What are the Economic Benefits of Investing in Water?

hands holding water
Posted by: Dana Colson Category: Corporate Sustainability, Environment

What are the Economic Benefits of Investing in Water?

Water is essential to life on Earth. It has been estimated that each person on Earth needs at least 2 liters (roughly 8 cups) per day. It is also estimated that each person needs at least 1,000 liters of water per day to live. That is why investing in water can significantly impact an economy. Investing in water could be a great way to revitalize an area’s economy.

Furthermore, investing in water is an excellent way to build infrastructure and keep it running. The current economic impact of water depends largely on whether a city or country has access to clean water. Access to clean drinking water can be obtained for only around USD 9 per person annually in developing countries. Still, in developed countries such as the United States, that number is USD 25 per person.

Therefore, building public works projects or public utilities can help municipalities pay for themselves without raising taxes. Unfortunately, many countries face droughts, which can lead to a lack of water. This unfortunate reality can prevent industries and companies from growing without sufficient water.

For example, the drought issue in California has resulted in thousands of job losses due to farm closures. As it currently stands, an immense economic impact of water is on energy production and transportation since both require large amounts of clean water for operation. Therefore here are the economic benefits of investing in water:

1. Water-Utilizing Industries

Water-utilizing industries such as energy production, farming, and transportation require water for their daily operations. Energy production and transportation are very specific to each industry.

For example, an oil field requires large amounts of water to allow oil extraction, whereas farmers need water to irrigate crops. Therefore, each industry needs enough water to meet its respective needs. Therefore, investing in water can benefit the economy by helping industries and businesses free up additional funds for other projects.

2. Infrastructure Development

Placing a high value on infrastructure development is one of the most important steps for both companies and governments in order to improve an area’s economy. Investing in infrastructure can help develop a city’s or country’s economy because it improves transportation and keeps it running.

This infrastructure investment can also be an impetus for growth, which is the final goal of all investors. Most of the city’s water infrastructure is owned by the public, but a few high-profile exceptions exist.

3. Reduction in Water Bills

Investing in water can also benefit a city or country because it can help bolster the economy by reducing water bills. After all, many cities and countries have to pay for their water regardless of whether there is access to clean drinking water.

Therefore, investing in clean drinking water can keep expenses down while also positively impacting the local and national economy. Water treatment facilities are one of the most costly aspects of operating a certain utility type. Thus, the investment of private companies in water treatment facilities could be an essential catalyst for job growth.

4. Water Conservation

Investing in water can have environmental benefits by helping power plants and factories conserve some water usage. This is a win-win situation because it helps the industry save on operating expenses while also helping the environment by reducing pollution and runoff.

It is possible to invest in water without actually investing in new technology; simple cost analysis of one’s current water sources would suffice. Moreover, investing in water is not a very costly venture on the company or investor’s part.

5. Increase in Jobs

Investing in water can also benefit a city or country because it can help bolster the economy by increasing jobs. Many cities and countries, particularly developing countries, face high unemployment rates and are apprehensive of rising jobless rates.

Therefore, investing in clean drinking water can free up revenue for job creation. Furthermore, the creation of a new job can help boost the local economy. The creation of a new job is an important facet of the U.S. economy because it helps boost consumer spending and provide more jobs to Americans

6. Tax Revenue Increase

Investing in water can also benefit a city or country because it can help bolster the economy by increasing tax revenue and helping cover operating expenses. The European Union has a history of investing in water because it is cost-effective to improve their economies.

Moreover, investing in new infrastructure increases the ability of a utility to raise revenue because it has better access to customers and more ways to sell its services. Therefore, investing in water helps impart a powerful economic effect on a city or country.

Conclusion

Determining how beneficial the water crisis is to one’s city or country can be difficult because of many variables that contribute to an area’s economy.

This has, however, led many cities and countries to invest in water for economic reasons. Investing in water can help bolster a city or country’s economy by freeing up funds for other investment opportunities, reducing operating expenses, and increasing jobs.

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