[Debate] (Fwd) Green Economy profiteers: World Resources Institute's water commodification mapping (Joyce Nelson)
pbond at mail.ngo.za
Wed Jun 13 11:10:48 BST 2012
*Who's Profiting from the Water Crisis?
Joyce Nelson 2 June 2012
In January 2010, investment banker Goldman Sachs, along with General
Electric and a high-powered Washington thinktank called the World
Resources Institute (WRI), announced the launch of a new index measuring
water-related risks facing companies and their investors.
In the words of their corporate news release: 'In many regions around
the world, water scarcity from climate change and pollution is starting
to impact a company's performance, yet few analysts account for
This new water index would 'draw on publicly available data regarding
physical scarcity and water quality and overlay factors including the
regulatory regime and social and reputational issues' in various regions
of the world.
Business jargon aside, if you think this will be a useful tool for
corporations, you'd be right. In fact, the risk-index might more
accurately be called an 'opportunity-index' for water speculators and
Next year the water privatization market worldwide is expected to reach
$1 trillion. As Goldman Sachs puts it, 'There is no substitute for
water. It is the only utility you ingest.' According to Maude Barlow, a
leading Canadian critic of water privatization, 'The biggest water
company of all is General Electric.'
By August 2011, Goldman Sachs, General Electric and WRI had not only
found a name for their partnership -- the Aqueduct Alliance -- they had
also developed the index into a water database and mapping tool, which
can include the amount of infrastructure investment taking place in a
Moreover, they had put an 'environmental' spin on the project, claiming
that it will help corporations, governments and stakeholders become more
aware of their 'water footprint' and thus make more 'sustainable' decisions.
That same month the original threesome -- Goldman Sachs, General
Electric and WRI -- invited into the Aqueduct Alliance some new
corporate partners: Coca-Cola, Talisman Energy, Dow Chemical, United
Technologies and the financial/news conglomerate, Bloomberg LP.
The WRI's Kirsty Jenkinson told the Financial Times (FT): 'Companies see
the need to get better visibility about water if they are going to have
to access it for their business.' With the new water database, 'they can
see if they are at risk of not getting the water they need, or coming
into conflict with other users of that water'.
Presumably, the potential for 'conflict' is what attracted United
Technologies to join the Aqueduct Alliance. UT is the world's 10th
largest arms-producing company with sales of $11.1 billion in 2009.
Mired in controversy
Coca-Cola has handed over to the Alliance its own proprietary data on
freshwater availability worldwide -- data collected over years of
research for its bottling enterprises. 'Water is the lifeblood of our
business,' Coke spokesperson Joe Rozza told the FT. The Atlanta-based
company has hundreds of bottling-franchises worldwide, many of them
mired in controversy. In India and Latin America, Coca-Cola has
regularly faced irate local communities who are losing their drinking
and irrigation water to Coke's local bottlers.
In January this year, Britain's Guardian newspaper reported that
Coca-Cola is under fire for propping up Mswati III of Swaziland, one of
Africa's most notorious dictators.
Poverty is endemic, political parties are banned and activists are
regularly imprisoned and tortured in the country.
Another Aqueduct Alliance partner is Talisman Energy, a Canadian natural
gas company based in Calgary, Alberta. 'We are very excited to have been
asked to become the oil and gas sector sponsor for the Aqueduct
Alliance,' Talisman spokesperson Sandy Stash told Marketwire. 'Talisman
aspires to a water management strategy that defines best practices for
water withdrawal, reuse, disposal and conservation in our North American
shale gas operations.'
Just weeks earlier, in July 2011, the government of British Columbia
(BC) awarded Talisman a licence to divert up to 10,000 cubic metres of
water per day from the province's major hydroelectric reservoir for the
next 20 years. Talisman uses the water to 'frack' for shale gas in
northeastern BC. The company has also secured access to 6,200 square
kilometres of shale gas deposits along Quebec's St Lawrence River.
The Aqueduct Alliance intends to generate databases and water-maps with
'an unprecedented level of detail and resolution', including advanced
hydrological data and 'geographically specific indicators that capture
the social, economic and governance factors that affect companies and
economies'. The databases will include up-to-date regional news coverage
on water issues.
By September 2011, the Aqueduct Alliance had developed a prototype
database/map covering the Yellow River Basin in northern China. Water
shortages in China are already so severe that more than half its cities
are facing restrictions on water use.
In 2013 the Alliance intends to release four additional database/maps on
river basins of 'high priority', including the 2,300-kilometre long
Colorado River in the US which has experienced years of drought; the
Orange-Sengu River in Africa which extends across Botswana, Lesotho,
Namibia and South Africa; the Yangtze River in China, where 10 million
people were displaced by the Three Gorges Dam; and the Murray Darling
River in Australia.
All are regions where water scarcity is enticing speculators to secure
water-rights in a 'buy-and-hold' strategy. Their model is based on
recent events in Australia.
In a short-sighted cash grab, t
he Australian government in the 1990s introduced a water market for the
Murray Darling River Basin -- one of the longest river systems in the
world and the heart of Australia's agricultural production. But in 2001
a major drought struck the Basin and within a few years the federal
government in Canberra was forced to start buying back water from
The price shot up. By 2009, so many speculators had targeted the Basin
that some $3 billion in water-rights were bought and sold in that year
alone. The government was forced to compete with international
speculators, including giant hedge-funds.
By September 2010, the Australian government had spent at least $1.4
billion buying back water-rights. Although the drought eased that same
year, the fact that the Aqueduct Alliance is now focusing on the Murray
Darling Basin means that the risks and opportunities there are still
As one hedge-fund advisor quipped, an emerging worldwide water crisis is
creating 'serious profit opportunities for those in the know'. The
Aqueduct Alliance database/ maps will show where those opportunities are
located. Another 15 regions across the world will be analyzed once the
Alliance has created its first four database/maps.
'If you play it right,' says the advisor, 'the results of this impending
water crisis can be very good.'
Joyce Nelson is an award-winning freelance writer/researcher and the
author of five books.
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