Demand for carbon accounting software is on the rise, with $46 million in VC capital invested in Enterprise Carbon Accounting (ECA) software in the past year and an expected 600% expansion of the market according to Groom Energy. In the wake of disappointing performance at Copenhagen and for US Climate legislation, that’s quite a statement.
Obsessed as I am with the mounting global water crisis, I can’t help but wonder if this explosion of carbon accounting is going to translate over to better accounting for water. “Water is the next carbon” has become a go-to-soundbyte in the workshops and conferences I’ve been attending recently. But the closer I’ve looked, the more I’ve begun to uncover reasons why that’s just not true.
Why Water is Smaller than Carbon
At first glance, managing water seems like a coming echo of the still-yodeling world of carbon accounting. Both have to do with the environment, and keep employees, customers, and stakeholders happy. Both are a way to stay ahead of regulation from congress and the EPA. Both involve looking at your operations and supply chain, seeing where the most stuff gets used, and trying to use less of it. So what’s the big deal?
Most companies are busy trying to make money, and few understand sustainability well enough to see strong environmental performance as a strategic way to do that. Carbon accounting often happens as a concession to agitating groups of employees, executives, investors, customers and stakeholders. Once that concession has been granted, folks want to get back to the fun part where they outmaneuver the competition and expand market share, not wade into another hairy environmental reporting project.
Water is Cheap
The nice thing about saving carbon is that it generally saves money. Carbon coming out of a company generally starts as electrons and fuel coming in, and both electrons and fuel ain’t cheap. An enterprise-wide project to slim carbon can easily drop hundreds of millions to the bottom line. Not so with water. In many places water is almost too cheap to meter. Agricultural growers use 80% of California’s water. When I asked a major grower about installing basic measures to save the water massive amounts of water used to irrigate his crops, he said “It takes $3500 to grow an acre of spinach. $90 of that is water. If I use 10% less water I risk crop failure and I get 9 bucks, it’s just not worth it.” Most of the cost savings associated with water are in the energy it takes to move that water, so they’re getting capture by carbon audits anyway.
No One Cares
Thanks to “An Inconvenient Truth, the low-carbon lifestyle is in vogue among a growing percentage of the population. Cutting down on driving, eating local, and daydreaming about solar panels have all become popular cafe conversations here on the Left Coast. Few people are asking about the water footprint of their cup of coffee (1100 cups of water). People know that carbon = An Inconvenient Truth, but no picture’s been painted about the impact of water use. That means that pressure from customers and (most importantly) from employees within an organization is slow to manifest.
Why Water is Bigger Than Carbon
‘Cuz it’s WATER
Pop quiz! Which has been the second largest cause of conflict in human history after land rights:
A) Carbon Emissions
B) Water Rights
Go ahead and take your time.
Carbon emissions are a global abstraction. If the company next door emits too much carbon it’ll contribute to a climatologically complicated unprecedented phenomena that I may or may not believe in. If the company next door pollutes my water or uses it all up then I die. Controversies about water, especially local ones, have the potential to tap into a primal instinct for survival that carbon can never touch. It can cross ideological boundaries in a flash.
This means that public opinion around water will be much more volatile than around carbon. People’s concerns about carbon roll up nicely into big global numbers like 350 PPM, anything that drops us closer to those numbers is good and anything that pushes us away from them is bad. Because climate change is an abstract concept, carrots and sticks associated with it are equally abstract. Happy stakeholders are angry stakeholders. Regulatory risk or no regulatory risk. Lawsuits or no lawsuits.
Water is local, and operates with the abruptness of a tap shutting off. No one cares about water until they feel that their supply is at risk, and then everyone cares. There are the usual regulatory and litigation risks, but there is also the risk that supply will be cut off or become too polluted for a company’s operations, both of which would necessitate an immediate shutdown. Water shortages triggered by climate change have already begun to impact Nestle’s supply of cocoa from Africa, and though these shorts of shortages are still in their infancy in the States a good look at Australia and give us an idea of what’s in store.
‘Cuz It’s Local
Every time I breathe in, I get a few molecules of air breathed by Ghandi, Beyonce and Aristotle. The atmosphere is one global pool, which means that carbon accounting has the luxury of ignoring where carbon is emitted (with the exception of differences in local laws.)
With water, risk is hyper-localized. The risk associated with a company’s use of water are tied to its watershed, complicated tombs of local regulation, who’s using water up and downstream, and what stakeholder groups live in its backyard. Simply counting water is meaningless unless firms can also track the myriad local risk and opportunity factors associated with everywhere that it uses water. This makes water risk reporting a much larger and uglier beast than carbon for any water-intensive global enterprise, in terms of both the data analysis involved and in terms of the aggregate risk involved. It’ll take a much bigger ecosystem than carbon and a higher net percentage of revenues to manage effectively.
‘Cuz it’s Climate Adaptation, not Climate Mitigation
When it comes down to it, managing carbon is just a moral imperative. Cut our emissions and we (hopefully) make the shocks of global climate weirding a little less severe. The little bit that we can push the lever won’t make enough of a difference, so we call on everyone else to push with us.
Water is a survival imperative, arguably the biggest of those coming shocks. As climatological science comes down the pipe and people begin to understand how global watersheds will change (though climate is just one of a host of drivers) everyone, not just the morally motivated, will sit up and take notice. When they do they’ll see not a global problem that requires a global solution, but a limited local resource that they need their piece of.
If the metaphor for carbon is pushing the needle together, then the metaphor for water is the human immune system. In the immune system, a shockingly diverse array of cells collaborate seamlessly to deal with everything from viruses to parasites to splinters. The cells learn as they go, and rarely get confused and attack the body which supports them. If carbon is one problem located everywhere, water is millions of problems located anywhere. It will take a diverse, decentralized, adaptive ecosystem to keep us thriving.