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Water policy

Fresh water is scarce. We often hear this remark from environmentalists. The ensuing social issue has been elevated to a moral issue: use less water or you are destroying the world. In fact, domestic use of water only accounts for a small proportion of fresh water use. Majority of fresh water is consumed by industries and agriculture. Water is a major issue for the business sector.

In the December 2009 issue of the Mckinsey Quarterly, there is an article on the next-generation water policy for businesses and government. It looks at the water scarcity problem from the business perspective. Part of the solution will come from new technologies for the better management of water as a resource. In order to harness the water issue within the business environment, some companies are trying to develop water standards acceptable to the society and that they can meet in their operations. While companies have to manage water efficiently, society needs an equitable, efficiency-stimulating, and predictable legal and regulatory environment that governs all water uses. Such framework will facilitate the development and implementation of technologies which can enable society to get more product and services per unit of water.

There are three broad categories of technologies being developed to this end:

Productivity-enhancing seeds and agricultural technologies
Agriculture accounts for more than 80 percent of water consumption in the developing world. Productivity gain of the last round of agricultural technologies has lost its momentum. Innovations on better water use by agriculture are now vital to future growth. New productivity-enhancing seeds and associated agricultural technologies are now required. The importance of genetically modified GM crops is illustrated by the contrasting performance of corn in Europe where GM crops are not allowed, and in Iowa where 90% of crops are GM species. In the last ten years, corn yields in Europe have stagnated, while in the United States productivity has grown at over 2 percent a year. Existing GM crops use substantially lower amounts of fertilizers, pesticides, and water. Some new-generation crops will be better able to thrive despite water stress.

Technologies for treating water and wastewater
The supply of fresh water can be enhanced with technologies on desalination and treating of wastewater. The process of desalination illustrates the importance in this area. It is possible to desalinate seawater by using only 25% of the energy currently required to do so through new technologies. If new developments in nanotechnology and membranes allow some of this potential to be realized, the cost of desalination will fall to a level where most cities and industries in coastal areas throughout the world can turn to it as the new source of choice. These technologies can similarly be applied to the treatment of wastewater for the purpose of recycling it.

Just-in-time and just-what’s-needed information
Some companies are developing the capability of providing users with just-in-time information on the probability of rainfall, soil moisture, water, and fertilizer requirements. This is essential for energy consumption, domestic use of water, and for agriculture. Precision agriculture can produce much more crop per drop than traditional methods can. Industries and cities can use much less water by accurately monitoring their water use.

A growing number of companies have engaged with policy makers to ensure that key policies, including tradeable water rights, intellectual-property rights, and efficiency-enhancing regulation, are implemented. The key to facilitate a better use of water is a legal and business policy environment that stimulates the development of the next generation of water efficiency technologies.