Hello!
It’s been a busy few weeks for me and my family, and I haven’t been able to post on the monthly cadence I’ve promised. Life - and running low on Fancy Feast - happens.
Before we get into it this month, a look back and now at the family of COPs of late.
COP27 - the emissions one, yeah
Who would have thought we would even get some of we wanted?
Credit: Youtube
There was a win - yes! - on the loss and damages side of things, a commitment to create a fund for developed nations to help out developing / least-developed nations. Perhaps overly ambitious would have been binding agreements on the funding mechanisms, exactly who is going to pay in/out (the US and China would be big ones) - all of which would be settled in a number of technical committees from 2023. Given that it is the least-developed countries and low-lying island nations which are often most vulnerable to both climate change and security risks, this is good news. The devil is in the details, as they say, so this is something many will keep vigilant on.
Heard of the Santiago Network? I mentioned it in last month’s post and there is some good news here: the parties agreed to setting up the institutions to make a reality the technical assistance for climate loss and damages, with an eye to reduce climate-related risks where assistance is delivered. Let’s see the funding first, however. Where successful, it would provide meaningful recovery and a bit of resilience that is sorely needed in security-vulnerable communities.
Also worth mentioning: the summit resulted in a substantive progress to help countries transition away from coal. First off the block is South Africa, which announced a US$8.5bn investment plan - backed by the US, EU, UK, France and Germany with a substantive portion coming from private capital - to move the country away from burning and importing coal to upkeep its unreliable and oft-criticised power grid.
Methane: the US and EU drove a global methane pledge at COP26 in Glasgow in 2021. This year, over 150 countries also signed up to lower methane emissions by 30% by 2030. As methane is 40x more effective at trapping heat in the atmosphere, the expansion of the remit is worth celebrating…but it is only a partial victory as China and Russia did not sign up. Beijing’s representative, Xie Zhenhua, did show up to the discussions and committed to reducing China’s methane emissions, though without signing on the dotted line. It wasn’t quite what his American counterpart John Kerry wanted, but the episode in Sharm showed that at least when it came to climate policy coordination, the US and China are still willing to keep it real and talk shop. May that continue - let’s see how things go in the spring after key political sessions in Beijing and the new Congress under divided party control.
On adaptation, the financing side was effectively kicked down the road to COP28 in Dubai as technical workshops since Glasgow have not made sufficient headway to make any big statements.
COP15: I must admit that I am still getting smart on the ins and outs on the policy development underway to protect the biodiversity of our ecosystems, beyond another “30 by 30” pledge to protect the flora and fauna of 30% of our land and oceans by 2030. That China was meant to host this summit until COVID restrictions compelled a move to Montreal, running until 19 December, means China and hosts Canada have a bit riding on the meeting to produce a good outcome. A general framework to define and classify “what is good” regarding biodiversity protection may come of this, and perhaps push forward one or two existing certification frameworks to become market standards to drive both public and private investment to protecting ecosystems and the communities that live in and support them. What is increasingly clear is that after carbon, biodiversity is the “next thing” now in the pipeline when it comes to areas of focus for public and private sources of climate finance. Risk professionals, security analysts and climate tech leaders, take note re opportunities and threats.
Why we need to talk (more) about water
Speaking of the next thing to get the real COP treatment - I think it can be and should be water, because we can’t talk about just carbon or biodiversity in silos.
Credit: Jan Konietzko
Why does water matter? I don’t think it gets quite the level the attention it deserves - whether from policymakers, security and geopolitics people, the finance community and those in the climate space:
It’s vital for life: depending on the circumstances, our ability to live without water ranges from a few hours to about a week.
Every living being’s food security depends on it - weather cycles, livestock, crops, manufacturing processes, transport et all depend on reliable and quality water
It sustains the ecosystems around us (ah biodiversity!) which in turn keeps our environments - and communities - within healthy, sustainable bounds
It’s one of the few really public goods, next to air. However, it also means that it often falls victim to the tragedy of the commons.
It also kills and we must all work to eradicate this existential security threat.
Suffice to say without it, we won’t last very long - and it would be something people are willing to fight each other for in a crisis.
But you’ve only heard of “water wars” in films (Waterworld was a terrible film with a runaway budget btw, don’t let the IMDB reviews fool you)? Fair, so let’s bring back the Chatham House climate security risk ecosystem:
Source: Chatham House
Water-related hazards, such as sea level rises, rainfall pattern shifts, floods, storms, and sea temperature fluctuations, have a significant and sustained impact on crops, aquifers and water access. When severe enough it could harm food security, loss of livelihoods, disease spread, health and pandemic crises, and displacement of people. So where are the places under the greatest water stress (the risk to the quantity, quality, availability, and control of water)?
Sources: World Resources Institute
When we consider where underwater aquifers, the source of over 30% of the world’s freshwater, some regions surface as of particular focus for water insecurity flashpoints, where we have a mix of high water stress, groundwater usage and depletion e.g. crops and livestock, and population density:
Source: National Geographic
The Ogallala and California Central Valley in the US
The Indus and Brahmaputra basins in South Asia
The North China Plain basin
The Nile basin in Egypt and Sudan
What are some of the consequences of water insecurity turning into conflict? It’s never just about the water, but it can be a trigger for related disputes, or a reflection of underlying economic, social and political vulnerabilities of a community or country.
The 2019 water crisis in Chennai, India was a culmination of multiple cycles of irregular rainfall patterns which left the city’s water reserves depleted. Combined with what was later found to be poor management and governance of water resources, there was a mad rush to secure drinking water, leading to major protests and the emergence of a water black market. The city has now become more transparent in water data reporting though water stress risk in the broader Tamil Nadu province remain elevated.
Water has long been a source of local and transboundary dispute - and weaponisation - in Central Asia. Along the border of Kyrgyzstan and Tajikistan, the legacy of Soviet boundary-making has left a number of enclaves, exclaves that criss-cross communes, water sources, rivers and farmland. The border, however, is heavily fortified in many places due to the two countries’ outstanding boundary disputes, giving rise to dueling accusations over water access and allocations. In 2021, the destruction of cameras used to monitor water levels at a lake along one part of the border triggered deadly clashes. The same region experienced deadlier fighting in September this year as Tajik forces made a brief incursion onto Kyrgyz territory.
Chile has a long history of water disputes within local communities, often over competing priorities between local farming, residential use, mining and environmental protection. Most of the water in Chile is privately owned. Of note is an ongoing dispute between locals and lithium miner SQM. As countries like Chile are set to benefit greatly from the push to find new sources of critical minerals to fuel the energy transition (e.g. EV batteries), there will be greater downward pressure on local communities and governments to work with private firms to mitigate and resolve water usage issues. Not everyone will get it right, so the frequency of these disputes, sometimes flaring into protests and violence, grows over time.
A common thread across these callouts is the close relationship between water and security. In many of the places mentioned, water use for agriculture dominates, and overwhelmingly so in places like South Asia. Water infrastructure, access and management makes those communities more vulnerable / less resilient over time to flooding and megadroughts.
Chatham House’s 2021 climate risk assessment highlights the rising likelihood of crop failures in more than one of the four major maize (corn) growing areas, in any given year, by 2040 as 50%, with similar probabilities of failure for other food crops. The Ukraine war has already catalysed the compromised of one of these breadbaskets.
OK it’s a problem but surely we’re making it rain, right?
Water management in these regions are highly varied, reflecting a myriad of traditional and legal water usage patterns, competition between different user groups (e.g. farmers and cities), local politics, transboundary disputes, infrastructure investment and maintenance, and environmental management. However, investment has globally lagged behind needs and to achieve UN Sustainable Development Goals - the World Bank estimates $150bn is needed annually by 2030. A UN panel report from 2016 highlights that water insecurity’s impact - from poor supply, sanitation, flood damages - at $470bn annually, and knock off as much as 6% of annual GDP in the most water insecure regions. So what is being done to help mitigate these risks? A snapshot of how a few countries are faring:
In the US, a 2021 McKinsey study estimates that investment in water infrastructure and services has grown 5% annually over the past decade but water rates for residential use lags behind that in Europe. This creates a widening investment gap estimated at $40bn in 2020. This may reflect the World Bank’s assessment that water is an underpriced, undervalued public good, and the lack of urgency and coordinated investment is exacerbating underlying socioeconomic risks. The Drinking Water and Wastewater Infrastructure Act of 2021 ($35bn) and Bipartisan Infrastructure Act of 2021 ($55bn) were two critical pieces of legislature to authorise federal and lower-level funding for new and long-overdue repairs to vulnerabilities in the country’s water infrastructure - much of it managed at a local (city, municipality, county) level.
India is planning to invest $210bn between 2019-2024 in its water infrastructure, with a key area of focus being enabling more households to have access to drinking water. Water insecurity is a major political concern in India, with regional competition overtones, and intensifying climate change impacts on the subcontinent likely mean changing rainfall patterns which will place existing and new infrastructure and communal networks under greater challenges. Water access and flood management between India, Pakistan, Nepal, China and Bangladesh remain potential flashpoints for disputes, though some more detailed analysis from the US Institute of Peace suggests taking a more nuanced approach to the risk of interstate conflict - and remedies - is warranted.
A recent report from the charity WaterAid highlights the scale of the funding gap for water, especially when compared to other forms of sustainable finance, both public and private. Between 2016-2020, an annual average of $545bn of climate finance was deployed globally. Much of that financing went to mitigation than adaptation. Because water investments often fall into the adaptation finance bucket, overall water (or water supply, sanitation and hygiene systems - WASH in the industry lingo) investments represented a paltry 3% (about $16bn/year) of overall climate finance flows. In 2020, there was $19bn of reported water related climate finance, but represented a shrinking percentage of overall adaptation finance.
But if we don’t massively scale up our investment in solutions which make more resilient water quantity, quality and access, the harms are massive to almost everything we do, everywhere:
Local communities who rely on surface and underground aquifers for all uses ranging from farming, grazing to drinking water
The proper running of our homes and all sorts of critical infrastructure, from data centres to cement factories
Power generation for hydroelectric dams and nuclear power plants which rely on either sufficient volumes of water, or water access within certain temperature bounds for effective operation
Rising risk of crop failure, which can precipitate social instability and mass migrations, placing further structural burdens on the resilience of receiving communities and the global system at large.
Coastal flooding from rising sea levels and more frequent / extreme weather events can increase loss and damages to coastal infrastructure, ecosystems and freshwater supply.
So what now? Going to share a few thoughts, and would be keen to hear yours:
We need to make water more bankable toward UN SDG 6 goals, and advocate for voices pushing for a more systems (vs siloed pilots and projects)-based approach to development and funding / financing. Finding money to build, maintain and operate water infrastructure is nothing new, but its under-investment compared to other asset classes cries out for greater attention and innovation.
Start with the security basics: security risk professionals have resilience and crisis management systems front of mind. Learn more about water risks and how your organisation’s critical processes intersect these risks. Investing in these systems - and the people that make them run smoothly - by governments, charities, companies - will be integral to mitigating AND adapting to the threat of a wide range of risks, including water insecurity.
There are just shy of a zillion monitoring software and hardware solutions in the climatetech and geoint spaces. Solutions that a) truly monitor and verify e.g. evapotranspiration rates, water nitrogen and oxygen levels, b) provide early warning e.g. of a drought c) can act both commercially and as a public good - perhaps depending on geography - would truly make an impact
Wrap up the co-benefits flywheel: water, like CO2 emissions and biodiversity, gender and social equity, don’t and should not be tackled one at a time - the ecosystem doesn’t work that way. One example of the flywheel at work: Andrew Millison at Oregon State University has a Youtube channel focused on water, regen and permaculture around the world, and I found his series on India absolutely fascinating and inspiring for its innovation, low-tech solutions, and true community engagement and empowerment - efficient and self-reinforcing. More of this please.
Not investing on mitigation now means a LOT more adaptation cost later. As the climate emergency gets worse, we would be compelled to start spending more to adapt and be resilient . A University of Chicago study this year estimated that in a worst-case high emissions (RCP 8.5, 4C+ rise by 2100) scenario, where we fall far short in climate mitigation, the global economy could suffer over $3tn/year in costs by 2100. Adequate adaptation finance could bring that overall cost down to $400bn-$520bn, and halved further if government and commercial activity takes us to a more RC4.5 (a 2-3C rise by 2100) path.
Are you a water person? I’d love to chat with you to learn more about how risk folks can have a greater impact on reducing our water insecurity in the face of the climate emergency.
What caught my eye
I enjoy reading and learning from Lubomila Jordanova’s weekly LinkedIn newsletter on the business of sustainability. Lots of great insights and resources from a thought leader in the space.
Asia watchers: the Center for Climate and Security has launched a new report on climate security risks for China, worth a read.
Sci-fi thrillers are one of my favourite genres: I started watching The Peripheral on Amazon Prime, which stars Chloe Grace Moritz, who reminds me of the main character from Heroes. It’s about alternate futures and one of those 2022 buzzwords - polycrisis. If you want to scare/thrill yourself further about the future, give it a watch!
The Biden administration is allocating $135m to help Native American tribal communities to relocate due to climate change impacts.
The next annual UN Water Conference is in late March.
And finally, your ESG rating for Tesla please for this Elon Musk sighting at the Chappelle Show in SF a few days ago.
Thanks again for reading and leave any comments below. See you next time!
This newsletter represents my personal views only, and not necessarily those of my employer.