If you’re looking for ways to invest your money in 2010, you’ll get a return on companies building wastewater treatment plants, according to United Nations (UN) experts speaking to journalists gathered today at UN offices in Nairobi, Kenya.
Satinder Bindra, director of communications for the UN Environment Program (UNEP), said his financial advisor told him this week that “one of the best investments this year is water quality improvement.”
The theme of the 17th annual World Water Day, on Monday, is “Water Quality” with an emphasis on water pollution caused by human sewage, often dumped directly into rivers, lakes, and the ocean in the developing world, where treatment plants can be few and far between.
According to the UN Environment Program (UNEP), more people die every year from exposure to polluted water than in all wars and conflicts around the globe. And most of that pollution is in the form of pathogens from human and animal waste.
As populations and economic development climb, and water resource are spread even more thin, we are reaching a tipping point at which wastewater issues can no longer be ignored, according to the experts. One of the results: wastewater-treatment and sanitation projects becomes a entry point for larger-scale, and often well-funded, development projects. Engineering, and water treatment and supply companies that will be contracted for these projects stand to make profit.
While the corporate world and investors capitalize on cleaning water, taxpayers and governments could also find financial reward. For every dollar invested in wastewater treatment, it is estimated that society gets a $3-34 return when you consider medical and environmental costs, according to Nancy Ross, communications director at the California-based Pacific Institute, which specializes in global water issues.
The Value of Water, Wetlands, and Forests
If you’re personally not looking for insider trading tips, there is another angle on water economics that may be of interest–the value of green infrastructure, including wetlands that provide natural filtration, fisheries support, and flood control, and forests that protect water quality.
Wetlands alone are valued at $400 billion globally, according to the Pacific Institute.
A paper issued yesterday by the Convention on Biological Diversity, cites an analysis of Chinese forests that puts a $1-tillion pricetag on the water storage and filtration functions of these trees. Soil and vegetation store, and to some degree keep clean, nearly 60 percent of the world’s renewable freshwater. That water, when returned to the atmosphere through evapotranspiration, or water vapor, eventually falls back to the ground through precipitation, providing a generally reliable water source for drinking, agriculture, and business.
Intact forests also help reduce the amount of sediment–considered a pollutant–that ends up in the water supply through erosion, a common result of deforestation. The Convention on Biological Diversity values the water storage capacity of the trees in China at nearly three times what they are worth as lumber.
On the other side of the world, the Amazon rain forest, according to Pavan Sukdev of UNEP, is a similar water pump that sends nearly 20 billion tons of water daily into the atmosphere and generates rain for a nearly $1-trillion, primarily agricultural-based economy in the region.
Yet, deforestation continues.
In an attempt to curb the cutting and protect freshwater sources, the World Bank and environmental nonprofits are funding forest protection projects in Costa Rica, Nicaraqua, South Africa, and elsewhere. But the challenge remains putting a pricetag on some of these ecosystem services in a market where they have traditionally been unaccounted for, according to the Convention report.
Companies, especially beverage companies, are feeling the immediate effects of water pollution. According to UNEP’s Sukdev, bottled water producers Evian and Vittel are now paying upstream farmers $280 a hectare (2.5 acres) to protect forests, reduce sediment loads to the river, as well as the use of chemical herbicides and gross amounts of nitrogen-rich fertilizers–in essence to keep the water cleaner.
Scarcity sounds alarm bells too, for business. A 2009 Citigroup report said that unsustainable water usage has caused water scarcity to become a limiting factor in the growth of China, India, Indonesia, Australia, and the western U.S. A sister survey of Fortune 1000 companies found that 40 percent said water shortages would have a severe, if not catastrophic, impact on their business.
Citi concluded that we are on the verge of water bankruptcy.
For more on clean water and water conservation, visit National Geographic’s freshwater website.
[This post has been reformatted for Water Currents.]