Water: Stranded Assets and Last Century Infrastructure
Stranded assets are commonly associated with the fossil fuel industry - oil, natural gas and coal - impacted by climate change. The decarbonisation of the energy sector is devaluing these assets and driving this change.
This was recently underscored by Mark Carney, the U.N.’s special envoy on climate action and finance. In an interview he said “enormous” stranded assets show the need for a rapid energy transition.
In contrast, stranded assets related to water scarcity have been relatively rare, except for a few high visibility instances. Examples include beverage companies losing their social license to operate over disputes on water availability (perceived or real) and regulatory/public policy issues. What has not had enough attention is the impact of climate change on the decreased availability of surface water and implications for our water infrastructure.
This has changed, as pointed out in a recent article about the climate change impact on California’s ability to deliver water to cities and farms. Governor Newsom announced that “cities and farms should expect to receive virtually no water next year from the State Water Project”.
To provide some perspective, the past two years have been the driest in Northern California since 1976-77. Reservoirs remain at record-low levels. The response has been slow-moving at best. For example, this past summer Governor Newsom, asked California residents and businesses to reduce urban water use by 15 percent from last year’s levels. This is clearly not working: they were only reduced by 3.9 percent by September.
Policy has not kept pace with increasing demand for water due to population growth, urbanization, agriculture, and manufacturing coupled with a lack of investment in infrastructure. The reality is that the dams we built, the conveyances, and centralized water and wastewater systems are not suited for our current climate reality. The recent passage of the US infrastructure bill while helpful will invest in the last century (or the century prior) water infrastructure.
We need to invest in 21st-century technologies such as; digital technologies for real-time monitoring of water quality and quantity, decentralized (or extreme decentralized) water treatment systems for water reuse and recycling, smart water homes and cities, off-grid water generation (e.g., air moisture capture) and a dramatic rethink of agriculture (e.g., precision agriculture, drought-resistant crops, etc.).
There is increased risk of stranded water infrastructure due to climate change. Continuing to solely invest in this infrastructure is money unwisely spent. It’s time to rethink water.