July 16, 2003

Good news for the wet: water is the new oil

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As I write, I’m listening to the drip, drip, drip of water — lovely, cold, fresh water as it leaks through a light fixture in the sitting-room. Four in the morning, in the middle of the most ferocious deluge in years is not the time you want to discover that your balcony was jerry-built and the new, velvet sofa is sodden. It could have been worse; count your blessings, McWilliams, you don’t live in Clonmel.

Although this might not be the best time to say so, we should rejoice in our damp climate, for we are the lucky ones. Indeed, our much-maligned climate might be a key national asset for Ireland in the future. Clean drinking water and access to it, is likely to be as important in global geopolitics and economics in the years ahead as oil was in the post war period.

This might sound far-fetched, but water is a serious global issue. The snag is not so much the quantity of it but its distribution. Exploding populations in the developing world have led to a situation where countries with the most water tend to be the least populated and vice versa.

Every native Icelander enjoys an abundant 500,000 cubic metres of fresh water run-off from rainfall per year, while the poor, parched Egyptians have to make do with just 0.02 cubic metres each. Nor is this disparity limited to rich versus poor countries.

In Ireland, we squelch around the place for more than half the year, while Australians and Californians ration water as a rule. The politics of water is becoming a cause for concern.

For example, before the collapse of the Middle East peace process, one of the main sticking points among Israel, the Palestinians and Jordan was unfettered access to the fresh water of the Sea of Galilee.

Israel is set to import vast quantities of water from Turkey. In less fraught yet equally serious circumstances, Barcelona imports water from southern France and the authorities are planning to spend £600 million on building an aqueduct from Montpelier to Barcelona that will ensure fresh water for the region’s 4.5 million inhabitants.

Looking forward, water shortages will become more acute and the economics and politics of water more sensitive, as suggested by four global factors.

First, the population of the world is exploding. Every year, the world’s population grows by more than the population of Germany, Europe’s most populous country. According to the World Bank, eight out of ten children born in the next 20 years will be born in the developing world and of these, 88 per cent will live most of their lives in a huge megalopolis such as Mexico City, Lagos or Delhi. These cities will require fresh water.

Second, the food necessary to feed this population will demand that land across the globe is irrigated more intensely. At the moment, irrigation is highly inefficient as it absorbs 70 per cent of the world’s water supply.

Third, the traditional way of diverting water — building dams — is causing environmental disasters (for instance, the floods in China this year) and so it is not always a risk-free option. In the more sophisticated countries, this will become a key electoral issue.

Fourth, as in the Middle Eastern case, certain countries may play roulette with water by blocking off the supply to neighbouring countries downstream.

This type of conflict is emerging among Turkey, Iraq and Syria. Given that the Middle East is home to 300 million people — 5 per cent of the world’s present population with less than 1 per cent of the world’s fresh water reserves — it is likely that these conflicts will persist.

Taken together, these four factors point to serious risks. The most pressing of these is the fact that irrigation, which is very inefficient, is actually making the situation worse.

Excessive irrigation, by washing necessary minerals out of the soil, leads to desalination that renders land unproductive. It is reckoned that 25 per cent of Pakistan’s agricultural land is now useless due to desalination. India and China are facing similar problems. Therefore, the water problem is exacerbating the food problem which in turn is exacerbating the water problem.

In the years ahead the way we look at water will change fundamentally. Up to now, the world has taken a very odd approach to water, possibly based on its mythical, historic and natural values (as in the “water is life” approach).

As a result, water is rationed rather than priced. When water is scarce, even in western Europe, it is rationed rather than the normal market approach which would be to let the price of water rise.

It is highly likely in the near future that water will be priced according to its scarcity like any other valuable commodity. Therefore, the price of water will increase dramatically. And, as necessity is the mother of all invention, it is likely that an efficient way of transporting water will be found — not just via aqueducts and pipes — but in supertankers.

In this future world, countries with abundant supplies of water will see their wealth rise immeasurably. Water will match oil as a natural commodity to be traded between nations.

So the next time we experience a deluge as we did last week, let’s not moan, let’s rejoice because future prosperity comes in the strangest of guises.  


  1. stefan hanrahan

    that is great news David perhaps now is the time to
    purchace a few acres in Mayo i was wondering when the west
    would teach us all a lesson.

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