When it comes to urgent environmental crises, water is clearly in a class of its own. Few other issues have the same far-reaching impact on human health and well-being, economic sustainability, or national security. After all, you can live without oil; you can’t live without water. So it’s no surprise that many of the latest environmental campaigns along with a growing media debate are posing the question, “Is water the new carbon?”
Up to this point, oil and resulting C02 emissions have gotten most of the attention, but many experts warn that declining water supply and failing water infrastructure globally may soon become the world’s next major crisis if meaningful action isn’t taken soon.
They’re Not Making Any More of It
About 70 percent of the earth’s surface consists of water, but only 3 percent of it is freshwater, and less than a third of that is drinkable. The amount of water on the planet has remained static, due to the replenishing cycle of rain and evaporation over the past four billion years. Today, 6.5 billion people share that same fixed supply and even now, more than a third of the world doesn’t have enough water. Now imagine the situation when the global population adds another three billion people in the next 50 years.
Like so many of our natural resources, water is undervalued relative to its cost, which is adding to the problem and encouraging waste and inefficiency. Consider that some 70 percent of the quality drinking water flowing into North American or European homes is flushed down the toilet or used for cleaning. A significant amount of freshwater is lost through leaking pipes and outmoded infrastructure, but fixing these systems could cost trillions of dollars.
Freshwater supplies are decreasing globally due to waste, mismanagement, over-consumption and pollution. But the demand globally is increasing by an expanding global middle class whose appetite for consumer goods, personal transportation, electricity, and western diets filled with meat and dairy all heavily impact water supplies.
Big Business Responds
On a positive note, the folks at GreenBiz.com recently hosted their second annual State of Green Business Panel Discussion where leading corporations discussed how they are responding to water use issues. For example, Coca-Cola recently announced water neutral goals. They are pledging by 2010 to return to the environment all water used in their manufacturing clean enough for fish and farms. Companies like GE and IBM are also announcing reduction goals for freshwater.
Michael Kobori, VP of Supply Chain Social and Environmental Sustainability for Levi Strauss stressed the need to consider the full lifecycle of a product to truly assess the water footprint. The manufacturer only controls a portion of that footprint, but can take actions to impact water usage by consumers. As an example, one pair of 501 jeans uses 3,480 liters of water (or about 920 gallons): 49% is used in cotton growing, 45% in home laundering and just 5% in milling and manufacturing, which Levi’s directly controls. To address the consumer portion of water consumption, the company has changed the care label in the jeans to “wash in cold water and tumble dry.” And Levi’s is working with Proctor and Gamble’s coldwater Tide on in-store advertising in Wal-Mart stores which encourages consumers to wash less and use cold water.
Jason Morrison, Director of Economic Globalization and the Environment Program at the Pacific Institute highlighted the need for education around water issues. The Pacific Institute encourages companies to address water as a strategic initiative, and has published a report with BSR (Business for Social Responsibility) offering a framework for understanding water issues. He also described the CEO Mandate a public-private initiative designed to assist companies in the development, implementation and disclosure of water sustainability policies and practices.
Who Are the Water Winners?
Beyond big business, governments are also responding. According to the BBC News, “When water availability drops below 1500 cubic meters per person per year, a country needs to start importing food, particularly water intense crops.” Saudi Arabia faces this problem. Twenty other countries fell below this threshold in 2000, and another 14 will join them by 2030.
China, South Korea, and Saudi Arabia have all taken steps to lease agricultural land in Africa. Water is the main reason these countries can’t grow enough food for their people. By the way, Brazil, Russia and Canada top the list of water rich nations.
The Blood, Guts, and Feathers of the Thing
Four years ago, the Chicago Climate Exchange broke new ground by providing industries with a way to reduce their total emissions through the trading of carbon credits. Now at least one member of the Exchange sees a similar future in solving the problems of water pollution and shortages. “When I got involved in carbon offset development, it became obvious that water was potentially a bigger market than even carbon,” says John Regan. Regan founded the Environmental Credit Corp., a carbon-credit supplier on the Chicago Climate Exchange.
Carbon reduction is a relatively slow evolution. It takes 25 to 50 years before you see the impact of what you do today. If you don’t solve the water impacts in five years, you’ll have a crisis on your hands.
Just like a carbon trading scheme, under a water cap and trade system, water polluters would have the option to reduce pollution in their own operations, or to purchase pollution-control credits from another source.
The former oil tycoon turned wind tycoon, T. Boone Pickens, is now poised to become America’s first water tycoon. According to Business Week, Pickens owns more water than any other individual in the U.S. and is looking to control even more. He hopes to sell his water, some 65 billion gallons a year, to Dallas. He plans to move the water over the same corridor that would transport the electricity generated on his enormous wind farm. As far as Pickens is concerned, it’s a simple matter of supply and demand. “There are people who will buy the water when they need it. And the people who have the water want to sell it. That’s the blood, guts, and feathers of the thing,” he says.
In fact, many business opportunities exist for a new breed of water entrepreneurs as highlighted in a recent Triple Pundit article. The New York Times recently reported a Bureau of Labor Statistics finding that demand for hydrologists (scientists who study the distribution, circulation and physical properties of water) is predicted to grow 24 percent from 2006 to 2016, much faster than the average for all occupations.
There’s no question that carbon has gotten most of the attention over the past few years. Emma Stewart from the Environmental Defense Fund refers to this single-minded approach as “carbon myopia”:
[A] singular focus on one ecological system, the atmosphere, may cause perverse outcomes or neglected crises in the hydrosphere or lithosphere. We see this clearly in the rush to produce lower carbon biofuels and the unintended consequences this has had on land use, biodiversity, water and other issues. To put it bluntly, your company does not live by carbon alone, but on water, oxygen, nitrogen, phosphorus, sulfur and hydrogen cycles.
Awareness and concern over water use is on the rise, triggering a response from big business, government, and entrepreneurs. But thankfully, an understanding of the interconnection among our natural systems is also growing. Hopefully this will keep us from trading one crisis for another (water for carbon) and fixing one thing as we break something else. On this the experts also agree: A sustainable future depends on a balanced systems approach.