The ancient city of Petra in the Jordanian desert thrived and famously became an economic force in the Middle East because it figured out how to do one thing: capture water and manage its supply effectively. Not an easy feat in the first century B.C.
Petra is now a UNESCO World Heritage site. Its cisterns, pipes, pools, conduits and drains have fallen to ruin and rubble. The city is "petrified"-a stone symbol of both innovation and disrepair. As investments in its water supply system waned, so too did the commerce that fed off the oasis.
Today, the world is Petra. There is a dire need for water investments around the globe before we, too, fall to ruin. According to the San Francisco-based nonprofit organization Food & Water Watch, two-thirds of the world's population will suffer some sort of water shortage by 2025. According to the United States Environmental Protection Agency, $500 billion is needed to upgrade the water systems in the U.S., and trillions more dollars are needed to upgrade the systems of all the other countries.
Leaks, breaks and pollution are the results of poor water management systems. And with 14% of water leaking before it gets to its intended source-your home, crops or a business-it's no wonder that there is estimated to be a 40% world water shortfall by 2030.
Population and climate change are the two main factors affecting water supply, according to water experts. One needs look no further than Colorado, where wildfires roared recently, for evidence of drought. Or take Texas, the second-largest agriculture state in the country, and now one of the driest; livestock are being sold off or slaughtered, crops lie fallow. There isn't as much water as there used to be to grow or raise things.
To get a long-lens sense of the world water crisis, check out the water problems China and India are experiencing. They are scrambling to shore up water supplies in the face of the melting away of their biggest freshwater source: Himalayan glaciers. China holds 20% of the world's population, but just 7% of the world's water supply. Add to that India's population of 1.2 billion and water demand goes off the charts. India has just 4% of the world's water supply.
Water makes food. Water makes businesses run. Water is essential for proper health-care. And we need water for energy, too.
Peter Brabeck-Letmathe, the chairman of Nestle, the largest food maker in the world, has gone on record saying that wars will break out over water in the future. Businesses such as Nestle, Pepsi and Coca-Cola that rely on water for their viability are falling all over themselves to buy or control supply. Global Water Intelligence's annual market report has forecast that private-company spending on water supplies will grow in five years to $70 billion annually from $45 billion today.
In terms of health care, water-borne diseases kill about 2 million people every year; most of them are children less than 5 years of age.
And on top of all this there is the water-energy nexus to be concerned about. According to the Boston-based environmental coalition Ceres, the electric power sector alone in the U.S. accounts for 41% of freshwater withdrawals.
Given all this fire and ice, how can investors umbrella their capital? William Sarni, the director and practice leader of the enterprise water strategy group at Deloitte Consulting LLP and the author of Corporate Water Strategies and the forthcoming Water Tech-A Guide to Innovation and Business Opportunities (from the publisher Earthscan), says boosting the data and analytics segment of the water industry would bring great opportunities and positive change.
"As companies struggle to figure their own water use and how they can be more efficient, data and analysis become important," he says. "It's not glamorous, but there is high value and it's one of the building blocks."