The case for water in today’s climate discussion — Reflections from GCAS 2018's Water Pavilion
Imagine H2O recently organized the Water Finance program held in the Global Climate Action Summit Water Pavilion hosted by the Leonardo DiCaprio Foundation and the Water Foundation. Although the week underscored the need and opportunity for climate action, the current climate discussion continues to overlook a powerful opportunity — water.
Last month, Gov. Jerry Brown marked the end of his final term as Governor of California by bringing together climate luminaries, experts and activists from around the world at the Global Climate Action Summit (GCAS) in San Francisco. The Summit was a call to action for those committed to the “still in” movement supporting the Paris Agreement.
Despite water’s importance in the climate conversation, the topic remained on the sidelines of GCAS. The water community, expertly organized by the Governor’s Office of Planning and Research, gathered for two days at the Water Pavilion affiliate event. Imagine H2O convened a dozen global experts for a discussion on Investing in Water Climate Solutions. Here are our key takeaways from those conversations and the Water Pavilion more broadly:
1. Climate change is water change — act accordingly
Branding water with “affiliate” status at GCAS suggests that water somehow remains on the periphery of climate change. This is consistent with other global climate discussions that have relegated water to an adaption conversation. However, the majority of people experiencing climate change are doing so through water. Climate policy or actions that fail to establish a connection to water issues will fall short in the eyes of those experiencing drought or floods. It is time to bring water into the climate discussion, given that climate and water are inextricably linked.
2. Climate change remains inexplicably divisive — water issues unite us
The powers that be in climate governance are missing an important mobilizing strategy. All people, regardless of political views or attitude to science, can recognize the need for action on water issues.
For thousands of years, humans have convened and learned through the power of stories. J. Carl Ganter, founder of Circle of Blue, observed that water is an inherently emotional topic that can inspire action. Water has the potential to engage people in a way that emissions can’t. There are opportunities to shape a public narrative that demands action on everything from infrastructure renewal in Michigan to access and sanitation in Malawi. The better the stories in water, the greater the public mindset shift. The more public support, the more things get done, and the safer people will be from the worst effects of climate change.
3. The market is crying out for opportunities to invest in transformative water infrastructure and technologies
At the Milken Institute’s Green Bond market session, the Global Head of ESG Portfolio Management — Fixed Income at Goldman Sachs, Michael Kashani, told the room that their climate bond issuances in 2017 were 6x oversubscribed.
Scaling the supply of investable water projects and innovations will be increasingly important. The work of Sean Kidney and Justine Leigh-Bell at the Climate Bonds Initiative is vital — keep it simple, learn from what’s out there, and let’s build a repeatable process for pricing and issuing bonds, as well as reporting on their performance and impact.
We are currently undergoing a shift in business perception around all things “Green”. Sustainability (especially in water) is no longer a nice to have. It’s an increasingly important indicator of a company’s future resilience and reliability of cash flows, as well as being a strong marketing story to tell. This shift also reflects an inexorable transfer of ownership. As Mario Romero Orozco with Rotoplas put it, “as the generational handover from boomers to millennials continues, it’s not where the world is going — it’s where it’s already gone.”
4. Technology will be a key part of the solution, and the market needs support
Water innovation, with solutions to everything from wastewater treatment to utility finances, continues to proliferate in the market. Unfortunately, as Steve Kloos from True North Venture Partners observed, “private investment in water without the requisite expertise remains a pretty productive place to lose money.”
We already employ proven technology to manage, deliver and treat water. However there is more work to be done. In order to account for climate change as well as access for the most vulnerable populations, we will need the pace of innovation in water to increase. More can be done to usher in a new wave of innovation in water. Echoing Nicole Neeman Brady from Renewable Resources Group, this includes creating the same level of support and incentives for water that renewable energy benefited from in the 1990s and 2000s.
Dr. Andrew Benedek, CEO of Anaergia, underscored the need to look at Singapore, Israel, Australia and other water innovation markets for inspiration. Singapore, for example, has charted a path to become water independent from neighboring Malaysia, with a target to meet double the national demand for water by 2060 while cutting the energy required to deliver and treat water by 50%.
5. We must bridge the funding gap
Kathleen Dominique of the OECD pointed to the $1.7trn gap in funding needed to meet SDG 6 by 2030 — the U.N. goal to ensure the availability and sustainable management of water and sanitation for all. Blended finance, the use of public or concessionary capital to draw in private capital for water projects, is showing promise in mobilizing diverse sources of capital.
Ana Giros from Suez and Giulia Macagno from the European Investment Bank presented two case studies suggesting that blended finance is already attracting significant private financing dollars to meet global demand for improved water infrastructure. We must be imaginative about how we can mobilize capital.
6. Handing off the costs and consequences to our children
As Edward Norton, the closing speaker of the Pavilion said “our children are going to be paying back the water debt with loan shark levels of interest.” While this paints a bleak picture, the looming climate-water-energy crisis is an opportunity for the next generation of leaders to take a stand. As part of Imagine H2O’s Water Innovation Policy Program, we hosted a small convening of select policy leaders and graduate students to brainstorm new policy approaches to the water-energy nexus. We look forward to supporting emerging leaders like these and supporting a new generation of innovators.
7. We have a long way to go but we have the people — and that is key
There is a palpable, growing urgency around water. The Water Pavilion attracted some of the most dedicated, passionate professionals in the sector. Indeed, the Summit as a whole demonstrated an impressive global depth and breadth of talent among those who have chosen to dedicate their lives to these issues. The challenge now is to provide the resources and know-how they need to scale innovation at the largest possible level.