Water…the habitat of the first known living organism and probably the most common landmark used by aliens navigating towards our planet…basic human right? Maybe or maybe we should start qualifying “human”…

Let me paint a picture of the next 30 years…

By 2025, an estimated 1.8 billion people will live in areas plagued by water scarcity and with about 1 billion more mouths to feed worldwide, global agriculture alone will require another 1 trillion cubic meters of water per year (equal to the annual flow of 20 Niles!) According to the U.S. Intelligence Community Assessment of Global Water Security, by 2030 humanity’s “annual global water requirements” will exceed “current sustainable water supplies” by 40% By the year 2040 there will not be enough water in the world to quench the thirst of the world population and keep the current energy and power solutions. By 2050, 1 in 5 developing countries will face severe water shortages (UN’s Food and Agriculture Organization) and two-third of the world will be in ‘desert-like’ conditions…

Cape Town ‘Day Zero’

Evidence of the impending water crisis is so overwhelming that one need not resort to crystal ball gazing to predict the consequences. The City of Cape Town introduced the idea of Day Zero to focus everyone’s attention on managing water consumption as tightly as possible by cajoling water consumers into reducing usage. Day Zero was when most of the city’s taps were to be switched off — literally. The consequences of reaching this point would have been far-reaching. For one, it would mean residents would have to stand in line to collect 25 litres of water per person per day. The water would be sourced from the remaining supplies left in dams. Day Zero wasn’t a fixed target and was based on the city’s water demand breaching a certain level. At first, the city moved it out from April 12 to July 9 as the residents collectively reduced their demand. Over the last 3 months, the city has halved its consumption of water and for now, managed to push out Day Zero indefinitely. Ironically, ever since the “white” cloud of Day Zero lifted from the city, residents have resorted back to their old ways.

But, Cape Town is just the first of the many cities that are slowly inching towards their own Day Zero, including (but not limited to) Beijing (China), Mexico City (Mexico), Sanaa (Yemen), Nairobi (Kenya), Istanbul (Turkey), Sao Paulo (Brazil), Karachi (Pakistan), Buenos Aires (Argentina), Kabul (Afghanistan) and Bangalore (India).

In Bangalore, home to more than 10 million people, the water crisis has already hit settlements outside the city centre. Residents already live without municipal water supplies and families — largely women — must piece together drinking, cooking and washing water through a mixture of limited tap supply, communally bought canned water, and “water ATMs.” According to some estimates, water spends now accounts for as much as 5–8% of household incomes for low-income families. What has hit home for them is that water, which was always a free and taken-for-granted commodity, was now a paid resource, forcing them to be more judicious about it.

There is no free lunch….but the water with that lunch is free

Arvind Kejriwal’s astounding rise to become Delhi Chief Minister and ruling dispensation in the national capital stunned many political pundits. His most popular poll pitches — cheaper electricity, graft-free governance, free WiFi and free water — managed to forge an instant emotional connect with the electorate. In January 2016, one year after the free water scheme was launched, the Delhi Jal Board (DJB) announced that it had earned Rs 178 crore more that financial year as compared to their earnings from the year before, despite providing 20,000 litres of water for free to Delhiites every month. The underlying implication of this outcome was that people wasted the entire 250,000 litres of free water and more in that one year! As Indians, we have a predisposition to not value something unless we pay for it. This was recognized by the Delhi High Court when it criticized the AAP government’s policy of free water for domestic usage, saying “nothing should be given free” except for where it is really needed.

Blue gold, literally

Hedge Funds have already started viewing the impending water shortage as an investment opportunity. The United Nations authored a report in 2015 suggesting that the world may only have 60% of its required water by 2030, absent major global policy changes. The bottom line is that water is a precious and increasingly scarce commodity, so hedge funds are adding it to their portfolio for long-term growth. San Diego-based Summit Global Management, a 12-year-old hedge fund established by John Dickerson, has about $500 million in assets under management and is one of many U.S. funds that specialize in investing almost solely in stocks of water companies, reservoirs, land sitting atop aquifers and pipelines. This niche corner of the investment world is already about $6 billion in assets. Water funds are poised to reap the rewards of the need to replace ageing and crumbling water and sewer systems. It is an inconvenient truth that the world’s heedlessness is an opportunity some stand to clearly benefit from.

How do we solve the problem, then?

I recently collected a group of friends and we visited more than 50 households to talk about the water issue. We first wanted to quantify the issue ‘How much (water) is your household wasting?’ A quick back-of-the-envelope gave startling results. A household could be wasting up to 25,000L of water every year!

At 6 liters a minute, a minute shower expends 30 liters of water. Compare this to a bath with one and a half 15 liter buckets would be 22.5 liters of water. This means a 4 member family can save up to 10,000 liters of water a year just by choosing to bathe with a bucket. Similarly, research shows that households spend 80 liters of water to wash dishes every day and waste 30 liters by keeping the tap running/at high pressure. This is an additional 10,000 liters potential savings Fixing a leaky faucet and full load (instead of half) washing machines can save another 5,000 liters

When we visited these houses, we were expecting scoffs and slammed doors, but were surprised by the willingness of people to listen to us (some even looked visibly moved). Our adventure led us to three glaring insights. First, household help are bigger culprits of water wastage. For instance, they wash dishes under high pressure to save time and wash clothes in the machine frequently to avoid a pile-up of work. Second, most people acknowledged the water issue but conceded that they find it difficult to change their ways. For instance, almost half the households said that they know showers waste water, but they love them too much. So, it’s not an awareness issue, it’s an implementation issue. Finally, young people were more concerned about the issue than old people (this could also be a sampling bias). But we felt like there is growing concern in the younger generation (just like us) on the kind of world we are building for our children…

Concluding thoughts..

One of two things can happen. If over the next few years, water conservation becomes a serious issue that everyone in the world tackles together, then a major disaster could be averted. If we continue to be negligent and disregard this as an issue that “others” or “world leaders” can solve, increasing number of cities will face their own day of reckoning in the form of a Day Zero crisis. At some point, water will become such a major source of conflict amongst nations (river rights, claims on Antarctica, territorial issues) that the world will break into a war. And given its necessity for sustenance, a ‘water war’, so to speak, is far more likely than one with religious intolerance or xenophobia at its epicentre. And this seems like a very real possibility in a world of ice bucket challenges and flood irrigation.