Tuesday, March 3, 2009

Blue Gold

‘We simply cannot manage water in the future as we have in the past or the economic web will collapse’ stated a report released earlier this year by the World Economic Forum. Like every commodity out there (and some will object to my characterization of water as a commodity), water raises a number of issues around social responsibility. These concerns were clearly presented by Maude Barlow at last Saturday’s ‘Water: A Human Right? Let’s make it our business’ event, sponsored by Amnesty International

“Who should be making the decisions around this declining resource?” asked Ms. Barlow. Should water be a for-profit commodity, or should it belong to everyone, to the commons? This is becoming an increasingly urgent question.

The problems and the grey areas are well known. Industrial use of water, desertification, health and sanitation crises, aging infrastructure, energy use in desalination, the list goes on. As the World Economic Forum recognized ‘We are now on the verge of water bankruptcy in many places with no way of paying the debt back.’

Ms. Barlow offered us solutions, not always clear cut and acceptable to all, but suggestions for thinking about how to move forward. She believes that we must begin by declaring water to be a public trust that belongs to the people, to the ecosystem and to the future. No one would own it, it would be managed by the government, and accessed by those who need it. She also asserted that we need to leave enough water in nature to allow it to function. We need to recreate a healthy hydrological cycle, focus on ecology and conservation, integrated watershed management and new agricultural policies informed by water use metrics. Our decisions around water would be based on a prioritization of water for life before commercial use.

All of this is encompassed in the idea of water as a human right. The role of business would be in the sphere of technological innovation, helping us use our water more efficiently. This contrasts starkly with much current private sector activity which involves taking our water and selling it back to us.

Water presents to socially responsible investors some overarching issues. One is the decision as to which activities belong in the private sector. As a society, how do we decide what is acceptable to be managed by corporations, on a for-profit basis, and what should be managed by the public sector. Creating a world where air and water and forests have value does involve pricing them, and therefore a degree of commoditisation. But we have seen that the old economic model where these were ‘externalities’ has led to untrammelled degradation of the natural environment at ‘no cost’ to some, and significant cost to all. Appropriate mechanisms for valuing, pricing and trading are in their infancy, but will be fundamental to a world where the economy and the environment function in tandem.

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