By Sara Jerome,
A water scarcity "perfect storm" is approaching, and that makes it a good time to invest in water reuse technologies, analysts at Bank of America Merrill Lynch Global Research said in a new report.
"For investors, increased demand for water could generate potent investment opportunities. Water-related industries already represent a roughly $500 billion market," the report said, citing Sarbjit Nahal, an equity strategist at BofA Merrill Lynch Global Research.
“We think it will double to $1 trillion by 2020,” he said.
In particular, the report predicted expansion in the market for technologies that "make it more efficient and less costly to treat and reuse water, both in the residential and industrial sectors."
How bad is the outlook for water scarcity? "If current trends continue, water demand will exceed water supply by 40 percent within the next 20 years, by some estimates. And without efficiency gains, a diminished freshwater supply could cut the forecast for 2050 global GDP almost in half," the report said.
About 768 million people around the world lack access to clean drinking water, and 2.5 billion lack proper sanitation, the report said, according to CBS News.
Shifting food habits are partially to blame for the crisis, according to the research report. "One major source of stress on resources involves changing diets: The higher the household income, the more often people eat meat—and that requires more water," the researchers said.
For instance, beef is particularly water-intensive, Nahal said. “It takes 15,500 liters of water to produce a kilogram of beef. It takes 1,500 liters to produce a kilogram of grain,” he said in the research report. “This puts increasing pressure on global food security and water security.”
Water scarcity is a looming threat for many industries. "The World Economic Forum recently listed water scarcity as one of the three global systemic risks of highest concern, an assessment based on a broad global survey on risk perception among representatives from business, academia, civil society, governments and international organizations," Scientific American recently reported.
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