Water Journal : Water Journal September 2011
feature article feature articles 56 SEPTEMBER 2011 water as a carbon sink and ACCUs can be sold to Liable Entities, providing a new source of income for the agriculture industry. The proposal is without precedent in carbon markets around the world and offers opportunities to reduce or offset emissions through carbon sinks, land management changes and technological solutions. The focus of these opportunities is a financial incentive, via carbon credits, to encourage activity that either sequesters or reduces rural carbon emissions. The engineering consulting industry serves water authorities and businesses (among them the 500 Liable Entities) and, as an indirect result, may also be facing further changes in the market and the way they do business. Consulting firms will have the opportunity to provide more work in the energy accounting, climate change risk management and adaptation, and climate change planning areas. Risk Assessment, Management and Adaptation The nexus between water and energy is worth understanding for every business affected by a carbon price. Every water business will have an 'embodied' amount of energy per litre of water (potable and reclaimed) produced. Likewise, for every kWh produced there is typically an embodied amount of water. For example, coal-fired power stations in Victoria's Latrobe Valley use around 2.1 L of water for every kWh produced (Beyond Zero Emissions -- Zero Carbon Australia, Stationary Energy Plan, 2010). Currently, each industry is working towards becoming more efficient within a profitable limit, and the dividend in this is the reduction in the embodied elements in their products. The challenge for the water industry is to meet the needs of a growing population and demand, and use less energy to do it. A carbon price may support the numbers for a successful business case to change wholesale water delivery, treatment and recycling, as well as the adoption of a holistic approach to emissions reduction through improved customer awareness surrounding the water and energy nexus, aiding long-term cost savings. Water utilities must work with their customers to reduce the impact of rising costs for energy and water, while managing customer demand and service expectations. Resources and Energy Minister, Martin Ferguson, has warned that household electricity prices are set to jump by 30 per cent nationwide in the next three years, even without a carbon price. The water industry must look even closer at the value it provides to its customers. As water and energy are inexorably linked, the water industry has the ability and opportunity to influence a customer's use of energy. The Australian Bureau of Agricultural and Resource Economics and Sciences estimates energy demand is predicted to grow in Queensland by 72 per cent in two decades, overtaking demand in both Victoria and NSW. Those in the water sector who have been able to negotiate relatively inexpensive electricity prices for decades will face future challenges. It is time for tracking energy efficiency performance in a meaningful way. As the costs of main grid electricity rise, it is worth the investment of time and money to optimise on efficiency and resultant usage -- which could reduce these indirect costs of treating water and wastewater. The ability to identify and strategically assess risks is critical to support decision making and management within any organisation. As climate change is projected to reduce water availability in much of Australia's most heavily populated areas, understanding the extent and economic implications of the climate risk becomes imperative to long-term strategic water planning. The recent long-lasting drought conditions highlighted the water security issues faced by Australia's capital cities and regional Australia. Most jurisdictions responded by imposing water restrictions and investing heavily in desalination schemes to decrease their reliance on rainfall and surface water resources. While the drought demonstrated significant gaps in Australia's water planning regime, a benefit was its forced recognition of those gaps and improvements in drought preparedness, as well as water use throughout Australia. Notably, there was a 25% water use decrease in the Australian economy between 2004--2005 and 2008--2009 (ABS 2010). One impact of carbon pricing is likely be increased investment in the renewable energy sector.
Water Journal November 2011
Water Journal August 2011