Corporate Feet

Next month in San Francisco, there will be a conference on corporate water footprints.

MS saw the propaganda and says that the conference topic

simply strikes me as silly given that appropriate water pricing solves problems and without appropriate water pricing this really doesn't seem very useful or effective.

Is there a legitimate role for this sort of thing that I'm not seeing, or is it mostly a distraction from the pricing issue?

I said this:

Price embeds costs, so properly-priced water would result in properly-priced products. That said, ALL companies are interested in this for greenwashing -- but perhaps NOT interested in higher water prices.

Let me elaborate...

With the exception of rain, water consumption involves a certain amount of energy. Since non-green energy results in carbon emissions, water consumption results in carbon emissions. So it's "bad" to waste water both because of the adverse effect on supplies (shortage!) but also because of the averse carbon emissions (global warming!).

If water were properly priced -- including scarcity and carbon costs -- then there would be no need for water audits, water footprints, etc. Businesses would be paying the "true" cost of their water consumption. End of problem.

So, why is this conference ignoring water prices? (The only mention in the program is "the need to do business at a reasonable price") Perhaps because it's cheaper to do water audits, pay consultants, etc. than it is to pay more for water. Coke, Pepsi, and Nestle are big sponsors sending speakers, and they are NOT interested in higher water prices!

Nestle, btw, sent me their "corporate citizenship report" [PDF]. In it, they discuss all their green activities and goals wrt bottled water and carbon footprints. Of course they could reduce their carbon footprint to ZERO by telling people to drink tap water, but that's not gonna happen.

Ironically, businesses that try to avoid "real" water prices may be shooting themselves in the feet. Here's my logic:

1. Water reliability is a top concern of companies.
2. They can pay for water, since water cost is a small portion of total costs.
3. Water is now too cheap, so demand outstrips supply.
4. When rationing results, it's far worse for business than paying more for water would have been.
5. If water were priced for 100% reliability (conservation pricing) and carbon impact (environmental pricing), businesses would still be able to afford it, and businesses wouldn't have to worry about rationing OR tracking their carbon footprints.

Bottom Line: Proper pricing always beats audits, reports, regulations and restrictions.