Wednesday, October 7, 2015

Current Event 10/7 - Water Valuation

http://www.greenbiz.com/article/water-being-underpriced

This article spells out the issues revolving around the undervaluation of the world's most required resource: water. By 2025, the United Nations have predicted that two-thirds of the world's population will be living in a water-stressed environment. If we continue on the same path we have been traveling for the last few decades, a lack of available water could bring major problems to both the developed and undeveloped world. Food security, stranded assets and a decrease in the overall productivity of countries are risks associated with water-stressed communities. A research firm, MSCI, conducted a study and found that 412 of the 972 irrigation-intensive U.S. counties are located in water-stressed spots.

Without the included risk factor, water is seriously undervalued. If water suppliers around the globe would take into account the possibilities of a water-stressed world, they could make a more precise pricing model for consumer and commercial water use. A higher price would serve as an incentive for homeowners to regulate their use more efficiently and conservatively, while businesses would be more willing to acquire water efficient technology. For example, agriculture practices could shift to be more water conservative, implementing strategies such as drip irrigation or other highly regulated water use programs. None of this will be possible however, unless water suppliers globally accurately price their commodity.

No comments:

Post a Comment