Climate Change Ramifications For The Water Industry

Climate change isn’t going away — not in the literal sense, not in public discourse, and probably not as a point of contention. COP21, the international climate change conference held in Paris in December 2015, was perhaps the pinnacle of attention, as government and business leaders from around the world convened to discuss the problem and devise solutions. While the big-picture initiative arising from the talks was to halt global warming at 1.5°C, there are many smaller, more personal (but no less important) initiatives being taken on by water and wastewater professionals. Utilities, engineers, treatment technology providers, and municipal decision-makers all have a responsibility to monitor the situation and mitigate future impact.

To better understand the wide-ranging challenge — including risk, repercussions, building resiliency, and the financing of it all — I spoke with Albert Cho, VP of Strategy and Business Development at Xylem Inc., a water/wastewater solutions provider. Previously, Cho served as Senior Advisor to the Deputy Secretary at the U.S. State Department, where he was a White House Fellow and served on former U.S. Secretary of State Clinton’s Policy Planning Staff; he also served at the United Nations with Under-Secretary-General Jeffrey Sachs on a global plan for achieving the Millennium Development Goals. His background enables a viewpoint and understanding of both the ‘big picture’ and closer-to-home ramifications of climate change, shared in the following Q&A.

How will the events of the 2015 United Nations Climate Change Conference (COP21) directly impact the water/wastewater industry?

The Paris accord was a huge achievement. It succeeded at getting countries to agree on a common framework to slow climate change. Now the hard part starts, as leaders go home and start to implement their national commitments. Each country will need to cut emissions sharply, invest to become more resilient to a changing climate, and do all this while sustaining economic growth.

The water industry is critical to these efforts. On the one hand, it consumes a material amount of energy and generates greenhouse gas emissions, and as recent Xylem research shows, we can cut these emissions significantly while driving billions of savings by making smart investments in energy-efficient equipment. On the other hand, our sector has the critical infrastructure and know-how to help communities adapt to climate events such as mega-droughts and floods. Investing in water is investing in a climate-smart economy.

From a water perspective, what are the risk factors associated with climate change?

Water is the most intimate lens through which most people will experience climate change. We all drink water and go to the bathroom, and the infrastructure that makes these actions safe consumes energy and generates greenhouse gas emissions.

At the same time, scientists forecast that we will see greater climate variability — the risks of which will be felt through water-related events such as floods and droughts. Water will increasingly become a health and safety risk, an operational and supply chain risk, and could even become an existential threat to cities and communities.

So today, many water utilities are facing a ‘perfect storm.’  They are facing the basic challenges of running an under-funded, mission-critical service in the face of deteriorating infrastructure, regulatory pressure, and changing consumer habits and expectations. Add to this the need to reinvest for resilience to new extreme weather risks and you can see why our country’s utility operators deserve an award for heroism!

Many are critical of timelines tied to climate change impact. How do you inspire urgency when the exact nature of the threat is uncertain?

We need to connect the dots for people. We already have a crisis even without more climate change. California lost billions of dollars in revenue due to drought; businesses and insurers are losing billions of dollars due to floods. In the base case, growth in our economy, our population, and our cities will mean that these risk exposures will grow. Scientists are telling us that it’s probable these challenges will intensify unless we take action today. It’s just smart risk management to realize that early investment in climate mitigation and resilience water technologies will save you money over the long term.

In general, who is best suited or most likely to approve/install resiliency initiatives in a municipal setting?

No single person, organization, or central planner can build resilience alone. In a municipal setting, citizens, businesses, and community groups know where the vulnerabilities are. They need to be engaged in participatory planning processes to identify the most pressing challenges and assess alternative solutions. I recently heard of some great work by organizations like PUSH Buffalo in New York and the Cooper’s Ferry Partnership in New Jersey, where community groups and governments are working together in this way.

At the same time, municipal agencies need to collaborate to solve problems jointly so that public services — such as water, power, emergency response, and transportation – complement each other’s efforts. The Rockefeller Foundation’s “100 Resilient Cities” initiative is funding “Chief Resilience Officer” roles in cities around the world to catalyze this type of on-the-ground coordination.

What are some specific examples of infrastructure improvements that combat drought or floods?

It’s going to take all kinds of interventions — large and small, gray and green — to make our urban infrastructure fit-for-purpose in a more variable climate.

With respect to drought infrastructure, water reuse is a key technology that is about to take flight. In Singapore and Israel, it has played a crucial role in creating water security over the past several decades, and the underlying technologies are proven and increasingly accepted by consumers.

On the flood side, we’ll see many different technology categories take root. Green infrastructure has an important role to play in reducing destructive urban stormwater flows. Many cities will also want to consider modernizing and expanding drainage infrastructure such as pumps, and in some cases repurposing other forms of infrastructure to serve as water storage or conveyance. Kuala Lumpur did just that with its SMART tunnel, which serves as a roadway most of the time but doubles as a stormwater diversion tunnel during flood incidents.

In both cases, I think you’re going to see smart infrastructure — leveraging intelligent actuation, analytics, and data flows from vast networks of embedded sensors connected to the Internet — playing an increasingly important role in managing both droughts and floods. From soil moisture sensors to pervasive flow metering, measurement, analytics, and control will be important drivers of urban resilience.

Where will the money come from, considering that many water and wastewater utilities have severely limited budgets?

I don’t see public financing growing significantly in the U.S. in the medium term, so there’s a big gap to close. Part of the solution is tapping every potential cash flow we can find to support new investment. For example, we know that utilities consume a lot of energy. Our research shows that in some cases efficiency gains from newer technologies can more than pay for the up-front costs of the equipment. That means that we’re leaving value on the table that we can ill afford. We need to unlock an energy efficiency revolution in the water sector, and the trick is finding the right partners and transactional structures to get the ball rolling.

What alternative financing models are available, and how can we promote the understanding and acceptance of these options?

Financing models from other sectors include Energy Savings Performance Contracts (ESPCs) and carbon finance. The water sector needs to develop the “soft market infrastructure” that enables these and other innovative financing mechanisms to successfully catalyze investment. But today, energy efficiency is often not a top-level KPI [key performance indicator] that drives decision-making, nor are there widely accepted definitions or frameworks to help water utilities set appropriately ambitious energy-use reduction targets. Diffusion of these tools will certainly drive greater capture of opportunities that save utilities money while reducing emissions.

What role does innovative technology play in combating climate change?

I believe innovative technologies will ultimately turn wastewater treatment plants into energy-positive carbon sinks that displace fossil energy and encourage carbon sequestration. That’s a long-term vision — though utilities like DC Water are clearly making strides in that direction. In the interim, there are plenty of existing water technologies that can contribute to climate change mitigation through significant reductions in energy consumption, and we need to accelerate their adoption with innovative financing and new incentives.   

How can we ensure that these technologies get installed whenever possible? Should "green" and energy-efficient tech be regulated?

I would like to see an industry-wide coalition set an ambitious quantitative, time-bound energy reduction target and collaborate closely with the public and private sectors to achieve it. For very good reasons, our sector’s culture is historically conservative and risk-averse, so we need to elevate the importance of energy efficiency to the highest levels of organizations to drive change. Putting energy efficiency at the top of our industry’s policy agenda would make financial sense for rate-payers and utilities, while also delivering environmental and economic co-benefits for the nation and the world.