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The right to use water will soon follow in the footsteps of carbon emissions and become a commodity, like the right to pollute, that industry will have to pay for, executives have warned.
"In the not too distant future, we will see a price on water just like there is now for carbon and carbon emissions," said Ditlev Engel, chief executive of Vestas Wind Systems. "It will have to be factored in as a cost."
Engel is not alone in his prediction. Whether it is Arizona or Darfur, water rights have become an increasingly contentious issue - the United Nations has warned water will become the primary cause of conflict in Africa unless agreements are struck or a regulatory system is established.
As the world's population soars, economic growth and the resulting demand for energy have led to a growing consensus that the days of unfettered and unregulated extraction and usage rights will come to an end.
Neil Eckert, chief executive of Climate Exchange, the carbon trading system, believes a cap-and-trade system like the one Europe has established to regulate carbon emissions could be a solution.
"If there is not enough of something, you ration it. Once you ration it, you create a secondary market, and it starts to be traded," he said.
As head of the world's largest wind turbine manufacturer, Engel has an interest in water being assigned a price. Wind generation requires just 5 litres of water to generate 5MWs, the average amount of energy consumed by a household per year. Coal requires 10,000 litres, while nuclear needs 12,500, to produce the same amount of power.
Eckert said: "Right now you have companies buying and selling the right to emit a pollutant. With water, you can do the same."
- INDEPENDENT
