Most externalities are under-priced - carbon-emissions currently in the limelight due to rising concern about global warming. However, over the past few years corporations across the globe are increasingly viewing water as a close contender, many fearing that this natural resource will soon be commoditized similar to oil. For once, I'm inclined to support corporate executives who feel water needs to be more effectively priced to help reduce reckless consumption (witnessed mostly in the west - an American taking a five-minute shower uses more water than the average person in a developing country slum uses for an entire day). As of last year, therefore, Nestle was able to bottle 265m liters of fresh water and pay nothing for the resource - perhaps it is time the regulators intervene to mandate more responsible water management. My only concern here is that more often than not, re-pricing a resource impacts cost to consumer to a greater extent than the producer's bottom line.
Water scarcity is now a prime concern for most nations with 780 million people across the globe lacking access to clean water - that's more than double the US population. If that doesn't merit your concern, think about it like this: Lack of access to clean water and sanitation kills children at a rate equivalent of a jumbo jet crashing every four hours!
There is a dire need to consume water more efficiently before we find ourselves paying exorbitant amounts for a life sustaining resources. I believe it is only a matter of time before the free market attaches an economic value to H2O.
“Is now the time to buy water?” enquired the email that showed up in my inbox earlier this week. Its authors weren’t worrying about my dehydration levels. Rather, they were urging me to think of water in quite a new way: as a commodity to invest in. Making money from water? Is this what Wall Street wants next? This summer, however, myriad business forces are combining to remind us that fresh water isn’t necessarily or automatically a free resource. It could all too easily end up becoming just another economic commodity. At the forefront of this firestorm is Peter Brabeck, chairman and former CEO of Nestle. In his view, citizens don’t have an automatic right to more than the water they require for mere “survival”, unless they can afford to pay for it. Brabeck is right to argue that we risk depleting the world’s supply of fresh water irresponsibly through careless and thoughtless consumption of an apparently free resource.