The long road from Copenhagen, going forward

The upcoming climate conference in Copenhagen casts its shadows clearly ahead. Miscellaneous non-governmental organizations (NGOs) see the opportunity to put forward their views on climate change. But it's not just NGOs that try to draw attention. A financial boutique like the Swiss asset manager Sam also makes use of "Copenhagen" to bring its message to the attention of potential investors. Too much focus on CO2 reduction A special plea comes on the part of the Centre for Global Development. This NGO assumes that the outcome of Copenhagen will be a near total failure. The debate surrounding CO2 will probably lead to continued bickering over the distribution of the financial contributions to cover the costs of the climate change. Indeed, the core of the discussion is to establish global rules for a balanced reduction of greenhouse gas emissions. This probably calls for revolutionary changes in the manner of production and consumption on a scale that is historically unprecedented. That may be too much asked for, the centre assumes.According to the NGO it is not unlikely that any decision made will not be favourable for the average citizen in developing countries. The real danger is that people in developing countries will be pushed at or below subsistence level. It is therefore perhaps better to shift the focus of the discussion. The question should not be what developed and developing countries have to do to cut emissions. The question ought to be how inhabitants of the developed world can help developing countries to gain access to various forms of energy needed. The knife should cut both ways here. Energy security should help raise the quality of life of the average citizen to a decent level. At the same time this should be done with new energy efficient technologies that fit the development of countries concerned and that can be integrated quickly and easily into the existing social and economic organization. The stringent but gradual introduction of these new energy-efficient technologies can make a major contribution to reducing CO2 emissions in developing countries, thus claims the NGO. Water, challenge and opportunity A theme that undoubtedly will be discussed in Copenhagen is the growing lack of clean water in ever more parts of the world. The problems surrounding water and water supply may be well known by now. In most emerging countries, the water scarcity is due to the unholy combination of population growth, urbanization and a growing urban population aspiring to a Western standard of living. A lack of water constitutes a threat to economic growth. And if there is enough water, then a lack of an infrastructure is a problem and for sure not a small one. It is calculated that over the next 20 years some 350 million people will move from the countryside to the city. Everyone can see that huge investments are needed to build and maintain proper sanitation facilities for these urban crowds.
Private investment The question is whether governments are willing to pay for the investments needed. More than 90% of the utilities in the world today cannot function without government support. Although privatization has lost much of its lustre, it is too easy to sweep aside this option. Experiences in the Philippines show that privatization can work to the satisfaction of all parties involved. The quality of the network improved, the level of the supply of fresh, clean water went up and larger numbers of consumers had access to good quality water at reasonable prices. The privatized water company makes an attractive profit. There are more areas where private capital is doing useful work. The Chinese industry is not known for its environment friendly policies. This has resulted in widespread contamination of surface and groundwater. The pollution is so great that it affects economic growth. The government therefore has started a comprehensive initiative to improve wastewater infrastructure. The scope of this initiative is $ 60 billion and it provides opportunities for local but also international companies to invest in wastewater systems. Besides, the Chinese public is increasingly concerned about the quality of tap water. The growing popularity of devices to ensure the required quality is proof to that. Less irrigation, higher returns An effective policy of saving water is impossible without improving savings in agriculture. This sector consumes 70% of the water used annually. Especially in countries like India with continued strong population growth it is of utmost importance to significantly lower the share of agriculture (86%) significantly. The combination of high population growth and haphazard irrigation results in more and more regions in the depletion of water resources and a sharp decline in the groundwater level. Wells with a depth of 400 meter are no longer the exception. In addition, the expected climate change will probably further threaten and damage traditional water resources. It is time for new and smarter irrigation techniques that drastically reduce the use of water. The drop technology provides the best results so far, with water usage going down by 80%. Copenhagen offers opportunities It is yet unclear how Copenhagen will end. Far-reaching decisions are not expected. Copenhagen is just a station on a long road. But it is obvious that new policies will be outlined. Given the weak financial position of many governments, it is obvious that a part of this new policy will be outsourced to private companies and investors. Without private efforts there will be no new energy efficient technologies, no new irrigation systems and no new water treatment technologies. And, be honest, these are very interesting markets, both in the developed countries and in the developing countries. The Chinese water market is worth $ 40 billion with an annual growth of more than 10%. Who can say no to such a proposition?



Sources:
Birdsall N. and Arvind Subramanian, Energy needs and efficiency, not emissions: re-fraiming the climate change narrative. Center for Global development, working paper 187. November 2009.
[1] Sam Insight, Water Crisis: Challenges and Opportunities in Emerging Markets. November 2009