Tag Archives: clean drinking water

How to Find the True Cost of Water

At current rates of consumption, the demand for water worldwide will be 40% greater than its supply by 2030, according to the UN. Portfolio managers are realizing that physical, reputational and regulatory water risk could hurt their investments, particularly in thirsty industries such as food, mining, textiles and utilities.

One worry is that shocks to supply could drown or dry out a company’s assets. In recent years Coca-Cola has been forced to close plants in India because of drought. In 2019 floods in America’s Midwest caused disruptions at the facilities of two food giants, Cargill and Tyson Foods. A survey by CDP, a non-profit firm, found that 783 big listed companies had faced a total of $40bn of water-related losses in 2018.

Another concern is that the price a company pays for water could rocket. The market price of water does not reflect the environmental and social costs of using it. Government subsidies also mean that companies often do not pay for its true cost. As aquifers are depleted, though, subsidies could become more costly and unpopular, forcing governments to retract them. S&P Global Trucost, a data provider, reckons that if Fortune 500 companies paid the true cost of water, based on estimates of scarcity, rather than current prices, their profit margins would shrink by a tenth. Margins for food, drink and tobacco firms would fall by three-quarters.

Disclosures of water risk are even patchier than those of greenhouse-gas emissions…Established names like Bloomberg and S&P Global are plugging the gap, as are startups. The result is that investors can approach management armed with data rather than questions. “We are getting rid of the black box that companies hide in.” 

Ceres, a non-profit firm, scores businesses on everything from direct water management to risks in the supply chain. Those seeking more detail can use visual tools, such as Bloomberg’s “maps” function, which plots a company’s facilities over a heat map based on water stress. (California is the same color as swathes of sub-Saharan Africa; far-eastern Russia looks a lot like western Europe.) Firms like Aquantix go further, and try to predict the financial cost of water risk.

The accuracy of such forecasts is not yet proven. For Andrew Mason of Aberdeen Standard Investments, though, they are still useful. They show companies that investors care about water risk and encourage them to share data. “This is where carbon was ten or 15 years ago,” he says.

Excerpt from An expanding pool: Investors start to pay attention to water risk, Economist, Jan. 9, 2021

Future of Green Life Depends on a Toilet

Innovator Cranfield University, U.K.: Putting down the toilet lid activates a dry flush. The motion turns a set of gears that drop feces and urine into a pan, where they are separated and either combusted into ash that can be thrown away or filtered into clean water that could be used to water plants, for instance, though not drinking. It was one of the few completely standalone toilets at the expo, able to function without links to water, sewer or electric lines.

The Innovator: Helbling Group, Switzerland: Helbling’s self-contained toilet system
Similar to other models, this toilet is a mostly self-contained system that transforms waste into clean water and a form of charcoal. But its makers, who were contracted by the Gates Foundation to develop this model, also had modern design in mind: A sleek, black-and-white prototype includes a touchpad for the flush and a container that can be detached to dump out excess water. While it doesn’t have to connect to water or sewer lines, one limit is that the model still needs electricity from an outside source

Sedron Technologies makes the Janicki Omni Processor, a small-scale waste-treatment plant that can filter wet fecal matter so thoroughly that the resulting water is not only free of bacteria and viruses but also safe for drinking. At its highest capacity the plant can manage waste for up to 500,000 people, the same range as two other plants featured at the expo. A trial has been running in Dakar, Senegal, over the past three years to identify and fix technical problems.

Excerpts  from Flush With Ideas: Bill Gates Pursues the Toilet of the Future, WSJ, Nov. 9, 2018

 

The Unquenchable Thirst: water mismanagement

Most of the drinking water consumed in Beijing has travelled 1,432km (895 miles), roughly the distance from New York to Orlando, Florida. Its journey begins in a remote and hilly part of central China at the Danjiangkou reservoir, on the bottom of which lies the drowned city of Junzhou. The water gushes north by canal and pipeline, crosses the Yellow river by burrowing under it, and arrives, 15 days later, in the water-treatment plants of Beijing. Two-thirds of the city’s tap water and a third of its total supply now comes from Danjiangkou.

This winter and spring, the reservoir was the capital’s lifeline. No rain or snow fell in Beijing between October 23rd 2017 and March 17th 2018—by far the longest drought on record. Yet the city suffered no supply disruptions, unlike Shanxi province to the west, where local governments rationed water. The central government is exultant, since the project which irrigates Beijing was built at vast cost and against some opposition.

The South-to-North Water Diversion Project—to give the structure its proper name—is the most expensive infrastructure enterprise in the world. It is the largest transfer of water between river basins in history, and China’s main response to its worst environmental threat, which is (despite all the pollution) lack of water.

The route between Beijing and Danjiangkou, which lies on a tributary of the Yangzi, opened in 2014. An eastern route opened in 2013 using the ancient Grand Canal between Hangzhou and the capital. (Jaw-dropping hydrological achievements are a feature of Chinese history.) A third link is planned on the Tibetan plateau, but since that area is prone to earthquakes and landslides, it has been postponed indefinitely…

Downstream from Danjiangkou, pollution has proved intractable. By diverting water from the Yangzi, the project has made the river more sluggish. It has become less able to wash away contaminants and unable to sustain wetlands, which act as sponges and reduce flooding. To compensate for water taken from their rivers, local governments are also building dams wherever they can to divert it back again. Shaanxi province, for example, is damming the Han river to transfer water to its depleted river Wei….Worst of all, the project diverts not only water but money and attention from China’s real water problem: waste and pollution.

Excerpts from Water: Massive Diversion, Economist, Apr. 7, 2018

The Fight for the California Aquifer

Deep beneath the desert east of Los Angeles is a Southern California treasure: a massive basin filled with fresh water.

The aquifer has spurred development of the popular resort towns in the Coachella Valley, such as Palm Springs, Palm Desert and Rancho Mirage. But it also lies underneath the reservation of a small Native American tribe that owns golf courses and casinos in the area.

The Agua Caliente Band of Cahuilla Indians say the drinking water is partly theirs, and wants a stake in how it is used by public utilities. A yearslong legal battle over the issue could end up being taken up by the U.S. Supreme Court this fall.  The high court’s action could affect groundwater rights across the arid West, where utilities now deliver the water to tribes as another customer, along with farmers, cities and businesses.

The 480-member tribe contends the local water agencies—the Desert Water Agency and Coachella Valley Water District—have mismanaged the groundwater by allowing too much to be pumped out and by replenishing the source with untreated water from the Colorado River that they consider subpar.  The water agencies, however, say the tribe appears to be making a water grab, potentially setting a dangerous precedent where control of a municipal resource is partially ceded from a public utility.

They also say the tribe, which has built two casino resorts and two 18-hole championship-caliber golf courses on its 31,500 acres, has little experience in managing water, and could potentially sell some of it.  “They’re in the money business,” said James Cioffi, board president of the Desert Water Agency. The tribe says its only interest is in preserving the quality of the water.

Agua Caliente in 2013 took its case to federal court, winning in the first round on the issue of whether it has federal reserved rights to groundwater. That ruling was upheld in March by the Ninth Circuit Court of Appeals in San Francisco. The water agencies appealed to the Supreme Court, which is expected to decide whether to hear the case this fall….If it lets the lower court rulings stand, more tribes could seek groundwater rights—triggering more litigation….Other tribes have already filed friend-of-the-court briefs on behalf of Agua Caliente’s litigation, including the Spokane in Washington and Paiutes in Nevada.

Tribal rights over rivers and other surface water supplies are well established in the West, but less so when it comes to groundwater—one of the most important drinking water sources in many desert areas.

Excertp from In Palm Springs, a Fight Over Who Controls the Drinking Water, Wall Street Journal,  Aug. 2, 2017

Water Resources,China: Short-Term Fixes

China’s new canal stretches over 1,200km (750 miles) from the Yangzi river north to the capital, Beijing. The new channel is only part of the world’s biggest water-diversion scheme. More than 300,000 people have been kicked out to make way for the channel and the expansion of a reservoir in central China that will feed it. But the government is in a hurry, and has paid their complaints little heed.

China’s leaders see the so-called South-North Water Diversion Project, which has already cost tens of billions of dollars, as crucial to solving a water problem that threatens the country’s development and stability. Grain-growing areas around Beijing have about as much water per person as such arid countries as Niger and Eritrea. Overuse has caused thousands of rivers to disappear. The amount of water available is diminishing fast as the water table drops and rivers dry up; what little is left is often too polluted even for industrial use. The World Bank has said that China’s water crisis costs the country more than 2% of GDP, mostly because of damage to health. T

Yet China’s water problem will remain unsolved. The canal is the second leg of the diversion project; the first, which opened last year in eastern China, brings water from the south along the route of the old Grand Canal, built 1,400 years ago, to the northern plain. Neither will prove more than temporary palliatives as demand continues to soar and pollution remains widespread. China’s water crisis cannot be tackled by showy mega-projects. Misguided policy is as much to blame as a mismatch in supply between the water-rich south and the arid north. A new approach to water management, rather than more concrete, is needed.

The solution is simple: China needs to price its water properly.  The Maoist obsession with food self-sufficiency compounds the problem. The arid northern plain, home to 200m people, produces water-hungry crops such as wheat and corn. Nearly 70% of water consumed in the area is used for agriculture. It is time for China to abandon autarkic thinking and import more food.

China’s water crisis: Grand new canals, Economist, Sept. 27, 2014

Water Sharing Agreement – Middle East

Drained by farms along its banks, the River Jordan is barely a trickle by the time it dribbles into the Dead Sea, and most of that is sewage coming out of Jerusalem and West Bank settlements. Israeli and Jordanian factories also use the water to recover potash.So fast are the Dead Sea’s briny waters shrinking that it has already shed its southern half. Much of the seabed is now as crusty as the pillar of salt that Lot’s wife turned into after fleeing Gomorrah. Hotels built on the shores in the 1980s have a cliff-top view today. Arthritic pensioners keen on the sea’s therapeutic powers are reduced to swimming in saline hotel pools. By 2050, say Friends of the Earth, a conservation group, the sea will be little more than a pond the size of two football fields.

After years of regional squabbling, Israeli, Jordanian and Palestinian ministers signed a deal ( a Memorandum of Understanding)* on December 9th, 2013 to slow desiccation. Backed by the World Bank, they plan to build a desalination plant on the Red Sea and pipe the run-off 180km (112 miles) north to the Dead Sea.  Some see advantages in diluting the Dead Sea’s nose-twitchingly sulphurous tides with ocean water. But there are drawbacks. Mucky algae might spread, turning the sea red. “It’s playing with an entire ecosystem,” says Mira Edelstein of Friends of the Earth.

The Dead Sea: Emptying out, Economist, Dec. 14, 2013, at 58

*The MoU outlines in broad language three major regional water sharing initiatives that will be pursued over the coming months by the cooperating parties. These initiatives include the development of a desalination plant in Aqaba at the head of the Red Sea, where the water produced will be shared between Israel and Jordan; increased releases of water by Israel from Lake Tiberias for use in Jordan; and the sale of about 20-30 million m3/year of desalinated water from Mekorot (the Israeli water utility) to the Palestinian Water Authority for use in the West Bank. In addition, a pipeline from the desalination plant at Aqaba would convey brine to the Dead Sea to study the effects of mixing the brine with Dead Sea water. In order to proceed with these actions, especially the desalination plant at Aqaba, technical work and studies will need to be undertaken.  See World Bank