Everywhere we look, one of our most vital resources is allowed to go to waste – and governments’ misguided environmental policies are not helping. By Peter Brabeck-Letmathe.

For the first time in a number of decades, the world is faced with a scenario of rapidly rising energy and food costs combined with an increasing scarcity of water resources.

In responding to this new situation, governments, industry, business leaders, NGOs and policymaking organisations need to act to create new strategies and innovative remedies.

Because it is considered common property, water is presently vastly underpriced. Large subsidies disguise the true cost of the infrastructure and investments required to find, purify, clean, stock and distribute water to farmers, industry and directly into our homes.

Water is necessary to sustain life, but should the water we drink each day and use for our personal hygiene and food preparation cost the same as the water we use to fill our private swimming pools or wash our cars? Should this form of water usage be subsidised? I think not. Indeed, I believe that, just as we pay varying rates for electricity, by day, or by night, we should pay different rates for water according to a hierarchy of personal needs and necessities.

An average household in a developed economy uses 200 litres per day. Industry uses 400 litres per day on a per capita basis. And each of us eats through 3000 litres per day of water, used by farmers to produce the food we consume. I often wonder how much of this is wasted, and where?

I have driven through the countryside of water-scarce regions and have seen water evaporating in the heat, or running away from the land in an inefficient manner. This is because many farmers do not invest in protective infrastructures to minimise water wastage.

Use and misuse

Because water for agriculture is cheap and undervalued, it is misused. Due to government subsidies, ­present-day agriculture has no incentive to manage water resources efficiently, and without a system of financial incentive to encourage efficient water use, this situation will not change.

Let’s now bring energy into the equation. The market dynamics of energy production, pricing, distribution and consumption, are quite different to water.

Much is already being done to use energy more efficiently. With increasing oil prices, we can be sure that efforts to save oil will be intensified – on a broad and sustained basis, even if the current excessive oil prices fall again slightly in the foreseeable future. It is beyond debate that we have to look for alternatives to fossil fuels, and not only because of greenhouse gases.

Despite greater efforts to use energy more efficiently, though, it is unlikely that our dependence on fossil fuels will decrease much in the short to medium term. We need a lot of energy to produce water, to extract it, to create the pipes that transport it, to tear up the roads to lay those pipes, or to build and operate desalination plants in countries dependent on sea water. We also need substantial energy to produce food – in agriculture, in industry and for food distribution and preparation.

To encourage sustainable energy production, many governments now promote the use of biofuels through subsidies and compulsory fuel blending. These policies significantly contribute to reinforce both water and food scarcity. By introducing an additional competitor for already scare resources, I believe such governments were misguided and badly advised.

It takes up to 4000 litres of water to produce one litre of bioethanol, and up to 9000 litres for a litre of biodiesel. The production of biofuels has stimulated a vast, and destructive, reorientation of the world’s agriculture markets. Where there is already a scarcity of water and food, the highly controversial biofuels are adding to the problem because of the extra demand for water to cultivate food crops to turn into fuel for our cars, instead of to feed us.

Rethink priorities

Put simply, in a world of increasing scarcity people need additional food, not new biofuels, and in this context I have gone as far as to describe government subsidies for biofuel production as ethically indefensible. Commodity price increases are a clear warning from the market that we need to rethink our priorities in this respect.

At Nestlé year after year we reduce our water consumption while significantly increasing our food and beverage production, and we are certainly not alone among food manufacturers in making and sustaining such efforts. However, all efforts by companies and consumers will be in vain if governments continue to contribute to the problems instead of solving them.

For me, the remedies are clear: first, farmland and ever scarcer water must be used for the cultivation of food, and not to grow raw materials for fuels. Second, governments must work with utility companies and other actors to encourage appropriate pricing systems to protect this scare resource. And third, the search for truly sustainable energy sources, including solar and wind, biogenic and improved use of hydroelectric power should accompany less heated and more rational debate, analysis and planning of our present fossil fuel usage and consumption.

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