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  • Colin Mclain

The Looming Threat of Water Commodification

Is access to water a human right? You bet! In fact, for almost two decades, the United Nations has declared water for consumption and sanitation to be an entitled right, with an additional double down affirmation just as recent as last year. Yet, despite this repeated statement, this has not quieted the steadily increasing clamber for water to be added to the commodities market.

But, what does that mean?

Well, to put it simply, it means that water can be bought and sold. Locally, we see water as something provided through a utility or for some as a draw from underneath our properties. Utilities (non-profit entities) are regulated through oversite and water drawn from privately owned land are the responsibility of the landowner. This, essentially, means that water is currently not being bought and sold as a unit.

However, that could change, and rather quickly.

Doing just a cursory search of the web, I was able to find a large variety of sites encouraging adding water investments into portfolios. Talk about liquidity! Indeed there is a twisted logic in recommending this course of action, but only if you take this advice separate from the moral and ethical strings attached to being the gatekeeper of water access. Drinkable water is becoming more and more scarce and with that, the idea of adhering to the simple theory of supply and demand can be appealing. Simply put, with water becoming less available in the future, there is a lot of money to be made.

Tragedy of the Commons

One of the main selling points for those looking to commodify water is the idea that if there is no proper "value" placed on access to water, then no one will actually value their access to water. This is called the "Tragedy of the Commons." The idea goes something like this: Say there's a plot of land in a town set aside for everyone to use for free as they see fit. Each townsperson can use this plot of land as they need. Some use it for picnics. Some use it for growing flowers. Some us it for a giant game of tag. However, one townsperson uses it as a grazing area for their goats. The goats eat the grass, leave feces, trample the flowers, and generally leave the plot of land unusable. This townsperson was using it as he needed, but at the cost of the other townsfolk who are unable to use the plot of land, now.

Access to safe water is becoming more and more limited.

The theory is that if we place a value on a thing, people will treat it better. And, what better way to place a value on a thing, than actually placing a monetary value on this thing, right? This would lead to an "owner" who takes care of the thing. With an owner in charge of that plot of land from the example, they would have the oversight to say, "Hey, you can't bring those goats into this place. The giant game of tag will be ruined." So, this owner would then be incentivized to charge the townsfolk to help keep up the property, to make them value it, and moreover, value their access to it.

But, here's the conundrum. The "plot of land" in question is water, and once you have an "owner" of water access, the other townsfolk will have access limited simply because they may not be able to pay.

The concern about treating water as a commodity is that it will become subject to market prices. Higher demand will inevitably lead to higher prices. In conjunction with private companies at the helm of water infrastructure, only those who can afford it will have access. The commodification of water directly threatens the fundamental notion that water is a human right, to be available to all people regardless of their income or economic ability.

Where Morals and Economics Meet

Jim C. from HDT states it simply.

To place a price on water is to place a price on life. Valuing water, the basis of life, as a commodity goes against the "land community" ethic that all things are interrelated and connected. Water must be valued, but it must be valued at the most basic level. Water is much more than sustenance for is life itself.

Water is more than a means to keep hydrated, to grow crops, or to assist industry. Water is linked with everything in the planet. We are a species, nay, we are a world that is reliant totally on the availability of water. Jim continues:

"Water is Life" speaks powerfully about the value and need for water, for without it, all life dies. Recently, I heard it explained that soil microbes are a subaquatic species, logic being that the majority of soil microorganisms live in the thin film of water that encapsulates soil particles. Soil, for all its importance, fails to exist without water. Without water, soil lacks biology, and is just plain dirt. At this very basic level, Water IS life.

Water access and soil health go hand in hand.

Rather than public states adopting a more costly water conservation strategy or implementing efficient water technology, there are private entities that have suggested to take those natural resources and privatize it, much in the same manner as oil or metals. That's the hard topic, though, isn't it? When economics mixes in with natural rights, there's where the conflicts begin.

There is a clear line between access to water and public health. People are healthier when they get water to bathe, drink, and wash effluence away. Such benefits have typically required strong public systems to implement these services at a low cost, and for the most part (at least in first world countries) they are a shared burden (paid by the many users). However, with scarcity rearing its ugly head, these costs, these "shared burdens" may become too expensive without extensive government intervention. This raise in cost will lead to a draw of private organizations to take up the mantle of water distribution, and if it the method of water distribution is privately owned without that strong oversight...well, it's not hard to see where some less than honest people may take advantage of the increase in desperation.


A Bloomberg article states that despite all the hub bub over the adding of water to the commodities list, there is actually very little justifiable reason to do so. (It's basically because of transportation and weight issues.) So, there is a glimpse of hope that there isn't enough incentive to pursue that course of action. However, it may be a simple matter of time before the potential profits outweigh the costs and other deterrents.

We do not live in a bubble. Our economy, and our portfolios, do not exist in a vacuum. We can not, and definitely should not treat this upcoming water crisis without looking at the entire picture. Water access is becoming more and more limited, even after the tremendous efforts from non-profit and service organizations focused on minimizing the negative effects. (Just look at what Rotary International, Charity:Water, and Water for Good are doing. They're truly inspirational!)

But, we shouldn't rely on the generosity and goodwill of kind-hearted people and the groups they belong to. There must be government (read: non-privatized) oversight that guarantees the access to water for all people. We must put into place measures that will counteract the pure greed behind the idea that commodifying access to water is somehow not a despicable thing.


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