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The paradoxes of water: value

In China, water scarcity limits growth and urbanisation escalates a crisis, say James G Workman and Montgomery F Simus. Opening a four-part series, they address the subject of value, the first conservation challenge to overcome.

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Peter Brabeck-Letmathe chairs Nestlé, the world’s 44th-largest company, which last year earned US$10.5 billion in profits on US$121.1 billion in revenues. He is the consummate international businessman, bargaining hard, overseeing 280,000 employees, outflanking competitors and at ease with heads of state. Yet Brabeck remains incapable of negotiating one simple and irreplaceable ingredient without which his company ceases to exist: water.

He hardly seems a gloomy Malthusian, yet Brabeck foresees “limits to growth” because our global fresh water supply is both finite and being rapidly, stupidly, depleted. The world can sustainably use 4,200 cubic kilometres of water, he notes, but it consumes 4,500 even as aquifers plummet and rivers run dry.

A few years back, he called water scarcity “the other inconvenient truth,” one riskier than climate change, and predicted that the cost of staple cereals would rise as the world exhausted its water. Time proved him right. Grain prices spiked 90%, triggering widespread urban food riots like those roiling much of Asia. Why is this happening? “Put bluntly,” he explains, "water has no price. When we see and treat water as a free good, we waste it."

Brabeck is the latest victim of the oldest, most widespread and First Paradox of Water: in China and throughout the world, the liquid matrix of all life is both figuratively and literally “priceless”.

In 1776 this paradox stumped Adam Smith, whose book The Wealth of Nations noted how diamonds are utterly worthless in use yet invaluable in exchange, while the converse was true for water. Without water, humans can’t exist, yet our species devalues nature’s precious liquid asset into a vague liability.

This paradox troubles water whether rural farm or urban factory, firm and family. Annual shareholder reports discount water as a negligible “cost” to be “managed”. Accountants consider it a line item to absorb into spreadsheets. Chief financial officers regard water as a material risk to avoid. Any country can quickly provide its exact mineral wealth, human resources, arable land, energy potential, gross domestic product and federal monetary budget; none can tell you the annual water reserves that keep its economy alive. No official knows the full cost of providing water because no individual can know it; water’s value is subjective, varying by time, place, conditions and seven billion water users, half of whom live in cities.

The First Paradox of Water ensures that what individuals each intuitively grasp as a priceless asset we must collectively debase into a liability that is inherently worthless.

Why does this paradox of value arise, and how can we resolve it?

The brilliant conservationist Aldo Leopold famously warned urban readers about “two spiritual dangers in not owning a farm. One is the danger of supposing that breakfast comes from the grocery, and the other that heat comes from the furnace.” As self-interested stewards, we value only natural assets we own. We ignore what we can’t.

Since our food and energy trace their existence to water, our compound danger lies in not owning a well or creek. Instead, we suppose water comes from a faucet, toilet tank or pipe. We lose interest in water throughout the urban supply chain. Unable to own or trade our share, we produce an urban, deeply tragic, commons.

A few “exchanges” of water occur between neighbours sharing a river or well, but these are rare, rural, informal (perhaps even illegal) and inequitable. For exceptions to become the rule, China’s city dwellers must formally have an equal opportunity to own and trade water. It may seem a logistical nightmare for our urban world to literally “own” a real well and distribute the vital wet stuff. But thanks to the Internet and ubiquitous cell phones, such barriers don’t prevent ownership.

Frequent-flier miles let us virtually “own” physical airline seats. Likewise, each of us can now transparently “own” a defined virtual share of water, distributed automatically, daily, digitally and equally to all by the water monopoly that unites us. We may call this virtual share a right, credit or a privilege, but it now is ours to earn and accumulate, to use and exchange however we choose.

Urban “H2Ownership” leads to investment and care. As we buy and sell our unused shares, water accrues real worth and allows a slum dweller or Nestlé executive to negotiate its relative local price. Thus together we can at last resolve this paradox of water, as its value in exchange can rise to the level of its value in use.

NEXT: The paradox of efficiency


James G Workman and Montgomery F Simus are co-authors of the forthcoming book H2Ownership vs The Three Paradoxes of Water and co-founders of SmartMarkets LLC, an online, utility-based system that they say could unleash a widespread, egalitarian race to conserve water and energy in cities worldwide. Workman is also the author of Heart of Dryness: How the Last Bushmen Can Help Us Endure the Coming Age of Permanent Drought, excerpted by chinadialogue in 2010. The authors can be reached at [email protected] and [email protected].

Homepage image from World Bank Photo Collection
 

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anumakonda

达芬奇:水是生命之源

这篇关于水的文章写得非常好。

达芬奇说:水是生命之源。

水对于我们的生活来说是不可缺少的,而现在人们愈来愈着重自来水的质量。尽管地球超过七成的面积被水覆盖,但只有一成的水是可以饮用的。虽然如此,我们的社会还是继续污染这样宝贵的水资源。水也被称为天然的溶剂。在自来水输送给消费者使用前,它们接触过许多不同的物质,包括有机物质、无机物质、化学物质和其他污染物。为了消除水中致病的污染物,许多公共供水系统都会在水中加入氯气。虽然我们知道这个过程非常重要,但氯气所产生的味道和气味则令人反感。

A.Jagadeesh 博士(美联社),印度内洛尔
邮箱: [email protected]

Water is the Elixer of Life - Leonardo Da Vinci

Excellent article on Water.

"Water is the Elixer of Life" - Leonardo Da Vinci.

Water is a key component in determining the quality of our lives. Today, people are concerned about the quality of the water they drink. Although water covers more than 70% of the Earth, only 1% of the Earth's water is available as a source of drinking. Yet, our society continues to contaminate this precious resource. Water is known as a natural solvent. Before it reaches the consumer's tap, it comes into contact with many different substances, including organic and inorganic matter, chemicals, and other contaminants. Many public water systems treat water with chlorine to destroy disease-producing contaminants that may be present in the water. Although disinfection is an important step in the treatment of potable water, the taste and odor of chlorine is objectionable.

Dr.A.Jagadeesh Nellore(AP),India
E-mail: [email protected]

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timquijano

这不是因为人们“愚蠢”,而是因为他们未受教育、不情愿及无能为力

我很欣赏你的文章,特别是奥尔多·利奥波德的引文。但是你在描述浪费水资源的时候用了“愚蠢”一词,我觉得这样既不负责任又不正确。浪费水资源这个问题全球各地都在发生,这当然和人们管理不善有关,但问题的征结是:(一)人们(从小开始)缺乏环保教育及(二)资质差的政治领袖不愿意或者根本没有能力去实行有效的措施来限制发展水源短缺的地区或者提高水的价格。

Tim Quijano
quij.wordpress.com
@timquijano

It's not "stupid," but uneducated, unwilling and incapable

I appreciate your article, especially the Aldo Leopold quotes. I think the use of the word "stupid" though, in your description of the depletion of water resources, is irresponsible and inaccurate. This depletion occurring internationally is, of course, due to human mismanagement. The problem lies in: (1) the lack of environmental education (from a young age) and (2) poor political leaders unwilling/incapable of making pivotal moves to restrict development in water-scarce areas and/or to increase water prices.

Tim Quijano
quij.wordpress.com
@timquijano