Alpheus Water Research

"H2O Will Trump C02 in the Coming Decades ESG," F. Rowe Michels, CFA

Water sector investments are inherently ESG-oriented (i.e., incorporating environmental, social and governance analysis) because water is critical to life yet increasingly scarce and polluted. With the recent ratification of COP21 on global air quality, ESG-aware investors will likely shift their prior focus to water’s mushrooming challenges. This is not just because U.S. President Donald Trump is skeptical on global warming (i.e., air quality), or that he calls for massive increases in infrastructure spending (which likely includes water infrastructure). Rather, water is a next step, with as much as $2.3 trillion ($1 trillion in the U.S. alone) in deferred investments,1 leading to a “perfect storm” of rising water shortages, dilapidated infrastructure and pollution.

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"Depleting Aquifers," F. Rowe Michels, CFA

The world’s depleting underground aquifers are the most unmistakable leading indicator of a global water crisis. As the ultimate renewable resource, rainfall replenishes fresh water in rivers and lakes. However, as above-ground water supplies diminish, civilizations have drilled deeper and deeper into the huge underground lakes that were formed over thousands, if not millions, of years. These aquifers are being drawn down at an accelerating rate, implying that humanity is “borrowing” the world’s most critical resource from future supply.

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"Virtual Water—Real Price Upside for Benefitted Land," F. Rowe Michels, CFA

With a given amount of land and sun, agribusiness sustainability will be increasingly driven by access to water. Most of the world’s largest agricultural zones rely on rapidly depleting supplies of artificially cheap water. The water is underpriced because it only reflects the cost of pumping from the depleting aquifers and/or the transportation cost of aqueducts and pipes. As artificially inexpensive supplies are depleted, many of the world’s most valuable agricultural zones will lose their value. By contrast, other current and undeveloped agricultural lands that have replenishing water supplies will increase in value.

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"Water Quality...Don't Count on It," (various sources)

With the Paris COP21 on climate change ratified, the world’s prior focus on air quality will likely shift to water. It should. In the prior 15 years, air quality concerns (i.e., especially CO2 and global warming) have been addressed by higher energy prices and subsidies that have financed game-changing innovation in solar, wind, storage, and biofuels. However, the “perfect storm” of troublesome water-related data is accelerating and will need to be addressed by a similar level of increased financing and innovation.

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World Water Quality Facts


World water quality facts and statistics including:

  • Global Water Pollution
  • Human Waste
  • Human Health Impacts
  • Ecosystem Impacts
  • Drinking Water Quality
  • Costs and Benefits of Water Quality
  • Pollution from Industry and Mining
  • Pollution from Agriculture, Groundwater Impacts, and How Infrastructure Affects Water Quality.

Source: The Pacific Institute

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