The Coming Water Crisis: Investing for Another Kind of Liquidity

Water use has been growing globally at more than twice the rate of population increase in the last century, and an increasing number of regions are reaching the limit at which water services can be sustainably delivered, especially in arid regions.

Water Scarcity, United Nations

In Australia’s Darling River, millions of fish have died in recent months. Intensified agriculture and overuse of the Murray Darling Basin, plus recent flooding and a heat wave, have caused a nauseating disaster that endangers the drinking water for communities up and down the river.

In western France, violent protests have broken out over the government’s decision to build hundreds of “mega reservoirs” and fill them with water pumped from the region’s groundwater supplies to sustain the country’s grain farmers and winemakers in the face of increasingly frequent summer droughts.

Decades of mismanagement in India have left the country in danger of depleting its precious and irreplaceable groundwater resources, as the country tries to balance the agricultural water use needed to feed the world’s most populous country and the growing municipal water demands of an expanding middle class with the harsh reality that it has 17% of the world’s population but only 4% of the world’s freshwater resources.

At least 60% of Uruguay is afflicted by extreme drought. The government has estimated that this has caused nearly $1.2 billion in losses, much of it incurred by the agricultural and livestock industries. 

The United Nations World Water Development Report predicts that as many as 6 billion people will suffer from clean water scarcity by 2050, and some critics believe that forecast is a significant underestimation. Much of the water crisis can be attributed to simple math. Less than 2% of the water on this planet is usable freshwater. With current technologies, that’s unlikely to increase.

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