It's Time to Start Pouring Cash into Water; Indian Villagers Collect Water from a River after the Monsoon Rains

Article excerpt

THE IDEA that water is free is a common misconception - it is simply notthe case, and the world is belatedly coming to terms with this fact.

Scarce water is the third-leg of the Asian-driven commodity cycle and many arenow referring to it as the 'next oil' or 'blue gold'.

The urbanisation of China, growth of Indian infrastructure and spill-overbenefits across Asia have been the driver of the hard commodity cycle and arecurrently forcing similar patterns in soft commodities and agriculturalproducts alike.

There is no doubting that water is a finite resource. Despite all this waterremains an unlisted commodity.

Though two thirds of our planet is blue when viewed from space, 97pc of theworld's water is sea water, with only 3pc being fresh.

Of this water, the majority is currently inaccessible, with 70pc held in frozenglaciers.

Coupled with this severe lack of supply there is an ever-increasing demandwhich will grow rapidly over the coming decades.

For example, the recent signing of the Energy Bill in the US will dramaticallyincrease production of ethanol over coming years in order to advance the use ofbiofuels. It is estimated that the production of two pints of ethanol takes2,666 gallons of water to produce.

Two-hundred years ago the world's population stood at only 1bn people. Todaythis figure stands at 6.7bn and is forecast to increase to 8-10bn over the next20 years.

This population growth is putting an inordinate amount of pressure on waterreserves. The more industrialised the world becomes the greater amount of waterthat is required.

The areas experiencing the fastest rates of urbanisation and industrialisationare those with the lowest water supplies, meaning there is a severe geographicimbalance of fresh water reserves across the globe.

For example China possesses 21pc of the world's population, but only 7pc of therenewable water resources. By 2020 India's demand for water is expected toexceed all current sources of supply.

There are four main investment areas within the water spectrum, these beingutilities, water technology and infrastructure, equipment and services.

At present utilities are dominating the whole arena, however we expect this tochange in the coming years as technology and infrastructure play an ever moreimportant role.

Whilst there are numerous supply issues with water there is also a requirementto deliver the water to the end user and to then transport the waste water backto the treatment plants. …