Wall Street History

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Wall Street History

07/23/2010

The Water Crisis

This past May, The Economist ran an extensive piece on the topic of water. Going through a pile of articles I set aside for later reading, I just rediscovered it and want to pass along some of the magazine’s findings in what is a critical long-term issue with broad economic consequences.

60 years ago, for example, the world’s population was about 2.5 billion and water worries affected relatively few people.

Then the population grew to 6 billion in 2000...7 billion today. 

By 2050, the world’s population is estimated to grow to 9 billion.

The amount of water drawn for farming, though, has tripled since 1950. And that’s a problem.

In 2000, 8%, 500 million, lived in countries chronically short of water. By 2050 that figure could rise to 45%.

Even today, though, 1 billion go to bed hungry partly because of the lack of water to grow food.

In the United States, 41% of water withdrawals go to agriculture, almost all of this for irrigation. In China that figure is 70%. In India it’s 90%. For the world as a whole, 70% of the water taken out goes to farming. 

“Farmers’ increasing demand for water is caused not only by the growing number of mouths to be fed but also by people’s desire for better-tasting, more interesting food. Unfortunately, it takes nearly twice as much water to grow a kilo of peanuts as a kilo of soybeans, nearly four times as much to produce a kilo of beef as a kilo of chicken, and nearly five times as much to produce a glass of orange juice as a cup of tea. With 2 billion people around the world about to enter the middle class, the agricultural demands on water would increase even if the population stood still.”

With 70% of the world’s water going to agriculture, the other 30% is broken down 22% for industry and 8% for domestic activities.

Then you have the issue of where exactly the water comes from.

97.5% of the earth’s water is from the oceans…which is salty. Just 2.5% is fresh water. The salt can be removed, but desalination is still cost prohibitive in most cases and it uses a lot of energy. The Economist concludes “no one expects (desalination) to provide wide-scale irrigation soon.”

Of the 2.5% that is fresh water, this is broken down as follows:

Glaciers and ice caps…68.7
Permafrost…0.8
Groundwater…30.1
Surface and atmosphere…0.4

The Economist cites Singapore as the country that manages its water resources best. Granted, it receives a lot of water through rainfall and it is relatively small (4.8 million people), but it has little land to collect and store it. So Singapore uses desalination and also imports a large portion of its needs from Malaysia; the latter being dicey because relations between the two haven’t always been great. One of the two water treaties by which Singapore and Malaysia operate is due to expire next year. Lee Kuan Yew, the father of Singapore, “has never forgotten that the invading Japanese blew up the water pipeline when they seized Singapore in 1942.”

Singapore collects its water everywhere, including on tall buildings and bridges, which is then fed into a pair of reservoirs and on to treatment plants.

“Together, recycled waste and desalinated water are expected soon to meet 25%-30% of demand, and local industries, many of them with a need for the cleanest supplies are more than happy to use it.”

Domestic water use, thanks to the mandatory installation of low-use taps and toilets, and thrifty showers, is down 10 liters per person a day since 2003. [165 to 155.]

There is a sense of seriousness about water use in Singapore that extends from the top levels of government on down. The water authority is also run by excellent, highly paid professionals, who aren’t afraid to bring in private partners to get things done, rather than kowtow to the wishes of politicians.

Singapore’s water industry – some 50 companies – is thriving and these companies are winning contracts in such faraway places as Qatar and Algeria.

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