1 00:00:00,200 --> 00:00:03,920 Speaker 1: Day zero. It's a phrase that is as ominous as 2 00:00:03,920 --> 00:00:07,560 Speaker 1: it sounds. Cape Town in South Africa is running out 3 00:00:07,600 --> 00:00:11,280 Speaker 1: of water and day zero is the hypothetical moment when 4 00:00:11,280 --> 00:00:14,200 Speaker 1: the city will turn off the taps and ration water 5 00:00:14,320 --> 00:00:17,799 Speaker 1: to residents. This would be devastating to the economy in 6 00:00:17,880 --> 00:00:21,800 Speaker 1: one of the continent's wealthiest cities. So how did Cape 7 00:00:21,800 --> 00:00:24,319 Speaker 1: Town get to this point? And where else in the 8 00:00:24,320 --> 00:00:28,240 Speaker 1: world has water become a risk for economic disaster or 9 00:00:28,360 --> 00:00:40,680 Speaker 1: the key to an economy's success. Welcome to Benchmark. I'm 10 00:00:40,680 --> 00:00:44,000 Speaker 1: Scott Landman, an economics editor with Bloomberg News in Washington. 11 00:00:44,440 --> 00:00:48,360 Speaker 1: I'm Daniel Moss, economics writer and editor at Bloomberg View 12 00:00:48,479 --> 00:00:52,320 Speaker 1: in New York. So, Dan, you grew up in Australia, 13 00:00:52,520 --> 00:00:55,400 Speaker 1: a place that's not really known for its rainfall or 14 00:00:55,480 --> 00:00:59,440 Speaker 1: abundant water. How does the scarcity of water affect people's 15 00:00:59,520 --> 00:01:03,600 Speaker 1: vives on under? Not much is the answer, and the 16 00:01:03,640 --> 00:01:07,880 Speaker 1: reason is why the continent is vast and a large 17 00:01:08,080 --> 00:01:11,360 Speaker 1: portion of it is dry. Most of the people in 18 00:01:11,400 --> 00:01:15,720 Speaker 1: Australia live on the east coast and a portion of 19 00:01:15,760 --> 00:01:21,440 Speaker 1: the southeastern corner that's where most of the rainfall is concentrated. 20 00:01:22,360 --> 00:01:25,200 Speaker 1: Wasn't really a thing when we were growing up. Well. 21 00:01:25,560 --> 00:01:27,880 Speaker 1: With climate change, you just never know, maybe it will 22 00:01:28,000 --> 00:01:31,440 Speaker 1: become a thing at some point in the future. And 23 00:01:31,680 --> 00:01:33,840 Speaker 1: you know, thinking about this topic are day to day 24 00:01:33,880 --> 00:01:37,600 Speaker 1: coverage of the economy. We we write a lot about GDP, inflation, 25 00:01:37,760 --> 00:01:42,039 Speaker 1: fiscal policy and so on, and lately trade policy of course. 26 00:01:42,120 --> 00:01:44,839 Speaker 1: But you know, one thing we don't focus on much 27 00:01:45,040 --> 00:01:50,120 Speaker 1: is how resources besides oil are influencing economies around the world, 28 00:01:50,680 --> 00:01:54,600 Speaker 1: and yet civilization would just not be able to function 29 00:01:54,600 --> 00:01:58,840 Speaker 1: without plentiful available water. We really take it for granted 30 00:01:58,880 --> 00:02:02,480 Speaker 1: that water will be the air, but maybe it won't. 31 00:02:02,520 --> 00:02:05,960 Speaker 1: But let's bring in our first guest. Corpert Brand is 32 00:02:06,000 --> 00:02:08,560 Speaker 1: an editor in our bureau in Cape Town, where he's 33 00:02:08,560 --> 00:02:11,320 Speaker 1: lived for the past eight years, and he's been covering 34 00:02:11,360 --> 00:02:14,680 Speaker 1: the water crisis there this year. Robert, thanks for joining 35 00:02:14,760 --> 00:02:18,720 Speaker 1: us on Benchmark. Good evening, Scott, it's nice talking to you, Robert. 36 00:02:18,919 --> 00:02:22,760 Speaker 1: Why have the city's water supplies gotten so low? Okay, 37 00:02:22,760 --> 00:02:25,519 Speaker 1: so you know, capeed On, even at the best of times, 38 00:02:25,680 --> 00:02:30,240 Speaker 1: is not particularly well endowed with water. It's got a 39 00:02:30,280 --> 00:02:35,160 Speaker 1: Mediterranean climate, which means long and dry and hot summers 40 00:02:35,320 --> 00:02:40,120 Speaker 1: and relatively short wet winters. The city doesn't have any 41 00:02:40,120 --> 00:02:45,000 Speaker 1: perennial major rivers, so all its water or portable water 42 00:02:45,080 --> 00:02:48,639 Speaker 1: comes from man made reservoirs that are fed mainly by 43 00:02:48,720 --> 00:02:54,480 Speaker 1: rainwater runoff from the mountain ranges surrounding the city. And 44 00:02:54,480 --> 00:02:56,160 Speaker 1: that kind of sort of has worked for us for 45 00:02:56,200 --> 00:02:59,240 Speaker 1: a couple of centuries, I guess um. But two things 46 00:02:59,240 --> 00:03:02,040 Speaker 1: has happened recent more recently. The one is that there's 47 00:03:02,040 --> 00:03:04,640 Speaker 1: been a huge influx of people into Cape Town. So 48 00:03:04,680 --> 00:03:07,839 Speaker 1: the population of the city has doubled in the last 49 00:03:07,880 --> 00:03:11,400 Speaker 1: twenty years to about three and a half million. And 50 00:03:11,440 --> 00:03:14,080 Speaker 1: then we also in the midst of the worst drought 51 00:03:14,200 --> 00:03:18,240 Speaker 1: in living memory. So we've had three years of below 52 00:03:18,280 --> 00:03:21,880 Speaker 1: average rainfall, which is a highly kind of unusual occurrence, 53 00:03:21,919 --> 00:03:26,360 Speaker 1: and court authorities and everybody unawares. And so, to make 54 00:03:26,400 --> 00:03:28,880 Speaker 1: a long story short, just too many people, not enough 55 00:03:28,880 --> 00:03:31,720 Speaker 1: water storage and not enough rain and maybe a little 56 00:03:31,760 --> 00:03:35,760 Speaker 1: bit of bad planning throwning. And now there have been 57 00:03:35,880 --> 00:03:40,400 Speaker 1: some water restrictions enacted, Right, how have they changed life 58 00:03:40,480 --> 00:03:43,800 Speaker 1: in Cape Town? So eighteen months ago, Cape Town as 59 00:03:43,800 --> 00:03:47,520 Speaker 1: a city was using about one point two billion liters 60 00:03:47,520 --> 00:03:50,920 Speaker 1: of water a day, and that's been brought down to 61 00:03:51,280 --> 00:03:54,520 Speaker 1: just over five million liters, So it's a sixty percent 62 00:03:54,640 --> 00:03:58,840 Speaker 1: reduction in water consumption in just every year, and mainly, 63 00:03:59,280 --> 00:04:02,960 Speaker 1: you know, through kind of money inconveniences that have almost 64 00:04:02,960 --> 00:04:06,520 Speaker 1: become part of daily life. Here in my family, for example, 65 00:04:07,160 --> 00:04:10,120 Speaker 1: we don't bath. In fact, the last time I had 66 00:04:10,160 --> 00:04:12,680 Speaker 1: a bath, ironically, was in the middle of a desert 67 00:04:12,720 --> 00:04:16,040 Speaker 1: in Dubai a couple of months ago. Don't get me wrong. 68 00:04:16,080 --> 00:04:19,880 Speaker 1: We do wash, We shower, but we take very short 69 00:04:19,880 --> 00:04:23,680 Speaker 1: showers seconds and we do it standing in the bucket 70 00:04:23,760 --> 00:04:25,479 Speaker 1: so that we catch all the run off water and 71 00:04:25,560 --> 00:04:28,719 Speaker 1: we can use that. Then the flush the loom, and 72 00:04:28,920 --> 00:04:31,480 Speaker 1: we don't flush the loo and unless it's absolutely necessary. 73 00:04:31,520 --> 00:04:34,080 Speaker 1: So it's all these kind of a little small things. 74 00:04:34,120 --> 00:04:37,039 Speaker 1: It's it's really more about thinking about your water usage. 75 00:04:37,080 --> 00:04:39,719 Speaker 1: And obviously stuff like you know, washing the car or 76 00:04:39,720 --> 00:04:43,240 Speaker 1: filling the swimming pool or watering the lawn, those kind 77 00:04:43,240 --> 00:04:46,640 Speaker 1: of things are long gone. Yeah, So so you know, 78 00:04:46,920 --> 00:04:50,000 Speaker 1: there hasn't really been a major disruption yet the tap 79 00:04:50,040 --> 00:04:53,120 Speaker 1: seven run dry, but it's almost as if a new normal, 80 00:04:53,720 --> 00:04:56,160 Speaker 1: a sitting where we think a lot more about how 81 00:04:56,200 --> 00:04:59,000 Speaker 1: we use water and try to limit our water usage 82 00:04:59,000 --> 00:05:03,520 Speaker 1: as much as possible. Robert explain the huge influx of 83 00:05:03,680 --> 00:05:06,680 Speaker 1: people to Cape Town that you mentioned at the start, 84 00:05:07,240 --> 00:05:10,680 Speaker 1: what's driving that and how much of the strain on 85 00:05:10,720 --> 00:05:13,719 Speaker 1: the water supply system does that account for. You could 86 00:05:13,720 --> 00:05:16,880 Speaker 1: say there's mostly economic migrants and and but by different 87 00:05:16,920 --> 00:05:20,800 Speaker 1: kinds of economic migrants. So there's been a huge influx 88 00:05:20,839 --> 00:05:23,719 Speaker 1: of of poor people that live in informal settlements and 89 00:05:23,760 --> 00:05:26,240 Speaker 1: shanty towns around the kind of center of the city. 90 00:05:27,080 --> 00:05:29,320 Speaker 1: And at the other end of the socio economic scale, 91 00:05:29,360 --> 00:05:31,640 Speaker 1: there's also been quite a large influx of kind of 92 00:05:31,720 --> 00:05:34,360 Speaker 1: upper middle class people that have moved to Cape Town 93 00:05:34,520 --> 00:05:38,120 Speaker 1: to seek a better standard of living. A lot of foreigners, 94 00:05:38,920 --> 00:05:42,359 Speaker 1: a lot of UK residents, Germans and son that that 95 00:05:42,440 --> 00:05:45,680 Speaker 1: come here to kind of seek the summer sun. So 96 00:05:45,680 --> 00:05:48,120 Speaker 1: it's kind of a range of socio economic you know, 97 00:05:48,200 --> 00:05:51,000 Speaker 1: ethnographic groups have moved in basically in search of a 98 00:05:51,040 --> 00:05:53,400 Speaker 1: bit in life. If you look at the water consumption 99 00:05:53,440 --> 00:05:56,479 Speaker 1: in Cape Town, the I think the main consumption that 100 00:05:56,640 --> 00:05:59,080 Speaker 1: the most water is used by the upper middle class 101 00:05:59,560 --> 00:06:02,560 Speaker 1: people the suburbs of Cape Town, and obviously those are 102 00:06:02,560 --> 00:06:04,440 Speaker 1: the people that have got launch the water and some 103 00:06:04,600 --> 00:06:07,560 Speaker 1: equals the full and those kind of things. The poorer 104 00:06:07,640 --> 00:06:11,320 Speaker 1: classes the shanty towns and informal settlements, and people do 105 00:06:11,400 --> 00:06:13,520 Speaker 1: not have those kind of amenities, and so they're kind 106 00:06:13,520 --> 00:06:16,320 Speaker 1: of more used to almost using a lot less water. 107 00:06:17,080 --> 00:06:20,600 Speaker 1: But it's the economic migrancy and and and and across 108 00:06:20,600 --> 00:06:24,520 Speaker 1: the whole socio economic spectrum. Robert, there are some scarre 109 00:06:24,560 --> 00:06:27,479 Speaker 1: headlines that we saw even all the way here in 110 00:06:27,520 --> 00:06:30,279 Speaker 1: the United States a couple of months ago, that day 111 00:06:30,400 --> 00:06:33,280 Speaker 1: zero was just a couple of months away. I think 112 00:06:33,560 --> 00:06:36,599 Speaker 1: it was even supposed to have happened already at one point, 113 00:06:37,279 --> 00:06:40,600 Speaker 1: but now it's been pushed out to nineteen. Is there 114 00:06:40,640 --> 00:06:44,719 Speaker 1: still the same sense of danger that the still might happen, 115 00:06:45,040 --> 00:06:48,120 Speaker 1: or are people starting to go back to old habits? 116 00:06:48,680 --> 00:06:50,640 Speaker 1: You got a good word. At one point back in January, 117 00:06:50,680 --> 00:06:53,000 Speaker 1: I think we were about six weeks away from day zero. 118 00:06:53,080 --> 00:06:56,240 Speaker 1: But d zero was also a moving target, so it 119 00:06:56,320 --> 00:06:59,479 Speaker 1: was always based on assumptions about water consumption and and 120 00:06:59,560 --> 00:07:03,880 Speaker 1: water supply, and as people started cutting their consumption and 121 00:07:03,920 --> 00:07:08,160 Speaker 1: getting closer to the target set by the city, they've 122 00:07:08,200 --> 00:07:11,400 Speaker 1: got moved out further and further until now it's been 123 00:07:11,400 --> 00:07:16,000 Speaker 1: postponed indefinitely. But but that's on the assumption that we 124 00:07:16,040 --> 00:07:21,520 Speaker 1: will have normal winter rainfall starting about now. So if 125 00:07:21,560 --> 00:07:23,520 Speaker 1: we get to the end of April and the end 126 00:07:23,520 --> 00:07:27,720 Speaker 1: of May and haven't had a normal rainfall, then I 127 00:07:27,760 --> 00:07:30,560 Speaker 1: think in day zero will be back on the calendar. 128 00:07:31,560 --> 00:07:33,280 Speaker 1: So we're keeping uping his cross. There is some good 129 00:07:33,360 --> 00:07:36,120 Speaker 1: rainfall forecast for tomorrow and the rest of this week 130 00:07:36,120 --> 00:07:39,960 Speaker 1: in Captain, and we're all waiting and hope Day zero 131 00:07:40,440 --> 00:07:45,560 Speaker 1: has a very apocalyp ring to it. What actually happens 132 00:07:46,120 --> 00:07:50,560 Speaker 1: day zero? It sounds really bad, but what actually happens? 133 00:07:50,600 --> 00:07:52,320 Speaker 1: And do you think that's a good name for it 134 00:07:52,440 --> 00:07:54,920 Speaker 1: or not? It is apocalyptic in a way because what 135 00:07:54,920 --> 00:07:57,360 Speaker 1: would happen is the taps would literally run dry, so 136 00:07:57,440 --> 00:08:00,640 Speaker 1: this city would basically turned off the water supply into 137 00:08:00,680 --> 00:08:04,960 Speaker 1: homes and everybody rich and poor would have to go 138 00:08:05,000 --> 00:08:08,800 Speaker 1: and queue at about two hundred points around the city 139 00:08:09,320 --> 00:08:12,520 Speaker 1: for the water would be dispensed by the authorities and 140 00:08:12,600 --> 00:08:15,880 Speaker 1: he would be entitled to I think twenty five liters 141 00:08:15,920 --> 00:08:18,760 Speaker 1: per person per day. And you can think a city 142 00:08:18,760 --> 00:08:21,480 Speaker 1: of three and a half million people and about two 143 00:08:21,520 --> 00:08:24,840 Speaker 1: hundred water collection points. You can think of the kind 144 00:08:24,840 --> 00:08:29,120 Speaker 1: of scenes that would happen there, and and you know, 145 00:08:29,200 --> 00:08:32,400 Speaker 1: with the the army and police standing by to to 146 00:08:32,520 --> 00:08:35,360 Speaker 1: keep order and and and prevent crime and so on. 147 00:08:35,720 --> 00:08:37,800 Speaker 1: So it is kind of an apocalyptic vision and and 148 00:08:37,840 --> 00:08:40,480 Speaker 1: that that is what what would happen if once the 149 00:08:40,600 --> 00:08:43,280 Speaker 1: damn levels or the levels of the reservoirs around Cape 150 00:08:43,360 --> 00:08:45,640 Speaker 1: un dropped below a certain level about it in percent 151 00:08:46,000 --> 00:08:48,840 Speaker 1: of capacity, then that is what's going to happen. What 152 00:08:48,920 --> 00:08:52,680 Speaker 1: will people do for morning coffee? Exactly? I think morning 153 00:08:52,720 --> 00:08:56,560 Speaker 1: coffee would be kind a thing of the past. Yeah, 154 00:08:57,000 --> 00:09:01,680 Speaker 1: that's a serious question, basic assumption and about civilization will 155 00:09:01,679 --> 00:09:05,760 Speaker 1: start to erode starting with the coffee right now? Well, 156 00:09:05,800 --> 00:09:10,920 Speaker 1: would it threaten, for example, the government's grip on power? Not? Not? 157 00:09:10,920 --> 00:09:14,400 Speaker 1: Not not on a national level because Cape Town and 158 00:09:14,559 --> 00:09:17,080 Speaker 1: the Western Cape Province of which Cape Town is the capital, 159 00:09:17,160 --> 00:09:19,920 Speaker 1: is actually governed by the opposition main opposition party, the 160 00:09:19,960 --> 00:09:24,200 Speaker 1: Democratic Allne so so the national government. From that point 161 00:09:24,200 --> 00:09:25,640 Speaker 1: of view, I don't think it would have an immediate 162 00:09:26,800 --> 00:09:30,880 Speaker 1: be an immediate threat to the national government. But obviously 163 00:09:30,880 --> 00:09:35,400 Speaker 1: the government's responds to this kind of crisis would would 164 00:09:35,400 --> 00:09:37,839 Speaker 1: probably be a factory in the next election that we 165 00:09:37,920 --> 00:09:40,839 Speaker 1: have next year. And so so it is also a 166 00:09:40,840 --> 00:09:44,360 Speaker 1: big political issue, especially with the opposition running the province 167 00:09:44,400 --> 00:09:48,160 Speaker 1: and and and also facing accusations of not responding to 168 00:09:48,200 --> 00:09:52,079 Speaker 1: this crisis appropriately or maybe being a bit slow responding 169 00:09:52,120 --> 00:09:55,160 Speaker 1: to the crisis. But I think it's more, you know, 170 00:09:55,240 --> 00:09:58,920 Speaker 1: rather than a political issue. It is more it would 171 00:09:58,920 --> 00:10:02,319 Speaker 1: be a of them off trying to to maintain law 172 00:10:02,360 --> 00:10:04,840 Speaker 1: and order in a situation with you know, of million 173 00:10:04,880 --> 00:10:08,439 Speaker 1: people are dependent on two hundred you know, water collection 174 00:10:08,480 --> 00:10:12,240 Speaker 1: points form not only the morning coffee, but the water 175 00:10:12,360 --> 00:10:15,480 Speaker 1: that we need for daily laugh. Well, it's definitely a 176 00:10:15,480 --> 00:10:18,000 Speaker 1: story that we're going to keep an eye on, and 177 00:10:18,280 --> 00:10:20,840 Speaker 1: I'm sure it'll make headlines around the world again if 178 00:10:20,840 --> 00:10:24,920 Speaker 1: we get anywhere closer to the day zero. Again, Robert Brand, 179 00:10:25,040 --> 00:10:28,000 Speaker 1: thank you so much for your time on Benchmark. Thank you. 180 00:10:30,480 --> 00:10:33,120 Speaker 1: All right, let's go to our next guest, who is 181 00:10:33,160 --> 00:10:37,480 Speaker 1: an expert on issues related to economic performance and climate change. 182 00:10:37,800 --> 00:10:41,120 Speaker 1: Helen Mountford is the Global director of Economics at the 183 00:10:41,120 --> 00:10:45,439 Speaker 1: World Resources Institute in Washington. She was formerly the Deputy 184 00:10:45,480 --> 00:10:50,560 Speaker 1: director of Environment at the Organization for Economic Cooperation and Development. Helen, 185 00:10:50,640 --> 00:10:53,520 Speaker 1: thanks for coming on Benchmark. Great to speak with you. Scott. 186 00:10:53,520 --> 00:10:56,440 Speaker 1: Thank you, Helen. We were just talking with our Bloomberg 187 00:10:56,440 --> 00:11:00,120 Speaker 1: colleague Robert Brand about the situation in Cape Town. What 188 00:11:00,200 --> 00:11:03,720 Speaker 1: do you view as the mistakes Cape Town made in 189 00:11:04,000 --> 00:11:07,679 Speaker 1: managing its water supply. Cape Town has been facing an 190 00:11:07,679 --> 00:11:11,280 Speaker 1: extraordinary challenge with three years of intense drought, but there's 191 00:11:11,280 --> 00:11:13,320 Speaker 1: still a lot that we can learn from what they've 192 00:11:13,360 --> 00:11:16,320 Speaker 1: been doing there, and that's applicable to other cities and 193 00:11:16,360 --> 00:11:19,280 Speaker 1: countries around the world in terms of how to better 194 00:11:19,320 --> 00:11:24,199 Speaker 1: manage water resources in increasing situations of drought or scarcity. 195 00:11:24,960 --> 00:11:28,680 Speaker 1: One important lesson I think is just better understanding what 196 00:11:28,840 --> 00:11:32,040 Speaker 1: the water risks are there. Cape Town is a city 197 00:11:32,080 --> 00:11:35,480 Speaker 1: which has had a rapidly growing urban population. It's doubled 198 00:11:35,480 --> 00:11:38,280 Speaker 1: in the last eighteen years, and there's a lot of 199 00:11:38,800 --> 00:11:42,640 Speaker 1: demands from agriculture and from industry. So in order to 200 00:11:42,800 --> 00:11:45,800 Speaker 1: understand what sort of demands there are now, what demands 201 00:11:45,800 --> 00:11:48,439 Speaker 1: are coming in the future, but also how these will 202 00:11:48,480 --> 00:11:51,520 Speaker 1: be affected, for example, by climate change. We know with 203 00:11:52,000 --> 00:11:55,840 Speaker 1: increasing climate change we're seeing much more variable rainfall, more 204 00:11:55,920 --> 00:11:59,040 Speaker 1: droughts and floods, and those droughts and floods are often 205 00:11:59,080 --> 00:12:02,680 Speaker 1: more severe, So understanding those risk is important and and 206 00:12:02,840 --> 00:12:04,720 Speaker 1: one of the things that we actually have now at 207 00:12:04,720 --> 00:12:08,640 Speaker 1: our at our disposal is a fantastic global water risk 208 00:12:08,720 --> 00:12:13,000 Speaker 1: mapping tool called aqueduct, which helps companies, investors, cities, and 209 00:12:13,040 --> 00:12:16,840 Speaker 1: countries to understand those risks. Full disclosure. I want to 210 00:12:16,880 --> 00:12:20,480 Speaker 1: mention that for any Bloomberg terminal users listening to this podcast, 211 00:12:20,520 --> 00:12:23,320 Speaker 1: we have a really nifty function that lets you see 212 00:12:23,679 --> 00:12:26,720 Speaker 1: the water stress levels in areas around the world. You 213 00:12:26,800 --> 00:12:29,800 Speaker 1: just type maps and you click on environmental risk and 214 00:12:29,840 --> 00:12:33,160 Speaker 1: you'll see a map of water risk with information from 215 00:12:33,720 --> 00:12:37,000 Speaker 1: Helen's group, the World Resources Institute. So check it out. 216 00:12:37,040 --> 00:12:39,600 Speaker 1: If anybody has any questions, just shoot me a message 217 00:12:39,600 --> 00:12:43,160 Speaker 1: on the Bloomberg. That's that's exactly right. Um, that's a 218 00:12:43,200 --> 00:12:47,160 Speaker 1: really useful tool. The other two areas of lessons that 219 00:12:47,200 --> 00:12:49,719 Speaker 1: I think we should all learn from Cape Town's experiences 220 00:12:50,480 --> 00:12:53,920 Speaker 1: is that we do need to actively manage the water budgets. 221 00:12:53,920 --> 00:12:57,120 Speaker 1: Once you understand the water risks and the availability, the 222 00:12:57,200 --> 00:13:02,640 Speaker 1: allocations between agriculture, between urban and users, between energy and industry, 223 00:13:03,040 --> 00:13:07,600 Speaker 1: it's really important to manage those different allocations and to 224 00:13:07,679 --> 00:13:11,079 Speaker 1: ensure that all are using water as efficiently as possible. 225 00:13:11,480 --> 00:13:13,360 Speaker 1: And one of the things we've seen in a number 226 00:13:13,400 --> 00:13:17,120 Speaker 1: of countries is that pricing water well can actually help 227 00:13:17,200 --> 00:13:21,600 Speaker 1: to manage demand, can reduce inefficient water use. Um get 228 00:13:21,600 --> 00:13:25,600 Speaker 1: people to invest in more efficient appliances, for example, reduce 229 00:13:25,720 --> 00:13:29,040 Speaker 1: their UM water use where they don't need it. And 230 00:13:29,240 --> 00:13:33,920 Speaker 1: it's also an important source of revenues which governments. Many 231 00:13:33,960 --> 00:13:37,679 Speaker 1: governments need to invest in water supply and sanitation infrastructure 232 00:13:37,720 --> 00:13:40,920 Speaker 1: in the first place. So UM water pricing is can 233 00:13:40,960 --> 00:13:44,960 Speaker 1: help us with managing water demand. Helen, you talk about 234 00:13:45,080 --> 00:13:49,720 Speaker 1: water as though it's the new oil. Is it in 235 00:13:49,760 --> 00:13:54,800 Speaker 1: a sense like oil hot commodity that was often taken 236 00:13:54,880 --> 00:14:02,040 Speaker 1: for granted, yet its scarcity can cause significant reverberations throughout 237 00:14:02,080 --> 00:14:06,800 Speaker 1: the economic, social, and political life of a country thanks 238 00:14:06,800 --> 00:14:09,120 Speaker 1: to I mean, some people do call it the new oil, 239 00:14:09,200 --> 00:14:12,440 Speaker 1: others called the new gold. I do think water as 240 00:14:12,480 --> 00:14:16,600 Speaker 1: a resource is extremely precious and it's one that not 241 00:14:16,640 --> 00:14:22,120 Speaker 1: just human life, but all our activities here, whether it's agriculture, industry, etcetera, 242 00:14:22,480 --> 00:14:25,640 Speaker 1: depends on water. It's absolutely fundamental to our well being. 243 00:14:26,200 --> 00:14:28,480 Speaker 1: And what we're seeing is where there are areas of 244 00:14:28,640 --> 00:14:32,520 Speaker 1: extreme water scarcity or where we're starting to have severe 245 00:14:32,520 --> 00:14:36,600 Speaker 1: water pollution, that's really a massive impact on human health 246 00:14:36,640 --> 00:14:39,560 Speaker 1: and well being. So I don't think it's something that 247 00:14:39,680 --> 00:14:43,200 Speaker 1: we have properly valued in the past in many cases. UM. 248 00:14:43,400 --> 00:14:46,800 Speaker 1: In most countries around the world, for example, agriculture, which 249 00:14:46,840 --> 00:14:50,680 Speaker 1: is responsible for about seventy of water use, doesn't actually 250 00:14:50,680 --> 00:14:52,880 Speaker 1: pay for that water use at all in many cases, 251 00:14:52,880 --> 00:14:54,960 Speaker 1: so we're not putting a value on that. And that 252 00:14:55,040 --> 00:14:57,360 Speaker 1: also means we're not sending a signal to those who 253 00:14:57,520 --> 00:15:00,480 Speaker 1: use water that this is important and valuable they should 254 00:15:00,560 --> 00:15:03,720 Speaker 1: use it as efficiently as possible. That is starting to 255 00:15:03,840 --> 00:15:08,640 Speaker 1: change as people realize the risks of over overdrawing on water, um, 256 00:15:08,680 --> 00:15:13,280 Speaker 1: polluting it and not having sufficient around. Let's turn to China. 257 00:15:13,360 --> 00:15:16,320 Speaker 1: I lived in Beijing for a few years. Has a 258 00:15:16,400 --> 00:15:21,360 Speaker 1: very dry climate. You get dust storms, uh during the year, 259 00:15:21,960 --> 00:15:25,560 Speaker 1: and um, you know, it's just generally very dry place. 260 00:15:25,880 --> 00:15:29,560 Speaker 1: And now China has actually built a pipeline to bring 261 00:15:29,720 --> 00:15:32,680 Speaker 1: water from the wetter south of the country to the 262 00:15:32,760 --> 00:15:38,320 Speaker 1: drier north, particularly to Beijing. Is this good policy? Well, 263 00:15:38,520 --> 00:15:42,520 Speaker 1: China is facing some acute water scarcity problems in the 264 00:15:42,560 --> 00:15:46,800 Speaker 1: northern provinces UM, so they do need to actively manage those, 265 00:15:46,840 --> 00:15:50,800 Speaker 1: and they've taken a number of steps already, including you know, 266 00:15:50,880 --> 00:15:55,920 Speaker 1: significantly enhancing water use efficiency, putting some caps on water demand, 267 00:15:56,120 --> 00:16:01,400 Speaker 1: including establishing a pilot UM trading system of water rights 268 00:16:01,400 --> 00:16:04,960 Speaker 1: in Nisha Province and doing what they can to reduce 269 00:16:05,000 --> 00:16:08,280 Speaker 1: water pollution so there's more clean water available for different uses. 270 00:16:08,720 --> 00:16:11,360 Speaker 1: But beyond that, they need to then put in place 271 00:16:11,440 --> 00:16:15,280 Speaker 1: some some major options in terms of infrastructure development. That 272 00:16:15,320 --> 00:16:18,680 Speaker 1: can be desalonization and that can be pipelines, and the 273 00:16:18,680 --> 00:16:22,160 Speaker 1: South and North Water Diversion Project is one such. It's 274 00:16:22,160 --> 00:16:26,040 Speaker 1: already transferred something like eleven billion cubic meters of water, 275 00:16:26,600 --> 00:16:30,400 Speaker 1: supplying factories and businesses and and an estimated fifty three 276 00:16:30,480 --> 00:16:33,920 Speaker 1: million residents, so that's quite significant. But one of the 277 00:16:34,000 --> 00:16:37,960 Speaker 1: challenges they face is that demand continues to increase. So Beijing, 278 00:16:38,040 --> 00:16:41,320 Speaker 1: for example, um which gets about seventy of its water 279 00:16:41,400 --> 00:16:44,960 Speaker 1: through this this project is expected to add another two 280 00:16:45,040 --> 00:16:48,960 Speaker 1: million people before the government caps the city's population, so 281 00:16:49,240 --> 00:16:51,480 Speaker 1: there's going to be even more people needing water, so 282 00:16:51,840 --> 00:16:55,800 Speaker 1: that is a real challenge. Once the project is at 283 00:16:55,840 --> 00:16:59,040 Speaker 1: absolute maximum capacity, it's still not necessarily going to be 284 00:16:59,080 --> 00:17:02,680 Speaker 1: able to keep up with growing demands. So more emphasis, 285 00:17:02,720 --> 00:17:06,840 Speaker 1: even more emphasis on efficiency measures and working with consumers 286 00:17:06,880 --> 00:17:10,920 Speaker 1: and industry and energy to use water as efficiently as possible, 287 00:17:11,000 --> 00:17:13,440 Speaker 1: to treat it as a precious resource is going to 288 00:17:13,520 --> 00:17:17,040 Speaker 1: be essential there in China. Israel is often seen as 289 00:17:17,040 --> 00:17:22,040 Speaker 1: a nation that's effectively managed its water supply despite not 290 00:17:22,200 --> 00:17:27,240 Speaker 1: having much of it. Helen, what's its secret. Israel does 291 00:17:27,280 --> 00:17:30,639 Speaker 1: face real challenges. It gets only forty to fifty days 292 00:17:30,640 --> 00:17:33,239 Speaker 1: of rain or so in coastal regions per year and 293 00:17:33,320 --> 00:17:36,800 Speaker 1: four to five and air, and so it's very, very dry, 294 00:17:36,960 --> 00:17:39,359 Speaker 1: and it has been one of the big success stories 295 00:17:39,400 --> 00:17:42,159 Speaker 1: in terms of managing that. Part of that is just 296 00:17:42,280 --> 00:17:46,920 Speaker 1: investing heavily in de salonization. They've built five de salonization 297 00:17:46,960 --> 00:17:51,080 Speaker 1: plants since two thousand and five. They are also some 298 00:17:51,160 --> 00:17:53,640 Speaker 1: of the most energy efficient ones in the world, so 299 00:17:53,760 --> 00:17:58,000 Speaker 1: they're using as little energy as possible to do that desalonization. 300 00:17:58,280 --> 00:18:01,359 Speaker 1: Beyond that, they've also invested a lot on the recovery 301 00:18:01,440 --> 00:18:06,400 Speaker 1: and treatment of wastewater and using that particularly for agricultural 302 00:18:06,400 --> 00:18:10,960 Speaker 1: irrigation or for industry purposes. So they've been taking wastewater, 303 00:18:11,080 --> 00:18:15,520 Speaker 1: treating it and then reusing it. They've also had significant 304 00:18:15,520 --> 00:18:19,360 Speaker 1: reforms in terms of water sector governance and the policies 305 00:18:19,400 --> 00:18:23,800 Speaker 1: that actually manage water allocations across the country, but also 306 00:18:24,080 --> 00:18:27,600 Speaker 1: how they collect water charges. And one of the things 307 00:18:27,600 --> 00:18:30,879 Speaker 1: they've done is moved towards water tariffs that account for 308 00:18:31,280 --> 00:18:34,480 Speaker 1: the full cost of producing water and distributing it. There 309 00:18:34,840 --> 00:18:37,040 Speaker 1: that's not something that most other countries have done, but 310 00:18:37,119 --> 00:18:40,879 Speaker 1: they're charging the full costs, which provides real incentives to 311 00:18:41,000 --> 00:18:44,720 Speaker 1: households and to industry and agricultural users to use the 312 00:18:44,720 --> 00:18:48,400 Speaker 1: water as efficiently as possible, and also helps to generate 313 00:18:48,440 --> 00:18:52,640 Speaker 1: revenue which is reel fully reinvests in the water infrastructure 314 00:18:52,640 --> 00:18:56,040 Speaker 1: and provision so they're able to keep that water infrastructure 315 00:18:56,080 --> 00:18:59,880 Speaker 1: as efficient as possible without the leakages that we see 316 00:18:59,880 --> 00:19:03,720 Speaker 1: in many other countries from old and degrading pipes. So 317 00:19:03,920 --> 00:19:07,560 Speaker 1: political and security issues in the Middle East are often 318 00:19:07,720 --> 00:19:12,680 Speaker 1: framed in terms of oil or religion. Should we add 319 00:19:12,760 --> 00:19:17,480 Speaker 1: water to that. Absolutely, we're seeing increasingly that water is 320 00:19:17,480 --> 00:19:20,480 Speaker 1: playing a part in some of the major crises that 321 00:19:20,560 --> 00:19:23,000 Speaker 1: were that we're seeing around the world, including in the 322 00:19:23,040 --> 00:19:27,240 Speaker 1: Middle East and in Africa. UM even with the recent 323 00:19:27,280 --> 00:19:30,640 Speaker 1: crisis in Syria, we have seen that that has been 324 00:19:30,640 --> 00:19:34,679 Speaker 1: in part driven by extreme droughts in the country. That 325 00:19:34,880 --> 00:19:37,480 Speaker 1: is something which is an increasing threat um in many 326 00:19:37,560 --> 00:19:40,480 Speaker 1: countries and many regions around the world. Why don't we 327 00:19:40,520 --> 00:19:43,080 Speaker 1: hear much about that aspect of it. I think it's 328 00:19:43,119 --> 00:19:46,440 Speaker 1: perhaps not as exciting and sexy to people as other 329 00:19:46,520 --> 00:19:51,679 Speaker 1: reasons behind these these crises. But also often water is 330 00:19:51,720 --> 00:19:55,120 Speaker 1: something which starts off the crisis, but by the time 331 00:19:55,160 --> 00:19:57,920 Speaker 1: it actually reaches the attention of the media, it's it's 332 00:19:57,960 --> 00:20:02,200 Speaker 1: snowballed into other child lunges. So, for example, in Syria, 333 00:20:02,760 --> 00:20:06,560 Speaker 1: there is an extreme drought UM which started leading to 334 00:20:06,680 --> 00:20:10,320 Speaker 1: farmers having to leave agricultural lines and move into the city. 335 00:20:11,000 --> 00:20:13,520 Speaker 1: As you get people coming into the city and urban areas, 336 00:20:13,560 --> 00:20:17,480 Speaker 1: there's pressures on urban areas, there's unemployment UM and this 337 00:20:17,640 --> 00:20:22,679 Speaker 1: exacerbates where there are underlying tensions already or dissatisfaction and 338 00:20:22,760 --> 00:20:25,199 Speaker 1: so UM. The drought is one of the factors that 339 00:20:25,240 --> 00:20:28,359 Speaker 1: can actually take a situation which is tense and difficult 340 00:20:28,760 --> 00:20:32,800 Speaker 1: and spill it over into a real crisis. Helen Mountford 341 00:20:32,800 --> 00:20:35,159 Speaker 1: of the World Resources Institute, thank you so much for 342 00:20:35,240 --> 00:20:37,760 Speaker 1: being with us today. Thank you great to speak with you. 343 00:20:41,440 --> 00:20:43,960 Speaker 1: Benchmark will be back next week. Until then, you can 344 00:20:44,000 --> 00:20:46,600 Speaker 1: find us on the Bloomberg terminal, Bloomberg dot com or 345 00:20:46,600 --> 00:20:51,080 Speaker 1: Bloomberg app, and podcast destinations such as Apple Podcasts, Spotify 346 00:20:51,280 --> 00:20:53,680 Speaker 1: or wherever you listen. We love it. If you took 347 00:20:53,720 --> 00:20:56,520 Speaker 1: the time to rate and review the show. Your feedback 348 00:20:56,600 --> 00:20:59,639 Speaker 1: helps more listeners find us. You can also check us 349 00:20:59,640 --> 00:21:03,640 Speaker 1: out on Twitter. Follow me at at scott Landman Dan, 350 00:21:03,920 --> 00:21:08,520 Speaker 1: you're at Moss Underscore Ecode. Robert Brand is at at 351 00:21:08,800 --> 00:21:11,680 Speaker 1: r O B Brand, and our guest Helen is at 352 00:21:12,160 --> 00:21:15,200 Speaker 1: at h M O u n t f O r D. 353 00:21:15,640 --> 00:21:19,439 Speaker 1: Number four Benchmark is produced by Toe for Foreheads. The 354 00:21:19,440 --> 00:21:23,119 Speaker 1: head of Bloomberg Podcast is Francesca Levy. Thanks for listening, 355 00:21:23,200 --> 00:21:24,040 Speaker 1: See you next time.