These days the talk is all about oil, but wait a couple of decades and oil politics could be a quaint historical artifact.

"The most valuable resource we have now is water, not oil," says Steve Halls, an engineer-biologist. " Fifty years from now we could, in theory, have a certain degree of independence from oil, but we will never be independent of water. Life is water."

A Scotsman by birth, Halls has spent most of his 51 years outside the United Kingdom. For the past three years, he has been based in Osaka as the director of the United Nations Environment Programme's International Environmental Technology Centre. There, he and his colleagues promote the dissemination of environmentally sound technologies, focusing mainly on identifying and sharing solutions to urban and fresh water problems.

Hoping to get some background on the Third World Water Forum (WWF3) that opens this weekend in Kansai, I spoke with Halls by phone. The following are excerpts from our talk.

What is the purpose of the Water Forum?

Similar to last summer's World Summit on Sustainable Development in Johannesburg, the purpose is to move from words to action. We know what the issues are, and we need to take action now because of the impending urgency of water-related issues.

Why is Japan hosting WWF3?

The government of Japan clearly understands the importance of water, which is ironic because Japan is a water-rich country. Asia, however, is not a water-rich region. UNEP [has looked at a scenario] 30 years into the future, and Asia is going to become more than 50 percent water-stressed. Japan understands that by helping address these issues it is helping to strengthen its own position economically and politically. It is not being totally altruistic, but it understands that water is an urgent need, particularly in this part of the world.

How can Japan benefit economically?

Water-related technologies could be a major part of the industrial revitalization of this economy. For example, Japan can make small-scale water-purification treatment systems quite cost effectively through the application of their membrane technologies, and they can also offer alternative energy sources through solar panels.

What are the main global issues concerning water?

There are really three, but they hinge on two: quantity and quality. The issue of quantity involves too much and too little. With climate change we are increasingly seeing precipitation patterns shifting, so areas that currently receive rainfall may not receive adequate rain in the future, and areas that do not get adequate rain now could be inundated. Extreme events of drought and flood are going to be amplified.

Quality relates primarily to industrial pollution and municipal waste-water treatment plants that do not work effectively or, in many countries, [do not exist]. Hence about 1.2 billion people around the world do not have access to safe drinking water. Human waste contaminates water and consequently becomes a source of disease. A further 2.4 billion people do not have access to sanitation.

The third issue is that both quantity and quality affect the natural world's ecosystems. Flooding and contamination can significantly alter ecosystems, and ultimately all of this ends up in the seas. We are already seeing increased stress on fisheries, not just because of overfishing, but because of pollution. The irony of this is that it comes back to us through our food chain.

What are the main problems of water supply and use?

From a technical perspective, the problem is [distribution systems]. In certain Southeast Asian countries, up to 70 percent of the water that leaves the point of distribution never gets to users -- an incredible waste. A system may be leaking, literally, all the way through its entire network, hence for every drop that comes out, a million drops never get there.

As for use itself, we are all sources of inefficiency. Brushing our teeth with the tap running, flushing 8-liter toilets, these are unnecessary overuses of water. We need much more effective ways of optimizing the use of water through technologies, but also through education and awareness.

Certainly agriculture is important too. Agriculture is clearly the largest source of water usage of all industry areas. We need to improve the efficiency of irrigation systems, and we need to understand what is the optimal amount of water that crops need. The rampant use of pesticides also affects groundwater resources.

What role is UNEP playing?

One of the most important activities is still awareness- raising at all levels, not just in the developing world, but in the developed world. UNEP is also playing a very important role in creating a network of multilateral environmental agreements, because of the significance of transboundary and international waters. At the local level, water governance is also being highlighted.

What are the pros and cons of water privatization?

Water itself is a global common, like the air we breathe. The confusion that exists is people think they are buying water, but no, they are buying the service that brings them the water, the infrastructure and the service for cleaning the water. However, to meet the needs of tens of millions of people requires large-scale capital investment to mobilize the physical resources, and this can only be done by multinational entities or governments.

Many people view public-private partnerships as a parasitic relationship. They see the utility company, the private sector, coming in and sucking money out of a municipality, then walking away. So these partnerships have to be, not five- or 10-year partnerships, they have to be long-term -- but this leads to issues of monopoly. So there are many issues that are not technical, they are contractual, perceptual, and economic.

What about people who can't afford to pay?

This is where civil society -- and different economic classes in society -- have to work together. There is a moral and ethical imperative here, and there has to be a dialogue between the rich and the poor of societies, in a way that is fair and equitable. Local and city governments can play an important role here, but communities have to understand this is something they need to work out for themselves -- finding innovative solutions for water governance, education and technology.

What will be the highlight of WWF3?

There is a need to build self-sufficiency based upon self-reliance, and to do so means that we've got to have partnerships, people have to talk to people and involve people. So that will be the highlight, finding that we can solve some of these problems and that it's being done at the local level.

The importance of water is at last coming home. We are no longer treating it like it's something that we don't have to think about: we do.