FAQ – The Blue Gold – How much is it worth to us? (Huft Mix)

litbonanza.jpgWe utilize it for washing and waste disposal, employ it for transportation, power generation and irrigation, use it for cooking and after all need it to live – water. Although it is essential for all life on our planet, we often forget that freshwater resources are limited and in short supply in many regions of the world. The world population, currently estimated at 6.8 billion, lives on only 1% of the of the earth’s water with the remainder being either salt water or tied up in snow and ice. Population growth puts stress on our planet’s freshwater resources, as more and more people vie for less and less water [1,2].

This inevitably raises the question if water is a “human right”: Should everyone have access to clean water? But how should water supply and consumption be regulated to guarantee both universal access to and sustainable use of this precious resource? Arguably, less water would be wasted if it were priced at market value. Would this scarce resource be better managed if water were treated as a commodity, and traded and priced accordingly?

Canada has been blessed with large freshwater resources and is often termed one of the “water-richest” countries in the world. So, why can’t we just lean back and enjoy nature’s plentiful supply? With increasing water shortage in other regions of the world, water-rich countries are brought into play as possible sources and suppliers of the Blue Gold. This raises the question if we should share our abundant supply with those who are desperately in need of water. It is not so much a question of engineering pipelines but – first and foremost – of putting adequate and sustainable governance and management systems in place to regulate water supply with all environmental foresight necessary.

What makes water so special?

We tend to think of water as something consumed, but water does not actually “get used up” – and understanding the issue of water shortage requires some counterintuitive thinking. The amount of water on our planet does not change – only its distribution. In a continuous cycle, the same water molecules evaporate from the oceans and the land surface into the atmosphere, drop onto the land as precipitation and transfer back to the sea (hydrologic cycle). Groundwater occurs in the tiny spaces between soil particles (silt, sand, and gravel) or in cracks in bedrock. In many cases, groundwater is interconnected with lakes and rivers and often resurfaces as springs. The underground areas of soil or rock where substantial quantities of water are found are called “aquifers” and provide most of the water supply in regions where the surface water is scarce or polluted. Aquifers are important sources of irrigation water and are used extensively for municipal, domestic, and industrial water supplies.

Groundwater resources may, however, become depleted when the rate of recharge does not match the amount of water withdrawn – either a result of overpumping, the extraction of groundwater in excess of supply, or decreasing recharge, e.g. caused by droughts. Due to their inaccessibility, most aquifers cannot be “cleaned up” once they have been subjected to contaminants. Moreover, as aquifers can be buried hundreds of meters below the earth surface, it may require decades or even hundreds of years for them to replenish. Deeper aquifers, in particular, may not recharge because the weight of overlying sediments causes the aquifer to compress as the water is pumped out, i.e. it may not recharge for generations, if at all.

An additional degree of complexity is added by the intimate relation between the water cycle and the climate: The climate of a region largely determines the evaporation, precipitation and ultimately the local water supply. The average annual water flow, its seasonal distribution and its variability can be directly affected by climatic changes resulting in an increase in the frequency of extreme weather events and may further put the availability of fresh water at risk. Water supplies may ultimately become scarcer as a combined effect of extreme weather patterns, an increase of water evaporation and a reduction of stored fresh water resources in glaciers and snowpacks.

The world’s water: human right or commodity?

The World Bank considers access to clean water a “human need” rather than a “human right” [3]. What seems a subtle difference at first glance, actually allows for two fundamentally different interpretations: a human need can be supplied by the market – in other words, water becomes a trade good, a commodity which is subject to principles of profit. Human rights, on the other hand, cannot be traded. Up to this date, however, the right to access to drinking water has not been added explicitly to the Universal Declaration of Human Rights [4]. It is argued that access to water is included in the right to an adequate standard of living [5] leaving substantial room for interpretation.

The issue of water privatization is fairly recent. Historically, private companies showed little interest in owning or managing water utilities as there was little or no profit to be made. Water and sanitation have traditionally been supplied by public utilities. Limited public budgets are, however, increasingly driving governments to foster the privatization of water supplies, mainly centred on two reasons: apart from securing additional revenue by selling water licences to private companies, many governments regard it as means of improving public infrastructure and service delivery without tremendous public investments. Furthermore, multinational corporations such as Suez, Veolia Environment and Monsanto see lucrative business opportunities as freshwater resources become rare [6].

Traditionally, water management was limited to safeguarding public water supply by maintaining infrastructure for water storage and distribution but did not focus on reducing water demand. In many municipalities in developed countries, and in North America in particular, water pricing does not encourage water conservation as it rarely reflects the true cost of water. Hence, pricing water at market value has the potential to prevent overconsumption, as long as financial assistance for low-income households still guarantees universal access to drinking water. In addition, environmental laws should require private corporations bear the environmental costs of their operations.

The World Bank, in particular, actively fosters the privatization of water services in developing countries [7,8]. This raises the question, if market-oriented policies that may hold for market economies in “developed” countries can be transferred to countries with a thin domestic capital market or severe debt problems [9]. For instance, Tanzania [10] and Guinea-Bissau [11] have recently received funding under the condition to promote water privatization in their countries. The profit-orientation of private corporations often results in poor water quality as investments in costly equipment and qualified workers are kept low. Depending on the degree of privatization and monopoly – the company’s power to control the water market – one particular company may receive the exclusive right to control the price. An estimated number of one billion people worldwide lack access to safe, potable, and affordable water [12] and increasing water prices may make this essential resource unaffordable for even more low-income families.

On the flipside, it is important to note that water privatization is not necessarily “bad” per se: Many economists argue that private businesses are more cost-efficient and effective in providing services than the public sector. Even if a particular private corporation failed to provide adequate service, one needs to consider the quality and availability of water and the state of the supply system before this company entered the market. Understandably, private corporations will only consider capital investments in infrastructure to expand water delivery systems to poor urban communities, if they can expect a reasonable profit. Yet the profit motive on its own is not enough to condemn privatization as a bad idea or a particular company as exploitative.

Privatization can take various forms with local governments having different degrees of control over water distribution, the infrastructure investments or water pricing. Public tenders, where local government request bids from private contractors to design, construct, operate, and maintain public facilities are a common form of privatization. It allows for competition while giving the local government opportunity to intervene should the company fail to provide adequate service. Privatization, however, becomes more controversial when pumping plants and distribution systems or even water as resource (in form of aquifers or surface water) are sold or transferred to private corporations, allowing a particular company to dictate the price. In developing countries, privatization makes most sense where governments lack the capacities to provide basic public services to their people. However, privatization promotes exploitation in countries where weak or corrupt governments fail to adequately control and regulate the private sector.

On Guard for Thee?

Canada has 20% of the earth’s freshwater, but only 7% of the world’s renewable freshwater supply – the rest is fossil water, water left over from the ice ages trapped in ice, snow and glaciers [13]. Water for profit, however, may take a number of other forms which bring the worldwide water crisis home to Canada: international free trade agreements such as the North American Free Trade Agreement (NAFTA) and World Trade Organization (WTO) have the potential to create international markets for water – be it in bottles, by shipping or building canals and pipelines. Canadian legislation currently prohibits the bulk removal of water from major watersheds. But how will the federal and provincial governments position themselves in a world where more and more countries are running short of water? It is expected that by the middle of the century, up to 6 billion people may live in countries where water is in short supply [14]. This will ultimately not only impose a tremendous pressure on Canadian water export regulations, but also holds the promise of big profits. Given that the removal of large quantities of water will most likely have irreversible effects on the ecosystem, it is of utmost importance not to place short-term profit over environmental sustainability. On top of that, an international water market would be beneficial to only those places in the world that can afford the high water prices rather than to those who are in most urgent need of water.

Nonetheless, it would be fatal to ignore other countries’ demands for water while most parts of Canada seem to be blessed with freshwater resources. It is rather time to conserve our own resources, for example by installing more water meters to move away from flat-rate contracts. Pricing water according to consumption rate has proven to promote water conservation. In order to minimize international tension, sustainable water management calls for the implementation of local alternative water supplies, be it the efficient use of rain water, water desalination plants or water recovery systems. In regions that heavily rely on irrigation, developing alternative agricultural crops and techniques may be part of a solution toward sustainable water use and management. Concerted international efforts are necessary to conserve this precious resource but also provide access to clean water for all – so that water does not become a new source of conflict.


[1] United Nations Expert Meeting On World Population in 2300, New York, December 2003.
Accessed November 17, 2008 (link).

[2] World Population Prospects: The 2006 Revision Population Database, United Nations.
Accessed November 17, 2008 (link)

[3] Comprehensive Assessment of the Freshwater Resources of the World, Preparation coordinated by Stockholm Environment Institute (SEI), 1997. Accessed November 17, 2008 (link)

[4] Universal Declaration of Human Rights, UN Office of the High Commissioner for Human Rights. Accessed November 17, 2008 (link)

[5] General Comment 15: The Right to Water (Articles 11 and 12), UN Office of the High Commissioner for Human Right – Committee on Economic, Social and Cultural Rights, 2002. Accessed November 17, 2008 (link)

[6] V. Shiva, Water Wars: Privatization, Pollution and Profit, South End Press, p.88, 2002.

[7] Policy Paper, World Bank – Water Resource Management, p.15, 1993. Accessed November 17, 2008 (link)

[8] Ibid. p.42.

[9] J. Vickers, G. Yarrow., Economic Perspectives on Privatization, Journal of Economic Perspectives, vol. 5, no 2., p.111, 1991.

[10] Press Release No:2003/384/AFR: Tanzania Receives US$250 Million To Support Government’s Efforts To Reduce Poverty, World Bank, 2003. Accessed November 17, 2008 (link)

[11] Press Release No:2006/468/AFR: World Bank Supports a Program to Rehabilitate National Infrastructure, World Bank, 2006. Accessed November 17, 2008 (link)

[12] V. Thorne, W. Thomas, Issues of Water Scarcity and Multinational Corporations, 18 Nat. Resources & Env’t, 13, 2003.

[13] A Primer on Fresh Water, Environment Canada, 2006. Accessed November 17, 2008 (link)

[14] The United Nations World Water Development Report – Executive Summary, 2003. Accessed November 17, 2008 (link)

Related Topics


An engineer at heart, Jens Huft has recently discovered his passion for biomedical research which led him to pursue graduate studies at the University of British Columbia. He would like to help advance separation science and contribute to health research by developing a high-throughput micro-scale system for the separation of peptides. Passionate about sustainability, he hopes that both technological innovations and re-education of the public will help meet future challenges. When he is not busy in the cleanroom, he delights in "classical" music and greatly enjoys the outdoors and Vancouver's multicultural flair.

Leave a Reply

Basic HTML is allowed. Your email address will not be published.

Subscribe to this comment feed via RSS