Andrew Winston, in a blog for the Harvard Business Review has asked a stunning and vital question: Is water the next carbon? Of course, the tongue-in-cheek irony is the suggestion that these are trends like any other, when they are in fact issues that determine how we interact with the underlying value structure of the global environment. The carbon footprint concept allows for assessment of whether we are over-using energy; the water footprint concept may help to show whether we are depleting the most vital natural resource for life, other than air.

Three decades ago, R. Buckminster Fuller suggested, in the introduction to his book Critical Path, “a world-around uniform costing and pricing system for all goods and services based realistically on the time-energy metabolic accounting system of Universe”. He further projected that this “common energy-value system” would make it possible to value all human activity “in kilowatt-hours, watt-hours and watt-seconds of work”.

Instead of measuring value by dollars and cents or pounds sterling or pesos, he suggested, a time-energy metabolic accounting system would allow for accurately “costing the production of the complex of metabolic involvements per each function or item”. What exactly was fuller getting at? Fuller was describing one of the basic problems of conventional economics: following the flow of money from place to place and from moment to moment, economics has long studied artificial valuations, ignoring the possibility of actually assessing the value of natural resources and ecosystem services.

He cites, for example, the work of oil geologist, François de Chardenèdes, who examined the geological processes that result in the compression of biomass into petroleum, over millions of years, and found that recreating the bio-intensity, the breakdown, the sedimentary processes, the intense pressures, and the time-scales, would cost well over $1 million per gallon of petroleum. So nature spends $1 million to produce what we burn for a few hundred pennies.

To get back to the carbon question, just one gallon of gasoline, of the variety commonly in use in the United States, produces fully 19.4 pounds of carbon-dioxide emissions. The impact of each gallon of gasoline on the wider environment might be better understood, if we considered the actual natural value of the substance we are burning, its metabolic interconnectedness to other substances and facets of the environment.

Now, is water the next carbon, the thing we need to learn to monitor and not to over-exploit? Water scarcity is rapidly becoming the environmental hallmark of the 21st century, with major rivers running dry for part of the year —rivers like the Nile and the Colorado— and clean drinking water for human consumption being depleted by industrial and agricultural uses, so that its availability per capita is actually falling around the world.

The Carbon Disclosure Project, rated by Harvard Business Review “the most powerful green NGO you’ve never heard of“, has actually now initiated its first Water Disclosure report, and the findings are instructive, to say the least. The report finds water constraints are now a major concern in corporate boardrooms across the planet.

Among the findings:

Water has climbed high on the corporate agenda. 67% of responding companies report that responsibility for water-related issues lies at the Board or Executive Committee level, while 89% have developed specific water policies, strategies, and plans. Encouragingly, 60% have set water- related performance targets.

67% of responding companies report that responsibility for water-related issues lies at the Board or Executive Committee level, while 89% have developed specific water policies, strategies, and plans. Encouragingly, 60% have set water- related performance targets. Water is a current, not a future, corporate issue. The immediacy of water as a corporate issue was highlighted by the timescales associated with water-related risks, with more than half of the risks identified across all categories (physical, regulatory and ‘other’) being classified as either current or near-term (1-5 years), and 39% of companies already having experienced detrimental impacts. These impacts fall into the broad categories of disruption to operations from drought or flooding (in one case resulting in $100 million in remediation costs), declining water quality necessitating costly on-site pre-treatment, increases in water prices, and fines and litigation relating to pollution incidents.

The immediacy of water as a corporate issue was highlighted by the timescales associated with water-related risks, with more than half of the risks identified across all categories (physical, regulatory and ‘other’) being classified as either current or near-term (1-5 years), and 39% of companies already having experienced detrimental impacts. These impacts fall into the broad categories of disruption to operations from drought or flooding (in one case resulting in $100 million in remediation costs), declining water quality necessitating costly on-site pre-treatment, increases in water prices, and fines and litigation relating to pollution incidents. The major floods in China and Pakistan have together resulted in almost $100 billion in damage to date.

E nvironmental fallout is putting pressure on business through water system health and security. Shares in the Zijin Mining Group were suspended from trading on the Hong Kong stock exchange on October 4th 2010 in advance of disclosure of the penalties and clean-up costs associated with the 2.4 million gallon acid spill into the Ting river in July 2010. The Ajka aluminium waste spill in Hungary has now reached the Danube, having extinguished all life from the Marcal river.

E Shares in the Zijin Mining Group were suspended from trading on the Hong Kong stock exchange on October 4th 2010 in advance of disclosure of the penalties and clean-up costs associated with the 2.4 million gallon acid spill into the Ting river in July 2010. The Ajka aluminium waste spill in Hungary has now reached the Danube, having extinguished all life from the Marcal river. Climate destabilization, drought are depleting needed water resources. Widespread drought conditions in China, Argentina, Russia and New Zealand have hurt profits in the agricultural and hydroelectric sectors. The business impacts of water issues are becoming increasingly evident.

The CDP Water Disclosure report is available in full, for download in pdf form. It may prove to be a breakthrough in the process of building a new global economic survey, that looks not only at currency and artificial wealth valuations, but more precisely at natural time-energy flows, and the availability of underlying resources, like water, air, land, energy, and yes, even time.

Mr. Winston adds that CDP WD is not the only such report to be released recently. He names the following as well:

The lessons to be learned from these reports and from similar/complementary research are that as demand for fresh water is on the rise, the quality of available supplies is deteriorating; the destabilization of global climate patterns is seriously disrupting natural water replenishment services; the monetary valuation of water is wildly off-base, and further complicated by the basic human right to life-sustaining clean water; the industrial economy (including agriculture) has been designed around a misuse of water resources.

Even as efforts to put a price on carbon dioxide emissions continue to heat up, over the coming years, the decade of 2010-2020 will be crucial for the future fortunes of much of the world’s human population, according to how we choose to manage and protect global fresh water resources. If overconsumption continues to be the norm, the economic, political and biological impacts may be unrecoverably devastating in many parts of the world.