For a planet that’s 71% covered in water, the gap between clean, accessible freshwater (less than 1%) and all the other types, however, is stark. Agriculture and food take up 69% of the world’s water resources. And this is set to only grow, both as a response to population growth, as the world hits 9.7 billion in 2050[2], and the increased wealth of that population, whose rise out of poverty leads to a demand for more ‘luxury’ foods, such as meat.
This continually increasing need will draw on aquifers that have been in decline since 2003, especially in areas of the world where water scarcity is already an issue. NASA has discovered that 21 of 37 of the world’s aquifers are currently being depleted[3]. Other freshwater sources, although not being drained are rapidly becoming polluted beyond repair. The Chinese government, for instance, admits that roughly 80% of the country’s surface groundwater is not fit for drinking, 90% of groundwater in urban areas is contaminated, and that 40% of its rivers are too polluted to use for either agricultural or industrial use. Jacques Cousteau long ago pointed out that, “water and air, the two essential fluids on which all life depends, have become global garbage cans.”
A significant issue in the Western world comes in the form of an ageing infrastructure that is prone to springing leaks. In the US, 13.7% of daily household water usage is lost through leaks[4], while almost a quarter of the UK’s public supply goes the same way.
By 2025, it is estimated that 66% of the world will live in water-stressed areas according to the World Resources Institute. We’re not just talking the usual headliners of California, North India (whose groundwater loss can be seen from space) or the Arabian Peninsula either, but a worldwide mismatch that will see a 40% gap between demand and supply emerge over the next 15 years[5]. Far from a modern phenomenon, even Dwight D. Eisenhower identified the importance of water, remarking “Among these treasures of our land is water, fast becoming our most valuable, most prized, most critical resource.” So where do the opportunities and solutions lie?
The first has to be supply – if there isn’t enough water on the planet to go around, how do we create more? Exploration will help uncover new aquifers and sources of water; efficient waste water treatment will help to recycle much of what we already use. The smart capital in the Middle East is chasing new purification technologies, such as graphene-desalination, a process that turns deserts into irrigated farmland.
So, what exactly is Michael Burry investing in? He prefers water-rich farmland away from large governmental and infrastructural limitations. Burry has said in interview:
“What became clear to me is that food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas. This is the method for redistributing water that is least contentious, and ultimately it can be profitable, which will ensure that this redistribution is sustainable”[6].
Take the humble almond, for instance. Burry’s investing in a nut that uses five litres of water per seed, and whose popularity keeps rising. In California, where 80% of the world’s almonds are grown, they use 10% of the available agricultural water. So growing almonds outside of drought-affected areas and shipping them back in makes logical and financial sense
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