Michigan is all wet. And that’s a good thing.
Financial analysts and investment fund managers have begun to evaluate companies for their water risk with increased scrutiny. Translation: demand for clean, fresh water is growing dramatically and the price will likely rise significantly in the future. The concept of “free water” is a thing of the past. Even the big four firm, Deloitte has published a report on the growing awareness in corporate boardrooms of global water shortages.
Companies like Smuckers, Coca-Cola and Coors, to name a few, depend on high-quality H2O to create their products, so investors must consider the cost of water when buying those stocks. As the world’s population grows and weather becomes less predictable, the value of water will swell like tides in a brewing storm. And that’s scary to companies that require it.
But that also means Michigan’s stock is rising. The Great Lakes State is surrounded by 20% of the world’s fresh water, with no shortage of precipitation. While politicians bid for jobs with corporate tax abatements, I believe Michigan has an ace up its sleeve.
The state could offer companies water credits. That is, they could lock in the price of water for a period of time, let’s say 10 years, in exchange for a commitment to locate in Michigan and generate jobs. That way, taxpayers don't have to subsidize corporations, and companies earn their benefits year by year. They continue to get lower water prices as long as they stay and keep employing people.
Of course, we’d have to enforce clean water regulations to protect this precious resource, but it makes sense for Michigan to play this trump card to win high paying jobs.
Keep this idea in mind: you can drink orange juice, but you can’t shower in it, process most foods with it or manufacture pharmaceuticals or other products with it. And salt water is not an option for most industrial processes.
Maybe Michigan should revise its state motto to read: If you seek a pleasant fresh water peninsula look around you.