Water ...This will be a big and growing market for a long time

Freshwater Becoming More Scarce
The United Nations estimates that by 2050 more than two billion people in 48 countries will lack sufficient water. Approximately 97 percent to 98 percent of the water on planet Earth is saltwater (the estimates vary slightly depending on the source). Much of the remaining freshwater is frozen in glaciers or the polar ice caps. Lakes, rivers and groundwater account for about 1 percent of the world's potentially usable freshwater.

If global warming continues to melt glaciers in the polar regions, as expected, the supply of freshwater may actually decrease. First, freshwater from the melting glaciers will mingle with saltwater in the oceans and become too salty to drink. Second, the increased ocean volume will cause sea levels to rise, contaminating freshwater sources along coastal regions with seawater.

Complicating matters even further is that 95 percent of the world's cities continue to dump raw sewage into rivers and other freshwater supplies, making them unsafe for human consumption.

The Need for Freshwater is Increasing Rapidly
Yet, while freshwater supplies are at best static, and at worst decreasing, the world's population is growing rapidly. The United Nations estimates that the world population—approximately 6.5 billion in 2006—will grow to 9.4 billion by 2050.

The cost of water is usually set by government agencies and local regulators. Water isn't traded on commodity exchanges, but many utilities stocks are publicly traded. Meanwhile, investments in companies that provide desalinization, and other processes and technologies that may increase the world's supply of freshwater, are growing rapidly.

Companies Investing in Water
General Electric Chairman Jeffrey Immelt said the scarcity of clean water around the world will more than double GE's revenue from water purification and treatment by 2010—to a total of $5 billion.

GE's strategy is for its water division to invest in desalinization and purification in countries that have a shortage of freshwater. Saudi Arabia is expected to invest more than $80 billion in desalinization plants and sewer facilities by 2025 to meet the needs of its growing population. And while China is home to 20 percent of the world's people, only 7 percent of the planet's freshwater supply is located there.

"This will be a big and growing market for a long time," Immelt said at the GE annual meeting in Philadelphia in April 2006.