a progressive pricing system; similar ideas are already in practice in the U.S. With such a pricing system, the first units of water delivered to a home or commercial facility are relatively inexpensive; however, the costs increase rapidly as consumption increases.
So where are the opportunities from taking such actions? Among them are the following:

— First and foremost, higher costs will invariably influence water consumption and make Americans much more water-wise and responsible when it comes to water.
— Rising costs will encourage private industry to step in and develop water-using products that are much more water efficient; we see this happening already.
— Additional funds collected due to rising water prices can be used to invest in water infrastructure and pipelines, which are in dire condition in many parts of the U.S.
— Improving water infrastructure creates all kinds of jobs for the public and private sectors from engineers and designers to construction workers; moreover, these are typically well-paying jobs.
— Funds become available so we can more accurately measure and monitor water; current and accurate water data are necessary for water efficiency.

While I am certainly not an advocate for additional regulations, these smart water regulations have some merit if for no other reason than to help make Americans more water-focused.  If implemented correctly and transparently, they very well may bear fruit, helping us turn water risks into opportunities.

Klaus Reichardt is CEO of Waterless Co. Inc, Vista, Calif. Reichardt founded the company in 1991 with the goal to establish a new market segment in the plumbing fixture industry with water conservation in mind. Reichardt is a frequent writer and presenter, discussing water conservation issues.  He can be reached at klaus@waterless.com.

*DNV GL operates in more than 100 countries, working with organizations to safeguard life, property, and the environment.

The UN Global Compact was started in 2000; today it is considered the largest corporate-sustainability initiative in the world with more than 12,000 stakeholders who promote responsible corporate policies and practices in the area of human rights and the environment.
Monday Morning is Scandinavia’s largest innovation think tank promoting new ideas and solutions to address world issues.

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