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Exclusive interview with Valérie Issumo, founder, Prana Sustainable Water, Switzerland.  She will address the Water track at African Utility Week on:  “Ethical water exchange – the monetary value of recycled wastewater”.

Valerie Issumo

You have created an Ethical Water Exchange which is a trading platform to buy or sell commoditised treated wastewater.  Kindly can you give us some background and facts and figures on the current situation in untreated wastewater in Africa?

The three most critical global challenges to be solved urgently are:

  • Water pollution endangering our health, planet and growth: how to cope technically with complex chemical wastes (nano pollutants, radioactive)
  • Water infrastructures finance
  • River basin management prioritising human rights (2,500 liters/capita/day including water footprint for 2’000 calories/day) and ecosystems services without jeopardising current small sources of revenues

Africa has unfortunately the biggest share in the lack of access to water and sanitation and the official numbers are not reflecting the reality if we add the volumes of untreated wastewater due to bad working status. These problems of lack of access to sanitation and untreated wastewater endangering our health, our environment and our economy could be solved by matching part of the water footprints of commodities with the supplies of treated wastewater for part of the water input of those commodities. Productions of future crops or extractions can happen and be financed thanks to the matching of purchases & sales commitments via futures contracts which are traded on commodities exchanges or futures markets.

Commodities like gold, coffee, soya, copper, nickel…. traded on futures markets sometimes up to five years before their production is a good opportunity to correlate the commitments for those commodities with the water procurement security for those commodities and/or to internalise the externalities for those commodities to link the credit lines for those commodities with decentralised wastewater infrastructure.

Collection and treating in priority floods, domestic and organic wastewater means that related wastewater becomes a valuable resource when treated and consequently leads to the development of sanitation. For example, approximately 1,500 liters of water must be used to get one kg of refined cane sugar. If supplementary irrigation is necessary like in Swaziland or in Australia, part of the water footprint can come DIRECTLY from treated wastewater from the communities or activities near the sugarcane fields.

Water depletion or water resources contamination is not yet considered in GDP evaluation (or not sufficiently). There is not a single product or service that hasn’t got water as an input or which has a water footprint so the water interdependencies cover production, health, social, environmental and economic fields.

Water contamination does not recognise any borders, neither does international trade.  This makes the challenges global. Nevertheless water problems or opportunities must be tackled locally.  

The Ethical Water Exchange is the platform to transform wastewater into a clean tradable resource: treated wastewater. This will help to link and correlate partial water footprints of some commodities traded on futures markets with potential supplies of standard treated wastewater.

To match sanitation with the visibility of committed offers and demands of some commodities with huge water footprints and sometimes traded four to five years before their production is a way to leapfrog the urgent and massive need to limit the negative consequences of untreated wastewater.

What would the Ethical Water Exchange mean for the African market, for example the cotton industry?
Cotton water footprint is approximately 10’000 liters/kg of cotton a cotton t-shirt has an average water footprint of 2’700 liters of water. Now guess what happens if noxious wastewater reaches the cotton cultures? Yields and pollination drop, cotton growers must use more fertilizers and − as you can see on this graph − cotton prices become very volatile.
 
A trend that must come from renewable energy is that it provides a good opportunity for positive energy wastewater facilities that produce more energy than they consume.
A wastewater treatment line that links systems based e.g. on activated sludge with increased biogas production via anaerobic digestion.

On a global level if only 10% of the cotton water footprint for the yearly cotton production of 25 million tonnes comes from treated wastewater, access to sanitation for about 3’424’657 persons (generating 20l wastewater/capita/day) can be provided.

How big a threat is this to the economies on the continent?  How are the different sectors affected by each other?
Many serious reports and analysis state that by 2030, projected global water demand could exceed 40% of the current water supply.  (http://www.grida.no/graphicslib/detail/water-availability-in-africa_3368)

The goal is to trade ONLY treated wastewater. Wastewater that otherwise would be dumped as toxic waste with huge negative impacts on people and environment.

On a practical level, how do you see it operating?
We are awaiting the ISO standards for treated wastewater reuse for irrigation (http://www.iso.org/iso/iso_technical_committee?commid=616869) to complete the specifications of the futures contracts for ethical treated wastewater.
 
A trader can cover the market and sourcing risks for future cotton crops via partial water procurement security by buying futures contracts of treated wastewater.
2A. A water management company using clean technologies generating sludge energy will get a solvent water market by selling futures contracts of treated wastewater. Collection, treatment and supplies must be smart metered.
2B. The combinations of offers/demands for commoditised treated wastewater at listed places allow the financing of decentralised sanitation and COMPETITIVE supplies of treated wastewater for cotton productions. The money goes directly for the right purpose.
3. The ethical or philanthropic part goes for treated waste water into reservoirs to be used in priority for insurance or basic human needs or climate changes needs. The transparent pricing of futures contracts for treated wastewater is calculated according to local constraints such as the treated wastewater that needs to go back to nature.

To rapidly execute the Ethical Water Exchange solution, we don’t need thousands of actors.

Traders and financial institutions active on these futures markets can be the responsible catalysts for the urgent water governance.
A trader prefers to see, for example, Africa as a market of a billion consumers rather than a place with a billion survivors. This trader will also be able reduce the risks of defaults for its sourcing.

Any financial institution can condition its credit lines to the use of futures contracts of treated wastewater to reduce the water risk exposures and to get its loans paid back.

Investors will choose to finance water footprints where it makes sense and where there is untreated wastewater. This is for the good sake of efficient water use and consequently reduces the production costs.

If we do the same for other commodities traded on futures markets such as gold, wheat or soybean… the Ethical Water Exchange can rapidly solve the vital and economic problems of water contamination or fresh water overuse.

Increased sanitation will accelerate the eradication of the foremost cause of deaths and loss of human energy and consequently help poverty alleviation.

If you fear bad speculation for this new commodity, please note prices will be fixed according to the global offer/demands and final uses with progressive prices according to basic human needs like food security. For example, we all need approximately 2’000 calories a day. It is assumed that to produce one calorie of food, about one liter water is needed but it would be wrong to give priority to rice if there is for example demand for treated wastewater for copper in the same region because the copper might be used e.g. for tractors for agriculture or for houses which are also basic human needs. If the copper industry has proved that it uses water more efficiently than the rice grower according to the water footprint methodologies; it is not difficult to prioritise treated wastewater for the more efficient water user (+ of course for non-criminal or drugs purposes).

The Ethical Water Exchange is our life, DIGNITY and business INSURANCE.

What will be your message at African Utility Week in May?
Health is wealth.
We also must think of the water infrastructure in terms of service hierarchy:

  • safety
  • availability
  • affordability

Africa can avoid the mistakes of old industrialised countries that have led to the financial and environmental crisis. The conditions are to better value the African resources and not to bargain away the related social and environmental costs.

Anything you would like to add?
African leaders should not be shy to follow the European model mainly based on state interventions.