Globally, the problem of water scarcity is growing and by 2050, experts predict a “55pc increase in the amount of water required to meet demand from rising populations, food production and industry. To avoid serious shortfalls the world will need to invest an estimated $1.8 trillion (£1.05 trillion) over the next 20 years that could ultimately deliver $3 trillion in benefits for the global economy”, according to estimates by the United Nations.
In these kinds of circumstances markets can play an important role in the provision of future water security. The City can help to fund vital water infrastructure and the creation of a futures market to trade water that would help to create a baseline pricing mechanism against which regional water tariffs could be fairly set. But one of the fears is that water scarcity could eventually see water-rich countries form into groups like the Organisation of Petroleum Exporting Countries (Opec) even though water isn’t a commodity that can be easily traded across borders just yet. “Water will become a commodity – but a very different commodity because it is also a basic human need. If you track economic growth and you agree that water is a vital input then it will eventually become a commodity,” said Rao-Monari. At Enable our IFA’s like to keep an eye on the future.
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