The Coming Water Wars

Morning Comrades.

To start, and those of you that have been for the last 7 years will know that I am not in the business of predictions. If memory serves me well, it’s been done once, here on this platform and I was utterly wrong and to be precise it’s not reason to not engage in predictions but I fear that I know too little about the entirety of what moves the world to our disadvantages, or give these mechanics and their reasons too much credit.

A few weeks ago Erald Kolasi and Jesse Damiani published a piece on here that many of us read, discussed and generally agreed was not only sound in its methodology but even more so in its conclusion. If you have not read this study, please do, its findings and conclusion haven’t left me alone since they published it.

Now, being a Chef I think of food differently than those not in the industry, logically so, and much of time is spent thinking about agriculture, supply chains and the realities many of us in the very comfortable West, food wise, will be facing due to Climate Change, most of which is so bleak that I tend to, truthfully, blot the worst scenarios out of these essays and my day to day thinking and yet, it’s always there, like a looming storm front out on the Ocean if you’ve ever had the privilege of being out on the Open Seas, it’s menacing to say the least. Nonetheless and coming back to the above paper, and the ever increasing menace of AI - or what the snake oil salesmen call AI - and the mind numbing increase of a technology that is dangerous, unneeded and as the above so brutally lay bare, wasteful of a resource we have finite amounts of on this planet, water. Technically, I should be writing about food, but after the above and finding myself in the rabbit hole of this MDPI paper’s sources over the last few weeks, well, let’s talk about Water. This is going to be a two part essay, only to not take up more of your time than I normally do.

There is a tendency, when speaking about the future of water, to imagine the coming conflict in the most cinematic possible form: armies advancing towards rivers, states fighting over dams, missiles striking reservoirs, millions of refugees moving across borders as governments collapse into a desperate struggle for the last remaining sources of freshwater.

The image is not entirely imaginary, because some of these things have already happened, and because water infrastructure is already treated as strategic infrastructure in contemporary warfare, but it risks misunderstanding the more profound transformation that is underway. The water wars of the twenty-first century are unlikely to begin as wars over water in the narrow sense. They will begin as struggles over who owns water, who controls its infrastructure, who receives it when there is not enough, who is permitted to consume it, whose agriculture is protected, whose cities are supplied, whose industries are prioritised, whose data centres are allowed to expand, and, increasingly, who possesses the financial instruments through which scarcity itself can be converted into an opportunity for accumulation. The decisive question will therefore not simply be whether humanity has enough water. It will be who has the power to decide what happens when it does not.

This distinction matters because the physical problem is becoming considerably more serious at precisely the moment when the dominant economic system is attempting to transform every increasingly scarce necessity into an asset. A 2026 United Nations University assessment has described the world as entering an era of “water bankruptcy”, arguing that human societies are consuming freshwater beyond the capacity of many natural systems to replenish themselves, with more than half of major lakes shrinking, roughly seventy per cent of aquifers in decline and billions of people experiencing water scarcity during at least part of the year.

The language is revealing even where one might dispute the financial metaphor. Bankruptcy implies not merely shortage but the exhaustion of an underlying resource base upon which an economic system has built claims. The problem is therefore not simply that there is less water, but that modern civilisation has constructed an enormous architecture of production, settlement, agriculture, energy and capital around assumptions of hydrological abundance that are becoming physically false.

The significance of the recent work of Erald Kolasi and Jesse Damiani lies precisely in refusing the fantasy that the technological economy exists somewhere above the material world. Their recent collaborative work on the energy, emissions and water footprint of artificial intelligence is particularly important because it exposes a contradiction that will become increasingly central to the politics of water: the industries presenting themselves as the most advanced, weightless and immaterial sectors of capitalism are in fact deeply dependent upon some of the most material infrastructures ever constructed.

Kolasi’s broader work similarly insists upon the ecological and energetic foundations of economic development, while Damiani’s work on technological futures places these transformations within a wider framework of accelerating systemic pressures. Kolasi has explicitly warned that AI infrastructure requires enormous quantities of electricity, steel, concrete and water, while his recent discussion of data centres describes their growing dependence upon public water systems and the political conflict emerging as corporations consume resources whose costs are frequently socialised. The importance of this argument extends far beyond AI. It reveals the fundamental political problem of the next phase of capitalism: growth is increasingly colliding with the physical limits of the systems upon which growth depends.

Water is where this contradiction becomes especially brutal because, unlike many commodities, it cannot simply be substituted away when its price rises. A corporation can change the material composition of a product, redesign a supply chain or substitute one energy source for another, but human beings cannot substitute something else for water.

Agriculture cannot negotiate with biology, cities cannot abolish hydration because the water price has rise and ecosystems cannot bid against industrial consumers in a market. Water is therefore simultaneously a biological necessity, a condition of social reproduction, an input into virtually every productive activity and an increasingly scarce physical resource. The contradiction is obvious: capitalism treats water as an economic input whose allocation can be mediated through price, while human life requires it as a non-negotiable condition of existence.

This is where the financialisation of water becomes more than an obscure development in commodity markets and water is already being financialised. The Nasdaq Veles California Water Index exists as a formal benchmark for the price of water in California, and CME Group offers futures based upon that index, describing them as the first regulated, exchange-traded instrument designed to manage water supply and demand risk. This does not mean that a trader can simply purchase a tanker of Californian drinking water and have it delivered to a warehouse in London. The reality is more complicated and, politically, more important. What is being traded is exposure to the future price of water and the rights, contracts and financial claims associated with water markets. The distinction between physically owning water and financially speculating upon its scarcity is therefore essential, but it should not reassure us. Financialisation does not require every molecule of water to become a tradable commodity but it requires the creation of sufficiently secure property rights and price mechanisms around water that financial capital can acquire an interest in the conditions under which water is allocated.

The transformation is already sufficiently advanced that researchers can model groundwater markets in explicitly financial terms, including the ability of participants to trade and bank water rights across time, while newer research is exploring rationing mechanisms and the relationship between water prices, market participation and inequality. A substantial academic literature has likewise emerged around the financialisation of water, examining the movement from privatisation and marketisation towards the construction of water as an asset class. The danger is therefore not some hypothetical future moment when Wall Street suddenly “discovers” water, that process has already begun, what remains uncertain is its scale.

This is precisely where the phrase “water wars” needs to be rescued from both sensationalism and complacency. The coming water wars will probably not resemble the wars of the twentieth century because the ownership of water does not need to be established through conventional military conquest in order to become politically coercive. A water war can be fought through a dam, a pipeline, a concession, a privatisation contract, a debt agreement, an agricultural subsidy, a sanctions regime, a futures market, a corporate acquisition, a military occupation or a regulatory decision. It can occur when one state diverts a river, when a corporation purchases groundwater rights, when a city raises tariffs beyond the capacity of poorer households to pay, when an agricultural region is deprived of irrigation to preserve urban supply, or when a government decides that a semiconductor plant or hyperscale data centre represents a higher economic priority than the communities whose water system it consumes. Again, this is already happening.

Indeed, some of the most important water wars may never be recognised as wars at all.

The historical record already demonstrates that water can become an instrument of political struggle without being the sole cause of interstate war. The Indus basin remains one of the clearest examples. India and Pakistan have maintained an extraordinarily durable water-sharing arrangement through repeated periods of military conflict, but the political relationship surrounding the treaty has deteriorated sharply in recent years. Following the 2025 Kashmir attack and subsequent military escalation, India suspended participation in the Indus Waters Treaty, while Pakistan accused India of weaponising water and warned that interference with agreed flows could constitute an act of war. The significance of this episode lies not in proving that a conventional “water war” is inevitable but in demonstrating how quickly water can move from the domain of technical management into national security once ecological pressure interacts with geopolitical hostility.

The same pattern can be seen in the Nile, the Tigris-Euphrates system, the Jordan basin and numerous other transboundary watersheds. Water rarely causes conflict in isolation. Scarcity becomes politically explosive when combined with pre-existing inequalities, territorial disputes, militarisation, economic crisis and competing claims over sovereignty. Research on Iraq and Yemen, for example, demonstrates that water scarcity can become either a driver of conflict or cooperation depending upon the political and social institutions through which it is mediated. This is an important corrective to simplistic environmental determinism. The coming water wars will not happen because nature mechanically causes human beings to fight, but they will happen because societies organised around unequal power will encounter material limits and then attempt to distribute the consequences of those limits according to existing structures of ownership.

This is why the most dangerous water conflict may actually occur inside apparently self-described peaceful and wealthy societies.

Consider what happens when a region experiences prolonged drought, similar to what is happening in France, the UK and Greece at this very moment, for example. The liberal economic answer is likely to be expressed in the language of efficiency: prices rise, inefficient users are discouraged, water rights are reallocated, investment flows towards more productive uses, infrastructure is modernised and markets discover the “true” value of water. At first glance this will be presented and logical and reasonable, but the phrase “productive use” already contains a political judgement. Productive for whom? A farmer producing food, a household drinking water, an ecosystem maintaining a watershed and a corporation operating a data centre do not possess equal purchasing power. If water is allocated through price, scarcity does not disappear; it becomes a mechanism for deciding which forms of life are economically valuable enough to survive, and this distinction is fundamental. A market does not ask who needs water most. It asks who can pay most for it.

This is where the financialisation of water intersects directly with the Marxist problem of class power. If water becomes increasingly scarce while remaining embedded within private property relations, then scarcity itself becomes an opportunity for accumulation. The owner of water rights becomes more valuable because water is more valuable and the owner of infrastructure becomes more powerful because everyone depends upon the infrastructure. The financial institution holding claims against those assets gains a new source of rent and the corporation capable of moving water across regions gains political leverage. And so on, and so on, we’ve seen this film before and it never ends well. Importantly, this is not a marginal transformation of capitalism. It is capitalism functioning according to its most basic logic.

The historical process of enclosure transformed collectively accessible land into private property; the privatisation of utilities transformed collective infrastructures into revenue-generating enterprises; financialisation subsequently transformed those enterprises into vehicles for increasingly abstract claims upon future income. Water presents the possibility of extending this process into the material precondition of social reproduction itself. The commodity does not have to be the molecule, but it will most likely be the the right to access the molecule, the infrastructure through which it flows, the financial derivative based upon its scarcity, the land beneath which it exists, or the future income stream generated by controlling it.

The consequences become even more severe when the rapidly expanding technological economy is added to the equation.

I will try and get the concluding part out by Wednesday.

Until then, I remain yours, warmly,

V.