Our Most Valuable Natural Resource

September 13, 2017 Oak Ridge Investments

Global water trends continue to forecast dangerous scarcity issues – global water use has quadrupled in the past century and this trend will continue as populations surge in areas where stress on water supplies is already high.  India, for example, is projected to run out of water by 2050 if trends remain unchanged and water resource management does not improve.1

China faces a similar scarcity challenge.  More than half of China’s 50,000 rivers have vanished over the past two decades and about 70% of its remaining fresh water is polluted.2 The 2030 Water Resources Group projects that if consumption habits and population growth projections in China remain unchanged, the supply of fresh water will be unable meet demand by 2030.  China, in an effort to supply areas of the country already lacking potable water, is in the middle of a three-phased, $62 billion diversion project to redirect water from the Yangtze River in the south to plain regions in the north.

The region around Beijing, known as the North China plain, is home to nearly 35% of the country’s population and 40% of its arable land but has only 7.2% of its fresh water supply.3 The diversion project, ultimately a concrete river, will span nearly 2,400 miles – transferring water the distance from New York to Los Angeles and providing clean water to 1.1 billion people.

CHINA'S SOUTH-NORTH WATER TRANSFER PIPELINES

Water is renewable but it is finite – diverting natural waterways restricts access to that resource by other countries who depend on it. The Himalayan glaciers in China are the headwaters of many major rivers that feed the Asian sub-continent and South East Asia.  This puts countries like Bangladesh, Cambodia, India, Laos, Myanmar, Pakistan, Thailand and Vietnam at greatest risk for scarcity as populations grow, to say nothing of natural risks like drought or monsoons.4 Even within China, the project could decimate rivers like the Han, an important tributary of the Yangtze – about 40% of the river’s water will be diverted north, despite acute shortages that already plague cities along its banks.2

Sustainable water resource management is key to anticipating and preventing water scarcity.  Singapore, for example, has the highest water stress ranking in the world due to a dense population and zero freshwater lakes or aquifers.  However, the country has invested heavily in technology, international agreements and responsible management to meet its freshwater needs.  Advanced rainwater capture systems alone provide 20% of Singapore’s water supply.5

Holistic water management plans that take into account the entire water cycle: from source to distribution, economic use, treatment, recycling, reuse and return to the environment will demand continued investment globally.

Watch to learn how Oak Ridge Investments invests in water resources here.

 

1 - United Nations Environment. March 2016.

2 - China's Water Diversion Project Starts to Flow to Beijing. The Guardian. December 2014.

3- World City Report. Seoul Solutions. January 2016.

4 - Water Wars: Future Disputes over Water. CinaWaterRisk.org

5 - World's 36 Most Water-Stressed Countries. World Resources Institute. December 2015.

Previous Article
The Problem With Your Commodity Index ETF
The Problem With Your Commodity Index ETF

Outside of shorter term portfolio hedging, commodity indexes can often drag down performance...

Next Article
CEOs: Pressure to Make Impact
CEOs: Pressure to Make Impact

CEO survey examines changing stakeholder expectations around social responsibility