Physical Impacts On Unregulated Sectors Water Supply and Treatment

It could be argued that the water supply and treatment industry is the human activity most immediately affected by climate change, given its direct dependence for its raw material on everyday experience of precipitation and temperature. In their response to the Third Carbon Disclosure Project, the directors of RWE, the utilities conglomerate, stated:

For our water business, adaptation to climate change is a major challenge. More uneven distribution (of water) together with a rise in temperatures will lead to serious concern over availability of sufficient water supplies. If the expectation of society to achieve progressively higher quality standards is maintained, this could lead to additional use of energy and higher emissions, notwithstanding that technology success might be able to reach higher efficiency gains. (Kiernan and Dickinson 2005)

One thing that is certain about climate change is that it will inject a great deal of uncertainty into our lives, especially those whose lives relate to the production of weather-dependent products, like drinking water. In the water supply business—if customers expect the same degree of reliability that they have enjoyed in the past (admittedly only in the richer, industrialized economies)—then that expectation translates directly into additional investment in water supply infrastructure, beginning with storage capacity and including loss reduction in distribution. One of the most predictable consequences of living in a carbon-constrained world will be ongoing heavy investment in water supply and treatment.

For example, Britain enjoys a temperate climate with prevailing westerly winds bringing a constant stream of moist air from the cool waters of the North Atlantic. Yet even Britain is experiencing uncertainties and shortages of water supply, as evidenced by the unexpected drought in Yorkshire in 1995 (Bakker 2000). At the time, the leading hydrologists and meteorologists in Britain were reluctant to link this unusual event to climate change. As Yorkshire Water Services had recently been privatized and the company had returned millions of pounds of profit to its parent holding company (Yorkshire Water plc.), public opinion preferred to blame the new management for the shortage, for which the regulators had provided plenty of warning.

Whatever the rights and wrongs of this particular case there is already greater uncertainty for water supply—even in a temperate country like Britain—and that uncertainty will require substantial, ongoing investment in the decades ahead. An interesting example of the degree to which the situation has changed is provided by the proposal to build a water desalination plant to meet the future needs of London! Note: This is not a proposal for Bahrain or Malta. Thames Water plc. tabled the proposal in the summer of 2005 as an essential part of their plan to meet the anticipated needs of the projected increase in population in the region known as the Thames Gateway, the lands downstream of London, adjacent to the Thames. Even before the government water regulators could respond to the proposal, the Mayor of London, Ken Livingstone, dismissed it completely, proclaiming it to be ''the wrong way to go," because the days of supply-side management were over, and the future lay in ''demand-management,'' that is, conservation and reduction in water use.

Thus, it seems very likely that increasingly we will be living in a water-constrained world, as well as a carbon-constrained world. Companies that might prosper under these conditions will be low-carbon companies and

A. Subsector B. Gas

A. Subsector B. Gas

Dust Devil Whirlwind

FIGURE 4.1 GHGs from agriculture

Source: Baumert, K., T. Herzog, and J. Pershing 2005. Navigating the Numbers: Greenhouse Gas Data and International Climate Policy, World Resource Institute, available at www.wri.org.

FIGURE 4.1 GHGs from agriculture

Source: Baumert, K., T. Herzog, and J. Pershing 2005. Navigating the Numbers: Greenhouse Gas Data and International Climate Policy, World Resource Institute, available at www.wri.org.

will use water and energy as efficiently as technology allows. If the future also sees the gradual removal of subsidies and the freer play of market forces, it is likely that prices for water, energy, land, and other commodities will rise, at least in the short term.

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