If water is priced wrongly, it will be valued wrongly. Widespread droughts are energising that proposition. Water is a new front in ESG investment, even as a battle rages over carbon. The Valuing Water Finance Initiative, an investor grouping, plans to scrutinise water-glugging corporates such as Nestlé, Chiquita and Levi Strauss.
Moves may follow to allocate water better via trading schemes. But these will fail if they ignore elementary differences between carbon dioxide and H2O. The gas adds to a global excess. The liquid is prone to local shortages, however widespread.
Property rights, essential for competitive markets, are often non-existent for water. There may be moral objections to assigning them. Pricing policies must recognise access is a human right. Shanty towns should not lose out to golf courses.