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WEF: To achieve the SDGs, the world must work together

News Source: WEF
By: PAUL BULCKE, Member of the Board of Directors and Chairman-designate, Nestlé
Published: Tuesday, January 10, 2017

In contrast to the UN Millennium Development Goals agreed in 2000, the private sector was given the opportunity to provide input and help elaborate the 2030 UN Sustainable Development Goals (SDGs) agreed in September 2015 by the UN General Assembly. It is only natural that the private sector must, in turn, assume a shared responsibility, in partnership with all other actors in society, to achieve these goals. We have expertise, knowledge and capacity at all levels to contribute to their achievement, especially at the country and community levels.

Moreover, a business can only be successful over time and create value for its shareholders if it also creates value for society as well. At Nestlé, we call this Creating Shared Value. From my perspective, a Creating Shared Value lens can help mobilize companies to identify and focus specific business efforts in support of the SDGs.

Let me go into a bit more detail on what this means for us. First, I would argue that each company must identify those areas where they can have the most impact. For us, driven by our company purpose to enhance quality of life and contribute to a healthier future, our positive impact on society focuses on enabling healthier and happier lives for individuals and families, on helping the development of thriving and resilient communities and finally, on stewarding the planet’s natural resources for future generations.

Second, I would argue that each one of us should leverage their specific comparative advantage to deliver impact. The private sector can bring global scope and scale, implementation capacity, innovation and research capabilities, and efficiency in execution. It is up to each partner to identify how best they can contribute.

But third, and very importantly, we each have to think beyond our own direct operations and fields of activity. We live in an interconnected world and our futures are inextricably linked. For us, it is only through cross-sector, cross-industry and cross-society partnerships that we can scale the societal commitments to which we hold ourselves accountable. So we need to explore and establish dynamic partnerships that explicitly expand our boundaries, particularly at the national and local levels where the necessary flexibility allows us to address locally relevant issues.

The 2030 Water Resources Group (2030 WRG) and the New Vision for Agriculture (NVA) are two examples of action-oriented multistakeholder partnerships with which we have been involved since their beginnings in the late 2000s. What they both provide is a neutral convening platform where country-level public, private and civil society stakeholders can come together for open discussion, the identification of sustainable solutions and ultimately, transformative change. They are an essential breeding ground for trust, which surely must be the first ingredient for any successful attempt to bring about sustained transformation.

Six years after the 2030 WRG was first incubated at the World Economic Forum to close the gap between water demand and supply by 2030, this public-private partnership is working in 11 countries or states, with 44 proposals for programmes and policies to be implemented – of which 14 are already under implementation – engaging over 500 country partners.

The NVA has engaged over 600 organizations across all stakeholders to simultaneously deliver food security, environmental sustainability and economic opportunity. It has catalysed multi-stakeholder platforms in 21 countries across Africa, Asia and now Latin America and has, to date, reached over 10.5 million smallholder farmers.

We have learned many things from our experiences with these partnerships. First, it has become even clearer that we cannot achieve system-wide change alone. Actually, no one can do it alone. What we are able to do as a partnership builds on and strengthens what we can do by ourselves. Second, government commitment at all levels is an absolute prerequisite if there is to be real and sustainable impact on the ground. Third, trust is often enhanced through collaborative action at the national or local level where the locally relevant ambition or vision can be defined and a strong sense of pragmatism leveraged. The framework for country-led action developed by the NVA provides useful guidance on this approach.

There are a couple of key prerequisites too, notably having the right “values” frame and the right time frame. The latter – more specifically, a long-term framing – cannot be overemphasized. Transformative change takes time and a long-term framing induces the right values and approach across all stakeholders, often bringing them together. Looking forward, I am optimistic and excited. Since the two partnerships that I have outlined were born, we have come a long way. I look forward to continuing the journey we have started and delivering what we helped elaborate in 2030.

The 2030 Water Resources Group is a platform where public, private, multilateral, and nongovernmental-organization actors collaborate and work toward identifying solutions that increase water sustainability and efficiency. The secretariat of the 2030 Water Resources Group is currently being hosted by the IFC at its Headquarters in Washington D.C.

Innovative irrigation financing for smallholder farmers key to Kenya’s water-smart future

by PS Patrick Mwangi

Ministry Water and Irrigation

 

There is no disputing the importance of agriculture to Kenyan livelihoods and our economy. In 2014, Kenya imported food worth KES 114 billion. This figure is expected to increase to KES 200 billion by the end of 2016. Agriculture contributes approximately 28 percent of GDP, employs 75 percent of the national labor force and accounts for 65 percent of the country’s total exports. If we are serious about realizing our Vision 2030 goal of increasing agricultural production in the face of the country’s low water endowment, growing population and changing climate, we must focus our attention on two of the sector’s greatest contributors—water and smallholder farmers.

While we may agree upon the importance of water to our lives, we may not fully appreciate its fleeting nature if we do not manage our resources responsibly. If we maintain a business as usual approach to the way we manage our water resources, by the year 2030, Kenya will see a 30 percent gap between available water supply and demand. Expanding our agricultural production will therefore require we better manage our water resources to close this gap. Understanding how such resources are currently being used helps us decide the best way forward.

The agricultural sector is the largest user of water in Kenya. Of available water supply, about 60 percent of the country’s fresh water is used for agriculture. If we wish to expand the sector, it is imperative we work to improve agricultural water productivity by looking at water efficient technologies and practices. Given that less than 20 percent of Kenya’s arable land is suitable for rain fed agriculture, irrigation schemes, which currently cover only 2.4 percent of arable land, provide a more suitable solution.

We must therefore introduce farmers to new techniques, such as drip and sprinkler irrigation where appropriate. What many of us may not realize is that roughly 75 percent of Kenyan agricultural output is produced not by large scale agricultural companies, but by smallholder farmers. The role of these smallholders is therefore critical to attaining our goals.

While many larger companies have the resources to make their businesses more water efficient by investing in smarter irrigation systems, the majority of smallholders do not. Access to financing for the agriculture sector in Kenya, often perceived as risky, is extremely limited. A few banks and non-bank financial institutions, such as Barclays Bank, Equity Bank, Sidian Bank, formerly K-REP Bank, KCB, One Acre Fund and Umati Capital however, have taken initial steps to close the gap. These institutions are working to encourage investment in irrigation through traditional guarantees, supply chain financing, and group lending.

Compounding the lack of access to finance, is still reluctance and/or an inability on behalf of smallholder farmers to embrace more efficient irrigation technology. Further understanding of the benefits of efficient irrigation technologies and available options through capacity building is still needed to make this a reality. Successful interventions will therefore require an ecosystem approach that includes building awareness, developing financing mechanisms and connecting farmers to inputs and markets.

Invited by the government to help close the projected water gap, the Kenya 2030 Water Resources Group is a public-private-civil society partnership working with the Ministry of Water and Irrigation to build on these early financing initiatives. The Kenya 2030 WRG is working on developing national partnerships and structures with government, farmers, banking institutions, aggregators and equipment providers to encourage more lending to commercial smallholder farmers and prove market readiness.

Initial steps may include the use of bank guarantees, innovative blended finance mechanisms, or direct lending to non-bank financial institutions. Scaling-up investment will, however, require partnerships among stakeholders in the value chain.

Leveraged properly, innovative financing for smallholder farmers will emerge as a keystone to Kenya’s water-smart future.

Water for food, for energy, or for elephants?

Dave Butler Tanzania

Photocredit: Dave Butler, Tanzania

What we can learn from the Ruaha experience about our options for tackling water scarcity

It is a testament to the wealth of environment riches in Africa that a national park of 20,000 square kilometers – half the size of the Netherlands, more than twice the size of Yellowstone – can remain relatively unknown. This is the case with the Ruaha National Park in Southern Tanzania.  In fact, even fewer of us may have heard of the Ruaha were it not for the fact that the river that feeds the park, the Greater Ruaha, has been drying up. 

Blogpost written by Will Davies, 2030 WRG Regional Lead Africa, and Onesmo Sigalla, 2030 WRG Tanzania Country Representative.

Historically, this 300 mile river would consistently flow year round, but in 1993 the river dried up for the first time for a period of three weeks. By 1999 this had reached three months. In 2008 the documentary “Surviving the Drought”, which highlighted the plight of the park’s wildlife, notably its estimated 10,000 elephants, brought the park to the attention of a wider public. But the decline in water levels has continued unabated, with record low flows reported in 2012/13, and in some cases dry spells being reported even during the wet season.

The factors underlying this trend are both well known, and familiar. Rapid population growth in the catchment, and the country as a whole, has led to dramatic increases in demand for agricultural land, and consequent impacts on water, in particular via increased irrigation. For those interested in more detail, read the excellent “Water resources system analysis for the Usangu Plains and its subbasins” (2015) by Rikard Liden in the Global Water Practice. A particular challenge in the Ruaha is suitability of the flood plains for rice, a high-demand crop in Tanzania usually grown via water-intensive flood irrigation methods, with extremely inefficient traditional water abstraction and conveyance systems (especially for smallholders).  Much has been written on this topic. In the international press, the voice of the environment is perhaps heard the loudest, with emphasis placed on the need to secure the priceless ecological assets of the catchment.  In conversations in Tanzania, the weight of opinion differs, with a stronger emphasis on the importance of food security and livelihoods.

This challenge is illustrative of the raison d’être of the 2030 Water Resources Group. We bring together key stakeholders impacted by water stress, from across the public sector, private sector and civil society, to overcome these kinds of “tragedy of the commons” scenarios that so often occur in the water resource sector. In 2013, we were invited by the Government of Tanzania to set up a Tanzania 2030 Water Resources Group partnership, to drive collective solutions to address the growing gap between water demand and supply in the country.

Great Ruaha Catchment

The solutions being discussed in the context of the Great Ruaha Restoration Campaign, a new catchment level multi-stakeholder initiative convened by the Tanzania 2030 WRG partnership, fall into three broad categories:

Increasing water productivity in agriculture

More people equals more demand for food.  But the water we need to grow that food is finite. So we need to grow more with less, or generate “more crop per drop”.  The word productivity, rather than efficiency, is used deliberately, as hydrologists will rightly debate what “water consumption” means and whether, for example, flood irrigation is inefficient if the water that is not absorbed by the crops returns to the environment.  What is clear is that in many cases, as in the Ruaha, the use of more productive irrigation methods, such as drip and sprinkler systems, as well as other water-maximizing farming practices can increase agricultural productivity while reducing the amount of water that needs to be abstracted, thereby allowing the farmer to grow more with less.

This inevitably leads to the question of how to finance “modern” irrigation technologies which, while more productive, are also more capital intensive; a big challenge for cash-strapped smallholder farmers.  This is a challenge we are tackling through the 2030 WRG, not just in Tanzania but also in Karnataka (India) and Kenya.  This topic is worthy of a future article in itself, so watch this space.

Dealing with trade offs

Secondly, while water productivity is often the easiest starting point, water scarcity may ultimately require harder decisions to be made around water allocations.  For example, it is not economically rational to be operating hydropower plants on the Ruaha river well below their operating capacity on account of lower value abstraction of water upstream for irrigation.  Likewise, increasing irrigation productivity may not solve the environmental challenge if the “savings” are simply used to expand further land under irrigation downstream.

The challenge here, of course, is that water allocations are motivated by cultural and political, as well as economic, considerations.  Getting the balance right ultimately requires some level of adjudication or “refereeing” between sectors – i.e. ensuring that the interests of the energy, agriculture and tourism sectors collectively represent the optimal outcome for the country.  Making this work in practice is a major challenge for any country, and represents an important value add that 2030 WRG can play, given its role in convening stakeholders from across sectors, both public and private.  Indeed, the planned Great Ruaha Restoration Campaign is being set up with this cross-sector coordination objective in mind.

It should also be noted that effective regulation is a pre-condition for effective allocation decisions.  If no one is monitoring or enforcing water abstractions in the first place, then discussions around allocations across sectors and water using groups can only go so far.  Hence, as in the case of the Ruaha, strengthening monitoring and regulation of permits is vital, as is getting the incentives for monitoring and enforcement right, in a context of politically-viable pricing (again a topic worthy of longer discussion).

Tanzania dry riverInfrastructure solutions

Another category of solutions to the challenges in the Ruaha lie in infrastructure.  The recent “Integrated Water Resources Management and Development Plan” for the Rujiji Basin (within which the Ruaha lies) strongly recommends increasing agricultural water productivity, but also the construction of larger infrastructure to allow for large scale storage of water, and hence regulation of dry season flows.  Additional infrastructure is certainly an important part of the puzzle, especially in countries, like Tanzania, with very low aggregate water storage capacity.  However, raising any level of commercial finance for such projects is inevitably challenging, given the public nature of most benefits, and hence such projects generally have to wait for large scale concessional funding to come available.  In the meantime, hydro-economic research by 2030 WRG shows that, in many cases, demand side solutions offer better cost-benefit returns than capital intensive supply side interventions.

Seeking Sustainable Water Services in Peru

Fernando MomiyThis blog post has been written by Fernando Momiy Hada/Chairman of the Board of Directors of the National Inspection Office for Sanitation Services (Superintendencia Nacional de Servicios de Saneamiento SUNASS).

Steady urban population growth, the effects of climate change, the risks posed by natural disasters, and the impact of water source and reservoir contamination are calling for greater effort in the area of regulatory management and the involvement of water and sewage service operators in this process.  However, many more institutions are also involved, including the people themselves, whose commitment and active participation will be necessary for the sustainable provision of this vital service.

SUNASS, as the sanitation regulatory entity in Peru, is cognizant of the fact that if we do not tackle these challenges comprehensively, policy or regulatory improvement or economic and financial models will not be able to guarantee the sustainable provision of water and sewage services in the country. Our effort to implement Compensation Mechanisms for Ecosystem Services (Mecanismos de Retribución de los Servicios Ecosistémicos (MRSE)* in order to ensure that sanitation service providers can finance projects that help preserve the consistency, quality, and quantity of the water sources reveals the need for comprehensive management of water resources.

We therefore commend the Ministry of Housing, Construction, and Sanitation—the sector’s governing body—for approving the regulatory framework for the use of groundwater by turning over its infrastructure (wells and underground tunnels) to the sanitation service providers for maintenance and conservation and tasking SUNASS with responsibility for approving rate-setting methodology.  This progress is being made in the context of the challenges arising from the ground water depletion being observed in Lima and Callao, which runs the risk of leaving the population without water reserves, should changes in the water cycle occur in the watersheds that supply water to the cities.

SUNASS approved the implementation of the system revolving around rate subsidies for potable water, which will pave the way for optimization of the incentives for the development of the service by residents.

Taking stock of water resources in the design of the country’s development strategy is the first step to guarantee future growth.  Water is critical to all economic activities.  For this reason, if we do not approach our development taking water into account—how we will use it and distribute it and how much we will develop it—we will not be able to lay the groundwork for sustainable development in the future.

In our quest for sustainable water resources, we have received support from such key institutions as the 2030 Water Resources Group (WRG), which included us in working groups and opened the doors of its Board of Directors so as to seek consensus among national authorities, NGOs, private enterprises, and international assistance entities, all assembled as one group with the aim of contributing to crafting a joint vision and model for water use, which Peru needs.

*Compensation mechanisms for ecosystem services are financial mechanisms intended to conserve, recover, or use, in a sustainable manner, water source ecosystems through the provision of incentives to residents to carry out these activities.

LinkedIn Pulse Blog: Smart water management to address overuse

News Source: LinkedIn Pulse Blog by Peter Brabeck Letmathe

Despite limited availability of freshwater for human use (in the right form, at the right place and at the right time – availability estimated at a worldwide total of 4,200 cubic kilometres), withdrawals continue to increase globally (not in the US, I will come back to this with a later post) and will probably reach an estimated 5,000 cubic kilometres this year. In a situation of secular overuse, drought turns into a much more severe crisis.

By 2030, without a substantial improvement in water management, this figure could be close to 7,000 cubic kilometres – an increase driven by growth in population and prosperity. If we want to avoid a much more severe water crisis in future, we will have to find ways to reduce freshwater withdrawals by 40% compared to this status quo extrapolation.

A 40% reduction within the next 15 years seems like a lot, but it is not impossible. In several posts here on LinkedIn, particularly those about the 2030 Water Resources Group that I am chairing, I pointed to ways that would significantly and cost-effectively contribute to narrowing the gap between withdrawals and sustainable supply of freshwater.

Measurement of withdrawals – the first step

Measurement would be an important first step: if you want to save water, you must measure its consumption in each sector of usage. If you can’t measure it, you can’t manage it.

In many if not most countries, we have to start in agriculture, which accounts for about 70% of all freshwater withdrawals worldwide, and more than 90% of water consumption (in California, according to US government data, it is 80% of all freshwater withdrawals).

But in too many instances, measurements of withdrawals remain incomplete, often with virtually no measurement of withdrawals by farmers (and often also a lack of measurement elsewhere, e.g. water withdrawals of municipal water supply schemes, to compare with delivery for estimates of leakage), and no measurement of actual needs – just rough global estimates, which indicate that withdrawals of freshwater by agriculture exceed the actual physiological need of plants by 100-150%. Fields are flooded, sprinklers run at noon, pumps continue when energy is free and the way out to the field is too long to bother about the water overuse; all entirely rational behaviours when water is not given any value at all.

Technologies to monitor and steer efficient use of water exist and function

Actually, the technologies to monitor, measure and steer efficient use of water exist – and they function. A good example are air and soil moisture sensors in a wireless network controlling drip irrigation I’ve seen being used in South Australia (my readers no doubt know many other comparable stories).

The first thing being measured is the humidity of the air, to adapt the water flow exactly to the evapotranspiration needs of the plant (or to stop the irrigation if the air is for some time too dry and most of it would not enter the soil). You will see these simplified weather stations all over the fields and vineyards.

Second, special devices in the soil measure how far down the irrigation water is actually seeping, i.e., as far down as the roots go, but not beyond. This optimises the water supply, and it protects the groundwater, since the irrigation water is ususally already supplemented with fertilisers.

At the heart of all this: no longer a nice farmhouse and barn we know from Europe and children’s books, but a computerised control centre, based on real-time data, which steers irrigation and the addition of fertilisers according to the exact need in different parts of the farm and different points in time.

Set incentives for comprehensive, cost effective solutions to water overuse

As an incentive to invest in such sophisticated schemes, and in order to make measurement and management fully relevant, water needs a value. Not surprisingly, in South Australia this is the case. Its value is set in a market of water usage rights tradable among farmers (i.e., giving a value does not mean imposing a tax on water use paid to government). And, as a result, it is carefully and smartly managed, contrary to many other places where it is seen, overused and abused as a free good.

Giving water a value will also work as a strong incentive for more water efficiency in industry, the generation of energy, and, last but not least, for reducing leakage losses in municipal water supply.

I know there are a number of innovations going even further; this is only the beginning of smart water management. An increasing number of companies offer highly innovative technologies and concepts; companies from the water sector (irrigation, treatment, supply, etc.) but also from other sectors (such as IBM, Dow and Ecolab for instance).

We need comprehensive, cost effective solutions to water overuse; piecemeal approaches and witch hunts will not do. Proper sensoring will be the first step.

Your comments, in particular with more information about innovations in measurement for better management of water, would be welcome.

Source: LinkedIn Pulse Blogs (2716 views, 670 likes, 106 comments)

 

LinkedIn Pulse Blog: Water overuse and waste – addressing the global crisis locally

Source: LinkedIn Pulse Blog by Peter Brabeck Letmathe

The 2015 Global Risk Report of the World Economic Forum (WEF) is a reminder, and stark warning, that we use far more water than what is sustainably available. According to the report just published in Davos, water scarcity is the biggest economic and societal risk for the next ten years. The 2030 Water Resources Group that I am chairing is the most important Davos-based initiative to address this risk.

First, some orders of magnitude of the problem. In 2015, freshwater abstraction for all kind of human use, mostly to grow food, increased to some 5,000 cubic kilometres, while sustainable annual supply is only 4,200 cubic kilometres. If there is no change in the way we use water, withdrawals will continue to increase with world population and prosperity to some 7,000 cubic kilometres by 2030. In other words, to re-establish balance and sustainability by then, we have to find ways to reduce withdrawals by some 40%.

The 2030 Water Resources Group (2030 WRG) aims to respond to this challenge with a global, multi-stakeholder structure, becoming active through local structures. In many respects, it is a unique form of public-private-civil society partnership; it helps governments, at their request, transforming the management of their water resources for the sustainable development and economic growth of their countries.

2030 WRG is founded on the understanding that governments, the private sector, and civil society have a common interest in the sustainable management of water resources, and that unsustainable use of water will have negative effects for economic development, wellbeing of people, food security, and ecosystems. As we want to broaden the membership base, this post is also an invitation to signal your possible interest in joining.

2030 WRG was launched in Davos in 2009 and later on formally incubated in the International Finance Corporation (IFC), part of the World Bank Group. It is a combined global and local public-private partnership, involving also NGOs.

Initial discussions that ultimately led to its creation started at a private breakfast organised by Nestlé, with guests from other companies, governments, intergovernmental agencies, academia and civil society in January 2005, an event where I personally together with other leading participants for the first time clearly supported water as a human right.

But, since declaration alone are never sufficient, we defined an initial roadmap to overcome the increasing freshwater overdraft. We agreed that it was necessary to first create awareness outside the specialised water community, to develop some new analytical tools (the water cost curve), to contribute to creating an enabling environment, and to bring together the relevant local stakeholders to actually drive the process in order to solve the emerging global water crisis with a specific set of relevant, cost-effective local individual and collective actions.

2030 WRG wants to be disruptive – in the way Schumpeter defined it: i.e., not re-inventing any wheels, but re-arranging information into a perspective that triggers different, more relevant action.

Water is local, overuse requires local solutions; one-fits-all approaches do not work. Water overuse must be addressed in the main river basins; at this level our tools are supposed to help close the gap between long-term water resource needs and water resource availability in a sustainable, cost-effective and equitable manner.

This approach was discussed and confirmed at the 2015 Annual Meeting of the Governing Council of 2030 WRG in Davos. It is about local solutions, as the following examples of country- and watershed-specific action shows:

In South Africa, in close co-operation with, and actually driven by government and local partners, measures were taken to reduce the very high leakage in municipal water supply systems: the No Drop incentive program to reduce municipal leakages with a focus on performance based contracts to achieve desired outcomes. There are measures to address drainage from coal-mines, which pollutes rivers for downstream users and ecosystems. And there are efforts to improve inefficient and outdated irrigation schemes, as well as current exclusion of new farmers in these old schemes.

In Bangladesh, first discussions with government and local stakeholders took place in 2014, with a focus on improving water use efficiency (increasing reuse and recycling) and reducing pollution from certain industries. Further discussions have taken place on improving agricultural efficiency and water productivity, and enhancing wastewater treatment and surface water quality.

In Mongolia, the partnership with 2030 WRG was initiated personally by the country’s president Elbegdorj in one of the water sessions in Davos some years ago. In the meantime, several rounds of discussions with government and local stakeholders addressed incentives for sustainable water resources management, water challenges in the Gobi area, including a need to reduce water use by industry, mining and municipalities to make sure herders are not losing their livelihood. Discussions further addressed Ulaanbaatar’s – the capital of Mongolia—future water and waste water challenges, including the need for reducing leakage in the existing system and increasing service to existing “Ger” areas (informal settlements). Stakeholders agree that this requires robust data systems and water governance structures.

In India, at national level, 2030 WRG discussed with the government its possible national engagement with a specific emphasis on the Ganga river, possibly as a demonstration of replicable water sustainability models for public-private-civil society engagement within the urban, industrial and agricultural sectors. A broad variety of stakeholders that 2030 WRG brought together wants to develop and implement economic incentives for enhanced long-term sustainability of waste-treatment plant operations. Additional discussions and projects were set up in two of the Indian states, namely Karnataka and Maharashtra.

In Tanzania, and then in Kenya 2030 WRG discussed with the government and local stakeholders possibilities to increase water use efficiency across all sectors, but in particular in irrigated agriculture, better inter-sectoral coordination (including at the Government level) to overcome conflicting demands on water between agricultural and energy sectors as well as for ecosystems and municipal use, and the need to improve water security, including potential interventions relating to better use of groundwater, increased small scale storing capacity and rainwater harvesting, and potential for inter basin transfers etc. but also enhancing wastewater treatment and reducing pollution and, very importantly in this country, improving the collection and dissemination of water related data.
Finally, in Peru, together with the government and local stakeholders, 2030 WRG looked into ways to prioritise investments in coastal catchments and the need for innovative financial instruments to develop and promote investment mechanisms to attract funds to the water sector.

Let me add three final comments:

The WRG is not a lobby group, but a partnership looking for solutions in the interest of all stakeholders around a watershed. In that sense, it is also not a charity or a philanthropic effort by private enterprise, but rather something that has to be seen within the concept of creating shared value. We are engaged as private enterprises, putting our money and personal efforts into this effort, because it is important both for society and for the success of our business.

Second, from our discussions with local stakeholders, we know of the need for credibly comprehensive solutions for individual watersheds, particularly to overcome the so-called ‘tragedy of the commons’.

What we have made a rule, therefore, is that we only work in a country if we are requested to by the government, to ensure comprehensive views and strategies. Normally, it’s either the President or the Prime Minister who expresses their interest; we then suggest that they appoint a coordinator because water is treated by many different agencies, ministries, etc.

Third, with help of the WEF, and our partners in government, intergovernmental agencies, academia and civil society, we still have to create more awareness about the urgency of increasing water scarcity and the need for comprehensive solutions to it. We have to make governments aware that the water issue is urgent and has to be tackled now.

As ever, I welcome your comments.

Source: LinkedIn Pulse Blogs (190 likes, 65 comments)

LinkedIn Pulse Blogs: Water overuse – at the top of the 2015 WEF global risk ranking

This article was featured in Green Business and LinkedIn Pulse.

Over several years, World Economic Forum (WEF) Global Risk Reports have identified water as one of the three most important challenges worldwide. This year it has moved to the top, as the biggest societal and economic risk for the next ten years. The report assesses risks that are global in nature and have the potential to cause significant negative impact across entire countries and industries: Water is key for life, central to societal development. Water risks affect industrialised and developing economies alike, repercussions of its overuse and increasing shortage are multiple and complex, widespread and severe.

The report also assesses risks in terms of probability – in the case of water, it is not about problems outlined by models and simulations that start from a diversity of assumptions; shortages from overuse are already facts today and are rapidly getting worse.

Let me mention five aspects of these risks:

1. Water for people: according to the World Health Organization there are still more than 700 million people without access to so-called ‘improved’ water – here the trend is positive; the proportion of the world’s population with access to improved drinking water sources increased from 76% to 89% globally between 1990 and 2012. But ‘improved’ is by no means ‘safe’. An article by Gérard Payen, former chairman of Aquafed and Member of the United Nations Secretary General’s Advisory Board on Water and Sanitation, states that close to 2 billion people use water that is unsafe and dangerous for their health, while 3.4 billion people use water of doubtful quality, at least from time to time. And these problems are getting worse, due to insufficient investment in water infrastructure – also in advanced economies.

2. Water for food: we start seeing the first problems in regions where natural buffers – groundwater reservoirs – have been used up in times of normal rainfall. In other words: media will see drought as the problem, but droughts come and go. The real problem is that we destroyed the ‘natural’ safety nets by overusing groundwater. So without a change in the way we use water, the global growth in population and prosperity are rapidly leading us into massive shortfalls in global cereal production.

3. In the past water was mostly abundant – at least up to the 1990s – so we have forgotten how important it is for growth in prosperity. Some episodes where power generation in thermal plants had to be slowed down because of lack of cooling water may be early signs for more widespread problems ahead.

4. There is a cross-border, and increasingly geopolitical dimension, e.g., in the Nile basin, along the Panj river, Euphrates/Tigris, Indus, Mekong and Colorado, to mention but a few of cross-border basins.

5. Water for the environment: this is about urgently needed wetlands, about biodiversity. But drying rivers also destroy human livelihoods, and sinking groundwater tables threaten human settlements.

Thanks to the WEF and the team behind the Global Risk Report for the careful, fact-based work. It sets the right focus for discussions in Davos and beyond.

As ever, I welcome your comments.

Source:  LinkedIn Pulse Blogs  by Peter Brabeck Letmathe – 4613 views, 482 likes, 64 comments

 

Make every drop count

By AJIT GULABCHAND

Water must be managed by a coalition of public, private and civil society interests.

Water should be seen as a commercial good to avoid wasteful use. — Sushil Kumar Verma

Water should be seen as a commercial good to avoid wasteful use. — Sushil Kumar Verma

Water is one of the most indispensable of all natural resources. It is vital for the survival of human beings and the scarcity of water has a significant impact on our economic development and biological diversity.

Water is one of the most indispensable of all natural resources. It is vital for the survival of human beings and the scarcity of water has a significant impact on our economic development and biological diversity.

Nations across the world, including India, have recently been facing the challenge of rapidly growing water demands, driven by an increased population and economic growth, linked to urbanisation and industrialisation. Also, the prevailing water scarcity is not only a result of quantitative or qualitative scarcity but also a consequence of inefficient use and poor water management, which has been recognised in India’s draft Water Policy (2012).

Water security is one of the most tangible and fastest-growing social, political and economic challenges faced today. It is also a fast-unfolding environmental crisis. In every sector, the demand for water is expected to increase and analysis suggests that the world will face a 40 per cent global shortfall between forecast demand and available supply by 2030.

This outlook bears potential for crisis and conflict since water lies at the heart of everything that is important for human life: food, sanitation, energy, and production of goods, transport and the biosphere as such.

BASIC RIGHT AND BEYOND

Water has been argued to be a social good. It is commonly accepted that access to water is a basic human right. However, being a social good and private good are not mutually exclusive conditions. In fact, more water for one individual can mean less water for other individuals who share a water-supply system. Classifying water as a basic human right, therefore, introduces further social complications in terms of equitable distribution.

Water is a commercial good when it comes to farming, manufacturing, etc. Water is environmental good and we need to conserve it to conserve our environment.

Water needs to be defined not only as a social good, to which everybody is entitled free of cost, but also as commercial good — to be paid for and an environmental good that you treat with great respect.

India will face around 50 per cent of water shortage and an expenditure of around $6 billion per annum for the next 5-6 years is needed to restore the balance.

While the Government must be the ultimate custodian of the national water resources and plays the key role in setting frameworks and strategies, many other stakeholders also have a role to play in delivering solutions.

Proper coordination within government-set strategies requires sound facts and an approach that supports cost-effective solutions. The resulting need for multi-stakeholder engagement means that coalitions are required; public-private-civil society coalitions focused collectively on addressing the water security issue, each leveraging its own comparative advantage towards meeting the challenge within a common policy framework.

Theoretically, managing water as an economic good entails that water can be allocated across competing uses in a way that maximises the net benefit from the amount of water in question. Practically, the increasing financial burden on users to pay for clean water has social and political implications. There has been growing controversy over the privatisation of water worldwide as the economic principles of valuation, privatisation and efficiency are being applied to water, a resource that many consider a basic human need and right.

BUSINESS RISK

Growing competition for scarce water resources is a growing business risk, a major economic threat, and a challenge for the sustainability of communities and the ecosystems upon which they rely. It is an issue that has serious implications for the stability of countries in which businesses operate, and for industries whose value chains are exposed to water scarcity.

Recognising the gravity of the problem, The 2030 Water Resources Group (WRG) was formed in 2008 to contribute new insights to the increasingly critical issue of water resource scarcity. Members include McKinsey & Company and the World Bank Group (led by the International Finance Corporation – IFC) with a consortium of business partners, including Hindustan Construction Company.

All the competing sectors, be it agriculture or industry, must practise water use efficiency to the extent possible. Water efficiency measures must be viewed holistically within a business’ strategic planning. Businesses that use water more efficiently now will have a competitive advantage over those that choose to wait. A successful programme must prioritise needs, set well-informed goals, establish current performance minimums and carefully plan a course for action.

WAYS TO BOOST EFFICIENCY

Some ways to achieve water use efficiency within the fence of a given industry are:

Identifying and eliminating wastage and inefficient processes: This may be the most low-cost area for water savings, as it involves minimal capital outlay. Savings can be made through implementing procedural changes, such as cleaning plant areas with brooms rather than water.

Changing processes and equipment: A retrofit of key plant equipment may increase efficiency. Alternatively, upgrades to more efficient models can be factored into planned maintenance and replacement schedules.

Recycling and Reusing treated wastewater: This option may improve the reliability of supply, whilst reducing trade waste charges and associated environmental risks.

Out of suggested measures, equipment (and/or process) changes may be viewed as a ‘permanent fix’ to achieve water efficiency. Changing employee behaviour, such as an operating procedure, may be viewed as a quick and inexpensive way to achieve similar savings without up-front capital expenses. Both the technical and human side of water management is important. Consistent training and awareness, in combination with proper tools and equipment, have the potential to achieve more permanent water savings.

Recycling or reuse of industrial wastewater is possible through adoption of preventive approaches at each production stage to minimise the generation of wastewater.

Segregation of wastewater streams is one of the commonly used preventive strategies to achieve efficient treatment of effluent aimed at recycle and reuse.

Although there is a growing awareness of the strategic importance of water, very few industries across India manage water in a systemic and holistic way.

Water management, in the majority of industries, is limited to ensuring the provision of water. In some instances, there are efforts to control or treat effluents and some responsible businesses go beyond the convention and adopt absolute water use efficiency. However, in most of the cases where water efficiency efforts are implemented as a mere formality, they tend to be unorganised, often leading to sub-optimal results.

These disappointing results may make the management more inclined to withhold its support for any future efficiency projects. Potential exists within the industrial sector to substantially boost water productivity provided it is being adopted/guided by an adequate mechanism.

(The author is Chairman and Managing Director, Hindustan Construction Company)

Why worry about water? A quick global overview

by Dominic Waughray* for the Guardian Professional Network

Dominic Waughray explains the need for urgency in dealing with the world’s growing demand for freshwater.

An iceberg melts in Kulusuk Bay, eastern Greenland in July 2007. Photograph: John Mcconnico/AP

An iceberg melts in Kulusuk Bay, eastern Greenland in July 2007. Photograph: John Mcconnico/AP

The future security of freshwater resources around the world is of increasing concern. Due to our interlinked global economy, water scarcity in many parts of the world could harm the global economy in ways we had not thought of. Shortfalls in crop yields and more variable food prices could be an early impact.

Our demand for water is closely linked to economic growth. As we grow wealthier, the more freshwater we require to supply cities, powerplants, factories, and the production of high-protein food such as dairy, meat, and fish.

It is not just a question of more people requiring more water. Rather, it is a case of more wealthy societies demanding much more water. In the 20th century, while the population grew by a factor of four, freshwater withdrawals grew by a factor of nine. If we take these past patterns and look forward, the outlook for 2030 is stark.

Currently, about 70% of the world’s freshwater withdrawals is for agriculture, 16% is for energy and industry, and 14% is for domestic purposes. Recent work suggests that unless we change our historic approach to how we use water, we could face a 40% gap by 2030 between global demand and what can sustainably be supplied.

Why is this so, and what are the implications?

To meet the forecasted growth in demand for food over the next 20 years, farmers will need to increase production by 70% to 100%. Changing diets will increase the demand for meat and dairy products in particular. A kilogram of meat requires up to 20,000 liters of water to produce (compared to about 1,200 liters to produce a kilo of grain), and the global demand for meat is forecasted to increase by 50% by 2025.

Herein lies the water challenge. If we already use over 70% of freshwater withdrawals for agriculture and face an increase in demand for food by 70% by 2030, especially for water-intensive meat and dairy, it is clear that a business-as-usual approach is not an option. We cannot use over 100% of our freshwater for agriculture. Significant, perhaps radical changes in agricultural water usage will be required.

At the same time, our demand for energy will also grow, and energy is also a thirsty sector.

The International Energy Agency forecasts that the world economy will demand at least 40% more energy by 2030. McKinsey and Company estimate that 77% of the power stations we will need by then have yet to be built. By that year, China will need to expand its power-generating capacity by over 1,300 GW (1.5 times the current level of the United States) and India by 400 GW (equal to the current combined total power generation of Japan, South Korea, and Australia).

Increasing access to energy is a priority for many countries. 1.5 billion people in the developing world still lack access to electricity, and over 3 billion rely on biomass for heating and cooking. Yet energy needs a lot of water. In richer countries, up to 50% of freshwater withdrawals can be used in the production of oil, gas, and electricity.

Take the United States (US) for example. The US Geological Survey estimates that to produce and burn the billion tons of coal the country uses each year, the mining and utility industries withdraw 55- to 75-ton gallons of water annually. That’s about equal to all the water that pours over Niagara Falls in five months. In other words, about half of all water withdrawals in the US today are used to cool electricity-generating stations. (It is important to note that this water is not consumed; it is withdrawn from rivers and reservoirs and used for cooling, etc., then returned. But access to freshwater is still vital. No water, no power station.)

By 2030, the US is forecasted to increase its energy demand by 40%. Using current energy systems, this could translate into a large increase in freshwater access needs, up to 165% according to some analyses. The maths suggests that, with the demands from other areas such as agriculture, this simply can’t be done.

More challenging still, many “clean” energy solutions that the US may wish to pursue to meet its wider environmental obligations, such as carbon capture and storage, shale gas, nuclear power, and solar thermal plants, can actually require even more water for their systems than a coal-fired power station.

Against this water and growth conundrum, General Electric has asked if there will be enough water in the US to power the future. The Economist has written about the end to farming in the California valleys as a result of water shortages and water reallocations. In the future, the US will likely have to depend much more on other countries’ agriculture and water, so it will import its orange juice and raisins (and potentially its wine). Even the US Department of Energy recently told Congress that energy production in the US is at the mercy of water availability.

This water for food versus water for energy dilemma that the US already faces is similar to that which many fast-growing economies will have to tackle very soon. As much of Asia urbanizes and industrializes (and is encouraged to pursue lower-emission energy choices), more water will have to be directed toward energy and away from agriculture. Some modelings suggest that a 76% increase in water demand for energy and industry will be required across Asia by 2030 compared to today. Recall that this will occur at exactly the same time as these countries will also need to almost double their food production. Against a baseline of 70% of water already being used for agriculture, how can these competing challenges be squared off?

We can see first responses to the growth challenge of the food-energy-water nexus already being played out around the world as water-scarce, fast-growing economies in Asia and the Gulf seek to acquire agricultural land in water-rich countries like equatorial Africa. These so called “land grabs” are really about water. If our global trading regime offered a more effective trade in agricultural goods, there would be much less need for such land/water deals.

This challenging scenario of water trade-offs over the next two decades should also be set against the context of today’s water management challenges. Unfortunately, the story gets worse. Due to historical profligacy of water use, the old adage of “You wouldn’t want to be starting from here” holds true.

Many countries are extracting groundwater faster than it can be replenished (Mexico by 20%, China by 25%, and India by 56%). Over 70 of the world’s major rivers now hardly reach the ocean due to the extensive diversion of water for human use. If current trends continue, by 2030, increasing water scarcity could cause annual grain losses equivalent to 30% of current world consumption (just as we need 70% more food). As demand continues to grow, competition for water will intensify between economic sectors, as well as between geographies.

In addition, let’s not forget that a potentially changing climate will simply accelerate freshwater security challenges faced in many places around the world. Unlike options in energy, there are no substitutes or alternatives to water. We will simply have to adapt.

This is not just a problem for the very poorest nations. Water security will affect people in Australia, the Balkans, California, China, India, Jordan, Greece, Mexico, North Africa, Pakistan, Saudi Arabia, Spain, South Africa, and Turkey among others. Even southern parts of the United Kingdom can already be classed as under water stress.

For all these reasons, business-as-usual is not an option. We cannot manage water into the future as we have in the past. Given the timescales associated with turning things around in the water sector, the need for long-term planning, and the dire conditions in which some countries already find themselves, senior analysts suggest we have about ten years to act.

The good news is that the next few years hold great potential for a transformation in the world’s water management. Unlike climate change, no one can argue that the problem does not exist, or that solutions are quickly required. New technologies, new arrangements, and new policies will be required.

The water services sector, water processing, water recycling technologies, and water policy links to the energy and agricultural sectors are fast becoming a busy space for business, financial, and professional services firms, policymakers, and issue specialists. The World Economic Forum itself has embarked on a major initiative to help develop an improved fact base, and a public-private platform of advisory services to help governments that wish to engage in transformational water reform. This will tackle many of the challenges set out above in real-time and in real situations, and I will write more about what we find as it gets underway.

Suffice it to say the arrival of a space to talk about water and its links to business, governments, and growth is very timely. My congratulations go to the Guardian Sustainable Business section for embarking on this exercise. I look forward to a vibrant expert community of bloggers emerging and sharing thoughts and experiences on water, water and business, and water and our wider economic growth.

*While Dominic Waughray is senior director and head of environmental initiatives at the World Economic Forum, he emphasizes that he is writing in a personal capacity. The views expressed here do not necessarily represent those of either the World Economic Forum or any of its constituent partners.