Tuesday, April 01, 2008

Worth Its Weight in - Water!

One of the most immediate effects of climate change has been disruption of water systems around the world. It's not that there's less rain, it's that rainfall patterns have changed. It produces a "feast or famine" problem of flooding followed by droughts.

Any farmer can tell you that crops depend on the supply of the right amount of water at the right times. Too much rain is as devastating as too little.

The eastern Mediterranean region has been particularly hard hit by drought and soaring temperatures. The Greek tourism minister warned last summer that his country is losing its Mediterranean climate. In places like Turkey, asphalt roads melt.

Ankara came awfully close to running out of water last summer. According to the Environmental News Network, the municipality had to impose strict rationing:

"Faced with low rainfall and a shrinking reservoir, the city of 4 million resorted to water rationing. Hospitals delayed surgeries. Stray dogs died in the streets. Mayor Melih Gokcek asked residents to "wash your hair, not your bodies" and came under heavy criticism for alleged water mismanagement."

Global warming is presenting an enormous water challenge to both India and China. The Himalayan glaciers are in full retreat which threatens the major irrigation arteries of both countries including the Ganges and the Yellow River. India's bread basket region is utterly dependent on Himalayan runoffs for agricultural production.

Last week 38-mayors met in Istanbul to hammer out the Istanbul Urban Water Consensus. They're working to develop protocols for water supply to major cities and, not surprisingly, that means for some the dreaded "public private partnership" solution. This is a huge growth market. The Indian newspapers leave no doubt that the emerging economic superpowers will have to rely on the private sector to manage and operate their water supply services.

The typical P3 operation sees the water remain a public asset. The private operator establishes the infrastructure to collect, treat and distribute water at a price that discourages wasting the resource while still being affordable to the entire population. Unfortunately that can be an impossible task without government subsidies.

With half the world's population now living in cities, you could do worse than to invest in a successful water supply company. It's a definite growth industry although it's still in the teething stage so the outcome remains a bit unpredictable.

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