Reducing the output of carbon emissions is one of the most critical responses to climate change. But often overlooked is the importance of mitigation strategies, especially when it comes to water.
Do you ever wonder why there is not more progress when it comes to combating climate change? This question is especially perplexing when considering the growing number of environmentally aware and engaged leaders, such as CEO Larry Fink of BlackRock, the world’s largest asset management company with more than $7 trillion under its control, who recently said climate change is the leading existential threat to financial markets, society and the natural world.
Here are three reasons that may help explain why:
First is the imprecise messaging about why climate change is bad. Ask 100 professionals working on the climate change issue and you will most likely get as many different answers. The reason climate change is bad is because of its immediate disruption to the planet’s water cycle, which is leading to the increasing frequency and intensity of droughts and floods. It is also contributing to other risks, such as major cities running dangerously short on reliable water, deteriorating food security, uncontrollable wildfires, mass population migration, increased conflict and accelerating species extinction.
Second is the strong emphasis on carbon reduction, which of course is important, but tends to overshadow the importance of climate mitigation. Public awareness does not tend to focus and prioritize the immediate need for climate adaptation and resiliency to solve the climate change-induced problems noted above.
And third, adequate financial incentives for climate mitigation and adaptation have yet to be implemented through appropriate regulation. To be effective, water regulations, for example, need adequate TLC – transparency, long-term opportunity and regulatory certainty – to attract the trillions of dollars required for a profitable transition to a sustainable, climate resilient, low-carbon global economy.
It all comes down to water. The climate misperception illustrates the point that water requires and deserves a more equitable balance of both capital investment and emphasis with renewable energy. For example, surveys show that most people think of climate change investments primarily as renewable energy and divesting from carbon-based industries. Not so many, however, think first about investing in the water industry. While hundreds of billions have been invested in renewables, just a fraction of that has been invested in water. That must change to ensure life as we know it.
Fundamentally, energy pricing – whether renewable or carbon based – is likely to remain volatile and trend lower for the foreseeable future. Investing in water, on the other hand, has shown to “beat” the market for decades. Clean reliable water is scarce and getting scarcer and its price consistently goes up at a rate greater than inflation. Investing in water, therefore, can help achieve solutions to climate change.
More emphasis, prioritization and capital allocation for water will also enable greater progress towards achieving the 16 UN Sustainable Development Goals (SDGs). Making progress on SDG 6 – clean reliable water and sanitation for all – is the one SDG that also facilitates progress for all the other SDGs, such as on global health, food security, social justice, poverty reduction, conflict alleviation and biodiversity conservation.
When it comes to climate change, it is time to state simply and clearly that it is primarily a water problem. Water companies that anticipate and solve drought and flood problems require equal recognition, creative regulatory-based incentives and policy, and access to comparable large-scale capital available to renewables and electric cars.
Even climate change deniers cannot ignore how intensifying drought and flooding is telling it like it is – rising sea levels flood coastal communities, and drought-induced water supply risk is at dangerous levels in both the developed and developing world. While the world’s water problems may appear colossal in scale and scope and are in fact materially worsening due to climate change, there is not a water problem on earth that is not solvable. All that is required is more water competent capital and the will to act.
The opinions expressed herein are solely those of the authors and do not necessarily reflect the official views of the GGKP or its Partners.