The United Nations, The World Health Organization, Amnesty International, and Public Citizen all agree: Water is a human right. It’s hard to argue with that idea. We all need water to live. But maybe, just maybe, weâ€™d be better off if, instead, we thought about water as a business opportunity.
Hereâ€™s why. Thinking about water as a human right tends to lead to solutions that involve governments, charity, foreign aid, etc. What’s more, we donâ€™t ask people to pay for human rightsâ€”the right to vote, to due process or law, to freedom of speech, etc. They’re “free,” and properly so.
But water is, obviously, a resource. Business and markets do a good, albeit imperfect job, of allocating resources. And if we don’t ask those who can afford it, including the poor (if not the very poor), to pay for water, it’s hard to see how we will come up with sustainable ways to deliver clean water to the hundreds of millions of people who need it.
Up until now, it must be said, neither governments nor markets have managed to deliver water to the worldâ€™s poorest people. Thatâ€™s an enormous problem. According to the UN, about 1.1 billion people (17% of the worldâ€™s population) lack access to reliably clean water and 2.6 billion (42% of the world’s populationâ€”a stunning figure) lack access to improved sanitation. About 1.6 million deaths a year are estimated to be caused by unsafe water and sanitation, most among kids under 5.
Those numbers come to me courtesy of the Global Water Challenge, an initiative of the UN Foundation, supported by NGOS and big business, whose goal is nothing less than to generate â€œa global movement to meet the urgent need for safe water and sanitation.â€ I had lunch the other day with Paul Faeth, executive director of the GWC, who joined the group earlier this year after 18 years at the widely-respected World Resources Institute.
Faeth told me an interesting story. He went to see a pilot program, funded by Coca-Cola and overseen by Care, that provided a well, some latrines and hygiene education to a school in a village in Kenya. The costs were lowâ€”about $10,000â€”and the results were dramatic. By providing the kids water to drink, and a place to go to the bathroom, the school drove its absenteeism rates down from more than 10% to about 1%. Whatâ€™s more, the kids and their families got access to drinking water and we can assume (although the projectâ€™s still new) that rates of disease have gone down and will stay down so long as the well is operating.
On the way to the village, though, Faeth said he passed five or six Kenyan villages with pumps that were not working. They were installed years ago and the water was “free,” but when the pumps broke down, as they will inevitably do, there was no way to repair. All were well-intentioned, of course, but without money or people to take responsibility for maintaining and repairing them, they stopped working. It sounds crazy, but he swears it’s true.
This is one reason why it may be worth turning to market solutions to deal with water problems. Another is the sheer scale of the problem. “There’s not anywhere close to enough aid money to solve the problem,” Faeth says. This year, all governments and aid organizations will spend about $3 billion on water projects, and it’s been estimated that the cost of providing water and sanitation to those in need would required $180 billion in outlays.
If that’s not a business opportunity, well, I don’t know what is. So it’s not surprising that General Electric has been buying up water filtration companies and other water-related business to bulk up one of its “Ecomagination” businesses. According to an excellent overview of water issues from the Financial Times (available for download), GE is already selling water purification units that can produce clean water from sewage at $3,500 for a unit that will serve 500 people for 10 years. The company has sold 5,000 units, many in India.
Dow Chemical, meanwhile, has formed a Dow Water Solutions business unit that sells a variety of technologies (most of them to complicated for this non-engineer to understand but you can learn more at this Dow website.) The FT reports that Dow’s water unit has sales of $400 million, which it aims to increased to $1 billion by 2015. Dow supports the Global Water Challenge, and it is also the primary corporate backer of a publicity/fund-raising event called the Blue Planet Run, in which a group of runners are literally running around the world to raise consciousness and money around water issues.
Water Health International is a smaller, for-profit company whose mission is to deliver clean water to all people worldwide “including the poorest of the poor.” Investors include Dow’s venture fund, Johnson & Johnson and the Acumen Fund.
And just a week or so ago, Coca-Cola announced a global water partnership with the World Wildlife Federation, promising to replace all the water it uses in its beverages and their production. Coke and PepsiCo, as you may know, have come under sharp attack for their water consumption in India.
Faeth and his colleagues at the Global Water Challenge obviously have their work cut out for them. The group’s corporate partners include Coca-Cola, Dow and P&G; it’s also working with foundations and NGOs like Care. They’ll experiment with a variety of approaches, see what works and what doesn’t, and try to scale up their successes. He’s already got lots of ideas, including figuring out ways to loan money to communities to develop decentralized water systems, which they would eventually own.
Faeth suggested to me that one way to think about the so-called right to water is to say that everyone should have access to clean water, as well as a voice, and some control, over how their community’s water is used. That’s key. No one should be able to take a community’s water, and then sell it back to people at inflated rates–which happens all the time. But those who can afford to pay for water should pay, it seems to me, even if the amounts are very small. That will stimulate more companies to get involved. And that’s almost surely a good thing.