Water Scarcity: Closer to Home Than You Might Think
May 12, 2023
|
Business Strategy
- Keywords:
- sustainability
May 12, 2023
|
Business Strategy
Having more freshwater reserves than almost anywhere in the world, many in the United States and Canada might feel like drought and water scarcity are something that happens to other people in other places.
In fact, this challenge is closer to home than many of us might think.
Despite boasting an overall surplus, freshwater resources are not evenly distributed across our population. As a result, water stress is common across western North America, including in the Canadian prairies and the interior of British Columbia.
The US Southwest is particularly hard-hit, and has been in a “megadrought” since early 2000, marking its driest 22-year period in approximately 1200 years and compounding socio-economic consequences across industries and value chains (Figure 1).
Figure 1: Recent drought conditions and associated impacts experienced across North America. Sources: National Drought Mitigation Center at the University of Nebraska-Lincoln, the United States Department of Agriculture, and the National Oceanic and Atmospheric Administration; NASA; US Department of Interior; Government of California; Statistics Canada; Agriculture Canada, and Emergency Info BC.
While water shortages and drought are often regionally localized, persistent water scarcity can impact international supply chains and can drive up the cost of goods for end consumers.
As temperatures rise globally, drought patterns are exacerbated by the shifting balance between water inputs and outputs; patterns and timing of precipitation are shifting as the climate warms while, at the same time, warmer air temperatures are evaporating more water from reservoirs, lakes, and soils. As a result, the challenges faced by water-stressed regions are expected to grow in the decades to come as a warmer climate could cause drought events to become likely (Figure 2). What’s more, areas that currently experience infrequent drought conditions could begin experiencing these conditions more often. For businesses, this means you can’t assume that the water needed to run your operation today will be as available in the future, so they need to plan accordingly
Figure 2: Likelihood of drought conditions being experienced across North America today and in 2050 under multiple future warming scenarios. Source: SpatiaFi.
As well as these evolving environmental pressures, are considerations like population growth, municipal water consumption, economic activities that consume and/or divert water from natural systems, and growing demand for power generation, all of which rely on predictable patterns in water availability.
Water scarcity is also very often a transboundary issue, requiring coordination between multiple stakeholders. Such complex interactions highlight the need for evolving water management strategies and consumption patterns in the face of shifting patterns of availability in a warming climate.
Holding more than 20% of the world’s freshwater reserves, North America boasts rich and diverse freshwater resources, but it is also home to some of the highest per-capita water consumption globally. Businesses and supply chains rely on effective management of this shared resource, which means that every drop will matter as we plan for a sustainable future.
Read more about how businesses can do their part to manage their water use and plan for the future.
The BMO Climate Institute, in partnership with Climate Engine and their SpatiaFi product, are advancing unique spatial finance capabilities to quantify the location-specific impact of climate change. We are identifying impacts across a wide variety of hazards including flooding, drought, extreme heat, wildfire, and more, today and into the future, to understand the evolving nature of how climate change is expected to occur and what this means for operational resilience. With this information we are informing financing strategies, guiding client engagement, and managing climate impacts for clients and the bank.
Read more
Having more freshwater reserves than almost anywhere in the world, many in the United States and Canada might feel like drought and water scarcity are something that happens to other people in other places.
In fact, this challenge is closer to home than many of us might think.
Despite boasting an overall surplus, freshwater resources are not evenly distributed across our population. As a result, water stress is common across western North America, including in the Canadian prairies and the interior of British Columbia.
The US Southwest is particularly hard-hit, and has been in a “megadrought” since early 2000, marking its driest 22-year period in approximately 1200 years and compounding socio-economic consequences across industries and value chains (Figure 1).
Figure 1: Recent drought conditions and associated impacts experienced across North America. Sources: National Drought Mitigation Center at the University of Nebraska-Lincoln, the United States Department of Agriculture, and the National Oceanic and Atmospheric Administration; NASA; US Department of Interior; Government of California; Statistics Canada; Agriculture Canada, and Emergency Info BC.
While water shortages and drought are often regionally localized, persistent water scarcity can impact international supply chains and can drive up the cost of goods for end consumers.
As temperatures rise globally, drought patterns are exacerbated by the shifting balance between water inputs and outputs; patterns and timing of precipitation are shifting as the climate warms while, at the same time, warmer air temperatures are evaporating more water from reservoirs, lakes, and soils. As a result, the challenges faced by water-stressed regions are expected to grow in the decades to come as a warmer climate could cause drought events to become likely (Figure 2). What’s more, areas that currently experience infrequent drought conditions could begin experiencing these conditions more often. For businesses, this means you can’t assume that the water needed to run your operation today will be as available in the future, so they need to plan accordingly
Figure 2: Likelihood of drought conditions being experienced across North America today and in 2050 under multiple future warming scenarios. Source: SpatiaFi.
As well as these evolving environmental pressures, are considerations like population growth, municipal water consumption, economic activities that consume and/or divert water from natural systems, and growing demand for power generation, all of which rely on predictable patterns in water availability.
Water scarcity is also very often a transboundary issue, requiring coordination between multiple stakeholders. Such complex interactions highlight the need for evolving water management strategies and consumption patterns in the face of shifting patterns of availability in a warming climate.
Holding more than 20% of the world’s freshwater reserves, North America boasts rich and diverse freshwater resources, but it is also home to some of the highest per-capita water consumption globally. Businesses and supply chains rely on effective management of this shared resource, which means that every drop will matter as we plan for a sustainable future.
Read more about how businesses can do their part to manage their water use and plan for the future.
The BMO Climate Institute, in partnership with Climate Engine and their SpatiaFi product, are advancing unique spatial finance capabilities to quantify the location-specific impact of climate change. We are identifying impacts across a wide variety of hazards including flooding, drought, extreme heat, wildfire, and more, today and into the future, to understand the evolving nature of how climate change is expected to occur and what this means for operational resilience. With this information we are informing financing strategies, guiding client engagement, and managing climate impacts for clients and the bank.
PART 1
Why Water Access Should Be Part of Your Risk Metrics
Alex Baniczky | May 15, 2023 Business Strategy, Private Equity Sponsors
In the current tally of key risks and mitigants it’s easy to feel that the risk side of the equation is having a banner era; with business lead…
What to Read Next.
Why Water Access Should Be Part of Your Risk Metrics
Alex Baniczky | May 15, 2023 Business Strategy, Private Equity Sponsors
In the current tally of key risks and mitigants it’s easy to feel that the risk side of the equation is having a banner era; with business lead…
Continue Reading>
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