Studies and reports continue to be issued at an accelerated rate, and conferences and forums seem to fill up any remaining dates on the calendar. There is scarcely a week in the year when there is not a water summit or forum of some sort underway. New books geared to the broader public seem to be published every month or so. The popular media continues to cover water issues with increasing regularity. Water has now been on the agenda in the President’s State of the Union message, and on stage at the Davos World Economic Forum. Bill Gates, Matt Damon and Pope Francis are all doing their part to raise awareness and find solutions.
Everyone is talking about water. And, the odd water crisis continues to pop up occasionally — as it did in Charleston, W. Va., right after New Year’s Day — that serves to remind some of us of the vulnerability of our water infrastructure. So, we must be making progress, right?
Addressing water challenges
We are getting pretty good at defining and recognizing the issues. We seem to be making progress in terms of explaining the problem and raising awareness across a larger cross-section of the public. However, are we really making much progress in beginning to actually address the daunting water challenges that we face? Are we identifying and effectively promoting specific and actionable means of solving our water problems? In short, are we still spending too much time just “talking the talk?”
Not to denigrate or question the intention of any of these aforementioned reports, studies and forums; I have no doubt that all of these efforts are genuinely committed and interested in solving the problem. Nonetheless, talk is cheap.
The other major challenge and related aspect of our problem is that water itself is also too cheap. Despite the increased public awareness, and the unfolding water crisis that we face, water remains — by almost any measure — pretty inexpensive. Yes, prices are starting to rise in most parts of the world, but water is still just too cheap for most people to spend much time worrying about it.
Our water challenges are still not very high on the radar screen of a world that is facing other daunting, and perhaps more immediate political, fiscal and public health crises. And, things will probably stay that way until water prices rise to the point where they start to really “hit us in the wallet.”
As much as those of us in the water industry would like to believe that water issues trump everything else, most political leaders are acting, believing and saying otherwise: “Yes, water issues are important, but they’re not as immediate or critical as some of the other issues I’m dealing with.”
Recognizing the value of water
The bottom line today is that water continues to be an under-appreciated and under-valued asset. However, water prices will eventually start to rise more quickly — as a result of ongoing population and demand growth, drought and increasing scarcity. More and more major urban areas are beginning to bump up against the challenges of true scarcity. And as water prices increase, we will gradually pay more attention and modify our behavior — towards improved conservation and more efficient use. As prices inexorably rise, we will ultimately be forced to confront and solve these problems, and truly recognize water’s fundamental value. But we aren’t there yet.
Two factors — the inability of serious studies and repeated warnings to so far generate much widespread concern or real change, and the fact that prices remain generally low relative to true value — combine to yield a situation today where people still don’t pay much attention and are often almost lackadaisical about water issues. Simply put, we have not reached the famous “tipping point” situation described in Malcolm Gladwell’s recent book, “The Tipping Point.” To paraphrase from the cover, we just haven’t had enough “little things” happen yet to start to snowball and make a big difference.
The droughts, water crises or infrastructure breakdowns that we have had, have been too isolated, too far apart in time or somehow not serious enough to really begin to generate that attention and momentum towards a real tipping point — where awareness accumulates a critical mass, attention starts to shift and things start to happen. All the reports and meetings have raised awareness, but they haven’t yet really led to comprehensive solutions.
We apparently need more frequent and more severe crises, in addition to more rational pricing. The droughts that many areas in the American west have experienced lately have put water scarcity issues up near the top of the political agenda. The decade-long drought recently suffered in southeastern Australia had a dramatic effect on water awareness, policy and the legal institutions and frameworks around water resources in that country. Things actually changed. Studies, forecasts, reports and “Chicken Little” warnings may help, but there is nothing like the impacts of a serious crisis to really focus the public mind.
The water risks and challenges that we face as a planet will continue to compound and grow if we cannot learn relatively quickly how to think and act differently with regard to water. By the middle of this century, the Earth will be home to an additional two billion people — bringing our total population to around nine billion. Finite food, energy and water resources will come under increasing pressure by this expanding, aging and more affluent population, leading inevitably towards the “stress nexus” that many experts are now forecasting. Water is the critical link.
Advancements in water industry technology
We often hear that there is no “silver bullet” in the water industry — usually in reference to technology. However, the real silver bullet in the water marketplace would be a more rapid move towards smarter and full cost-based pricing.
It’s popular today to talk about “disruptive” technologies as a way of shaking up the status quo, or moving an industry or a society in a new and different direction. What the water industry needs today is more disruptive thinking — fundamental change in the way we view, manage and utilize our finite water resources. However, until then, the issue seems destined to remain somewhat obscure in the bigger picture, further down on the planetary “to do” list.
So we have two problems: Talk is cheap and water is cheap. We need to change both things.
(Editor’s note: This article is an excerpt from the author's Annual Water Market Review 2014.)
Steve Maxwell is the managing director of TechKNOWLEDGEy Strategic Group (TSG), a Boulder, Colorado-based management consultancy specializing in transaction advisory services and strategic planning for the water industry. Maxwell writes the annual Water Market Review, a comprehensive summary of trends and developments in the world water industry, and is also the author of a new book published by AWWA entitled, “The Future of Water.” He has advised dozens of water firms on strategy and transactional issues, and can be reached at (303) 442-4800, [email protected] or via Twitter @smaxwell_water.