Decarbonizing Water: Applying the Voluntary Carbon Market toward Global Water Security
4% of the world’s carbon emissions - more emissions than aviation and shipping put together - could be saved within the water sector, while working towards clean water close to home for all, reveals new research commissioned by WaterAid, HSBC and VCMI.
Published ahead of World Water Day, the research finds that over 1.6 billion tonnes of CO2 could be saved per year in the global water sector, equivalent to nearly half of the EU’s annual emissions, confirming the importance of placing water at the heart of climate action.
This can be achieved by ensuring greater access to safe water and sanitation for millions of people living on the frontline of climate change, grappling daily with extreme fluctuations of drought and flooding.
Resilient water, sanitation and hygiene systems are essential to building healthy communities and thriving economies, with the risk of water stress on the most vulnerable communities elevating climate, political and economic fragility, as noted in this year’s global ‘Top Risks 2024’.
The research from the University of Colorado Boulder and Castalia Advisors, commissioned by WaterAid’s Resilient Water Accelerator (RWA), the Voluntary Carbon Markets Integrity Initiative (VCMI), and HSBC reveals an achievable pathway towards creating a greener, more resilient future for global water supplies, supported by voluntary carbon markets.
The research looked at where emissions come from within the water sector and found that delivering improvements in coastal blue carbon, wastewater treatment, drinking water treatment, irrigation, as well as energy efficiency more broadly, could improve water security whilst also generating large and necessary carbon credit emission reductions.
Harnessing market mechanisms such as high-integrity voluntary carbon markets (VCMs) can deliver a triple win: emissions reductions, improved water security, and improved access to safe water and sanitation for millions of people.
In practice, this would mean generating carbon credits from projects that deliver carbon emissions reduction as well as water benefits, such as improved drinking water access in developing countries, reduced methane emissions from latrines and centralized wastewater treatment plants or restored coastal environments.
To achieve this, collaboration is essential between countries, the water sector and the climate finance community. Kate Hughes CBE, Resilient Water Accelerator CEO, called for investment in water to be prioritised as a matter of urgency, saying:
"Water is at the heart of the climate crisis. The impacts of the climate change are felt through water, whether that be too little or too much. At the same time, emissions from the water sector are bigger than aviation and shipping put together.
"This research identifies a major opportunity to cut carbon emissions whilst also boosting vital water services for millions of people in low- and middle-income countries dealing with the devastating impacts of climate change, delivering a triple win.
"We need to see international partnerships fostering meaningful climate action across society, policy makers, and business to ensure investment from this untapped potential reaches communities on the frontline of the climate crisis."
Lydia Sheldrake, VCMI Director of Policy & Partnerships, said:
“These findings show the urgency of upgrading global water systems to achieve a low-carbon, just transition. If the world is going to get on track, we need to scale investment in emissions reductions well before 2030.
"High-integrity voluntary carbon markets provide one part of the solution. Now we need concerted collaboration and ramped up support to countries and communities to implement high-quality projects and mobilize demand, so finance flows to those who need it most.”
This work comes at a critical time with increasing recognition that the climate crisis is a water crisis. 90% of all natural disasters are water-related , including floods, drought, storms, aridification and sea-level rise.
From flood defences to drought resistance, the solutions are out there. But more investment and management are needed now to develop robust and reliable water, sanitation and hygiene systems that can withstand any climate.
The Resilient Water Accelerator is in a unique position to deepen access to the Voluntary Carbon Market through its work building and strengthening efforts to develop robust monitoring and management of water risk and engaging with finance organisations such as African Development Bank, 2030 Water Resources Group and African Finance Corporation.
Notes to Editors
The report can be found here. It was commissioned by WaterAid’s Resilient Water Accelerator (RWA) and VCMI in collaboration with Gold Standard, and was conducted by the University of Colorado Boulder and Castalia Advisors.
The Resilient Water Accelerator is a global initiative that brings relevant decision makers, technical experts and investors together to create connections that address water risk, strengthen resilience and attract public and private finance. Our goal is to demonstrate the business case for more and better public and private investment in water-related deals that strengthen resilience for communities on the front lines of the climate crisis. It’s important that these are replicable elsewhere so that millions more can benefit. We are currently operating in Nigeria and Bangladesh and exploring potential work in more countries.
The Voluntary Carbon Markets Integrity Initiative (VCMI) is a global non-profit empowering companies, governments and other non-state actors to make a real impact on climate action. VCMI provides guidance to engage in voluntary carbon markets with confidence. The Claims Code of Practice enables companies to make ‘Carbon Integrity’ claims, recognizing their commitment to going above and beyond science-aligned emissions cuts, while the Access Strategies Program supports host-country governments to establish policies and processes needed to underpin their country’s participation in high-integrity voluntary carbon markets.
Castalia is the trusted advisor of corporations, utilities, governments, international agencies and infrastructure investors around the world. They solve complex, strategic assignments and deliver sustainable, measurable results. The team from Castalia Consultants includes David Ehrhardt, F Javier Manzanares, Tony Clamp, Jane Zhao, Ilan Adler, Joseph Sax, Yulian Fan, and May Tint Tel.
This analysis was undertaken by Evan Thomas, Christina Barstow, Laura MacDonald, John Ecklu, Katie Fankhauser and Alex Johnson at the Mortenson Center in Global Engineering and Resilience at the University of Colorado Boulder, and developed in collaboration with the Sustainable Markets Initiative, WaterAid, HSBC, the Voluntary Carbon Markets Initiative, and Gold Standard, and supported by the Mortenson Center in Global Engineering at the University of Colorado Boulder, the Moore Foundation, and the Autodesk Foundation.