Greenland’s fresh water reserves are “frozen capital” as water becomes a security concern

Water is a finite resource and increasingly a national security concern, CNBC analysts say.

Demand for water is expected to exceed supply It will grow to 40% in 2030, according to the Water Economy 2023 landmark report. In addition, climate change affects the weather and when areas with abundant water are drying up. As a result, more water must be moved to ensure availability.

Freshwater is used in everything from manufacturing to agriculture, and as the population grows, the demand will increase. thirsty AI data centers are built.

As water is increasingly viewed as a strategic asset, market watchers view Greenland’s freshwater reserves as a potential resource. The Danish territory itself has recognized the strategic potential and has long sought to capitalize on the asset.

“The potential of water is manifold, as clean, fresh water can be used as drinking water and water for food production, as well as bulk water for factories, farms or as a contribution to bulk water supply,” the Greenland government said in a statement. website. “There are so many possibilities.” CNBC has reached out to Greenland officials for further comment.

Only about 3% of the world’s water is fresh water, which provides the basis for suitable drinking water, and even less is easily accessible.

“Historically, we’ve continued to drill deeper and deeper into aquifers, but now we’re at a point where aquifers can’t replenish themselves. It takes a long time for surface water to flow,” said Noah Ramos, an innovation research analyst at Alpine Macro with expertise in water technology. He added that deeper drilling simply cannot be “relied on” anymore.

Resource nationalism “Definition” has become a geopolitical game, he said — and that includes water. “Thus, water has become a strategic asset by nature.”

“I think countries that don’t have a strategic asset right now are better positioned in the long term” because it forces them to innovate, Ramos added. He highlighted the Middle East and its investment in technologies such as desalination, which turns seawater into potable water, and Israel, which recycles much of the water.

According to Ramos, the United States, South America and Canada have historically had abundant water supplies, but are facing new levels of water stress, putting them in a sticky situation.

Of course, half of the world’s population experiences water shortages for at least one month a year, which puts people’s health and food security into question. Let’s say, China strengthening of water infrastructure. Investment in 2025 alone will be about $182 billion As part of the country’s National Water Network Strategy, according to a government statement. Just like the eastern superpower, the US, water is not evenly distributed, the US has its own water strategy, and the European Commission raised the “water resistance” plan.

Most of the world’s fresh water is stored in glaciers and ice caps, primarily in Antarctica and Greenland; up to 300 billion tons of water melts from the Greenland ice sheet every year, the territory’s government.

“Greenland has a large fresh water reserve 10% of all reserves found on Earthlargely understood as frozen capital rather than available supply,” Nick Kraft, senior analyst for water, agriculture and responsible investment at Eurasia Group, told CNBC.

“Greenland water is a strategic asset and a niche opportunity for business, but it is not a realistic near-term fix for global water stress or demand,” he said.

Still, some hope to benefit from meltwater as climate change accelerates. In particular, the Arctic Water Bank, a startup planned build a dam to hold meltwater and export it internationally. It is not known what happened to the company, but the dam was not built. Another company, Inland Ice, bottles it as Kraft’s premium high-purity drinking water. Five enterprises currently have active 20-year licensesincluding the Greenland Water Bank Reportedly related to Ronald Lauderheir to billionaire Estee Lauder.

“The authorities have accepted ambitious proposals, such as building dams to export water,” Kraft said. “But real-world experience shows that until now what has happened has been small, premium boutique exports, and many large-scale export ideas have been announced and then stalled.”

Exporting water is not easy because of its weight, said Eric Swingedow, a professor at the University of Manchester who covers the intersection of resources and management to CNBC.

“The cost is enormous,” he said. “There have been attempts to transport many water vehicles (abroad); none of them were viable in any way.’

It is common to transport water overland, whether through canal systems or large infrastructure networks. However, it was shipped to Barcelona in extreme cases, especially during severe droughts in 2008 and 2024.

“Actually, it’s very difficult to make money from water — very difficult. There have been 20 years of trying to privatize water, but it hasn’t been very successful,” Svingedu said.

Although some geopolitical tensions are over water disputes – China’s largest dam plan in the world for example, there has been concern from India and Bangladesh – Swingeduu said intra-state frictions are likely due to the unequal distribution of water.

“I am convinced that part of the uprising in Iran is related to the severe drought that has been going on in Iran for some time and is making life very difficult in Iran,” he added.

Country is experiencing the sixth year of droughtin some cities, access to water faces regular interruptions.

Asked if it was in the government’s best interest to secure water resources to prevent civil unrest, Swingedoo said “not all states are the same.”

“So the Iranian state has systematically neglected to provide these basic infrastructures, with consequences that we know, and it has done so for geopolitical reasons. It is putting all of its money into the military, and that was their choice,” he added.

Swingeduu called on governments to focus more on providing water as a public service.

Kraft added: “Water is being viewed as a strategic asset—closer to critical infrastructure than a commodity—as climate variability and rising demand make water security a national security issue. This will probably bring more headlines about its water export potential, but I don’t suspect anything significant will change until the end of the decade.”

“Although Greenland’s fresh water will not be exported on a large scale anytime soon, it is geopolitically important.”