Assessing the climate resilience of Safe Water Enterprises

A group of funders, including the Stone Family Foundation, came together at the initiative of Danone Communities to commission a study, carried out by Dalberg, to assess the climate resilience of decentralised water systems.

In this blog post we share the key findings from the study, which will be presented in more detail at a World Water Week session on Monday 24^th August at 12:00 CET (register here).

This year World Water Week – a global water conference organised by the Stockholm International Water Institute (SIWI), and one of the largest sector events – will focus on the theme of water and climate change. Through discussion this theme will be addressed from different perspectives, from politics to technology and urbanisation. Within that, resilience of water systems at local and national level will be a central focus.

The question of how to build resilience is critical for the Safe Water Enterprises (SWEs) that we support. SWEs are ventures that operate decentralised water systems that distribute safe water through bottles and/or 20L containers, either through home delivery, networks of retailers, or at a kiosk. They are increasingly experiencing challenges as a result of global warming, with its impacts on rainfall variability, extreme events, water availability and accessibility.

For example, 1001fontaines in Cambodia is being impacted by changes in traditional rainfall patterns, that have become more unreliable – leading in 2019 to severe droughts and depletion of water sources in some areas. Jibu, operating across seven countries, also faces a range of climate risks – from floods changing water quality to inconsistent water supply.

In recognition of these challenges we came together with a group of funders to commission a study, carried out by Dalberg, that focused on answering the following questions:

• How does climate change impact the water value chain?
• To what extent are SWEs climate resilient – what is their capacity to adapt, anticipate and respond to climate risks to ensure continuity of water service delivery to all?
• What does this adaptation require in terms of investment, cost and process?

The study has provided some valuable insights which we have summarised below:   

1. Climate change is impacting the entire water supply value chain

The changes to the climate are affecting both the supply and demand for safe drinking water. For example, on the supply side, droughts are limiting water availability, flooding is contaminating water and disrupting distribution systems and both price and quantity of energy is impacted.

On the demand side, shock events such as storms can limit customers’ ability to access water, encourage migration reducing population density and impact livelihoods and therefore ability to pay.

2. In the next ten years, which is the timeframe considered in this study – water quality and water affordability are the two aspects of water supply that are most at risk in the face of climate change

This is driven by increasing levels of shock events such as flooding that increase water contamination, and increasing stress events such as reduction in the groundwater level that increases water salinity – both of which will increase treatment costs to SWEs and potentially impact affordability.

In some geographies water quantity and continuity will also be impacted, as decreasing levels of both ground water and surface water may interrupt water supply.

3. On the whole, SWEs appear to be fairly resilient and are developing a host of tactics to mitigate climate change’s effect and to continue to supply safe water in most regions of the world

Regions and service providers have varying levels of ability to respond to climate risks and depending on the context might need external funding and assistance to adapt. However, Dalberg found that overall SWEs were able to deploy strategies to build resilience.

For example, 1001fontaines’ and Jibu’s proactive planning and centrally supported franchise models help them adapt to local climate conditions. Both organisations have support platforms that provide kiosk operators with technical and financial assistance to source water from other kiosks in the network, or relocate to another water source, if the primary water source has run dry.

Other strategies deployed by SWEs include storing excess water in case of shortages, shifting to a more effective treatment process to address the challenge of increased water contamination, or investing in solar panels to mitigate anticipated increases in energy consumption and costs (e.g. water table depletion might necessitate more energy for water extraction).   

4. These adaptation strategies involve both capital and operational expenditures that will increase the overall cost of delivering the service over time

Dalberg estimates that the cost of delivering the service will increase within a range of 3% to 18% on average, depending on the strategies and level of risk (however this could be much higher in certain contexts and geographies). This includes both capital investments to ensure resilience (e.g. solar panels, new treatment technologies, tanks etc) as well as operational costs (e.g. more frequent maintenance and change of filters, increase in labour costs etc).

Nearly 90% of the increase in operational costs will be driven by treatment costs.

What are the implications of the study for SWES, funders, and policy makers?

Dalberg’s analysis will be presented in more detail at World Water Week at Home next week. The session will showcase, through specific case studies, the ways in which SWEs can adapt to climate change. It will also be an opportunity to discuss with other sector players what actions should be taken by SWEs, funders and policy makers as a next step and what additional data and evidence might be needed.

Particular areas of interest for us at the Stone Family Foundation include:

• Understanding how we can support SWEs understand the climate risks and its impact on the cost of service delivery;
• How in turn this might impact affordability;
• How this might be mitigated (e.g. through treatment cost reduction programmes).

We therefore welcome the opportunity to discuss these issues with SWEs, funders and enablers, to work together to develop the right strategies and identify sources of finance to support the sustainable delivery of safe water.