Water, Food, Air— Crises That Demand Investment

How concerted public policy and private sector support can offer solutions

Artificial Intelligence, Robotics, Space Exploration, Autonomous Driving, Quantum Computing — these are all areas that come to mind when you think of the advancements technology has made over the past few decades.

As of Nov 26, 2018, we’d landed a spacecraft on Mars, a scientific achievement of epic proportions. Healthcare with advancements like genome editing and RNA sequencing has introduced a new world of possibilities to modify fundamental characteristics of species of life.

Yet, I struggle to see how the biggest existential challenges facing earth are related to some of the very essentials of life — water, food, and air.

• Water Scarcity — 30% of the world’s population i.e. a whopping 2.36 bn people live in water scarcity.
• Food Security — According to the Food & Agriculture Organization of the United Nations (FAO), the number of undernourished people in the world has been on the rise since 2015, and is back to levels seen in 2010–2011.
• Air Pollution — Air pollution kills an estimated 7mn people worldwide every year. WHO data shows that 9 out of 10 people breathe air containing high levels of pollutants.

The reason for these obvious and imminent threats to life on earth not being tackled may not necessarily be a lack of technological advancement. The issue with most of the solutions lies in the scalability and cost-efficiency. However, like any other scientific breakthrough, constant and long-term investment and R&D are required to achieve cost-optimal results at scale.

Let us take a look at how we can tackle these issues, and what is required in terms of policy and investment support from the public and private sectors.

Water, Water Everywhere But Not a Drop to Drink

Earth is made up of about 75% water. Yet, we suffer from severe water shortage in many countries and the list of these countries is expected to get longer over the coming years.

The major reason for this is that out of that huge amount of water that comprises three-fourths of earth, about 97.5% is saltwater from oceans, and only 2.5% is fresh water, of which the majority is locked away as glaciers or groundwater.

The obvious solution then seems to be the ability to get fresh water from saltwater i.e. the process of desalination.

The current costs for water desalination make it cost-prohibitive to use desalinated water on a commercial scale, especially for industrial and agricultural uses, due to a combination of desalination and transportation costs. However, scalability and cost-efficiencies in any technology require significant investment. And that is where I believe enough hasn’t been done.

Global investment in energy supply over the past decade in the oil & gas sector has ranged at an average of around US$800 bn annually.

However, according to most estimates, the overall size of the Global Water Desalination market is only expected to be ~US$30 bn by 2025. With that minuscule scale, it is unlikely we will get close to solving a global water crisis.

A technical paper by the World Bank Group, dated March 2019, highlights and discusses the role of water desalination in an increasingly water-scarce world. While there are pros and cons to the approach, a concerted effort and investment may lead us to a lasting solution to a global crisis.

The majority of the costs associated with desalination come from energy costs — and as we switch towards more sustainable sources of energy (more on that later), the costs for desalination should substantially come down as well.

Food Security — A Penny Saved Is a Penny Earned

According to an FAO study, the global volume of food wastage is estimated at 1.6 billion tonnes of “primary product equivalents”. Total food wastage for the edible part of this amounts to 1.3 billion tonnes. This is roughly a third of all food that is produced globally.

This wastage in turn has a huge environmental cost, with a carbon footprint that is estimated at 3.3 billion tonnes of CO2 equivalent of GHG released into the atmosphere per year.

One in four people in the world is moderate to severely food insecure. Simple maths should tell you that if the ~30% food wastage is avoided or is managed to ensure it is channeled towards providing food security to the needy (25% of the population), we can surely achieve near-complete food security.

However, without proper accountability, food wastage will remain rampant. What is required here is stricter laws and legislation that penalizes food wastage both at an industrial and commercial level, as well as at the household level.

There is also commercial benefit in cutting food wastage. Some studies reveal that restaurants could make significant profits for cutting food wastage — the study observed an average benefit-cost ratio for food waste reduction at 7:1 over a three-year time frame.

An example of a company putting this into practice is IKEA. Since launching an effort to reduce food wastage at IKEA restaurants in 2017, over 2.3 million kilos of food has been saved, which is equivalent to more than 5 million standard meals.

With a combination of government policy and industry / private sector collaboration, significant steps can be taken to curb food wastage and enhance food security.

Air Pollution — A Symptom and Not the Disease

The majority of air pollution comes from energy use and production i.e. the burning of fossil fuels which releases chemicals and gases into the air, according to the National Resources Defense Council, a leading US environmental advocacy group.

The debate around carbon emissions and its impact on climate change in addition to the adverse health benefits of air pollution has been front and center over the past decade or so.

Currently, 92% of the world’s population is exposed to dangerously polluted air, according to the United Nations Environment Programme. The WHO estimates that 23 percent of all deaths worldwide — amounting to 12.6 million in 2012 — is due to environmental risks, and pollution is the largest environmental cause of disease and premature death in the world today.

The solutions to this global problem are widely understood, but not implemented nearly as well. Some of the basic steps that need to be taken must be implemented both at the government/industry level as well as at an individual household level.

• Shift towards alternate energy sources — According to the World Bank Energy Progress Report, only about 17.5% of energy consumption came from renewables in 2016, vs. 16.6% in 2010. That is hardly a significant shift over 6 years. A real shift in this distribution requires major policy shifts from governments and collaboration with the private sector to put in the required capital expenditure. Some of the biggest companies in the world like ExxonMobil, BP Plc, and others are oil producers. For these and other energy producers to have an economic incentive to make the shift towards sustainable sources of energy, longer-term policy support is key.
• Lifestyle changes at an individual or household level — The sharing economy by its very nature has a positive impact on the environment including air pollution. Sharing cars, use of public transport, shared workspaces, and various other measures reduce our resource dependence and in turn impact the overall carbon footprint. This can be further encouraged by taxation policies that promote resource-sharing behavior and reasonably penalize excessive resource usage such as multiple cars per household, excessive water consumption per capita, etc.

Some of these various issues are starting to see more focus as is apparent from the rise in Environmental, Social, and Governance (ESG) investing in recent years. However, there is still a long way to go in terms of achieving change and impact at scale before time runs out.