The most valuable commodity in the world today, and likely to remain so for much of this century, is not oil, not natural gas, not even some type of renewable energy. It’s water – more specifically, clean, safe, fresh water.

One way to identify emerging trends early, is to follow the money . . . and today, many of the world’s leading investors and most successful companies have started to make big bets on water. The facts are that even at current rates of consumption per capita there simply isn’t enough freshwater to go around, and the situation is expected to get worse before it gets better.

“There is only one direction for water prices at the moment, and that’s up,” according to Hans Peter Portner, manager of a $2.9 billion US Water Fund at Pictet Asset Management in Geneva.

“There is only one direction for water prices at the moment, and that’s up,” Hans Portner, Manager $2.9 billion US Water Fund Pictet Asset Management, Geneva.

 

The United Nations estimates that by 2050 over two billion people in 48 countries will lack sufficient water.

Over 70% of our Earth’s total surface is covered by water but although water seems abundant, the real issue is fresh water availability, since 97.5% of all water on Earth is salt water, leaving just 2.5% as fresh water.

Nearly 70% of that 2.5% fresh water is frozen in the icecaps of Antarctica and Greenland; most of the remainder is present as soil moisture, or lies in deep underground aquifers as groundwater not accessible to human use.

Only 1% of the world’s fresh water (that is just 0.007% of all the water on earth) is actually accessible for direct human use. This is the water found in lakes, rivers, reservoirs and those underground sources that are shallow enough to be tapped at an affordable cost. Only this tiny amount of global water is regularly renewed by rain and snowfall, and is therefore potentially available on a sustainable basis.

AND, if global warming continues to melt glaciers in the polar regions, the supply of freshwater could actually decrease. Freshwater from the melting glaciers will mingle with ocean saltwater and become too salty to drink and increased ocean volumes will raise sea levels to contaminate freshwater sources in coastal regions.

About one-third of the world’s population already lives in regions that are experiencing water stress. It has been predicted that fresh water availability will be a critical limiting resource for many regions in the near future, for reasons including:

  • Over 90 percent of the world’s cities dump raw sewage into rivers and other freshwater sources
  • Industrial pollution and contamination also affects residual water supplies, further reducing availability
  • Rapid population growth, putting increasing pressure on water supply through increased demand

Even in Asia, where water has always been an abundant resource, per capita availability declined some 50% between 1955 and 1990 and current projections suggest most Asian countries will have severe water problems by 2025, whilst other regions, like Africa, have historically always been comparatively water-poor. 

Significant water availability problems are predicted as populations of “water-stressed” countries (typically emerging market regions) jump perhaps six fold over the next 30 years. Already, some six billion people of Planet Earth use nearly 30% of the world’s total accessible renewal supply of water, but at anticipated future consumption growth rates, by 2025 that value could likely reach over 70% of total supply.

Accordingly it is reasonable to expect the following effect on fresh water values : “High demand for limited resources”

Oil is no longer the world’s most valuable commodity !

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