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Expect to pay more for water to quench the world’s thirst

Daily Ticker

The world is running out of water. Supplies could fall as much as 40% short of demand by 2030, according to the World Economic Forum, which ranks water crises as the third biggest risk to global stability in the next decade, after fiscal crises and unemployment.

But the impact of the water shortage is already apparent. Drought, affecting at least one-third of the U.S., is boosting food prices here. The USDA forecasts a 3% increase in food prices --more than double last year's 1.4% jump, the USDA also expects beef and veal prices to jump 6%--almost twice its original 3.5% forecast.

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Drought is not the only reason for the water shortage. The world population is growing, and by 2050 there will be 2 billion more people on the planet, for a total of 9 billion. They will consume more water and more energy, whose production requires water. Fracking, a particuarly large consumer of water, uses a mixture of water and chemicals injected into rock to create the fractures that release natural gas and oil.

Energy production accounts for about 15% of all water consumption and agriculture accounts for 75-80%, according to the UN. That doesn't leave much water available for everything else.

Related: Fracking has made the U.S. "the envy of the world": Russell Gold

"The topic of water shortages has become a much more relevant conversation whether it's food, energy or just the plain availability of water for drinking." says Snehal Desai, global business director for Dow Water and Process Solutions, a division of Dow Chemical.

But he's fairly optimistic that the water shortage problem can be addressed successfully.

He recommends that we:

  • Reduce consumption and where possible, be more efficient. Companies and municipalities have done "an excellent job" reducing water use, says Desai.
  • Recycle water where possible and make the most effective use of water.
  • Develop more freshwater sources. "Only 2.5% of the water on the planet is fresh water, ...[but] we do have other resources ... the sea, aquifers that haven't typically been tapped," says Desai.

"We have routes to getting to where we can actually tap into new sources," says Desai, and "industry is leading the way."

In the meantime, he says consumers should expect bigger water bills. California has raised its water rates by 85% over the last eight years, says Desai, adding that these costs are still less than monthly cell phone or cable bills. "In most cases the water is undervalued," says Desai

He also sees opportunities in public-private partnerships. Dow, for example, arranged with the government of Terneuzen in southwest Netherlands to treat its local wastewater, which Dow then used to expand its operations there. Dow got what it needed and the city of Terneuzen got some value for its wastewater, says Desai.

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