Problems with water

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Problems with water

Water shortage is not only a big problem for the world. It is also a chance to make money. Joyce Nelson reports on the Aqueduct Alliance.

In January 2010 banker Goldman Sachs and an American government group called the World Resources Institute introduced a new idea – an index to measure the water risks for businesses and their investors. As they said recently, in many parts of the world water shortage from climate change and pollution is starting to have an effect on businesses. But not many companies think about the risks from water shortage. This new water index uses information we have about water shortage and water quality in different parts of the world.

If you think this will be good for big businesses, you are right. In fact, this risk-index really is an opportunity index for people to make money.

Next year the water market will probably reach $1 trillion. Goldman Sachs says there is nothing you can use instead of water. Maude Barlow, an important Canadian critic of water privatisation, says: “The biggest water company of all is General Electric.”

By August 2011 Goldman Sachs and the World Resources Institute had name for their organisation – the Aqueduct Alliance – and they had made the index into a water database and a way to show how much money is spent in water management in any part of the world. Also they said that the index will give companies information about their “water footprint” and help them make more “sustainable” decisions.


Thirsty work: a man pours water from a stream into his rice field. Too much irrigation has caused groundwater levels in north India to fall a lot. Anupam Nath / AP / Press Association Images

In the same month the three - Goldman Sachs, General Electric and the World Resources Institute – invited some other big companies to join the Aqueduct Alliance: Coca Cola, Talisman Energy, Dow Chemical, United Technologies, and the financial/news business, Bloomberg LP.

Kirsty Jenkins from the World Resources Institute told the Financial Times that with the new water database, companies can see if they risk not getting the water they need or risk conflict with other users of the same water. Probably, the possibility of “conflict” with other companies is why United Technologies decided to join the Aqueduct Alliance. United Technologies is the world’s 10th largest arms producer with sales of $11.1 billion in 2009.

Serious disagreements

Coca Cola gave the Aqueduct Alliance its own data on freshwater around the world. The data is from years of research for its bottled drinks. “Water is the lifeblood of our business.” Coca Cola from Atlanta, USA, has hundreds of bottling companies worldwide. Many of them are in serious disagreements. In India and Latin America Coca Cola has often had problems with angry local people who are losing their water for drinking and farming.

In January this year, Britain’s Guardian newspaper reported that people are criticising Coca Cola for helping Mswati III of Swaziland, an African dictator. Poverty is a big problem there, political parties are banned and activists are often put in prison and tortured in the country.

Another Aqueduct Alliance partner is Talisman Energy, a natural gas company based in Calgary, Alberta in Canada. The company will become the oil and gas advisor for the Aqueduct Alliance. Talisman spokesperson, Sandy Stash said “We are very excited.” Sandy says that Talisman is looking at a water plan for their North American shale gas operations.

Just weeks earlier in July 2011 the government of British Columbia gave Talisman a licence for the next 20 years to take up to 10,000 cubic metres of water per day from their major hydroelectric reservoir. Talisman uses the water to find gas in northeastern British Columbia. The company also has access to 6,200 square kilometres of shale gas along Quebec’s St Lawrence River. By September 2011 the Aqueduct Alliance had developed a database/map covering the Yellow River Basin in northern China. Water shortages in China are already so bad that over half its cities have problems with getting enough water.

In 2013 the Aqueduct Alliance plans to add database/maps on important river areas including the 2,300 kilometre long Colorado River in the USA. The Colorado River has had years of water problems. Other rivers in the database include the Orange-Senhgu River in Africa, which runs through Botswana, Lesotho, Namibia and South Africa; the Yangtze River in China, where 10 million people lost their homes because of the Three Gorges Dam; and the Murray Darling River in Australia.

These are all places where there is a water shortage and companies want to make a profit. The idea comes from what happened recently in Australia. To make money in the 1990s the Australian government sold water from the Murray-Darling River Basin – one of the longest river systems in the world and the centre of Australia’s farmland. But in 2001 there was no rain in the River Basin. And after a few years the government started buying back the water from private owners.

The price of water went up very quickly. By 2009 people had bought and sold $3 billion of water rights. The government was in competition with international companies. By September 2010 the Australian government had spent at least $1.4 billion when it bought back the water rights. The Aqueduct Alliance is now interested in the Murray-Darling Basin.

The world water problem is giving people the opportunity to make a profit. The Aqueduct Alliance database/maps will show where the opportunities are. It will look at another 15 places around the world after it has finished its first 4 database/maps.

The world water problem can make a good profit for some companies!

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