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This Week In Water: Companies Manage Risk At Its Source

Ecosystem Marketplace's briefing for the business community on water risk, published this month, provides the sector with nature-based solutions to their water challenges while citing companies that have already met with success using this approach. Preparations are underway for two upcoming Katoomba events-one in Brazil in March and the other in Peru in April.



This article was originally published in the Water Log newsletter. Click here to read the original.



30 January 2014 |
Greetings! This month we published our latest piece of market intelligence, a briefing for business on managing water risk at the landscape level. Building on data from the State of Watershed Payments report and our inventory of projects, we benchmark companies employing "nature-based" solutions to their water challenges.


Business leaders from Coca-Cola to SABMiller to Sony
are
experimenting with natural infrastructure investments that address many of the operational risks at the top of their lists – including supply disruptions and emerging regulations – while saving money, increasing resilience to climate and natural disaster shocks, and improving relations with local communities. We also talk about what our 'State of' findings mean for business: whether anticipated new regulations, unseen risks, or new sites and sectors of opportunity.

In this month's Water Log, we bring you an array of stories from around the world, including updates on benefit-sharing mechanisms in the Andes, forest investments in Europe, a new network for water quality trading in the US, and an opinion piece on the practical value of valuation exercises. As always, if you have a tip, a job announcement, or an issue you'd like to see featured in the Water Log, get in touch.

We're also busy preparing for two Katoomba events this spring. Katoomba XIX: Scaling Up Sustainable Commodity Supply Chains takes place on March 19-20 in Iguazu Falls, Brazil. The next month, we'll be in Lima, Peru for Katoomba XX: Climate, Forests, and Water: A Vision for Alignment in Tropical America on April 22-25. Stay tuned for updates and coverage in the lead-up to these meetings.
 

— The Ecosystem Marketplace Team

For questions or comments, please contact newsletter@ecosystemmarketplace.com


EM Headlines

GENERAL

The Threat Beyond The Factory Walls: What Businesses Are Missing About Water Risk

The Elk River in the US state of West Virginia made headlines around the world when a small and preventable chemical spill there left more than a quarter-million people without clean water for over a week. Most water risk, however, is much less dramatic. Colombian beer-maker Bavaria Brewery, for example, realized the extent of the risk it faced when its water bills began increasing a few years back.

 

The cause, it turned out, was a gradual shift to cattle-ranching and farming on the high-altitude grasslands above Bogotá, known in Spanish as parámos. In a chain of events familiar to water managers around the world, large quantities of sediment began washing downstream out of the degraded parámos. In the city, the Aqueduct and Sewage Company of Bogotá had to carry out additional treatment on the water before it met acceptable standards, and passed the costs of treatment on to water users like Bavaria – which is how a brewery suddenly became very interested in what was happening in the mountains.

 

Like Bavaria, companies all over the world face risks that come from beyond the fence line of their operations. But so far, few businesses are addressing – or even thinking about – water risk at a landscape level. A recent CDP survey of Global 500 firms found that two-thirds had targets for internal water management within their direct operations, but just four percent had set goals for managing water risk in their supply chain, and only three percent did so for risk at the watershed level. New research from Ecosystem Marketplace, however, suggests the private sector may be starting to pay attention.

Keep reading here.
Download our new briefing for business on watershed investments.


The Value of Ecosystem Services Valuations

Nothing focuses the capitalist mind like high worth. If natural ecosystems can be demonstrated to have high value in the goods and services they provide, then – or so the thought goes – governments whose responsibility it is to ensure they are protected will be compelled to meet their obligations, while the private sector will see real benefit in investing. Communities and property rights owners will be stronger stewards, acting as individuals and as societies in ways so as to avoid undermining the golden goose.

 

We have seen this work in practice, and only a fool would argue that stressing the value of nature is a waste of breath. But what roles does economic valuation play in this? Is economic analysis always necessary to achieve conservation or sustainable use? And do economic analyses always lead to the expected, desirable outcomes? Tundi Agardy, a marine conservation expert and the director of Forest Trends' Marine Ecosystem Services Program, discusses her views on the benefits and dangers of ecosystem services valuations.

Read it here.


Water Is A Top Three Global Risk, Says World Economic Forum

Too much, too little, too dirty. For the third consecutive year, reckless use and abuse of water is seen by global authorities as having the potential to seriously disrupt social stability, upend business supply chains, imperil food and energy production, and generally make life miserable for billions of people, according to the World Economic Forum’s annual Global Risks report.

 

The various threats to the planet’s supply of fresh water rank third – behind debt crises in key economies, and persistent unemployment – on the list of convulsive planetary threats of greatest concern to more than 700 business, government, and nonprofit leaders who responded to the Geneva, Switzerland-based think tank’s annual survey.

The security and quality of the world’s water, however, goes even deeper than its bronze-level citation. At least three of the top ten risks identified in the World Economic Forum’s survey are principally problems fundamentally involving water. Problems involving water are generally viewed as having effects confined to a specific community or region. But the authors of the Global Risks study argue that water shortages and bursts of surpluses caused by flooding are systemic risks that reach much further.

Get the full story.


Maryland Marsh Plans To Rise Above The Rising Tides

The tall pine that stands at the edge of the marsh looks permanent to the untrained eye, but when we step off the pavement and onto the forest floor, the ground sways like a mattress. We’re standing on what Erik Meyers calls terra infirma. “This is all history,” he says. “This is all going to be gone.”

 

Maryland's Blackwater National Wildlife Refuge is disappearing due to sea level rise and is fast converting into open water. But non-profit The Conservation Fund in partnership with other organizations and federal agencies have crafted a plan to save the critical bird habitat with an adaptation strategy involving marsh migration upslope.

Read more at Watershed Connect.


A New Strategy To Improve Water Quality One Targeted Watershed At A Time

More than 15,000 streams, rivers, and lakes in the United States are too polluted with nutrient runoff to support wildlife, be enjoyed recreationally, or serve as a drinking water source. In the Mississippi River Basin (MRB), a region that encompasses about 41 percent of the continental United States, the majority of the local water quality pollution stems from farming activities involving fertilizer and livestock manure use. The MRB drains into the Gulf of Mexico, where the county’s largest “dead zone,” an oxygen-devoid region, forms every spring and wipes out aquatic life and fisheries.

 

Few programs have seen widespread success in tackling either local or the Gulf’s growing water quality problems, but an emerging initiative could present a way forward. The U.S. Department of Agriculture (USDA) launched the Mississippi River Basin Healthy Watersheds Initiative (MRBI) in 2009. New research from the World Resources Institute finds that with some specific improvements, the MRBI’s new approach could play a key role in improving the nation’s inland and coastal water quality.

Find out how.


In The News

POLICY UPDATES

Scaling up PES Projects in Europe's Forests

Clean air, fresh food, medicine and shelter are just a few of the services we get from forests. The United Nations recognized this recently with a report compiled by three agencies highlighting the benefits of paying forest owners for caring for these resources and services. The United Nations Environment Programme (UNEP), UN Economic Commission for Europe (UNECE), and the Food and Agriculture Organization (FAO) assembled the report with the intent that it serve as a tool for governments to create legislation supporting sustainable behavior in Europe's forests. The report encourages a scaling-up of payments for ecosystem services (PES) projects. It notes PES are particularly effective in creating a system that sustains the service while also empowering local communities, by initiating opportunities or helping to maintain an income. Coca Cola's bottling plant in Tagua, Portugal, for instance, pays local forest owners to maintain their forests. A healthy forest ensures a properly filtered supply of water for the plant. The report includes several best practice examples like this, but also stresses the importance of having sound policy in place in order for PES to function at its best.

Learn more at Eco-Business.com.


Akron is the Next Ohio City to Go Green

A third Ohioan city has become interested in green infrastructure. Akron, like Cleveland and Cincinnati, wants to reduce its sewer overflows by keeping excess runoff out of them. Green initiatives like permeable pavement, rain barrels, retention basins and green roofs can make that happen. At present Akron's sewer overflows dump two billion gallons of waste into the Cuyahoga and Little Cuyahoga Rivers, and into the Ohio and Erie Canal. Akron currently has a consent decree to address stormwater pollution, which doesn't include any natural infrastructure elements, pending in district court. The city now wants to withdraw part of the decree to include green initiatives, which city officials also feel will be less expensive. There is local support from environmentalists. But there's also concern that a revised plan will take too long in providing a solution for the pollution problem.

Read more here.


In Fiji, Reefs' Future May Lie in the Forests

A new study suggests that sustainably managing Fiji's forests will have an unexpected benefit: protecting the country's coral reefs. “Small adjustments to the proposed terrestrial protected areas can deliver large benefits to coral reefs,” Carissa Klein of the University of Queensland tells Mongabay. Even when only land-based conservation goals are pursued, benefits to the reefs were shown to increase by as much as ten percent. Fiji's government has committed to protecting 20 percent of land area and 30 percent of inshore waters by 2020; the study's results will inform the selection of protected areas in the future.

Keep reading at Mongabay.


GLOBAL MARKETS

Australia Reaches Into the Piggybank to Help Irrigators

For the first time, the Australian government will sell off some of its water licenses to farmers, to help irrigators manage

hot weather. Water allocations managed by the Commonwealth Environmental Environmental Holder are intended to guarantee enough instream flows to support the Murray-Darling River basin's health, which has long been negatively affected by large withdrawals for agriculture and other uses. Barnaby Joyce, Minister of Agriculture under the newly-elected government, says the government will build up its holdings again once rainfall returns. The Greens party are sharply critical of the decision and the precedent it sets; other conservation groups says such trading won't be harmful as long as environmental outcomes are monitored and transparent to the public.

The Guardian has coverage.


A Push for Water Equality in the Andes With Benefit-Sharing Mechanisms

CPFW-Andes (Challenge Program on Water and Food - a CGIAR initiative) is launching benefit-sharing mechanisms (BSM) among ten basins in Peru, Ecuador, Bolivia, and Colombia. Because there often is a disconnect between those who use water resources and those who care for them at their source, BSM attempts to right this problem by redistributing water rights equally for everyone in a watershed. It's a flexible model related to payments for ecosystem services, although not market-driven. Instead, the mechanisms are developed through a consultative process that involves local communities.

Learn more about the model here.


Water Quality Trading for Compliance: Unpacking Permit Language

Typically, water quality trading in the US is driven by permit language that allows dischargers to trade to meet compliance. A new report from the Electric Power Research Institute (EPRI) examines eighteen case studies using National Pollutant Discharge Elimination System (NPDES) permits incorporating trading, with an eye to illuminating how water quality markets can help meet NPDES obligations. Interestingly, the authors find that in several cases permits acknowledging trading have not yet actually traded; in other cases credits were purchased but not ultimately used for permit obligations.

Download the report here.


Reciprocity Drives Investments in Watershed Services in Bolivia

A watershed investment scheme in Bolivia is not only having a positive impact on the global climate while preserving forests, but boosting the livelihoods of locals in the meantime. Via Reciprocal Water Arrangement (or ARA - Acuerdos Recíprocos por Agua - in Spanish), downstream water users pay upstream landowners to conserve forest lands. This, in turn, ensures a healthier supply of water flows downstream. They're paid by way of in-kind compensation like beehives, fruit trees seedlings or barbed wire.


Nigel Asquith of Fundacion Natura Bolivia, a partner organization in the project, explains it this way: "Every [US]$20 invested by donors in a local water fund has been matched locally with $30, which purchases a beehive to compensate for conservation of two hectares of water-sustaining forest for five years. Honey revenue per hectare of forest conserved is US$5 per year, so within five years the landowner has not only used the US$20 of donor funds to conserve two hectares of forests but has also sold US$50 worth of honey." Since the first ARA was developed in Bolivia, 30 municipal governments and water cooperatives have joined the movement. "The ARA model does not focus on paying the opportunity cost for conservation, which can be very expensive, but on changing social norms," said Maria Teresa Vargas, also of Fundación Natura Bolivia.

Read more.


What We're Learning About the Restoration Economy

A University of North Carolina (UNC) report assesses the 'restoration economy,' measuring the size of this sector, which includes conserving and restoring ecosystems and mitigation activities. Results found an active restoration scene in the US contributing growth and jobs, with the preliminary number for national direct economic spending at $10.6 million annually. Restoration economy assessments have largely been done on a small scale up until now, so its full value isn't always captured. Linking jobs creation to the 'green economy' has also been difficult - partly because defining the green economy is complex as well. UNC is further conducting a nation-wide survey that should provide an exact figure on jobs directly created and sustained by the restoration economy.

Learn more at Forbes.


Navigating the Red Tape to Deliver Instream Flows

A new case study from the Property and Environment Research Center (PERC) looks at the success of the Scott River Water Trust - despite red tape and legal difficulties in California surrounding water transfers - and considers how the model might be deployed elsewhere to lessen California's water woes. The trust leases small volumes of water from farmers along the Scott River; the water is left instream to help protect salmon and steelhead during times of low flows.

Read the case study here.


New Study Adds Weight to "Natural Sponges" Theory of Forests

A new study published in the Water Resources Research journal has provided further evidence supporting the 'sponge effect': essentially, forests absorb excess water from storms and reduce peak runoff, while releasing water during droughts. It also supported the argument that forests slow runoff relative to deforested areas. The report was based on results taken during 450 tropical storms in Panama's forests. Because the report, which was completed by the Smithsonian Tropical Research Institute, found that forests release more water during the dry season, it underscores forests' importance to year-round flows and downstream agriculture activities and, in Panama's case, powering the Panama Canal.

Mongabay has coverage.


Reflecting on Lessons from Water Quality Trading

A new national network on water quality trading in the US will distill experiences from markets across the country to define best practices, principles for program design, and lessons learned from design choices. Coordinated by the Willamette Partnership and the World Resources Institute, dialogues between stakeholders will be captured in two documents, forthcoming next year: an 'Options and Considerations' document and a summary of principles and practices. The network plans to initially focus on point-nontpoint trades.

Learn more at Bloomberg BNA.


Price Tag for Rim Fire could Top $700M

The Rim fire that torched 257,135 acres of Stanislaus National Forest last summer and fall could cost as much as $736 million in ecosystem services lost in the first year post-fire alone, says an Earth Economics report. The report was completed for the San Francisco Public Utility Commission, which relies on the burned area for water supplies and hydropower. Other districts are monitoring the area, as well, watching for soil erosion and debris in their water supply. The fire killed all vegetation on 98,000 acres, not only releasing a huge amount of carbon into the atmosphere, but preventing capture of the gas on the land for decades to come. Aside from carbon storage, the report also cites watershed functions, aesthetic values and recreational services lost to the fire. Data for Earth Economics' report was gathered in September before the end of the fire. They are considering the figures presented in the study as initial and conservative, as later damages are not included.

Learn more.
Download Earth Economics' report (pdf).


Natural Gas uses Less Water than Coal, Even With Fracking

Researchers with the University of Texas say that natural gas as an energy source uses significantly less water than coal, even after the hydraulic fracturing process - known to require a lot of water - is taken into account. Natural gas-fired power plants can save up to 35 times more water than when coal is used, the report found. It also found that if all of Texas' 423 power plants operated on coal, the energy industry would have consumed over 30 billion gallons more of water. Still, other studies have shown that fracking can contribute to water shortages where activities are intensely concentrated or located in water-scarce areas.

Read a press release.


JOB OPENINGS

 


Program Officer, Water

Pisces Foundation - San Francisco CA, USA

Inspired by a vision of people and nature thriving together, the Pisces Foundation is dedicated to improving the environment for present and future generations. After hiring its first full-time staff in fall 2012, the foundation embarked upon a strategic planning process which has defined its vision, mission, and principles, as well as specific goals and outcomes for three areas of focus: environmental education, climate & energy, and water. To implement its new strategy, the foundation seeks a Program Officer to lead its water work. This position reports to the Executive Director and will play an important role in a dynamic, growing philanthropy.

Learn more here (pdf).


Senior Communications Officer

Global Water Partnership - Stockholm, Sweden

Global Water Partnership (GWP), an intergovernmental organisation with its global secretariat in Stockholm, Sweden, is recruiting a Senior Communications Officer. Reporting to the Head of Communications, the incumbent is expected to bring strategic thinking and practical skills to developing and managing communications activities.

Learn more here.


EVENTS

Webinar: Ecosystem Services Harmonization in Theory and Practice

The scientific community and policy makers recognize marine and coastal ecosystem services (MCES) as extremely important for human survival. Peer reviewed assessments to date, however, have used a variety of terms and classifications for ES which have caused confusion and misinterpretation of the results and hindered communication among involved parties. The European Commission’s Joint Research Centre research group has reviewed the scientific literature to assess the state of the art of existing MCES assessments, identify gaps and limitations, and propose ways forward. A wide variety of methodologies, terminologies, and ES classification systems were identified. Based on the existing approaches, the research group also identified the main research gaps, proposed an integrated ES classification system, and gave clear definitions of ES tailored to the marine environment. This webinar will demonstrate this work and will go beyond the scientific component by exploring potential practical implications. Evangelia Drakou of the EC's Joint Research Centre will discuss the applicability of the integrated MCES classification system for systematically organizing MCES information and enabling interoperability among existing MCES online platforms. Webinar co-sponsored by Marine Ecosystem Services Partnership and OpenChannels.org. 5 February 2014. Online.

Register here.


Webcast: The Legal Status of Environmental Credit Stacking

Environmental credit markets have been established to offset impacts to wetlands, endangered species’ habitat, water quality, and the global climate system. Potential participants have explored the concept of credit stacking, whereby a conservation project can produce credits in multiple markets. The rules governing sales of these stacked credits are still in development and proper balance must be struck to protect the environment and the market participants. Royal C. Gardner, Stetson University College of Law, and EPRI’s Jessica Fox have written a comprehensive article entitled The Legal Status of Environmental Credit Stacking (Ecology Law Quarterly), providing background on environmental markets, credit stacking, and considerations for a credit stacking protocol. The authors offer six considerations to strike a balance between the public interest in environmental mitigation and the credit producers’ personal interest in financial return. 11 February 2014. Online.

Join the webcast via this link.


Nexus 2014: Water, Climate, Food and Energy Conference

The Water Institute at the University of North Carolina at Chapel Hill and collaborators will host the Nexus 2014: Water, Food, Climate and Energy Conference on March 5-8, 2014 to examine the thoughts and actions related to a nexus approach. The co-Directors of the Conference are Jamie Bartram, Director of The Water Institute, and Felix Dodds, Associate Fellow at the Tellus Institute, with support from an International Advisory Committee. The Conference will bring together scientists and practitioners working in government, civil society and business, and other stakeholders focusing on the questions of how and why the nexus approach is, and can be, used on international and local levels. 5-8 March 2014. Chapel Hill NC, USA.

Learn more here.


Sustainable Water Management Conference

Presenting solutions for balancing the benefits of conservation with the costs, managing infrastructure, developing robust supply models and watershed management plans, water reuse, resource management, green infrastructure and more. 30 March - 2 April 2014. Denver CO, USA.

Learn more here.


2014 Water Policy Conference

An impressive slate of legislators and policymakers have joined the lineup for AMWA's 2014 Water Policy Conference in April. Key members of Congress and Administration officials will share their insights on national developments that will affect the nation's water utilities in months and years to come. Attendees will also have the opportunity to share their views with the speakers. 6-9 April 2014. Washington DC, USA.

Learn more here.


Groundwater Summit 2014

This annual meeting will focus on "10 years of moving research to solutions." Participants will have the opportunity to model, explore, characterize, bank, inject, extract, treat, and predict all subsurface needs with everything groundwater related. 4-7 May 2014. Denver CO, USA.

Learn more here.


2014 National Mitigation & Ecosystem Banking Conference

The only national conference that brings together key players in this industry, and offers quality hands-on training and education sessions and important regulatory updates. Learn from & network with the 400+ attendees the conference draws, offering perspectives from bankers, regulators, and users. 6-9 May 2014. Denver CO, USA.

Learn more here.



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