Mobilizing investment in water for climate
Kate Hughes speaking at Climate Week New York 2024
In September, we kicked off our Climate Week NYC with a live broadcast at We Don't Have Time's Climate Hub and an expert lineup of speakers who offered entry points and concrete solutions so that cities, countries and companies can get water right for climate action. Alliance for Global Water Adaptation's Executive Director John Matthews shared how tools such as the Water Resilience Tracker and initiatives like the Water Initiative for Net Zero are working to shift thinking on water, resilience and mitigation, and help countries get water right in their climate planning. John Matthews was joined by Kate Hughes, CEO, Resilient Water Accelerator as well as Virginia Newton-Lewis, Director of Water Sustainability, Grundfos and Mike Brown, Global Cities Lead, Climate Bonds Initiative.
We spoke to Kate Hughes about how to shift understanding of water’s role in mitigation and mobilize investment urgently.
Why is water's role in mitigation being overlooked?
This is a good question, as we know that we need to consider all sources of emissions to keep to 1.5C. The value of net zero as a concept, is that we have to look at all sectors and leave no stone unturned, but often water is not viewed as a sector in its own right. If it’s only considered as an input into other systems and processes, we risk missing a huge opportunity to tackle its emissions. Water is at the heart of so many industrial, agricultural, and domestic activities, as well as being central to nature based systems, and so it should be a logical place to direct action. We know that emissions from water are more than the maritime and aviation sectors combined – it is responsible for around 10% of global emissions from both CO2 and methane – and we can combine work to tackle those emissions with efforts to reduce pollution and increase access to essential services like water supply and sanitation.
Catalysing investment into water can be hard, but this is not a ‘hard to abate’ sector – there are many opportunities and the solutions are often well known. So this is more about making sure that we raise those opportunities up the agenda and think of water as part of the net zero solution in the same way we do about food, industrial processes, buildings or transport. The Resilient Water Accelerator’s report on the potential for using the voluntary carbon markets is this area shows just how large the benefits of this approach could be.
“Catalysing investment into water can be hard, but this is not a ‘hard to abate’ sector ”
How can shifting the understanding of water for mitigation mobilize investment in well-managed water resources and services and build resilience?
The impacts of climate change are felt through water – either increasingly severe droughts and flooding, or changes in rainfall patterns and increasing water pollution – so we need to see a lot more action on water across the board, and a lot more investment. However, we know that funding for resilience has fallen behind that for mitigation, particularly when we look at private finance. Climate resilience is often seen as being suitable only for grants and not generating revenue streams, and the business models are less developed. So exploring where and how water delivers mitigation benefits can open up different funding sources, in areas where investors feel more familiar and the risks (real and perceived) are lower. This can mean that – for example – financing for improved water efficiency is actually financing for energy efficiency, something which banks are familiar with and are comfortable knowing that returns are predictable. The same is true for switching to renewable energy to power water treatment and supply, or capturing biogas from sewage. And of course, as we improve water and wastewater management, water efficiency and wetland protection for emissions purposes, this also builds resilience of the water system for communities, economies and biodiversity.
How are countries and companies working together to address this?
We know from our work in Bangladesh that industrial water demand is projected to increase 360% by 2042, driven largely by growth in the garments and textile industries, which represent an estimated 70% of exports. So the interests of the country’s economy and of the companies are strongly linked with each other and are dependent on there being water available. There is already good understanding of these issues, and we are now working to see how we can support brands, factories, economic zones, the government and banks to see this as not just a shared risk, but a shared opportunity.
Similarly in Lagos, Africa’s fastest growing city, we are bringing policy makers and companies together to work through ways to increase water investment. Often these conversations do not happen, and there are misconceptions and miscommunication. The Resilient Water Accelerator has created the Lagos Water Partnership, which creates a forum through which issues of regulation, project development, pricing, climate impacts and investment potential are brought together, with both public and private sector stakeholders engaging together to overcome barriers and agree to next steps. It is already changing the way that water investment is viewed in Lagos, sparking both debate and action.
