Reviewing Challenges and Opportunities in the World Water Market

World MapAlthough it is often easy to become discouraged with or overwhelmed by the vast water challenges we face, fortunately many water problems do lend themselves to small and incremental solutions in many areas. Each of us can begin to take steps to address water problems, as we will see ? even if some are only baby steps. There are also many larger initiatives and solutions that we can help set in motion ? both individually and collectively ? to address and reverse some of the more fundamental and problematic trends, and to begin to move things in the right direction. Below, we will briefly examine a few of these recommendations and ideas.

Developing Better Public Understanding of Water Issues
Better public education programs are critical in helping the broader public understand and really begin to address our myriad water challenges. If the broader population had a better understanding of the nature and seriousness of the problem, then presumably many of them would start to act more responsibly, and would make wiser water decisions. For example, understanding that recycled water can be clean and safe to drink; understanding the water implications of having a plate of beef versus having a plate of chicken; understanding the implications of flushing unused pharmaceutical drugs down the toilet; understanding that our infrastructure is decaying and that it will be costly to replace; and finally, understanding that water prices will need to rise in order to cover the costs of providing safe and sustainable drinking water. The list of items goes on, but better public understanding of general water issues could help to create great progress across the board in addressing our complex and intertwining set of challenges.

Think Globally, Act Locally
Unlike most other resource problems and constraints, water challenges are typically regional or even quite local in nature. While technologies, conceptual solutions and broad policy approaches may be similar and applicable around the globe, application and implementation of these policies and approaches need to be carried out on a more location-specific basis.

If China burns cleaner coal, air pollution problems in Japan may lessen. Water is different; improved water conservation practices in California aren?t going to help to alleviate water shortages in southern India (although, as we will see below, when water consumption is viewed from more of a virtual or ?contained? perspective, things are not so simple). Some areas don?t really have any serious water problems yet, while others face severe near-term crisis; each area is different. Observers used to say that the western United States has a water quantity problem, while the east has a water quality problem, but now we recognize that the whole country has both quantity and quality challenges. Obviously, more arid regions generally tend to face more serious and more immediate supply issues, even though (counter-intuitively) it?s not always reflected in the prices that local consumers pay.

Water issues or challenges do vary widely from one watershed basin to another, based on population, level of industrial activity, climatologic conditions and so on. Technological solutions ? such as desalination ? may be economically feasible in one area but not another, depending upon alternative supply sources, local energy costs or distance to the sea. One solution may work best for us, while a completely different one might work for our neighbors. In water, locally-based systems and implementation will always tend to work better than centrally dictated plans.

This ?local? perspective is most likely to follow the geographic footprint of a single river basin area, or watershed region. Within a watershed basin, all users tend to have the same problem or face the same set of circumstances, and hopefully will share similar objectives in terms of water resource usage and management. Within a single river basin, all users should be willing to address ? and pay for ? certain water quality and water availability on some sort of equivalent basis. Meanwhile, water problems may be quite different or possibly even non-existent in a neighboring watershed basin.

We also need to build new international coalitions and frameworks, and find innovative ways to cooperate ? particularly from the virtual water perspective. While one water allocation or conservation solution may work better in one area, a different one may work better elsewhere. And as we move forward, there must obviously be some mix of ?top-down? and ?bottom-up? strategies for sharing, and more efficiently allocating and using water.

Pursuing Incremental Technological Advances and Solutions

There isn?t likely to be any major technological fix or ?silver bullet? which is going to miraculously emerge to solve all our water problems. However, technology will continue to march forward, and we can do much better in terms of financing, applying and sharing technology and scientific understanding to better manage our scarce water resources.

Even without the ?iron hammer? of higher prices forcing us to make more rational water allocation decisions, new technologies and systems can help us more efficiently produce and consume water. For example, advances in soil moisture monitoring and smarter irrigation techniques will contribute important savings in agricultural water usage. More widespread and advanced residential metering technologies will help us to be more careful and smarter about the way we use water at home. Techniques for in-situ repair and extension of the life of existing infrastructure can mean less water loss and wastage ? and in turn, more water put to efficient use. Rainwater harvesting ? whether an individual tank on the roof of a house, or a new storm water collection system in a city ?will prevent available fresh water sources from slipping away to the sea. Storing water in underground aquifers instead of in surface reservoirs will reduce loss from evaporation, and the lining of earthen irrigation ditches will prevent water from seeping away.

Although we have not spent too much time in this report discussing desalination, this technology could theoretically provide virtually limitless new sources of clean water ? particularly in certain coastal regions of the world where much of our population happens to be located. However, energy and environmental questions, and geographic limitations mean that this technology will generally only be practical in certain fairly restricted areas ? generally arid coastal regions with access to relatively cheap energy (the controversial and long-debated Carlsbad project near San Diego recently received final approvals as this report was in the works). Mobile sea-going desalination plants may be able to address some of the environmental questions, and provide emergency supplies to population centers that are experiencing droughts or short-term breakdown in infrastructure.

Creative technology developers in this country are often frustrated by the myriad certification processes and regulatory hoops through which they must jump, before they can get their new technologies approved for widespread use. Policies to incentivize new technology development need to be revamped and streamlined so as to encourage, not discourage developers of new ideas and products. Another oft-cited challenge for technology developers in this industry is the glacial pace at which municipal users tend to accept new or different technologies. Municipal clients, along with their external engineering consultants, should try to be a bit more adventurous and willing to try new approaches and ideas to address their urgent water or wastewater treatment needs. Clearly, there are vast opportunities to put new technologies, innovative management systems, and bright minds to work in addressing the world?s water scarcity challenges. Advancing technology can be a critical component in addressing global water problems.

Developing Smarter Laws and Policies

Talk is cheap ? it?s easy to say that we need to reform the way in which we legislate and regulate water issues. However, it?s a completely different challenge to actually figure out a way to enact such changes, and put them into practice.

It?s apparent that we need to think about refashioning many of our long-standing policies, regulations and laws ? indeed, our whole way of thinking about water. Government subsidies, major federally-funded water projects, and interstate water distribution and irrigation programs over the past hundred years or more may have all been undertaken for what might have been sound political or economic reasons at the time. However, in some cases, they may have seriously distorted the workings of localized markets, or led to usage and allocation decisions that may not be in the best interests of the broader population today. Our current regulatory structure, while well intended, often creates conflicts or unnecessary hardships, and sometimes may not even protect us against many of the contaminants and health risks it was designed to avoid.

Although we have just argued for the need to develop specific and local solutions to water challenges, there are also many broad and over-arching policy questions and legal frameworks that must be addressed in a more holistic manner at the national or even international level.

To look at just the United States, the sheer number of different federal agencies involved one way or another with water tends to make policy coordination or change an almost impossible challenge. Presently, almost 40 federal agencies or entities have some kind of authority over various water issues ? and they often act in isolation with only their own narrow objectives in mind. These entities are spread across six cabinet departments, 13 congressional committees and some 23 subcommittees ? all involved one way or another in water resource management. Hence, it?s no wonder that federal water regulations and policies are sometimes confusing or contradictory ? and all of this is at the federal level, before we even get down to state, local and regional watershed authorities of various types. Consolidation of these responsibilities into some sort of coordinated department or agency would help get rid of the ?silos? and make the job of holistically managing water resources easier.

Many observers have pointed out that we suffer not so much from an absolute shortage of water as from an inability to properly manage and allocate that water which we do have. This is a good perspective to keep in mind, but it requires us to resolve a lot of these intractable policy questions and to reformulate our political institutions. An Economist report from a few years ago concisely concluded that water is ?ill-governed and colossally underpriced.? Professor Asit Biswas of the Third World Centre for Water Management, a leading authority on international water management, has widely insisted that there is no water crisis, and that we have plenty of water to go around ? we just need to get better at managing and using it. But, as Peter Gleick of the Pacific Institute put it in a recent report, ?there is a vast amount of water on the planet ? but we are facing a crisis of running out of sustainably managed water.?

This paper is an excerpt from the ?2013 Water Market Review: Growing Awareness, Growing Risks? by Steve Maxwell. Maxwell is managing director of TechKNOWLEDGEy Strategic Group (TSG) and a frequent contributor to UIM. He can be reached at (303) 442-4800 or Maxwell@tech-strategy.com.

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