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The future of water
Leo Salter
Cornwall College,
ECB Bulletin July 2009
Cornwall College,
ECB Bulletin July 2009
The Environmental Chemistry Group held its Thirty-Sixth Annual General Meeting with the Distinguished Guest Lecture and Symposium The Future of Water on 4th March 2009 at Burlington House. The 2009 Distinguished Guest Lecturer was Professor Tony Allan (KCL).
The symposium was designed to bring together different macro-perspectives on water and fundamentally it addressed the realities of environmental strategies for water in terms of the economic, legislative and political forces which dominate environmental change. Each of the contributors brought a precise, well-evidenced and independent perspective to the symposium topic.
John Sawkins (Heriot-Watt University) began the symposium with a presentation entitled “Economic Perspectives on Water Access and Affordability” and described how potable water has long been recognised as one of the key underpinnings of civic society and how public policy has for reasons of public health, economics, and environmental protection, sought to facilitate the delivery of water to the population. The balancing of these public policy objectives is difficult and sometimes lacks clarity. This has been especially true because water has low substitutability and hence it has been argued that it has unique importance and deserves special treatment. However, public policy has increasingly commoditised water and (via privatisation) sought full cost recovery i.e. public policy has moved from prioritising social objectives to policies prioritising economic objectives. This ‘new’ policy (manifest as privatisation) has had a great impact household finances; for households in the lowest income decile the Mean Percentage of Gross Weekly Household Income spent on water and sewerage increased from 1.41% to 3% from 1997/8 to 2005/6. The shift of policy to full economic recovery from households poses the question as to whether the affordability of water should still be a responsibility for government at all, and whether a shift (driven by, for instance, the WFD) to environmental priorities should occur – and the mitigation of the effects of such a shift of policy on economically vulnerable households be sidelined as an issue. John Sawkins closed his paper with a quote from Samuel Johnson “A decent provision for the poor is the true test of civilisation.”
Discussion took place around the ‘affordability’ of water in the UK with one of the positions being taken arguing that water was currently not unaffordable to any household in the UK and that the supply of water as a ‘free good’ has led to a situation where the population ceases to value it. The view was also taken that tariff structures needed to reflect the abilities of all social groups to pay and although full cost recovery was unanimously seen as the way ahead, mechanisms for supporting the economically vulnerable to pay were needed. But it was also clear that the current form of such interventions was inappropriate, inefficient and only partially effective.
Richard Carter’s (Cranfield University) presentation (“Navigating Water Futures in Sub-Saharan Africa”) moved from the UK to give a more global perspective on the future of water; this future had a very different significance when contextualised by a continent which faces the prospect of climate change with an already inherently variable climate, fast growing urbanisation, profound degradation of land and water, low income economies, limited governmental political will, weak institutions and poor governance (“Bleak trends seem to be the future”!). However, in some areas (e.g. Central Africa) the unavailability of water has much more to do with the shortage of service provision than a physical shortage and this is exacerbated by the ‘naturally’ high rainfall variability with some areas (e.g. Sudan, Malawi) showing coefficients of variability of 30-25% and more. This variability in rainfall is compounded by a high variability in groundwater recharge which is strongly linked to average rainfall but depends more on the site and the temporal distribution of rain – and variability is at its highest at the beginning of the planting season when the rains begin. The added impact of climate change is difficult to evaluate – most of Sub-Saharan Africa is predicted to experience a ±10-20% change in Mean Annual Rainfall. Given the population growth, the increased urbanisation, and the fact that agricultural production in the region has remained static for 40 years, huge stresses will develop. Large scale solutions – dams, hydropower, and large scale irrigation – are necessary but the financing, managing and environmental impacts of them are very problematic. Small scale solutions – water conservation, enterprise solutions to water supply, and farmer-managed irrigation – are realistic and effective but do not intervene at the necessary scale. But without solutions famine, poverty, disease and environmental degradation will get much worse. The need for nationally owned policies for the modernisation and the intensification of agriculture, and for investment in water infrastructure, is paramount. The discussion which occurred was somewhat more muted than for the previous paper where the problems seemed to be much more tractable than the almost terminal situation in Sub-Saharan Africa. The human predicament there will outweigh any real consideration of the environment for the foreseeable future and the implications of this for the Sub-Saharan natural environment will be profound.
Lars Steffensen (Ebullio Capital Management LLP) spoke eloquently about the way in which a transparent futures market for water could bring a reduction in investment risk and a consequent growth in investment in water provision (“H2O Cif Shanghai – the next big thing . . .?”). Price discovery was identified as being the first stage in any water futures trading – how does water cost impact on the price of commodities such as wheat and aluminium? And then the fundamentals of trading were considered – where would water be traded (New York, London and Chicago all have the necessary infrastructure for commodity trades to occur), what are the grades of water which can be traded (potable, grey, brown?), what is the lot size (1000 tonnes?), where are the delivery points (are the consumers mainly in urban centres?) and who would regulate the trades (FSA?). The benefits would be significant – investment in new water capacity would be easier because there would be a long-term lock-in on the future value of water, liquidity would be provided to the investors by speculation, and farmers could hedge against the price of water – just as they do currently for fertiliser prices and energy. The application of a “Cap n Trade’ process where only the water in excess of a ‘cap’ (i.e. water defined as essential (e.g. for public health)) was traded, was seen as the way ahead. Futures markets are historical drivers of growth and wealth creation and they do this by encouraging investment, allowing long-term planning (because the rate of return becomes more predictable), and because risk is reduced. This presentation was discussed with all of the papers in the Open Forum and, as might be expected, evoked a strong but rational debate.
Prathivadi Anand (University of Bradford) began by posing the question as to what amount of water it is ‘reasonable’ for an individual to expect to be able to access and then moved on to explore how climate, culture and economic factors made any answer subjective. Hence the UN target for 2015 to “. . . reduce by 50% the proportion of people without sustainable access to safe drinking water and sanitation” itself becomes subjective – as do the data which attempt to measure global progress towards it. By all current measures the proportion of people without access to water or sanitation has remained the same since 1990 and hence the 2015 target will not be met; but, when the subjectivity inherent in the way the target has been stated is revealed, this is inevitable. Having accepted that ‘sustainable access to safe drinking water’ is a relativistic concept (and so therefore is ‘scarcity’) it becomes necessary to create a new paradigm by which water can be discussed, “It’s not the quantity of water which is the question, it is the outcomes.” In this respect for an individual, an adequate (or a scarce) amount of water becomes determined by a specific set of actions (‘functionings’) that an individual has reason to value and it is these entitlements which should be determined by the institutional structures that command resources. Making access to water a human right is meaningless unless it is implemented and focusing on substantive freedoms within a society by creating good (and responsive) governance which attends to the capabilities of the governed sidelines the idea of ‘how much water’ in favour of how much is achieved by access to it.
The Distinguished Guest Lecture (“The future of water: three weddings and avoiding two funerals?”) began with Tony Allan emphasising his view that the nexus between water and energy make it impossible to discuss them independently – hence his lecture would consider both. He first described the way in which ‘natural’ soil water was sufficient for mankind for the first hundred thousand years of existence but as soon as domesticated sources of meat became available diet changed and more water was required – and the industrial revolution further increased demand. Professor Allan hypothesised that this early evolutionary experience made man ‘blind’ to the use and value of water since so much of the human experience has been with rain-fed agriculture with invisible embedded water – hence current approaches to pricing the value of water are wrong because they reflect this ‘blindness’.
Having offered an evolutionary-perception explanation of the problem man has with the value of water (a problem themed in all of the symposium presentations) the ‘three weddings’ of the Lecture title were discussed – each represented a link between water and energy: water can be manufactured with energy, energy can be generated directly with water (or indirectly via biofuel), and local energy and water security has been enabled by trade. For instance, because of its status as a trading nation Singapore can import its food (and hence, indirectly, the irrigation water used to grow it) and it also can pay for sufficient energy to produce 50% of its ‘blue’ water by desalination. The ‘two funerals’ of the title are those of water resources (already seriously depleted and degraded) and the atmosphere (due to the use of stored solar energy in the form of fossil fuels); these are linked and exert strong positive feedback. As with many of the previous speakers, the predictions were harsh, ‘A hundred years to depletion’; though the movement of water via trade (soil water in distant catchments is moved via food to ‘energy-rich’ nations with sufficiently developed economies to trade manufactured goods) can ameliorate the situation. Hence, cheap energy (provided via solar thermal energy from the world’s deserts) is a solution for water ‘scarcity’ – desalination, water recycling, and trade can occur, water depletion and carbon dioxide emissions will cease. But the necessary creative precautionary constructive engagement for such interventions are lacking and the attention of providers, politicians, the media and consumers is too fickle to produce a situation by which such technically feasible solutions can get political support.
Discussion in the open forum, which followed the five presentations, was extensive. The ‘capitalist’ approach of futures trading was challenged on ideological grounds. Its basis in the fundamental drivers of human behaviour seemed unacceptable when lives and the environment seemed likely to suffer. Who will stop malign rulers trading their country’s water at the expense of the population; especially when the origins of water may be difficult to trace? However, although there was a reluctance to accept it, all of the speakers agreed about the anthropocentric nature of man and, unless world peace, perfect democracy and change in man’s nature are imminent, it is challenging to produce an approach which could better regulate global water than trading it.
Dr LEO SALTER
Cornwall College,
Pool, Redruth, Cornwall
March 2009
The symposium was designed to bring together different macro-perspectives on water and fundamentally it addressed the realities of environmental strategies for water in terms of the economic, legislative and political forces which dominate environmental change. Each of the contributors brought a precise, well-evidenced and independent perspective to the symposium topic.
John Sawkins (Heriot-Watt University) began the symposium with a presentation entitled “Economic Perspectives on Water Access and Affordability” and described how potable water has long been recognised as one of the key underpinnings of civic society and how public policy has for reasons of public health, economics, and environmental protection, sought to facilitate the delivery of water to the population. The balancing of these public policy objectives is difficult and sometimes lacks clarity. This has been especially true because water has low substitutability and hence it has been argued that it has unique importance and deserves special treatment. However, public policy has increasingly commoditised water and (via privatisation) sought full cost recovery i.e. public policy has moved from prioritising social objectives to policies prioritising economic objectives. This ‘new’ policy (manifest as privatisation) has had a great impact household finances; for households in the lowest income decile the Mean Percentage of Gross Weekly Household Income spent on water and sewerage increased from 1.41% to 3% from 1997/8 to 2005/6. The shift of policy to full economic recovery from households poses the question as to whether the affordability of water should still be a responsibility for government at all, and whether a shift (driven by, for instance, the WFD) to environmental priorities should occur – and the mitigation of the effects of such a shift of policy on economically vulnerable households be sidelined as an issue. John Sawkins closed his paper with a quote from Samuel Johnson “A decent provision for the poor is the true test of civilisation.”
Discussion took place around the ‘affordability’ of water in the UK with one of the positions being taken arguing that water was currently not unaffordable to any household in the UK and that the supply of water as a ‘free good’ has led to a situation where the population ceases to value it. The view was also taken that tariff structures needed to reflect the abilities of all social groups to pay and although full cost recovery was unanimously seen as the way ahead, mechanisms for supporting the economically vulnerable to pay were needed. But it was also clear that the current form of such interventions was inappropriate, inefficient and only partially effective.
Richard Carter’s (Cranfield University) presentation (“Navigating Water Futures in Sub-Saharan Africa”) moved from the UK to give a more global perspective on the future of water; this future had a very different significance when contextualised by a continent which faces the prospect of climate change with an already inherently variable climate, fast growing urbanisation, profound degradation of land and water, low income economies, limited governmental political will, weak institutions and poor governance (“Bleak trends seem to be the future”!). However, in some areas (e.g. Central Africa) the unavailability of water has much more to do with the shortage of service provision than a physical shortage and this is exacerbated by the ‘naturally’ high rainfall variability with some areas (e.g. Sudan, Malawi) showing coefficients of variability of 30-25% and more. This variability in rainfall is compounded by a high variability in groundwater recharge which is strongly linked to average rainfall but depends more on the site and the temporal distribution of rain – and variability is at its highest at the beginning of the planting season when the rains begin. The added impact of climate change is difficult to evaluate – most of Sub-Saharan Africa is predicted to experience a ±10-20% change in Mean Annual Rainfall. Given the population growth, the increased urbanisation, and the fact that agricultural production in the region has remained static for 40 years, huge stresses will develop. Large scale solutions – dams, hydropower, and large scale irrigation – are necessary but the financing, managing and environmental impacts of them are very problematic. Small scale solutions – water conservation, enterprise solutions to water supply, and farmer-managed irrigation – are realistic and effective but do not intervene at the necessary scale. But without solutions famine, poverty, disease and environmental degradation will get much worse. The need for nationally owned policies for the modernisation and the intensification of agriculture, and for investment in water infrastructure, is paramount. The discussion which occurred was somewhat more muted than for the previous paper where the problems seemed to be much more tractable than the almost terminal situation in Sub-Saharan Africa. The human predicament there will outweigh any real consideration of the environment for the foreseeable future and the implications of this for the Sub-Saharan natural environment will be profound.
Lars Steffensen (Ebullio Capital Management LLP) spoke eloquently about the way in which a transparent futures market for water could bring a reduction in investment risk and a consequent growth in investment in water provision (“H2O Cif Shanghai – the next big thing . . .?”). Price discovery was identified as being the first stage in any water futures trading – how does water cost impact on the price of commodities such as wheat and aluminium? And then the fundamentals of trading were considered – where would water be traded (New York, London and Chicago all have the necessary infrastructure for commodity trades to occur), what are the grades of water which can be traded (potable, grey, brown?), what is the lot size (1000 tonnes?), where are the delivery points (are the consumers mainly in urban centres?) and who would regulate the trades (FSA?). The benefits would be significant – investment in new water capacity would be easier because there would be a long-term lock-in on the future value of water, liquidity would be provided to the investors by speculation, and farmers could hedge against the price of water – just as they do currently for fertiliser prices and energy. The application of a “Cap n Trade’ process where only the water in excess of a ‘cap’ (i.e. water defined as essential (e.g. for public health)) was traded, was seen as the way ahead. Futures markets are historical drivers of growth and wealth creation and they do this by encouraging investment, allowing long-term planning (because the rate of return becomes more predictable), and because risk is reduced. This presentation was discussed with all of the papers in the Open Forum and, as might be expected, evoked a strong but rational debate.
Prathivadi Anand (University of Bradford) began by posing the question as to what amount of water it is ‘reasonable’ for an individual to expect to be able to access and then moved on to explore how climate, culture and economic factors made any answer subjective. Hence the UN target for 2015 to “. . . reduce by 50% the proportion of people without sustainable access to safe drinking water and sanitation” itself becomes subjective – as do the data which attempt to measure global progress towards it. By all current measures the proportion of people without access to water or sanitation has remained the same since 1990 and hence the 2015 target will not be met; but, when the subjectivity inherent in the way the target has been stated is revealed, this is inevitable. Having accepted that ‘sustainable access to safe drinking water’ is a relativistic concept (and so therefore is ‘scarcity’) it becomes necessary to create a new paradigm by which water can be discussed, “It’s not the quantity of water which is the question, it is the outcomes.” In this respect for an individual, an adequate (or a scarce) amount of water becomes determined by a specific set of actions (‘functionings’) that an individual has reason to value and it is these entitlements which should be determined by the institutional structures that command resources. Making access to water a human right is meaningless unless it is implemented and focusing on substantive freedoms within a society by creating good (and responsive) governance which attends to the capabilities of the governed sidelines the idea of ‘how much water’ in favour of how much is achieved by access to it.
The Distinguished Guest Lecture (“The future of water: three weddings and avoiding two funerals?”) began with Tony Allan emphasising his view that the nexus between water and energy make it impossible to discuss them independently – hence his lecture would consider both. He first described the way in which ‘natural’ soil water was sufficient for mankind for the first hundred thousand years of existence but as soon as domesticated sources of meat became available diet changed and more water was required – and the industrial revolution further increased demand. Professor Allan hypothesised that this early evolutionary experience made man ‘blind’ to the use and value of water since so much of the human experience has been with rain-fed agriculture with invisible embedded water – hence current approaches to pricing the value of water are wrong because they reflect this ‘blindness’.
Having offered an evolutionary-perception explanation of the problem man has with the value of water (a problem themed in all of the symposium presentations) the ‘three weddings’ of the Lecture title were discussed – each represented a link between water and energy: water can be manufactured with energy, energy can be generated directly with water (or indirectly via biofuel), and local energy and water security has been enabled by trade. For instance, because of its status as a trading nation Singapore can import its food (and hence, indirectly, the irrigation water used to grow it) and it also can pay for sufficient energy to produce 50% of its ‘blue’ water by desalination. The ‘two funerals’ of the title are those of water resources (already seriously depleted and degraded) and the atmosphere (due to the use of stored solar energy in the form of fossil fuels); these are linked and exert strong positive feedback. As with many of the previous speakers, the predictions were harsh, ‘A hundred years to depletion’; though the movement of water via trade (soil water in distant catchments is moved via food to ‘energy-rich’ nations with sufficiently developed economies to trade manufactured goods) can ameliorate the situation. Hence, cheap energy (provided via solar thermal energy from the world’s deserts) is a solution for water ‘scarcity’ – desalination, water recycling, and trade can occur, water depletion and carbon dioxide emissions will cease. But the necessary creative precautionary constructive engagement for such interventions are lacking and the attention of providers, politicians, the media and consumers is too fickle to produce a situation by which such technically feasible solutions can get political support.
Discussion in the open forum, which followed the five presentations, was extensive. The ‘capitalist’ approach of futures trading was challenged on ideological grounds. Its basis in the fundamental drivers of human behaviour seemed unacceptable when lives and the environment seemed likely to suffer. Who will stop malign rulers trading their country’s water at the expense of the population; especially when the origins of water may be difficult to trace? However, although there was a reluctance to accept it, all of the speakers agreed about the anthropocentric nature of man and, unless world peace, perfect democracy and change in man’s nature are imminent, it is challenging to produce an approach which could better regulate global water than trading it.
Dr LEO SALTER
Cornwall College,
Pool, Redruth, Cornwall
March 2009
