January 24, 2008 / 11:21 AM / 11 years ago

Nestle urges water market to drive conservation

DAVOS, Switzerland (Reuters) - A market for water needs to be established to drive conservation and avoid serious effects from over-use in agriculture, industry and energy production, according to Swiss food giant Nestle SA NESN.VX.

Chief Executive Peter Brabeck said on Thursday such a move would cause a major rethink of production processes. In particular, production of biofuels — turning crops into energy — would not be viable if producers had to pay the true price of water.

“There is a need for there to be a price associated with water,” he told a panel at the World Economic Forum annual meeting. “It takes 9,000 liters of water to produce one liter of biodiesel. This strategy, which is not the right one, is backed by all major governments.”

Water has become a hot topic at Davos this year, with advocates arguing that changing diets, global warming and energy needs will rapidly cause scarcity and potentially drive political conflicts.

Biofuels are now being produced on a large scale and have been encouraged by governments hoping to tap renewable energy sources, drive down prices and reduce dependency on often unstable oil-producing nations.

Brabeck also said that increasing oil exploration would require huge amounts of water. It now requires 2.5 liters of water to produce one liter of oil, but if plans go ahead to exploit heavy oil and oil sands that number would multiply to a ratio of between 20-100 to one.

For full coverage, blogs and TV from Davos see: here

editing by David Stamp

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