Water is Hard (Hard-to-Abate, that is)

Climate change has arrived

The average planetary warming is now ~1.5 C over pre-industrial times, and the effects are real: more frequent and more intense extreme heat events, flooding, and droughts - impacting the water cycle, food supply, and causing migration and geopolitical tension. It’s estimated that around 69% of the impacts of climate change are felt through the water sector, with global insurance losses due to storms, floods, and droughts rising from about $12B/yr in 1990 to around $150B today, and are projected to reach to between $200B to $350B by 2034.

The effects of climate change and the need to decarbonize are clear and paramount to the wellbeing of the planet and all its inhabitants.

Hard-to-abate designation

Decarbonization requires not just building out massive amounts of renewables to transform electricity generation, achieving Net Zero also requires addressing the so-called hard-to-abate sectors such as cement, steel, chemicals, aviation, marine shipping, and heavy-duty transport. These hard-to-abate sectors are responsible for about 20% of global GHGs.

Designating sectors as hard-to-abate is helpful, shining a spotlight on industries that need special attention and focus. The International Energy Agency (IEA) says “heavy industries both facilitate and complicate the transition to a net-zero emissions energy system”. The IEA and others have spent considerable time and expense breaking down these designated hard-to-abate industries by subsector, geography, and specific plants so that the problem can be well understood and quantified.

The water sector is a 10X contributor to global GHGs - and hard-to-abate

The water sector is typically left out of the list of sectors that generate large quantities of anthropogenic GHG emissions, despite it accounting for as much as 10% of all emissions globally. Water is a ~$1 trillion/yr sector globally, which is about 1% of global GDP, but water is responsible for about 10% of all GHGs. Let that sink in - water’s GHG footprint is 10X higher than its economic footprint.

Water is (mostly) ignored

With the hard-to-abate designation and visibility on heavy industrial sectors, governments around the world have designed policies and incentives for decarbonization of those challenging sectors and a huge climate investment community has assembled to fund innovative start-ups to meet the challenge. But water is mostly ignored. For example, the EU ETS carbon tax is applied to heavy industry but does not apply to water and wastewater. And many climate investors either ignore or deemphasize water.

Water’s GHG emissions are not well understood

Water’s contribution of ~10% of global GHGs is widely reported but actual build-up of those emissions, or the breakdown into subsectors and geographies is not well understood.

Global GHG emissions, in CO2 equivalents or CO2e, are estimated to be around 40 billion tons, or gigatons, per year. If water is 10% of those, then it would be responsible for about 4 gigatons/yr.

Let’s try to break down this 4 gigatons/yr, or 10% of global emissions.

• In 2022, Global Water Intelligence (GWI), in collaboration with GIZ, estimated that emissions from what we might think of as the traditional water and wastewater sector, so water treatment and supply, wastewater treatment, and onsite sanitation, to be 0.847 gigatons on a 100 year GWP basis but 1.462 gigatons on a 20 yr basis. In just this subsector, water’s emissions would be around 2.1% of global GHGs on a 100 yr basis or about 3.7% on a 20 yr basis - substantial.

• Water reservoirs are a major contributor to global GHG emissions, but are still largely understood as a major contributor. A recent study estimated the global CO2e of reservoirs to be between 0.73 to 2.41 gigatons per year, or about 1.8% to 6.0% of global emissions.

• A host of other water sub sectors that are less obvious and less understood likely contribute greater than 1 gigaton of CO2e per year, including heating of water (domestic and industrial), boiling water to make it safe to drink (for example in less developed regions), emissions from water in rice cultivation, irrigation in agriculture. 

Tough problems can be addressed when they are understood. We need a more complete, granular understanding of the emissions from the water sector using a uniform accounting standard.

Why is water left out of the conversation?

This question is perhaps more rhetorical than sensibly answerable, but let’s try. It is concerning that so much work and effort has gone into detailing emissions from steel, cement, aviation, etc. while water, which is a larger emitter than any of those sectors, is rarely included in the conversation. Why? There are at least three possible reasons:

1. Water is so obvious and ubiquitous that we look past it.* Water is everywhere - it’s 71% of the earth’s surface and we think of water as a human right. We understand that waste needs to be treated but don’t think through the energy intensity of treatment and the CO2, methane, and nitrous oxide (~300X 100 yr GWP vs CO2) emissions. Water is the invisible gorilla.

2. Water is a complex, fragmented sector, with emissions coming from a variety of sources, requiring a range of solutions. In contrast, the designated hard-to-abate industrial sectors are generally monolithic, where a single technical solution could (at least in theory) achieve complete decarbonization, for example sustainable aviation fuel (SAF) for airplanes, green methanol or ammonia for marine shipping, or electrified iron reduction for steel production.

3. The GHG emissions from the water sector are not well detailed or understood, aiding inaction. There is no singular report that details the emissions from water, by subsector and geography, that uses a uniform accounting method and that provides visibility into the assumptions and build-up of the numbers, and that needs to change.

Call to action

We’d like to make four calls of action:

1. Innovators. We continue to be amazed by the quality and passion of founders that are addressing water and its challenges and we are making a call for more to test the waters and jump in and join us in helping to solve water. Blue is green!

2. Researchers. We call for the granular understanding of CO2e from the water sector, done in an open, transparent, and collaborative manner using uniform accounting standards, with the results disseminated both in a detailed and easily accessible database as well as summarized in an intuitive and clear summary such as in a summary report and a Sankey diagram, and ideally regularly refined and updated.

3. Think Tanks & Policymakers. We ask that think tanks, NGOs, and intergovernmental organizations explore water as a hard-to-abate sector and for policymakers to engage in dialogue and consideration of carrots & sticks to help activate the needed changes alongside mitigation actions for other GHG sectors.

4. You. Please join with us and the other leading voices in the water-climate intersection to raise awareness and visibility of water’s GHG footprint. And, if you’re a capital provider, policy maker, industrial leader, or in a position to affect change, please take some time and study the issues and opportunities.

We can do this

Climate change is causing havoc on the water cycle and, consequently, the water sector is being reshaped - now is the time to implement the innovations that address water scarcity and security while also achieving the needed GHG reductions. Water is a $1.4T industry that’s projected to be the next big investment theme. Let’s get it right. We can do this.

*The selective attention test related to the invisible gorilla can be taken here: https://www.youtube.com/watch?v=vJG698U2Mvo