The Diamond-Water Paradox
There’s nothing like a good paradox, wouldn’t you say? Philosophers as far back as Socrates and Plato have pondered the “paradox of value”. In his documentation of a Socratic dialog, Plato writes: “For only what is rare is valuable; and ‘water,’ which, as Pindar says, is the ‘best of all things,’ is also the cheapest.” In other words, although water is wonderful and essential, it is plentiful hence it has a low economic value.
Adam Smith, the renowned American economist, took the paradox of value one step further when he discussed the diamond-water paradox in his classic work An Inquiry into the Nature and Causes of the Wealth of Nations (1776). He observed that although water is far more useful than diamonds in terms of survival, diamonds command a much higher exchange value, i.e., price, in the market. Similar to Socrates/Plato, Adam Smith explains the paradox through the market dynamic of supply and demand. Water literally falls out of the sky so its market value is lower. , 
The Many Values of Water
But value is not just an economic matter. Even in the case of diamonds, their high price is not just because they are in short supply; we also value diamonds for their beauty and their sentimental value. Water is no different¾it has many types of value. First and foremost, we as individuals couldn’t survive very long without it. It is also essential to the economy: one-fifth of the American economy would grind to a half without access to clean water. 
Water plays a critical role in keeping environmental ecosystems healthy. Water has a high recreational value; our world would be hard to imagine without powerful waterfalls to admire or lakes and rivers for swimming and boating. Some religions consider water or certain bodies of water to be sacred, and almost every religion includes water in their rituals of purification. 
Yet despite the many values of water, there is a widely accepted notion that we should not have to pay very much for its use. Water is typically priced¾at best¾to cover the costs of its extraction and distribution. It is rare that we are expected to pay for the water itself that comes out of our taps.
Changing Perceptions in the Private Sector
However, the increasing scarcity of clean water in both the developed and developing worlds is forcing us to re-evaluate this value perception and adopt more sustainable economic approaches to water. With 20% of our clean water supply being used by industry, it is important that the private sector change its perceptions about the value of water and we are seeing more and more examples of companies adopting sustainable water management policies.
Huge multinationals have publicly committed to significantly reduce their water footprints. Coca Cola, for example, is well on its way to achieving its goal of improving its water efficiency in its manufacturing processes by 25% by 2020, compared to a 2010 baseline. Another giant, Unilever, has adopted a strategic approach to its impact on the water scarcity problem and by 2016 it had lowered the amount of water used in its production processes by 38% as compared to 2008.
But it’s not just the big corporations that are changing their perceptions about the value of water. We recently read  about a Costa-Rican based beer company, Imperial Cerveza, that announced the world’s first “water positive beer”. Their first step was to reduce their own water usage by 44% (while increasing the volume of their beer production by 70%) and this brought them to a water-neutral status. In order to become water positive, they are investing in conservation groups that are bringing fresh water solutions to water-scarce communities.
Changing Perceptions in the Public Sector
Despite all the efforts of the private sector, however, it is the public sector that must create the conditions that can accelerate change. With this in mind, in January 2016 the President of the World Bank, Jim Yong Kim, and then UN secretary-general Ban Ki-Moon established the High Level Panel on Water (HLPW) comprised of 11 heads of state. The HLPW, working in close cooperation with NGOs such as the Global Water Partnership (GWP), has acknowledged the urgent need to value water in a way that makes apparent the cost of water pollution and waste in order to promote better water management practices. The principles that it has adopted as essential in valuing water are: , 
- Recognize water’s multiple values.
- Build trust among water stakeholders so that they can agree to the inevitable trade-offs.
- Value and protect all sources of water.
- Educate the public about the essential role of water and its intrinsic value.
- Increase investment in water-related institutions, infrastructure, innovation.
Final Note: The Power of Education
In January 2016 the Value of Water Coalition conducted a national survey  in the US about how consumers perceive the value of water. The vast majority (95%!) thought it was important or very important that the US water infrastructure be improved and modernized. However, only 47% were willing to pay more for safe, reliable water service, with most of these comfortable with an increase of at least 5%. Interestingly enough, after the respondents were provided with further information on water issues, 60% of the respondents were now willing to pay more so that water infrastructures could be improved.
The Arad Group will be actively participating in WATEC 2017, a biennial professional exhibition and conference taking place in Tel Aviv September 12-14. We are looking forward to the insights that will be shared by prominent industry experts regarding one of the key conference themes: new perceptions about water value. We hope to see you there.
 Paradox of value, Wikipedia
 Tim Kane, The Paradox of Value, February 11, 2016
 Water’s Value, Value of Water Campaign
 Water Wisdom
 World’s First ‘Water Positive Beer’ Now Being Served in Colorado, August 6, 2017
 How Do We Value Water? Rafiqul Islam, August 1, 2017
 Valuing water: preamble and principles, GWP
 Value of Water Coalition National Survey, January 2016