Running dry: Racing against time to secure our water future
Despite global commitments to achieve 2030 targets related to climate, sustainable development, and disaster risk reduction, we are falling short reaching these milestones. This is especially evident in water resources management, a top priority sector in National Adaptation Plans (NAPs) and other regional adaptation policies.
The 2023 UN Water Conference and the World Water Week in Stockholm made significant strides in addressing the global water crisis and promoting sustainable water management. The Water Action Agenda and commitments made during these events provide a roadmap for building a water-secure world. Collaboration between nations, innovative approaches, and investments in water resources are essential to meet 2030 goals. But achieving these targets will require USD 114 billion per year in capital expenditure.
UN resolution A/77/L.106 from the 77th General Assembly focuses on following up the UN Conference on the Comprehensive Midterm Review of the International Decade for Action on “Water for Sustainable Development,” 2018–2028. It also recognises the profound complex challenges climate change poses for global water security, like increased scarcity, flooding, contamination, infrastructure damage, ecosystem disruption, and potential transboundary conflicts. Overcoming these interconnected challenges will take bold commitments with innovative solutions, clear and measurable targets, institutional and policy reforms, dedicated financing, and cross-border collaboration.
Water-related and other physical climate risks significantly threaten public utilities, corporations, and financial institutions. These include increased water scarcity from changing precipitation patterns, flooding from extreme weather, and damage to water infrastructure from climate disasters. Such challenges can disrupt operations, increase costs, and potentially cause major financial losses. Investment in weather, water, ocean, and climate sciences is necessary to address these risks. While these sciences have seen revolutionary advancements in recent decades, gaps in global surface data, lack of accessibility for local communities, and insufficient scientific capacity prevent their full and effective use.
Attributes of systematic, interconnected, and cascading water related risk (Fakhruddin et al., 2022)
The Green Climate Fund (GCF) recognises the urgent need for a comprehensive, innovative approach to water security, as well as the importance of investing in early warning systems and risk assessment tools, critical water infrastructure, flood, and drought management, IWRM, climate resilience WASH and capacity building. However, these measures alone won't suffice. This is why GCF utilizes innovative financial tools, mobilising private finance to help expand our water security portfolio. To date, GCF has mobilised USD 2.8 billion to water security, allocated across 38 projects in 58 countries.
“As water protection cuts across sectors, GCF uses a comprehensive approach that ensures every aspect of water security is addressed. Around 51 per cent of all GCF water projects are devoted to water security. Of that per cent, 17 per cent are dedicated to agriculture and food security, 9 per cent to ecosystems and ecosystem services, and 7 per cent to early warning and early actions. The remaining 18 per cent are dedicated to energy, infrastructure, health, and wellbeing initiatives.”
GCF promotes innovative financing that leverages public and private investments to mobilise resources for water security. This includes not just grants and loans, but also equity investments, insurance, and guarantees. Aligning water security investments with climate action can create new financing opportunities, including new revenue streams and financing from climate-focused investors and public climate budgets/facilities.
GCF also sees the potential for water as a mitigation tool. Although most climate finance goes to mitigation projects, the mitigation potential of water remains largely neglected (e.g., wetland restoration and conservation). This presents an opportunity to scale up efforts and align financing flows (e.g., biodiversity, water management, carbon credits). Additionally, GCF promotes sustainable water management practices that conserve resources and protect ecosystems. It supports projects that enhance community adaptive capacity, particularly for those most vulnerable to climate change.
GCF's strategic approach to water security goes beyond simple integrated water management, and involves innovative financing, sustainable practices, viewing water as an asset class, supporting community resilience, and aligning with climate action.
In order to meet 2030 targets related to climate, sustainable development, and disaster risk reduction, we must:
- Increase investment in weather, water, ocean, and climate sciences to address the challenges posed by climate change and risk informed early warning system.
- Harness private finance and explore non-traditional financial instruments like equity investments, insurance, debt-swap and guarantees.
- Align investments for water security with climate action to create new financing opportunities for private sector linking to public sector or SMEs.
- Recognise the potential of water as a tool for mitigating climate change and scale up efforts accordingly.
- Promote sustainable water management practices that conserve water resources and protect ecosystems.
- Support projects that enhance the adaptive capacity of communities most vulnerable to climate change.
By Bapon Fakhruddin, Water Resources Management Senior Specialist, Division of Mitigation and Adaptation, Green Climate Fund