Fresh water stress. Economically viable Swiss solutions.
The scarcity of fresh water in major parts of the world is a well-known and alarming fact. Beside the water needed for agriculture, industry and human consumption, hygiene is often an unaddressed source of water consumption. Overall, water consumption is growing twice as fast as the population. Both, the need for better living standards and the inefficiency of our water-usage contribute to the accelerating growth.
By 2025, it is estimated that one third of the population will live in a water stressed area . Different rules do not necessarily apply for tropical regions. For instance, Singapore, neighbouring Indonesia and Malaysia increasingly suffer from uncommon weather events leading to temporary droughts putting stress on the water supply system. Around 55 percent of Singapore’s water is now desalinated or recycled with an aim to be self-sufficient by 2061, when a 1962 agreement to buy 1.1 million cubic meter of water per day from Malaysia ends.
Price of water and its paradox
Nonetheless, water is at a dichotomy. Water remains the most undervalued commodity and at the same time a source of important conflicts.
In certain countries suffering from water stress, there is a clear political will to keep the consumer price of water low. This artificially low price has perverse effects, one of which is the resulting difficulty to change wasteful habits. Furthermore, those extremely low prices require substantial subsidies. In the most extreme cases, one can observe countries in the Middle East experiencing high water stress with water price to consumers below USD 0.1 per cubic meter, while production and distribution cost is between USD 1.1 and 1.3 per cubic meter. Similar to fossil fuel subsidy system, the subsidy of fresh water supply remains an important political tool for governments in place.
Fear of a world without water. It falls largely to governments to regulate fresh water use with foresight and intelligence in light of current and future constraints. Nonetheless, water saving technologies and solutions developed and promoted by private companies should not only offer an economical benefit to the user payer, but absolutely be sustainable economically. Water saving technologies (environmental technologies), which rely on government subsidies, are not deemed to survive. Henceforth, enlightened leadership from the private sector should sustain governments and political leaders to take relevant decisions to limit the excessive water footprint and offer sustainable solutions.
At ValleyRoad Capital, we support Swiss technology companies promoting water saving with unique, innovative and economically viable technologies that address both private and public sectors to limit water consumption for human hygiene while preserving, even enhancing, the comfort of users.