Water started to trade in Wall Street and has become the investment that you have been waiting for.
Water is the gold of the XXI century. It may be hard to picture considering that it covers 70% of the planet and that we have access to it everyday, but that could stop being a reality soon.
Water use has been growing globally at more than twice the rate of population increase in the last century, and in a context where the world population will explode from 7 to 10 billion by 2050, people that will eat, drink, need clothes, medicines, and batteries for the phones, we can only expect that proportion will increase too.
And the reason behind that is not people’s consumption, as one may think. Agriculture accounts for 71% of all water use in the world, and industry another 16%. That makes it a total of 86%. And that wouldn’t be a problem if it weren’t because its usage turns out in waste water.
Nowadays, it takes about 70 gallons of water to produce 50 cents worth of milk, 2,906 gallons for a pair of jeans, 1,857 gallons for a steak, 31 gallons for a pound of steel and 104.000 gallons for a car… And as a consequence, two million tons of waste water flows into the world’s waters every day.
So water goes from being an abundant resource, to a scarce one. That’s how investing in waste water treatment becomes the best long-term investment you have been dreaming of.
According to Fortune, in 2010 the water-related markets generated revenues for USD 508 billion: the bottled water market generated USD 58 billion, the industry needed USD 28 billion for water equipment and services to all kinds of businesses, another USD 10 billion covered agricultural irrigation, USD 15 billion retail products like filters and various heating and cooling systems, $170 billion was used for waste water, sewage systems, waste-water treatment and water recycling systems and $226 billion for water utilities, treatment plants and distribution systems.
And ever since then, governments in Latin America have also acknowledged the importance of taking care of the resource and rewarded the industries that take care of their waste water, like Chile. Chile is the first country to incentive water recycling business. Companies that adhere to its Clean Production Agreement (APL) "Blue Certificate", may deduct as an expense for tax purposes the disbursements in which they owe incur for the implementation of actions aimed at the sustainable management of water resources. And just like Chile, Ecuador and Brazil are also offering incentives to industries that take care of the environment or develop infrastructure to that aim, and many more are expected to follow.
In the same spirit, last December, water started trading on the Wall Street futures market like oil or wheat, based on the Nasdaq Veles California Water index (NQH2O).
So governments, industries, farmers and even Wall Street already believe water is going to be the most valuable resource in the world in the near future; making it the long-term investment of the year. Are you up to the challenge?