Redefining Water’s Value: Towards a New Economic Paradigm by Mariana Mazzucato

okay, hear’s a bet based on the provided article, designed to be testable and tied to the core arguments presented.

The Bet:

Will South Africa successfully place water security as a central topic on the agenda of the G20 during its presidency (ending December 2025), resulting in a concrete, publicly announced G20 initiative or working group specifically focused on global water security and investment?

Terms:

“Successfully place…central” means that water security is demonstrably a key theme in major G20 communiqués,meetings,and public statements beyond simply acknowledging its importance as part of broader climate/sustainability discussions. It needs to be a distinct focus. “Concrete initiative/working group” means a formally established program, task force, or dedicated funding stream within the G20 framework, with defined objectives related to water security (e.g., investment in water infrastructure, data sharing, policy coordination). A simple statement of intent isn’t enough; there needs to be actionable follow-through.
Resolution date: December 31, 2025 (end of South Africa’s G20 presidency).
Sources for Resolution: Official G20 websites, communiqués, press releases, reports from the South African G20 presidency, and credible news reporting (Reuters, Associated Press, Financial Times, etc.).

Why this bet is good, based on the article:

Central Argument: The article heavily emphasizes South Africa’s unique chance, as the first African nation to hold the G20 presidency, to elevate water security to a global economic priority. It explicitly draws a parallel to Brazil’s climate action leadership.
Testable: The outcome is objectively verifiable through publicly available information.
Time-Bound: The bet has a clear resolution date tied to a specific event (the end of the presidency).
reasonable Odds: The article presents a hopeful outlook, but success isn’t guaranteed. There are political and logistical challenges to shifting the G20 agenda.

Let me know if you’d like me to refine this bet, adjust the terms, or create alternative bets based on different aspects of the article!

How can Mazzucato’s mission-oriented innovation framework be applied to address the underinvestment in water infrastructure?

the Current Economic Misvaluation of water

For too long, water has been treated as a free or nearly-free resource within mainstream economic models. This undervaluation, powerfully critiqued by Mariana Mazzucato in her work, leads to systemic failures in water management, investment, and ultimately, sustainability. Conventional cost-benefit analyses often fail to account for the true value of water – encompassing its ecological, social, and intrinsic worth. This isn’t simply an environmental issue; it’s a basic flaw in our economic thinking.

Key problems stemming from this misvaluation include:

Underinvestment in Infrastructure: Insufficient funding for water treatment, distribution, and conservation technologies.

Environmental Degradation: Over-extraction, pollution, and ecosystem damage due to a lack of economic incentives for responsible stewardship.

inequitable Access: Marginalized communities disproportionately bear the brunt of water scarcity and poor water quality.

short-Term Profit focus: Prioritizing immediate economic gains over long-term water security.

Mazzucato’s Framework: Value Creation,Not Just Cost Reduction

Mazzucato’s core argument centers on shifting from a cost-reduction paradigm to a value creation paradigm. This means recognizing water not just as an input to production, but as a foundational element for societal well-being and economic resilience. Her approach draws heavily on the principles of mission-oriented innovation, advocating for bold, publicly-led initiatives that address complex challenges like water security.

This involves:

1. Identifying Grand Challenges: Defining specific, measurable goals related to water – for example, universal access to clean drinking water, restoring degraded watersheds, or developing drought-resistant agriculture.
2. State-Led Investment: Directing public funding towards research, development, and deployment of innovative water technologies and management practices. This isn’t about replacing the private sector, but shaping its direction.
3. Cross-Sector Collaboration: fostering partnerships between government, industry, academia, and civil society to leverage diverse expertise and resources.
4. Value Capture Mechanisms: Implementing policies that ensure the public benefits from the value created through water-related innovation – for example, through taxes, royalties, or public ownership models.

The Role of Public Banks and Investment

A crucial component of Mazzucato’s vision is the revitalization of public banks. These institutions, unlike traditional commercial banks, are designed to prioritize societal goals over short-term profits. They can play a pivotal role in financing large-scale water infrastructure projects, supporting innovative water startups, and de-risking investments in enduring water solutions.

Examples of successful public bank initiatives include:

KfW (Germany): Provides low-interest loans and grants for environmental projects, including water management and conservation.

BNDES (Brazil): Historically funded notable infrastructure development, including water and sanitation projects (though its recent performance has been subject to scrutiny).

green Investment Bank (UK): Focused on mobilizing private capital for green infrastructure, including water-related projects.

Beyond GDP: Measuring Water’s True Value

Traditional economic indicators like Gross Domestic Product (GDP) often fail to capture the full value of water. Mazzucato advocates for developing new metrics that incorporate:

Ecosystem Services: The benefits that humans derive from healthy ecosystems, such as water purification, flood control, and biodiversity.

Social Value: The impact of water on public health,education,and social equity.

Resilience: The ability of water systems to withstand shocks and stresses, such as climate change and population growth.

Natural Capital Accounting is gaining traction as a method for quantifying the economic value of natural resources, including water. This allows for more informed decision-making and better allocation of resources.

Deep-Sea Exploration & Water Value: An Unexpected Connection

Recent expeditions, like the one detailed by Australian Geographic regarding the Mariana snailfish https://www.australiangeographic.com.au/topics/wildlife/2023/04/monsters-or-masters-of-the-deep-sea/, highlight the astonishing biodiversity and unique ecosystems that exist even in the most extreme aquatic environments. Understanding these deep-sea systems – and the value they hold – is crucial. The research requires significant investment, mirroring Mazzucato’s call for state-led funding of aspiring projects.Moreover, the potential for bioprospecting and discovering novel compounds from these organisms underscores the intrinsic value of preserving these environments, a value frequently enough overlooked in conventional economic calculations. The very act of exploration demonstrates a shift in outlook – from exploitation to understanding and valuing the unknown.

Practical Steps