Rethinking Resilience: How a New Era of Extremes is Changing How Utilities Invest
The cost of water could hit $1.5 trillion a year as droughts and floods become more extreme.
The intensity of water-related crises has increased three-fold since 2013 and could cost trillions of dollars to manage, according to a new report from Global Water Intelligence1 and Xylem2 . Rethinking Resilience: How a New Era of Extremes is Changing How Utilities Invest, maps this data alongside how the world’s leading utilities are adapting to the new realities of the water cycle.
The average intensity of drought and flood events tripled between the periods 2013-2018 and 2019-2024 according to new data from NASA3 published in the report. A six-fold increase in the intensity of extreme wet and dry events could be expected by 2040, if current trends towards higher global temperatures continue. Urban water systems are simply not designed to manage this trend.
Around 41% of the $401 billion total utility capital expenditure will go towards resilience related projects this year, according to a survey of over 1000 investment projects analysed for the report. This proportion is set to rise to 46% by 2030, but this is still not enough – the total spend would need to reach $1.5 trillion to guarantee water security. It calls for a rethink of the way public water agencies approach resilience.
Xylem Chief Strategy and External Affairs Office Al Cho commented “The data contained in this report confirms what global utility leaders are experiencing firsthand: a shift from means to variances. In other words, we are not only planning for gradual increases within known boundaries; we must now be deeply curious about how bad things could get. In mathematical terms, we have to become obsessed with kurtosis (the shape of tail risks) because understanding statistical extremes is becoming a matter of human urgency.”
GWI publisher, Christopher Gasson commented “We’ve known for some time that climate change is bringing greater extremes of droughts and floods. This report is the first time anyone has tried to put a number and a price on it, and the results are quite frightening. It is not just that we need to think more creatively about the infrastructure we build, we also need to rethink the financial models we have relied on, and the institutional approach to delivering resilience. We will need to move quickly or it could become very expensive.
Arresting climate change was always going to be the cheapest option for the world. Now, as temperatures continue to rise towards +2°C over pre-industrial levels, we need to think seriously about the cost of adaptation. Doing nothing will undoubtedly be the most expensive option in terms of the catastrophic losses ever more extreme droughts and floods will inflict on the world, but doing everything will also be very costly. I hope that this report opens up the global discussion about cost effective strategies for urban water resilience.”
The report includes case studies from major cities responding to the new realities of the water cycle:
• Sydney, Australia: tripling capital investment to reduce its dependence on rainwater.
• New York City, USA: a new mandate for coastal resilience and a $30 billion spending plan.
• Austin, Texas: a 100-year resourcing plan to meet the needs of one of America’s fastest growing cities.
• Athens, Greece: exploring all options to avert a water scarcity crisis.
• Dubai, UAE: a desert city now investing $8.2 billion in stormwater management.
Read the paper to find out more about NASA’s latest data & the future of resilience at www.globalwaterintel.com.
Rethinking Resilience: How a New Era of Extremes is Changing How Utilities Invest is released today, May 6, setting the agenda for next week’s Global Water Summit in Paris, May 12-14. The theme for this year’s event is ‘Accelerating Investment’. It will discuss strategies for attracting new capital into the water sector and approaches to investment that will maximise the impact of every dollar. Limited spaces remaining, see www.watermeetsmoney.com for details.
NOTES & REFERENCES:
- Global Water Intelligence is the leading provider of data and analysis to the international water industry.
- Xylem is a leading global water solutions partner for utilities, industrial manufacturers, building operators and communities looking to protect and optimise water.
- 3. The data is provided by researchers at the Goddard Space Flight Centre in Maryland working on NASA’s GRACE programme. It is based on a methodology for identifying extreme droughts and floods established in Changing intensity of hydroclimactic extreme events revealed by GRACE and GRACE-FO, by Matthew Rodell and Bailing Li, Nature Water, January 3 2023 doi.org/10.1038/s44221-023-00040-5
About Parul Dubey
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