Investing in Water

Published on 08/20/21 | Saurav Sen | 2,672 Words

The BuyGist:

  • Investing in water means believing that an imminent crisis will be solved.
  • We take stock of the magnitude of the crisis.
  • We note some "obvious" solutions.
  • Ultimately, we set ourselves up for re-evaluating one of our long-time holdings - Xylem.

Global Crisis

It sounds like a hippie cliché to harp on about the global water crisis. But the fact is that IT IS A CRISIS. We may not feel its effects at all, but millions of people around the world are. And there is no guarantee that our privilege will last forever.

The Water Crisis is a result of a myriad of factors but there are 2 that stand tall in this inglorious group:

  1. Climate Change
  2. Government Inaction

The common thread is lethargy – lethargy towards doing something about Climate Change and doing something about Water. These 2 global crises are intricately connected (more on that later). We believe that the Water Crisis, or the management of it, will gain renewed vigor and energy over the next decade. Why? Because it’s urgent, sure, but also because the problem is short-term, visible, necessary for survival and, above all, has tangible effects on local and national elections. So, governments are incentivized to move fast on this issue, mostly because of the last point.

Here are some facts by the UN, which should startle any government that has a modicum of humanity:

  1. About 4 billion people (that’s billion with a “b”), representing nearly two-thirds of the global population, experience severe water scarcity during at least one month of the year
  2. 2.3 billion live in water-stressed countries, of which 733 million live in high and critically water-stressed countries.
  3. 700 million people worldwide could be displaced by intense water scarcity by 2030.

If nothing is done, these numbers will get scarier. The scariest part of it all is that the deceleration into a full-on humanitarian crisis (like the pandemic) is so non-linear and unpredictable that any apathy today can cost millions of lives…tomorrow, next month, next year, in a decade…? We just don’t know. Most governments, especially those in the most affected areas, have been sticking their heads in the sand or, at best, been implementing all sorts of haphazard patchwork solutions.

In the next few sections, we’ll look at the connection between Climate Change and Water, followed by jarring examples from India and China. And then we’ll look at some simple solutions that have (shockingly) not yet been implemented at scale.

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