BOOK REVIEW: Liquid Asset: How Business and Government Can Work Together to Solve the Freshwater Crisis ~ MAVEN’S NOTEBOOK

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I took my first steps in the water world as a technical writer at a small consulting firm called Integrated Resource Management. After three years of exciting work for clients ranging from small towns 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 assets: How companies and governments can work together to solve the freshwater crisis (Stanford University Press, 2024), of immense personal and professional interest. What blew me away was his deft and comprehensive articulation of a water sector that is, always has been, and must remain fundamentally a public-private partnership. Drawing on decades of academic and legal expertise, Thompson has produced an incredibly important and valuable book that should not be missing from your water shelf.

Thompson begins his study by acknowledging both the inherent public interest in water and the economic value and governance mechanisms that together make water a “public good”:

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

It also offers a sober assessment of the current global water crisis, drawing the reader’s attention to the stark example of Cape Town’s recent encounter with “Day Zero,” when the city’s water supply nearly ran out.

With this pedagogical structure, which begins with a concrete example to illustrate and contextualize the broader argument, Liquid assets provides both a broad overview and several deeper dives into the many branches of the “water business.” From investor-owned water utilities to agricultural and industrial consumers, engineering and construction firms, financial advisors, water market investors, nonprofits, and technology startups, this sprawling and diverse corporate conglomerate partners with public water agencies, regulators, and regional organizations to manage water for the benefit of society and the environment. 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 the categories of water innovation in the technology sector.

Thompson is a wonderful guide to the world of private water, methodical and rich in quotes (including our own Maven’s Notebook!), but also eloquent and highly readable. He doesn’t shy away from differing perspectives and data points, such as disagreements about how many people are served by private water systems globally and in the U.S. (he comes up with 14% of the world’s population and 12-18% in the U.S.). The water consulting industry is similarly difficult to estimate, but Thompson estimates its size at about $10 billion a year and that it represents the largest part (about 30%) of the environmental consulting field.

Thompson strives to provide an unbiased assessment of the benefits and risks of mixing water and commercial enterprise. While he recognizes the primary role of governments to manage water resources as a public good, he firmly believes that the innovations inherent in successful, competitive enterprises are needed to help a conservative, fragmented public water sector confront climate change. At the same time, he reflects on the concerns raised by mixing the commercial profit motive with the public interest, and the potential for creating a technocracy or “consultocracy” that threatens to make governments less accountable to their constituents.

It is where Thompson is most critical of the water industry that we may diverge. He points to an “innovation deficit” in the public water sector, due to its fragmentation and conservatism—not ideological, but inert. One wonders whether, if we applied his arguments to the corporate sector, he would also find that small, family-run businesses lack innovation and the ability to serve their customers efficiently. As I have said elsewhere, bigger is not always better, and what we might gain from size comes at the cost of a loss of local democratic control. In fact, as Thompson points out, smaller agencies often make more Involving private sector partners to cover 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 special counsel to the Supreme Court in an interstate water dispute – doesn’t discuss the immense influence of the private legal profession in the public water sector. Perhaps it’s because he literally wrote the book (or books) on the subject and didn’t want to repeat himself.

Finally, Thompson provides excellent examples of “change agents and experts” from the private sector – consultants, nonprofits, foundations – who are helping the public water sector understand and address challenges. But what about the challenges that from the private sector – the industrial and agricultural polluters, the unsustainable developers and landscapers, the bottled water producers? The example of Coca-Cola’s controversial efforts to become “water neutral” is important in its final chapter, but not entirely valid. A fundamental question that remains to be answered is whether the private sector can deliver enough innovation to solve its own water problems.

In total, Liquid assets is a comprehensive, detailed and impressive look at the private water sector, at once generous and critical in its perspective, revealing exciting opportunities but also highlighting dangers and missteps. Perhaps most importantly, Thompson helps us think more broadly about water as an asset, in a way that combines profit-driven economics with public utility into a coherent valuation of water – an element that is both vital and desirable.