🗣️ "Drought, Floods Disrupt Global Water Sector"

Host: Reese Tisdale
Guests: Keith Hays | Vice President & Co-Founder | Bluefield Research &
Chloé Meyer | Global Water Analyst | Bluefield Research
Category: 🗣️ Opinion

Podcast’s Essential Bites:

[5:26] CM: “A big trend of the past few months has been […] climate related events having a huge impact from Asia to Latin America. For instance, in the Middle East, we've seen that Iran has been facing a steady decline of rainfall over the last decades. And this trend actually coincides this year, with the country's increasing dam construction, including four new dams added to Iran's largest river this year only. However, of course, extreme heat and evaporation has limited […] supplies and left municipalities short of demand for water and hydropower. And this contributed to causing power outages over the summer, and led to the government banning cryptocurrency mining, a major energy consumer and water user in Iran.”

[6:21] CM: “Droughts and water shortages are also [affecting] the economy of Chile, which experienced the driest year in a 12 year running drought. The government over the summer asked regulators to clamp down on water use and seek alternative sources in fear of an approaching Day Zero, the day when taps run dry. This is a threat that has already prompted major restrictions in Cape Town, South Africa and Chennai, India in recent years. And in Chile, the decrease in reservoir levels had a direct impact on electricity production, as hydropower represents almost 30% of the country's installed capacity.”

[10:46] CM: “The water energy nexus is at the forefront of concerns and hydropower plants all over the world are being disrupted because of water shortages. […] Going back to Chile, the country has set itself the goal of being carbon neutral by 2050, which is an objective that requires, of course, the shutdown of coal fired plants. But over the summer, as the reservoir levels were decreasing, one of the retired coal fired units was reactivated to support electricity production. And […] [it was] actually forecasted that diesel use could increase back by 10% in the country's energy matrix, by the end of the year. […] Droughts [have] also been threatening China's five year plan of reducing fossil fuels in energy consumption. In southern China, for instance, hydropower dams have been under provision and the coal plants are actually struggling to meet a rising demand driven also by a strong economic rebound after COVID. And limiting impacts of drought by diversifying further into renewable and potentially nuclear power will be key for the future of China.”

[18:22] KH: “These disasters we've seen, whether we're talking about droughts or floods in the US, or Europe or elsewhere, have made [water] much more front and center […] for investors. […] I think in sustainable investment, a lot of it was driven by emissions reduction, carbon footprint, and […] green bonds, and now you're starting to hear about blue bonds. The idea here is that water is forming much more a part of the overall conversation about sustainable investment. And so that takes different forms, whether it's bond issues, or it's taking equity stakes in technology companies, or financing rounds to help scale up some of these smaller companies.”

[20:20] KH: “It's one thing to […] set an emissions limit for a country or a state and create a certificates market, like the way it happens in renewable energy. With water, it's more challenging, you almost need to look at it more on a river basin level, because it is very local. And the targets or objectives that companies are setting are pretty much self […] calibrated, self reported. So […] I think it gives everyone a little bit of peace of mind to think that corporations are caring more about how much water they use. But I think the challenge that we even have as a research company is how do you compare apples to apples? How do you look at Coca Cola India versus Pepsi US versus Kraft Switzerland? There really isn't […] a basic set of metrics. […] We're all hoping as an industry that the water sector evolves, and that does become more measurable and we can hold corporations more accountable for that.”

Rating: 💧💧💧

🎙️ Full Episode: Apple | Spotify
🕰️ 35 min | 🗓️ 10/12/2021
✅ Time saved: 33 min

Additional Links:
Bluefield Research Newsletter: Waterline