News source: Greenbiz

News Source: The Guardian

Governments, civil society, corporations, farmers and grassroots organisations must co-operate to avoid the dangers ahead

Growing an economy is very thirsty business. We need to double food production – but we’re already using an average 70% of the world’s fresh water for agriculture. Meanwhile industrialised countries – the US in particular – are diverting 40% of their water to energy production, and that demand will also rise. Unsustainable levels of water are being extracted from many of the world’s fresh water ecosystems: up to 80%-90% of water is already being used in many arid and semi-arid river basins where water is scarce, according to the World Water Council. It is, quite simply and literally, unsustainable.

Such trade-offs have been poorly executed in the past, even in our most developed economies. In 2011 Texas nearly blacked out due to water shortages for its energy sector. Water experts have calculated that 26% of US-installed power-plant capacity is located in areas of water stress, a situation that will only get worse in the coming decades. Utility engineers in much of the US’s west and midwest will tell you how concerned they are.

These experiences offer valuable lessons for everyone, but particularly for emerging economies, where there is a tremendous opportunity to avoid the mistakes that others have made. The dangers of stranded energy or agricultural assets in a few decades can be minimised if water risk is fully accounted for now in development strategies and investment plans.

As recognition grows about the risk that water poses to our economic growth and development (the top global risk in the World Economic Forum Global Risks report this year), there are the demands from politicians, farmers and industry for new models and innovative solutions, new collaborative approaches for action at scale. There is a thirst for a new “water economy” where water really is everyone’s business.

Building the foundations for a new water economy will be difficult. It will require different sectors and specialists to work together. How do we construct an economy that is water-smart enough to secure future food and energy needs, while at the same time ensuring water for people and for nature, reducing greenhouse gas emissions and building resilience to manage the future water stresses?

All this was discussed intensively at the 25th Annual World Water Week in Stockholm, with the takeaway lesson being not that we have an off-the-shelf answer to this challenge (there is none) but that we need new models of cooperation, and that we already have sufficient data to begin redressing this systemic problem.

There is now genuine coalescence around a new, more strategic economic imperative to “get water right”, and it is percolating through the water community and beyond. This is exciting. The water agenda is reshaping. From this year’s Stockholm Water Prize Winner Rajendra Singh, who mobilises communities across India to build water security and resilience using traditional rainwater-harvesting techniques, to high-level discussions involving heads of state, leaders of international organisations and world experts, a call to action for a new global water economy is emerging and we must urgently amplify it.

And the timing is just right. The important international milestones of 2015 – the launch of the sustainable development goals and the focus on reaching a climate change agreement in Paris – will provide an important launch pad for propelling this much-needed new water economy agenda into 2016 and beyond. The risks of not transitioning to a new water economy are simply too great to contemplate.

Dominic Waughray is head of public-private partnerships at the World Economic Forum. Fred Boltz is managing director for ecosystems with The Rockefeller Foundation. Follow @dwaughray on Twitter.

Join our community of development professionals and humanitarians. Follow@GuardianGDP on Twitter, and have your say on issues around water in development using #H2Oideas.

By Sarah Murray, Financial Times reporter

Some 5,000 people living on low-incomes in poor housing in the Ghanaian city of Kumasi have been given better access to toilet facilities thanks to a project that uses an innovative business model. More than 1,000 toilets have been provided to residents under the scheme, designed by Ideo.org, a non-profit spin-off from Ideo, an innovation and design consultancy. Some 80 per cent of the population of Kumasi lacks domestic sanitation.

To prepare for the project, Ideo interviewed families about the kinds of sanitation they used. It found people were either defecating in the open or using poorly maintained public toilets. The only other option for them was to invest in a pit latrine, which are expensive to install and need to be emptied periodically by vacuum trucks, further adding to the cost.

“It was pretty unaffordable for middle and lower-class families in Kumasi,” says Jocelyn Wyatt, co-lead and executive director at Ideo.org. “So we thought that there could be a service model instead.” The end result was a rental toilet, also designed by Ideo.org, with a waste removal service, which households pay a monthly fee to use.

The UN estimates that more than 2.5bn people in the world lack basic sanitation services. These are badly needed. Among other things, lack of sanitation facilities increases the incidence of diarrhoea, a leading cause of death in children under five. The challenge is coming up with ways to fund the infrastructure needed to provide sanitation services.

Creating markets and educating consumers of the health benefits of sanitation is part of the process, says Sean Moore, portfolio manager at Acumen, a New York-based social impact investment fund. “The challenge has been understanding how people value clean water,” he says. “How do you create a willingness for people to spend their little discretionary money on this versus other things?”

This is a question being considered by the Water Supply and Sanitation Collaborative Council, part of the UN. Working with governments, non-governmental organisations and others, the WSSCC is developing education and training programmes, as well as awareness-raising campaigns that, for example, encourage people to adopt good hygiene practices such as hand washing.

“The approach is to bring about a change in thinking on the part of large numbers of people on the connection between sanitation and health, education and human dignity,” says Chris Williams, WSSCC’s executive director.

Generating demand is one thing, but creating incentives for investment in the infrastructure needed to supply sanitation services is another, and many see a bigger role for business and the financial sector. Globally, just 8 per cent of financing for water and sanitation infrastructure comes from the private sector, according to a report by the International Finance Corporation (IFC), part of the World Bank Group.

“One of the main challenges is the fact that in much of the developing world, responsibility for managing water and sanitation rests with government,” says Will Davies, Africa lead for the IFC’s 2030 Water Resources Group. “Utilities are often not run on financially sustainable lines and so find it difficult to access private financing.”

Moreover, traditional public sector or aid-based approaches to infrastructure have not always been successful, says Acumen’s Mr Moore and he cites the construction of water boreholes and wells as an example. “Often, the appropriate maintenance services weren’t in place and there wasn’t ownership of them by the community,” he says. He sees promise in local responses and companies that tap into microfinance and pay-as-you-go models or find innovative ways of generating revenue from water and sanitation facilities.

In India, for example, Guardian, a microfinance institution, makes small loans that allow families to buy water and sanitation products and services such as toilets, connections to the municipal water supply, rainwater harvesting equipment and household water purifiers.

Meanwhile, in Kenya, a Massachusetts Institute of Technology spin-off called Sanergy franchises its locally built Fresh Life-branded toilets to local micro-entrepreneurs operating in slums, and every day it takes the waste to be converted into organic fertiliser and sold to farmers. Sanergy’s model provides work and improves sanitation. And by selling waste to farmers, it generates the revenue needed to become financially sustainable.

When it comes to investments in large-scale sanitation infrastructure, the IFC is also working to help businesses develop skills and access financing through its Sanitation and Safe Water For All advisory service.

Mr Davies believes that widening access to private finance is essential to meet the global need for water and sanitation facilities. “The capacity of the public sector to finance the infrastructure is never going to be enough,” he says.

Source: Financial Times – see the article on the FT website