Next month thousands of people from
around the world will gather in Montreal to deal with one of
humanity’s most pressing challenges - access to safe drinking
water.

 

The href=”http://www.iwa2010montreal.org/programme.asp”
target=”_blank”>World Water Congress & Exhibition - Shaping the
Future of Water will look at cutting edge technologies and
water management strategies needed to address the human,
environmental and economic issues associated with access to clean
water.

 

The
enormity of the challenge is evident in the breadth of the
technical programs, research sessions, workshops, and industry
forums planned for the Congress. Particularly interesting to the
business audience will be sessions dealing with Water, Climate and
Energy, Innovation in the Water Treatment, and Cities of the
Future.

 

Much media
attention today is focused on water-related humanitarian issues
arising from natural disasters, or on the plight of urban poor in
developing countries trying to cope with unsafe water
supplies.

class=”box”>The Global Water Challenge, a coalition of
leading organizations in the water and sanitation sector, estimates
that nearly 1 billion people lack access to safe water. Illnesses
resulting from a lack of safe water kill more young children than
AIDS, malaria, and measles combined. The United Nations reports
more people die from unsafe water than from all forms of violence,
including war

 

But one
undeniable fact business leaders should note is that access to
clean water creates enormous challenges for business survival, but
enormous opportunities for profit as well.

 

On the
surface this may sound heartless; but in truth global water
scarcity is an emerging risk factor that all companies must deal
with and a reality that investors and shareholders should weigh
before making important financial decisions.

 

Prices for
water worldwide rose last year by 10 percent, well above inflation
rates, and this trend is expected to continue. Businesses in every
sector will be affected by increased costs and supply scarcity.
Failure to plan accordingly could spell disaster for many
companies.

 

The other
reality which business leaders should note is that scarcity of
vital natural resource as vital as water engenders competition, and
competition means there are winners and losers.

 

Clashes
over access to water in certain markets and regions have resulted
in abuses of political or market power, social discord, and
perilous business conditions.

 

No company
wants to become the ‘villain’ in situation that pits the profit
motive against the well being of ordinary people.

 

That being
said, how does business prosper under conditions of water scarcity,
or more properly, how do we create ‘win - win’ situations where
access to scarce clean water is an issue?

style=”mso-bidi-font-weight: normal;”>

Reusing Water

Initially, from a business (and social) perspective addressing this
challenge requires nothing less than a revolution in how we use and
reuse water.   

For
companies with water-related products there are
significant market opportunities for investments in products
and technologies that improve water quality or that reduce water
use. 

href=”http://www.gepower.com/about/press/en/2010_press/031710.htm”>Heiner
Markhoff, president and CEO, Water & Process Technologies
of GE Power & Water believes a global effort to support the
widespread adoption of water reuse practices can be a key step in
quickly and effectively reversing the global threat of clean water
scarcity.   

“With
supportive frameworks in place, we can make great progress in
creating a global society that adheres to and promotes water
reuse,” he noted recently.   

But, he
adds, while the water treatment and reuse technologies exists today
to help address this global challenge, often the motivation to
employ these solutions is missing. 

For some
businesses and some public agencies, it is less expensive to
withdraw water from a river or a well than to treat it and reuse
it, he notes.    

style=”mso-bidi-font-weight: normal;”>Public Education and
Public Partnerships 

That leads
to the second key message about how to create ‘win-win’ situations.
Effort must be made by businesses and by public institutions to
raise awareness of the importance of water conservation and to work
together to provide the tools that allow people to make daily
choices in products, services and personal behaviour that can lead
to tangible results. 

For the
most part, this messaging should be market-based. That is, it
should be in the form of new products or new business models that
can provide water-related goods and services at affordable
prices. 

As noted by
the target=”_blank”>World Resources Institute, traditional
approaches to address unmet needs for health care, clean water, or
other basic necessities involve setting targets for meeting those
needs through direct public investments, subsidies, or other
handouts. “The goals may be worthy, but the results have not been
strikingly successful.” 

class=”box_left”>”Water is the world’s most critical resource. More
vital than oil, water sustains life, and thus the global food
chain. Water sustains industry, and thus the global economy.”
William Danshin, President, PWC, Pure Water
CorporationMarket-based approaches recognize that it’s not
just the very poor who have unmet needs. They address the
willingness and capacity to pay across all market segments and all
public institutions. 

They also
create opportunities that link market development efforts with
business strategies that incorporate consumer education,
microloans, consumer finance, cross-subsidies among different
income groups, or franchise and retail agent strategies that in
turn can create jobs and raise incomes. 
 

Partnerships with the public sector institutions or with
nongovernmental organizations (NGOs) are also part of the tool kits
that progressive companies are developing.  These
may seem unorthodox solutions in the traditional business sense,
but they are ultimately market oriented and demand
driven. 

One
innovative approach recently put forward as a way to help
cash-strapped governments provide water reuse and protection
infrastructure is to set up exchanges that would facilitate trading
in water pollution credits.   

Like carbon
trading, water trading would allow heavy users/polluters of water
to meet a mandated limit, either by reducing their discharges or by
purchasing credits tied to reductions achieved elsewhere in the
watershed, such as by farmers, forest owners, or wastewater
treatment plants.

“Water
trading is poised to expand rapidly as a way to protect water
quality,” said Tracy Stanton, Water Program Manager for Ecosystem
Marketplace, a lead author of a href=”http://147.202.71.177/~foresttr/publication_details.php?publicationID=2438”>
report tabled at a recent global water conference. 
 

“We found a
number of programs already well-established, but to see wider
adoption, we need governments to stimulate the markets by setting
clear water quality standards that will drive greater demand for
pollution credits. Likewise, government is uniquely positioned to
help lower the barriers to private sector investors by lowering the
perceived risks.”

style=”mso-bidi-font-weight: normal;”>Cities of
Tomorrow 

Nowhere is
this message more compelling than in relation to designing or
redesigning the cities of tomorrow. 

 

Existing
water and wastewater management facilities and infrastructure in
most cities generally have been built over decades. In many cases
they are operating significantly beyond their design capacity and
beyond the life span for which they were originally
intended.    

For cities
as for people, water is the lifeblood for survival. Extending the
analogy the challenge for creating more water-sustainable cities
ranges from micro-scale “green” buildings, subdivisions, or
“eco-blocks” to macro-scale eco-cities and ecologically
reengineered urban watersheds. 

The
associated business opportunities involve wastewater treatment and
transportation systems for domestic, industrial and municipal
effluents and storm water; water treatment technologies, including
wastewater reuse and recycling; water distribution systems;
technologies that track water pollutants; hazardous wastes
monitoring and control; and management systems that cover all
aspects of water quality protection. 

Putting a
dollar value on the costs and potential profits associated with
maintaining urban water systems is a speculative venture at best.
The href=”http://www.allianceforwaterefficiency.org/uploadedFiles/News/NewsArticles/NewsArticleResources/Clean_Water_Green_Jobs-FLOW-Dec08.pdf”
target=”_blank”>Alliance for Water Efficiency pegs the
size of the total global water market at US$360 billion, and
forecasts it to rise to US$1.6 trillion in 10 years. Much of this
market is concentrated in or near urban
centers. 

According
to a 2008 Alliance for Water Efficiency report
Canada’s existing municipal water infrastructure
deficit stands at $31 billion. 

 

style=”mso-bidi-font-weight: normal;”>How Profitable is
Water?

This is not
an easy question to answer. Each company will have its own peculiar
parameters of operating costs and market conditions to deal
with. 

But as one
market analyst href=”http://www.articlesbase.com/advertising-articles/clean-water-the-blue-gold-investment-2190105.html”
target=”_blank”>notes, as global clean water resources
continue to be stressed driving-up the costs, companies involved in
developing   critical clean water technologies
and services necessary to sustain life will benefit in comparison
to other investment sectors by superior profits and
growth. 

In terms of
market performance, this analyst notes over the past five
years, the Dow Jones U.S. Water Index ($DJUSWU) has surged over
80%. Since the beginning of 2007, it’s outperformed the S&P 500
by over 20% - not including the hefty dividends many water related
companies pay. 

According
to a Global Summit Management report, “Water Investors who parked
money in water utilities for a 10-year period were even happier,
scooping a massive 446% gain from 1995 to 2005, while the S&P
500 earned about 9% over the same period.” 
 

style=”mso-bidi-font-weight: normal;”>Summing
Up 

In the
water-constrained world of tomorrow, a new array of water-related
technologies and new water management policy regimes and regulatory
controls are inevitable to meet rising demands. 
 

From a
business perspective, progressive companies recognize that their
continued survival depends on adapting to these realities and
implementing technologies and business practices that make better
use of water and that create ‘win-win’ situations in their critical
markets.

From an
investment perspective, the size of the global market is enormous,
as is the potential for real gain for shareholders, investors and
consumers.   

Next
month’s World Water Congress will provide “an opportunity to check
where Canada stands on the global scale and how we can move forward
to address global water challenges”, said Prof. Peter Jones,
Congress President.