The collapse of the old economic order

Leslie Carlson

Coca_colaI was puzzled when I read the news story about the CEO of Coca-Cola (and five other CEOs) had signed something called the CEO Water Mandate. Why would the CEO of Coca-Cola care about water in developing countries? And then it hit me: no clean water, no Coca-Cola. In fact, the entire future of the Coca-Cola company rests on the planet's supply of fresh, clean water.

So it is with many--if not all--of the products that we consume and use. Our PCs run on silicon chips, and the production of silicon is also heavily dependent on a supply of freshwater. Any company that manufactures something out of plastic needs oil. Paper products need trees. Steel comes from iron ore. To produce every product that we use or eat, we need raw materials from the earth and a cheap, plentiful source of energy.

Many CEOs are beginning to wake up--and fret--about scarcities in the materials they need to run their companies. Even the CEO of Wal-Mart, Lee Scott, seemed to recognize in a 2005 speech that his business model is utterly dependent upon the supply of natural materials:

The supply of natural products (fish, food, water) can only be sustained if the eco-systems that provide them are sustained and protected. There are not two worlds out there, a Wal-Mart world and some other world.

It's easy to think about the agricultural products and crops in Oregon that will be affected as global warming increases: wine, wheat, fish, pears, cherries. It's harder, but just as important, to think about the effects on the rest of the economy. What happens to the Silicon Forest if water gets scarce? What industries fail if our increasing demands for energy drive prices up? If you think hard enough, you might realize that your job rests in the balance.

Comments

  • Steve Bucknum (unverified)
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    My in-laws in Wisconsin could tell you a thing or two about water. Avion has attempted to buy up the water rights in a huge area of central Wisconsin.

    Here locally in Central Oregon, we have already run out of water. Any new development will rest upon taking water away from an "old" development. For cities to grow, farm fields must go dry (nearly all farming in Central Oregon is based upon irrigation based upon adjudicated water rights). And, we expect in the next 10 years to add 100,000 people to Central Oregon.

    The economic impact of the water shortage is already with us, its just not apparent in the public awareness yet. Those companies noted are NOT becoming friendly to the environment, what they actually want to do is buy part of the environment to perserve it for their use.

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    Steve, I know very little about water rights, but I think I recall that landowners can't take water out of the stream unless they've got rights to it.

    How can a new development take water from existing farms without getting the water rights first? Or, are they buying up the rights from the farmers?

  • NickerBits (unverified)
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    There's a book that came out last year called, "Oregon Water an Environmental History." It's written by professors at OSU, I believe. It's an interesting book that includes historical photos and stories regarding water rights, etc.

    As for cola companies caring one lick about clean water in developing countries, it's a sham. And a shame. When I was in Iraq in September 2003, the first thing I noticed was the amount of pop (i.e., soda if you're from the east). At a memorial service for a mass grave in northern Iraq, what was being served? Pepsi, of course. Walking down an alley in Baghdad, I met a young boy, Ahmed, and his sister, Sallie, who were playing basketball. Without a word being spoken, they ran inside their apartment and brought me a Coke.

    It was in Baghdad that I realized these cola companies benefit by having these countries where you'd rather die than drink the water. Because the only thing left to drink that's cheap and accessible is pop. If companies are signing on to a Water Mandate, it's only because of the hard work of common people raising awareness about their wells going dry while Coca Cola is down the road pumping out can after can (i.e., like what's been happening in India).

    I don't think any CEO is beginning to wake up. I think they've been awake all along. We're the ones who are beginning to wake up and take a stand with our dollars and our letters and our campaigns and that's forcing CEO's to take into consideration other factors besides the almighty buck.

  • pacowan (unverified)
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    i remember reading that small real estate developments are allowed to tap into groundwater without aquiring water rights. that water, of course, is mostly the same water that farmers use.

    in california, imperial valley farmers are finding it more profitable to sell their water rights to los angeles and san diego, than to farm. i don't think that is happening in oregon yet, but you never know. usually before that happens, water efficiency measures are put in place. you can usually find more than enough "new" water just by not wasting it in the first place.

  • spicey (unverified)
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    funny, this post is right up my ally. and yet, the can is bothers the hell out of me! coke gets my attention enough through billboards and other advertising, like the huge vending machine in our breakroom... but I understand why you used, it Emily.

  • oregonj (unverified)
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    If you think competition for water is changing things now, this is probably just the tip of the iceberg. Here is the forecast for the near-term:

    NOAA DROUGHT FORECAST

    And this Western regional pattern is entirely consistent with the models of a general warming in the atmosphere and in Pacific sea surface temperatures.

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    but I understand why you used, it Emily.

    Uh...I think you must mean me, Leslie. I'll answer for the time being anyway.

    I used the can for this reason: so many people don't associate something that seems as artificial as Coke with the environment (unless they think about recycling the can after they are done.) But I wanted people to understand the inputs to Coke (water, sugar, etc.) also come from the environment, which is increasingly under threat. So Coke, computers, buildings, you name it--all these things will be more difficult to produce as we run out of resources. And producing these things creates jobs...

    But if you think I gave Coke some unneeded and gratuitous exposure in this post, you are probably right.

  • spicey (unverified)
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    Yes, Leslie, I was talking about the exposure. And, sorry I got your name wrong.

  • Steve Bucknum (unverified)
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    Kari -

    Thanks for pointing out my lack of clarity. Water rights are in fact being sold, and a non-profit for those exchanges was set up in Bend about 8 years ago. So, water is going to the highest bidder - which is not the farmer. No one can be forced to sell something they own against their wishes without govermental action and compensation. However, I know of irrigated land here where water rights have been sold off for a value equal to the dry land.

    But it is only a matter of time before "takings" for water rights will start at least for urban development of irrigated grounds within city limits. With the rulings that ground water and surface water are intermixed in the Deschutes basin, for a town like Bend to add to its water system it has to buy water rights. In fact, there is a 10% put back rule. To use a million gallons from a new well, you have to buy 1.1 million gallons of water rights.

    The water wars are just starting to simmer over here on the dry side of the State. I expect that a very slow increase in awareness and a slow increase in problems will happen in this arena over the next couple decades. To the best of my knowledge, the only "shooting war" about water to date was the Klamath basin irrigation situation - the one that ended up killing all the salmon later. That was about an endangered species, endangered due to overuse of a water resource. It is the tip of the iceburg, as we are increasingly seeing farm vs. city played out. With the drought cycles in farming, you can bet that in 20 years, we will see a 20% reduction in food production east of the Cascades in Oregon as during the low production years of drought, farmers will be economically forced to sell off water rights. In turn, this will shift food production to other already over-taxed areas, and increase the cost of food.

    I'm no Chicken Little, but I do see some sky falling around here.

  • Jonathan Radmacher (unverified)
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    Nickerbits suggests that the CEOs of these kinds of companies want the water bad, so people will buy their products. Everything's a conspiracy, right? Except that it's not. Companies like Coke like to produce their products as close as possible to the source of consumption, to cut down on transportation costs, which benefits everyone (lower carbon emissions from transport). And give the amount of non-Coke that Coke and Pepsi sell (bottled water has its own problems, I know), I think they're probably just looking at opening up more markets, and looking like good guys.

  • Steve Bucknum (unverified)
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    Pacowan -

    You wrote, "i remember reading that small real estate developments are allowed to tap into groundwater without aquiring water rights. that water, of course, is mostly the same water that farmers use."

    You are partly correct. A residential household well can be drilled without buying a water right. Wells for up to three households can be shared without it being a community well. So, only wells that serve 4 or more households fall into the range of needing to buy a water right.

    As far as what water is what - farmers use both surface and ground water. Generally drinking water comes from wells, with exceptions like the watersheds found in Western Oregon (like Bullrun). So, over here in the Deschutes basin, where water rights for surface and ground water have been ruled to be the same due to the geology, any water taken from anywhere in the basin effects all water everywhere in the basin. And really, isn't that the way we should think of all of Oregon?

  • NickerBits (unverified)
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    Jonathan, you said CEO's "wanted" the water to be bad. I said they "benefit" by it being bad. Which is fact. The fewer choices people have in regards to what they can drink, the more money there is to be made by those who have products to offer.

    CEO's do not have a bottom line requiring that they consider the water quality and water quantity that they are leaving behind in communities where they operate factories. Ask the people of Kerala, India. Or Varanasi. Or Thane. All of these communities woke up well before we did in the States.

    You said "everyone benefits" by shorter transportation routes. Really? What if your water is now polluted and depleted to levels that can't support you and your neighbors? How do you "benefit" from that situation? (And, sorry, less carbon in the air due to shorter transportation routes is no consolation to moms and dads watching their babies die from diarrhea.)

    My point is that this whole "Water Mandate" is not happening because CEO's are waking up. They've been awake. Too many of us have been asleep. The credit really goes to activists in India and Africa, primarily, who refused to remain silent as their communities shouldered the toxic ripple effects while our communities cooled off with a nice cold Coke.

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