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Editor’s note: Russia’s grip on fresh water

The UN predicts global freshwater demand will exceed supply by 40 per cent by 2030, while the EU is already facing water shortages and drought © Dmitry Naumov/iStock/Getty Images
The UN predicts global freshwater demand will exceed supply by 40 per cent by 2030, while the EU is already facing water shortages and drought © Dmitry Naumov/iStock/Getty Images

The latest edition of our Sustainable Views newsletter

Dear reader,

Water and resources, rather than climate and emissions, should arguably be front and centre of EU policymaking, said one speaker during an event I attended in Brussels this morning. 

The debate during the event was focused on the various threats and opportunities to the EU’s climate policies after the upcoming European parliament elections, including potentially more seats in the parliament for the far-right, domestic challenges and geopolitical tensions. The costs of the energy transition, individual and business support for climate action, China’s trade and energy policies, and the US elections were all evoked. 

One speaker said it was “pretty amazing” that in the face of “crisis after crisis”, the EU Green Deal had “survived” and been agile enough to serve the challenges of Covid-19 and energy dependence after Russia’s invasion of Ukraine. Indeed, in addition to the Green Deal serving to reduce emissions, speakers insisted on its links to EU competitiveness and security. 

However, it was to “emerging faultlines” that one participant urged EU policymakers to turn their full attention — namely the implications of global temperatures sitting 1.5C above pre-industrial levels for a full 12 months between February 2023 and January 2024, and the fall of freshwater supplies globally. 

The UN predicts global freshwater demand will exceed supply by 40 per cent by 2030, and the EU is already increasingly facing water shortages and drought. The speaker asked how the union planned to “sustain an industrial policy”, even one supposedly aimed at getting to net zero, in the face of a lack of water and other resource constraints. 

A recent report by the WWF warns that “combined with poor water management, the destruction of freshwater ecosystems means water risks to businesses and economies are growing”, while the European Central Bank says 75 per cent of all bank loans in the Eurozone are to companies highly dependent on at least one ecosystem service — including surface and groundwater supply. 

This morning’s speaker urged “investment into a massive natural regeneration” programme to increase Europe’s resilience. They highlighted that one-fifth of the world’s freshwater reserves are in Russia — from which the EU has spent so much time since February 24 2022 trying to reduce its fossil fuel dependence. Time to finally approve the EU Nature Restoration Law as a security, as much as an environmental, policy?

In today’s opinion, Dr Rory Sullivan and Cora Buentjen from Chronos Sustainability underline the need, as outlined for example by the New Climate Economy initiative, to invest hugely in sustainable infrastructure in the coming years to meet the Paris Agreement goals. They set out three initial steps they believe can help investors thinking about net zero targets for infrastructure based on: tailoring guidance to meet the parameters of specific projects; investing in data; and involving asset owners in the big climate decisions.

Finally, we look at a report by Canadian think-tank the International Institute for Sustainable Development, which says countries should rely on domestic laws and wider regional policy frameworks to attract foreign investment for sustainable economic activities. The “Rethinking investment treaties” report weighs the feasibility of incorporating sustainability obligations in the governance of investment treaties and suggests the case for the continuing relevance of the treaty protection model is doubtful.

Until tomorrow,

Philippa

Philippa Nuttall is the editor of Sustainable Views 

A service from the Financial Times