GENEVA (Reuters) - In the eyes of investors, the announced scarcity of water resources should translate into a dizzying increase in the value of this strategic asset that is "blue gold" and thus offer amazing prospects for companies in the sector , like what happened in the energy sector.
Unlike resources such as petroleum, gold and wheat, the price of which is fixed on the world market, the price of water is generally established locally by the community or the private enterprise which distributes it.
"Water is different from oil because it is usually not transported over long distances," says Wolfgang Grabs, director of the water resources department at the World Meteorological Organization (WMO).
In the absence of a global water market, investors have already bought shares in companies specializing in this sector, such as the American Waste Management, ITT and American States Water or the French Suez.
Investors can rely on various water indices that track the results of companies involved in the sector such as the Dow Jones US Water Index, the International Securities Exchange ISE-B & S Water Index and the Palisades Water Index.
According to Philippe Rohner, who heads an investment fund dedicated to the water sector for the Swiss bank Pictet, water has been largely "ignored" during the last dizzying increases in the price of raw materials, despite the alarming forecasts on the scarcity of water resources.
HEAVY INVESTMENTS
According to Grabs, significant investments are necessary to improve the distribution of water and its sanitation as well as to promote better profitability of water for its use by individuals, in industry or agriculture.
Without significant changes, regions threatened by shortages - notably parts of the United States, Spain, China, India, Pakistan, Somalia, Namibia - will deplete their reserves.
From a financial point of view, this could translate into increased activity for companies that transport, distribute or store water as well as companies specializing in dam construction, irrigation or desalination.
The price of fresh water, which is assessed by the Pictet bank at 0,2% of its equivalent volume in oil, could be increased in order to reduce waste.
"We could set up a better pricing system so that people are more aware of the value of water," Grabs explains.
"One of the inescapable consequences of water scarcity is that its value, in monetary terms, will increase," said Achim Steiner, director general of the United Nations Environment Program.
The South African pricing system could serve as a model: while ensuring a minimum supply for the poorest, it discourages intensive water consumption.
Other economic transformations could result from the scarcity of water resources.
Countries could stop certain very water-intensive productions, such as cotton, steel and paper and choose to import them.
Other countries could reduce or even stop activities that consume a large amount of water such as agriculture or nuclear power plants that need water to cool reactors.
This last sentence delights me: on the one hand, we are told that several large energy gluttons like the US will relaunch their nuclear program to mitigate the rise in oil, on the other, we are told that for lack of water, cannot cool these plants.
The only way possible: stop wasting everything. When we stop washing our HUMMER every day, the planet will be better !!!
moreover, when the water is then unfit, they are paid for cleaning up !!!! I have specific examples (which I will not cite)
growth !!!