First published in Cleantech magazine, November/December 2009. Copyright Cleantech Investor 2009
Dear Reader,The impact of climate change is likely to be felt on a daily basis by millions of people who will face water shortages. A major water crisis is on the cards. However, the climate change agenda focuses not on water (how we might conserve, recycle or use water more efficiently), but rather on energy – how we can reduce our carbon footprint by using energy more efficiently and switching to alternative sources of energy such as renewables. Obviously the two are interlinked: the more carbon we release into the environment by using fossil fuels, the greater the threat of global warming and therefore water shortages. Still, it is disturbing that most of the mainstream media focus on the carbon/energy issue, while failing to grasp the enormity of the water problem.
Professor Lord Giddens, speaking recently at the FT WEC Energy Leaders Summit in London, made the point that climate change is a completely different issue from any that we have ever before faced as a society. Lord Giddens discussed the intractability of climate change, a phenomenon which he has dubbed the ‘Giddens paradox’. He argues that, because we are confronting abstract issues, and given that around 40% of the public are ‘climate change sceptics’, the challenge of mobilising the public to address the issue reaches beyond the scope of the sorts of challenges which governments have ever had to deal with in the past. Lord Giddens argues that the agenda will have to be driven through energy – a combination of clean energy and energy security – rather than pictures of melting ice caps.
Nevertheless, we have taken the decision to include pictures of melting ice caps in this issue of Cleantech magazine – on the grounds that our readers are more likely than the general public to take the water issue seriously. However, even amongst our readers, water is not a highly favoured sector. The challenges for a venture capitalist to invest in water technologies are considerable. Dr David Lloyd Owen of WHEB Ventures, a fund which does include water companies in its portfolio and considers water to be a core investment area, describes water as “CleanTech’s poor cousin” in an insightful feature on Venture Capital and the Water Sector (see page 37).
Amongst stock market investors, even the sustainable investment community has as yet failed to fully embrace the water theme. Some fund managers such as Pictet and Sustainable Asset Management focus on the sector and manage funds, but specialist water funds are still few in number compared to energy funds.
The forthcoming Copenhagen COP-15 climate change discussions will be critical in determining the approach of governments around the world to the climate change challenge. Water is not high on the list of topics for discussion. Dominic Waughray of the World Economic Forum makes the point that joined-up thinking is needed: that the energy agenda and the water agenda need to coincide with each other. However, there is little optimism that this will happen at Copenhagen.
Water technologies offer a host of investment opportunities – as we aim to demonstrate in this issue of Cleantech magazine. However, water remains ’the elephant in the room’: a major challenge which is not going to disappear, but which is not being openly and widely discussed.
Anne McIvor
November 2009
