A Perfect Storm for Water

‘Growing world population will cause a “perfect storm” of food, energy and water shortages by 2030’. That is what a UK Government chief scientist told attendees at the Sustainable Development conference in London yesterday. Prof. Beddington told the group that demand for food and energy will jump 50% by 2030 and for fresh water by 30%, as the population tops 8.3 billion.

Despite this, investment in water deals represented just 1.8% of the total investment in the Clean Technology area in 2008. There are number of reasons for this and also signs that this is changing.

The Venture Capital Community has been slow to invest in the water sector. Last year out of a total investment of $8.4 billion into clean technology ventures, just $148million (1.8%) is reported by the Cleantech Group by having been made into water. Why?

Some companies are not convinced that there is enough activity in the sector. Others feel it is a conservative market. However DFJ just made their first investment in water by investing $10M into Oasys Water, a US company with a forward osmosis technology.

The Artemis Project is running a ‘Water Top 50’ to identify companies with game changing strategies in the water sector and to demonstrate to the VC community that there are quality opportunities in this space. Global Water Intelligence has number of potentially disruptive technologies as entrants in their ‘Water Idol’ competition and overall several Water Indices, while showing losses, are still outperforming major stock indices.

One of the problems with water is that we only use it once. Of the wastewater which is collected globally, 38% is actually treated and only 5% of that is actually re-used. Michael Braungart, the author of ‘Cradle to Cradle – remaking the way we make things’, is addressing this issue at the Water Meets Money Conference in Zurich with a talk entitled ‘The End of Wastewater’.

So yes, it may be a perfect storm in terms of water shortages, but it may also be a perfect storm which will see innovation, the end of wastewater and new ways of using and managing this resource.

This post is submitted by Paul O’Callaghan founding CEO of O2 Environmental .