Financial Times sustainability conference in New York City issued dire warnings and a call to arms for investors and corporations around the world along with governments.
"Water scarcity is the new global warming"
Commentary: Management is key to prosperity and survival
By Thomas Kostigen
March 30, 2012
NEW YORK (MarketWatch) — The global director of water stewardship for Coca-Cola Co. says that water risk isn’t imminent; it’s already manifest.
Greg Koch, who spoke at the Financial Times sustainability conference in New York City on Thursday, issued dire warnings and a call to arms for investors and corporations around the world along with governments.
And he wasn’t alone.
Robert Hormats, Under Secretary of State for Economics, Energy and the Environment says disputes or outright water wars are imminent in the near future.
Here’s why: an increasing population with needs for more energy and food is putting undue demand on the world’s water supply. So much so that by 2025 some two-thirds of the world’s population will experience some type of water shortage, according to myriad estimates.
Water scarcity is even deemed the most immediate environmental risk to the world, according to Usha Rao-Monari, the global head of water, global infrastructure and natural resources for the International Finance Corporation.
There are two sorts of water risks, she says: physical risk, which is not having enough water at the source, and economic risk, which is the cost of moving water around.
Both are extreme and being experienced throughout the world right now.
In terms of solutions, Rao-Monari sees three: financial, innovation, and government policy. Each of these can play a critical role in water quality and delivery.
Not long ago, climate change and carbon emissions were the environmental demons knocking at our doors. 'The Carbon Disclosure Project' (CDP) sprung up out of this threat to measure, disclosure and share information among companies. Now it’s water.
The CDP also has a growing water initiative where companies report their water policies. The CDP Water Disclosure Global Report 2011 finds that 57% of the 190 publicly listed organizations that participated in the survey report board-level oversight of water policies, strategies, or plans. By comparison, a report released by CDP in September 2011 showed that 94% of Global 500 companies report board-level oversight of climate change, suggesting that corporate understanding of water as a business concern trails that of climate change.
To enhance investor analysis of corporate water risk and to support corporate action on water stewardship, CERES, the Boston-based coalition of environmental organizations and corporations, developed a go-to water gauge. Backed by investors managing over $2 trillion in assets, the “Aqua Gauge” provides a benchmark for best practice and enables investors to assess, scorecard and compare companies on their management of water risk.
Brooke Barton, the senior manager for water and corporate programs at CERES, says “investors need to get water on their governance agenda.” This includes not only, say, how water scarcity would affect a beverage maker or food producer, but also municipalities via their bond offerings. If water rates change due to shrinking supply, rates would likely rise and bond prices, in turn, lower.
I have long been vocal about the need for water conservation, efficiency, and management. In the developing world this is especially needed. Geography plays a huge role in water accessibility.
One of the biggest opportunities for social as well as environmental impact is through water investing.
Bennett Freeman, senior vice president for sustainability research and policy for Calvert Investments, notes that China holds 21% of the world’s population but only 7% of global water supply. Its water needs are massive. Therefore, water investment opportunities are massive.
Water is life
The entire developing world, as it develops, will need more water. The oil, gas, and timber industries in Africa, for example, take supply away from the direct consumption needs of freshwater supply. Management will be key to growth and prosperity.
And while the U.S. experiences water shortages throughout a majority of states, there is relative access to fresh water. It’s this skill of management and technology that could be a major U.S. export. Yet, we squander much of our skills and management.
Hormats says this is wrong. The U.S. State Department is seeking to export these skills in conjunction with the private sector, he says. “There is an important opportunity for the State Department to work with private companies and help other countries purify and manage [their water],” Hormats says.
Rao-Monari says that one of the first things that should be done is to put a price on water. She is right. There needs to be an established understanding from which we can manage water. It can exact incentives and penalties — a tool for better management.
Water is both a risk and an opportunity. Tech entrepreneurs and innovators take note. Billions of dollars worth of municipal and private projects are coming down the pike (Barton at CERES mentions projects in Nevada, Utah, and Colorado). And that’s just here in America.
[NOTE: Water remains a legislated political topic. There are many prices for water that vary by water districts. What is very poorly managed by politicians are groundwater and aquifer drafting and recharge. No matter how many water projects there are, politicians and their special interests always take their cut of the action. As it now stands, too many politicians accept the 2050-2055 CE destruction of human races as cost of doing their business as usual. --DGE]
Without water there is no energy. Without water there is no food. Without water, in other words, there is no life. Seems like that should be enough of a risk to warrant more attention.
As Koch pointed out, this isn’t a risk happening in the future. We’re dealing with these risks now.
Many people from around the world who came to the FT Sustainable conference agreed.
Water isn’t everywhere and there isn’t always a drop to drink. We need to invest in programs that find ways to get more.
Thomas Kostigen is the author of “The Green Blue Book: The Simple Water-Savings Guide to Everything in Your Life.”
Fin
The hydrologic water cycle describes the cycles water. The current and projected potable water shortage is caused by several factors:
# The only way to "create" large amounts of potable water is by desalination, which consumes huge amounts of energy (that must be clean nuclear energy).
# Increased populations require more potable water to support their lives.
# Increased gross domestic products (GDPs or increased wealth) increase water requirements.
# Increased atmospheric global warming temperature results in increased amount of moisture suspended within the atmosphere. there is less surface water available and ground aquifers are overdrafted. With global warming there is a net surface riparian and aquifer water loss, evaporation increase, water mining increases, net ice water loss, net ocean level rise, major weather changes, and additional factors that alter the hydrologic cycle.
# Most large scale water investments expect to function past 2050-2055 CE. However, if global warming political responses continues the way they have since 1750 CE, it is unlikely human races exist past 2055 CE.
Stresses of increased populations, increased hydrocarbon energy use, increased gross domestic product (GDP), and resulting increased global temperatures is evident. Most likely projections over time include uncontrolled population growth, limited technology changes, limited changes to energy use, critical political decisions not made, evil politicians, limited funding for effective clean nuclear energy, and several proposed impossible legislated changes to fundamental laws of physics by untoward politicians and surrogates. No one has proposed changes to global warming business as usual politics. There are no formed plans to alter the course of global warming temperature increase.
The entire developing world, as it develops, will need more water. China holds 21% of the world’s population but only 7% of global water supply. Its water needs are massive. Therefore, water investment opportunities are massive.
Unless natural and human greenhouse gases peak by 2020 CE, in 2030-2040 CE Earth global warming temperature increase shall exceed +2.0°C limit above preindustrial average temperature. Postulated is wipe out of agriculture and cattle ranching occurs as sand dunes and dust bowls appear across five U.S. states, from Texas in the south to Montana in the north. By +3 oC major to massive dust storms sweep the U.S. Midwest. Saltwater inundation of coastal groundwater stores will expand. Groundwater/aquifer pollution such as saltwater encroachment associated with over drafting of aquifers or natural leaching from natural occurring deposits are natural sources of pollution. U.S. Ogallala Aquifer (aka, High Plains Aquifer) is dry.
At +4 oC above 1750 CE preindustrial temperature, the Amazonian rain forest burns in a firestorm of catastrophic ferocity, covering South America with ash and smoke. Once the smoke clears, the interior of Brazil has become desert, and huge amounts of extra carbon have entered the atmosphere, further boosting global warming. The entire Arctic ice cap disappears in the summer months, leaving the North Pole ice-free for the first time in 3 million years. Water supplies run short in California as the Sierra Nevada snow pack melts away. U.S. Ogallala Aquifer (aka, High Plains Aquifer) is dry. Tens of millions displaced as the Kalahari Desert expands across southern Africa. Around +4 oC, rapidly rising temperatures in the Arctic Region (like Siberia) sea and land permafrost in the melt zone, releasing vast quantities of methane (CH4) and carbon dioxide (CO2) producing a temperature rise. Melting ice caps and sea level rises have displace more than 100 million people, particularly in Bangladesh, the Nile Delta, and Shanghai. Heat waves and drought make much of the sub-tropics uninhabitable: large-scale migration even takes place within Europe, where deserts are growing in southern Spain, Italy, and Greece. More than half of wild species wiped out, in the worst mass extinction since the end of the dinosaurs. Agriculture collapses in Australia. Decreasing water availability and increasing drought in mid-latitudes and semi-arid low latitudes result in the Amazon drying up. With temperature increase, more moisture is present in the air, more surface water evaporation, and more aquifer over drafting occurs. There is a resulting large transfer of potable aquifer water (and surface water) to oceans and atmosphere.
Catastrophic global warming events are suffering from coordinated benign neglect and political/media misdirection. The main media continues to be active in deceiving humanity as to the peril and catastrophic events of global warming leading up to sure 2050-2099 CE demise of human races, most likely 2050-2055 CE.
Before investing in environmental projects understand some of the basic physics involved with your investment. You can always change your investment portfolio, but you cannot change the laws of physics, GDPs, aquifer over drafting, riparian hypoxia, ice melt, rates of global temperature increase, nor population growth.
