Visit the Water Shelf main page

I got my start in the water world as a technical writer for a small consulting firm called Integrated Resource Management. After three years of fascinating work for clients from small cities to Fortune 500 companies, I moved into the public sector, but I often think back to that brief experience on the business side of water.

As a result, I found Barton “Buzz” Thompson‘s new book, Liquid Asset: How Business and Government Can Partner to Solve the Freshwater Crisis (Stanford University Press, 2024), of immense personal and professional interest. What blew me away was his skillful and comprehensive articulation of a water sector that is, has always been, and must continue to be fundamentally a public-private partnership. Informed by decades of academic and legal expertise, Thompson has provided an incredibly important and valuable book to have on your water shelf.

Thompson begins his study recognizing both the inherent public interest in water as well as the economic value and mechanisms of management that, combined, determine water to be a “public commodity”:

Water … is neither a pure public good (best allocated by the government) nor a pure private commodity (typically best allocated by markets). Water is best described as a “public commodity,” a resource critical to both public and private needs.

He also provides a sober assessment of the world’s current water crisis, focusing the reader’s attention with the stark example of Cape Town’s recent brush with “Day Zero” when its water supply nearly ran out.

Using this pedagogical structure of beginning with a concrete example to help illustrate and situate the broader argument, Liquid Asset presents both a high-level overview and multiple deep dives into the many branches of the “business of water” sector. From investor-owned water utilities to agricultural and industrial consumers, engineering and construction firms, financial consultants, water market investors, non-profits, and technology startups, this sprawling and diverse conglomerate of companies work alongside public water agencies, regulators, and regional organizations to manage water for social and environmental benefits. Table 2.1 in Chapter 2 provides a helpful summary of the major private water sectors, while Table 7.1 in Chapter 7 further breaks down categories of water innovation in the technology sector.

Thompson is a wonderful tour guide through the world of private water, methodological and citation-rich (including our very own Maven’s Notebook!) while also eloquent and eminently readable. He does not shy away from divergent perspectives and data points, such as disagreements on how many people are served by private water systems globally and in the U.S. (he lands on 14% of the world population and 12-18% of the U.S.). The water consulting industry is similarly hard to tie down, but Thompson estimates its size at roughly $10 billion per year, and that it represents the largest segment (roughly 30%) of the environmental consulting field.

Thompson takes pains to evenhandedly assess both the benefits and risks of mixing water with commercial enterprise. While acknowledging the primary role of governments to manage water resources as a public trust, he strongly believes that the innovations inherent to successfully competitive businesses are needed to help a conservative, fragmented public water sector address a changing climate. At the same time, he reflects on concerns with combining the commercial profit-motive with the public, as well as the potential for creating a technocracy or “consultocracy” that threatens to make governments less accountable to their constituents.

Where Thompson is most critical of the water industry is where we might part ways. He points to an “innovation deficit” in the public water sector due to its fragmentation and conservatism – not ideological but inertial. One wonders, if we turned his arguments to the business sector, whether he would likewise find small, family-run businesses lacking innovation and the ability to efficiently serve their customers. As I’ve said elsewhere, bigger is not always better, and what we might gain with scale comes at a loss of local democratic control. In fact, as Thompson points out, smaller agencies often make more use of private sector partners for the specific technical expertise that staff may lack.

I also found it surprising that Thompson – who both practices and teaches law, and once served as a Supreme Court special master in an interstate water dispute – does not discuss the immense influence of the private legal profession in the public water sector. Perhaps it is because he quite literally wrote the book (or books) on this topic and didn’t want to repeat himself.

Finally, Thompson provides excellent examples of private sector “change agents and experts” – consultants, non-profits, foundations – who are helping the public water sector understand and tackle challenges. But what about the challenges presented by the private sector – the industrial and agricultural polluters, the unsustainable developers and landscapers, the bottled water companies? His last chapter’s example of Coca-Cola’s controversial efforts to become “water neutral” is important but, well, not quite the real thing. A fundamental question that remains to be addressed is whether the private sector can provide sufficient innovations to address its own water challenges.

Overall, Liquid Asset is a well-rounded, detailed, and impressive review of the private water sector, both generous and critical in its perspective, open to exciting opportunities while pointing out dangers and missteps. Perhaps most importantly, Thompson helps us to think more broadly of water as an asset, in a way that combines for-profit economics with public benefits into a cohesive valuation of water – an element that is both vital and desirable.