Bursting the water balloon

Water... It is sometimes referred to as ‘blue gold’. But do we really fully appreciate the value of water? The fact is that we all tend to take water for granted, but the reality is more concerning.  We talked about the water issue with Kristine Walraevens, Professor of Hydrogeology at Ghent University, and Alex Martens, sector analyst at KBC Asset Management.

Demand for water exceeds supply

Due to scarcity and overexploitation of ground and surface water, climate change and high population growth, water is a scarce resource. At the same time, water consumption is high worldwide and is increasing every year: agriculture accounts for 69% of consumption, industry for 19% and households for 12%. 

In Belgium, it rains a lot, so we tend to think that there is an abundance of water, but in fact we face the same problem. Within the OECD (Organisation for Economic Cooperation and Development), Flanders ranks fourth among the regions with the lowest water availability. 

Climate change is increasing the extremes of weather and long, dry periods will become more frequent in the future. This will necessitate irrigation of crops, leading to a large increase in water consumption. 

Water scarcity isn't just a problem in third-world countries; there is more water available in Ethiopia than there is in Belgium!

Kristine Walraevens - professor hydrogeologie aan UGent

Scientists have been sounding the alarm for some time

The Flemish government is aware of the problem. Research has shown that the groundwater levels in our aquifers are suffering from overexploitation. 

However, there are solutions available to ensure that the water supply remains in balance.

More sustainable groundwater management
is one possible solution.  An example is a project being carried out by the drinking water company Aquaduin in the Belgian town of Oostduinkerke. In this project, the natural groundwater supply is artificially supplemented by infiltrating wastewater into the dunes after treatment and pumping it back up to the surface for use as drinking water. This is a solution on two fronts, addressing both the problem of wastewater and the problem of water shortage.

Another important solution is using a groundwater model as a management tool. This allows groundwater levels to be predicted, pumping limits to be set so that the storage reserve remains intact, multiple scenarios for phasing out exploitation to be studied and artificial replenishment processes to be controlled. 

Action needed on all fronts

The water issue is something that we must tackle together if we are to achieve a sustainable solution. You and me. Companies. The government.

  • As a private individual, you can make a real difference with lots of small interventions .Small things like taking a shower instead of a bath, eating less meat, capturing and storing rainwater in a water butt or well and reusing that water; installing water-saving toilet cisterns, shower heads, etc..  
  • Every company today is looking for alternatives – and innovative solutions for water treatment, leak detection or water management, for example, are gaining ground. On the one hand, companies are doing this in response to public pressure, but on the other hand, they also have a financial interest in doing so. 
  • The government can play its part by raising awareness, through efficient water management, by issuing fewer permits where there is overexploitation, by adjusting itspricing policy or through levies and subsidies. Governments can also set a good example in their own tenders, for example by constructing unpaved car parks and permeable roads.  

Investment is badly needed

Clearly, therefore, there is very great need for investment in different areas such as leak detection, water infrastructure, treatment and reuse. 

We checked in with Alex Martens, sector analyst at KBC Asset Management, who told us the following:  

  • The demand for water is rising; 
  • The water industry is a strategic, highly regulated sector that is important for everyone; 
  • Companies that are active in the sector often have a strong market position and enjoy good pricing power. They generate a healthy cash flow and their long-term valuation is solid. These are also often risk-averse companies.

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This article is for informational purposes only and should not be considered investment advice.

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