Water for Climate: COP29 Five Takeaways

Note: this article first appeared on CWR website on 25 November 2024 under the following link: https://cwrrr.org/opinions/water-for-climate-cop29-five-takeaways/

Writing this after spending a week at COP29 in Baku – the world’s first oil town – it all felt like déjà vu. My last COP was COP22 in 2016. COP29 is dubbed “Finance COP,” where developed countries are expected to increase their financial commitment through yet another acronym, NCQG (new collective quantified goal on climate finance).

Back in 2016, developed countries were urged to continue to scale up “mobilised climate finance” towards the goal of jointly mobilising USD 100 billion annually by 2020. The previous goal, agreed upon in 2009, was “barely met” in 2022. As expected, the negotiation on NCQG hasn’t been smooth sailing.

COP29 is said to be the second most attended COP. Compared to 2016, the presence of the fossil fuel industry seems more visible, as we approach the end of yet another warmest year on record. Despite the gloom and doom, I was heartened by the passion and ingenuity of young people I met on the ground. They gave me hope.

In a country where even my tour guide talks about the impact of climate change on rivers, I see water everywhere during this COP – from the Cryosphere Pavilion to the Ocean Pavilion, and various events on urban and industry solutions. I also spoke on a panel at the Water for Climate Pavilion on interlinkages between water and other sustainability priorities.

With the following five takeaways, I see water being increasingly recognised, albeit slowly, for its role in broadening and connecting climate conversations, and its importance in encouraging and driving collective actions.

1. Water unites climate negotiations

The launch of the COP29 Declaration on Water for Climate Action marks a renewed push to emphasise water in climate negotiations. This Declaration launches the Baku Dialogue on Water for Climate Action, a COP-to-COP collaboration platform hosted by UNEP, to address the crucial interplay between water and climate change, biodiversity loss, pollution and desertification. This puts a silver lining on the otherwise muddled climate negotiations.

The Declaration seeks to promote greater integration of water in the Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs). According to SIWI’s assessment of 114 NDCs from mostly developing countries, very few specific water-related targets were included in most NDCs.

Thus, “watering” NDCs, as well as NAPs, will be critical to ensure comprehensive and effective national climate strategies. The next updates to the NDCs, due by February 2025 and known as NDC 3.0, presents an opportunity to do so, although the clock is ticking.

The Declaration also seeks to instate a Water for Climate Ambassador, which could play a key role in advocating for integrated water and climate policies in future climate negotiations. By further mainstreaming water in the formal negotiation processes, this Declaration overall represents a critical step forward in recognising the vital role of water in global climate diplomacy.

2. Water feeds adaptation efforts

Water is the primary medium for the impact of climate change on ecosystems and societies. Its importance is recognised in the Global Goal on Adaptation (GGA), an integral part of the Paris Agreement. In late 2023, the UAE Framework for Global Climate Resilience was adopted to guide the achievement of the GGA, including a two-year work programme on indicators for measuring progress achieved towards the targets under the GGA.

Preliminary review of submitted indicators shows that, of 656 water-related indicators compiled by the GGA Secretariat, 31% are related to reducing climate-induced water scarcity, and 24% related to climate resilience water supply. Only 9 out of 9,987 indicators in the whole listexplicitly mentioned “glacier”, and 16 indicators mentioned “groundwater”, both of which are crucial parts of the water cycle. The tracking of adaptation efforts need to recognise the interconnectivity between various forms of water.

The cryosphere holds approximately 70% of the Earth’s freshwater. Glaciers are critical to global water cycles, acting as natural reservoirs that sustain ecosystems and communities. According to ICIMOD, the difference between 1.5°C and a high emission scenario is 30% glacier loss in the Hindu Kush Himalaya (HKH) region by 2100, instead of 70%.

However, even if we manage to stay within 1.5°C, the estimated glacier loss would still cause negative impacts on the ecosystems and millions of people living in the downstreams. The latest “State of the Crosphere Report 2024” from the International Cryosphere Climate Initiatives (ICCI) urges that 1.5°C must be the redline for the cryosphere.

It is encouraging that next year’s World Water Day will spotlight glaciers, coinciding with the International Year of Glaciers’ Preservation. More efforts are needed to improve our understanding of the cryosphere in order to build long-term resilience.

3. Water channels climate finance

The estimated water-related climate finance varies, ranging from 0.3% (focused on water supply and sanitation) to 3%. Much of it is in adaptation – UNFCCC’s latest Biennial Assessment and Overview of Climate Finance Flows shows that 49% of adaptation finance in 2021-2022 was spent in the water and wastewater sector.

Water is crucial for climate mitigation, as evidenced in a recent UN-Water Analytical Brief. The energy sector accounts for about 10% of global freshwater withdrawals, while water use, storage and distribution also consume energy, contributing 10% of global GHG emissions. This interdependence means that water could be an important factor in tripling renewable energy capacity by 2030.

Many adaptation investments, especially in resilience infrastructure, are related to water. Demand-side measures, such as improving water efficiency in agriculture and industry, also improve resilience. This intricate link extends to nature conservation, where protecting and restoring water-related ecosystems is a crucial component of climate resilience.

Money-wise, the adaptation finance gap persists – the UNEP’s latest Adaptation Gap Report 2024 estimated it to be at US$187-359 billion per year, contributing to a continued lag in adaptation planning and implementation efforts. But what matters more is the “means of implementation” — the combination of finance, technology and capacity-building – a contentious issue in adaptation-related negotiations.

However, we also need to take such numbers with a grain of salt due to the limitations posed by the use of specific terminology in such analysis. For instance, 19.9% or HK$33.4bn of the total proceeds of Hong Kong SAR Government Green Bonds issued to date, have been allocated or earmarked to water and wastewater management projects, such as the implementation of Water Intelligence Network. This is significantly compared to the 2.3%, or HK$3.9bn, allocated for “climate change adaptation” projects, such as rehabilitation of underground stormwater drains. Some water investors might not be counted as “adaptation finance,” but they certainly contribute to the resilience of the city.

4. Watering a whole-economy transition

By 2025, 1.8 billion people are likely to face “absolute water scarcity” (<500 m3 per year per capita, as defined by FAO). This is equivalent to less than 1.4 m3 (or roughly 7 bathtubs) per day per capita for all domestic and everyday needs.

However, technological solutions alone won’t be enough to ensure long-term water resilience. We need to adopt systemic approaches. For instance, a recent UNFCCC technical paper lists rainwater harvesting in cities as an example of “transformational adaptation”. However, such technology hardly addresses the system-wide issues underpinning access to safe water.

Thanks to efforts from regulators to NGOs over the past few years, financial institutions and business leaders have become increasingly familiar with climate targets and transition plans. Recently, the focus also extends to nature – by October 2024, over 500 organisations globally, including 129 financial institutions representing US$17.7trn in AUM, have committed to start reporting on their nature-related issues aligned with the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations.

Would a holistic “water” lens ever become integral to business planning and investment appraisal? While regulators have been working on climate and nature transitions, the concept of “water-nomics” and its role in a whole-economy transition remains underdeveloped. Transitioning to a sustainable economy requires recognizing the critical role of water, which needs to be “re-defined” and “re-valued”, as recently highlighted by the Global Commission on the Economics of Water.

5. Water knows no border

The above-mentioned Baku Dialogue on Water for Climate Action will also encourage establishing and reinforce partnerships on shared water basins. Currently, only 56% of transboundary basin areas have an operational arrangement for water cooperation, and very few NDCs mention transboundary water management and cooperation. Azerbaijan itself relies on transboundary waters for over 70% of its supply and is investing in desalination to diversify its water sources. However, the need to transboundary water management is still here to stay.

To achieve transformational changes, breaking silos and tearing down organisational walls is another important step. For instance, the UN itself has proposed a System-wide Strategy for Water and Sanitation (SWS) to encourage collaborative efforts across UN agencies to address the interrelated cross-sectoral aspects of water. While the process in practice won’t be easy, proactive and conscious actions matter.

Moreover, unlocking the power of SMEs and the public, especially the youth, is crucial for driving innovation in building water resilience. By fostering interdisciplinary dialogue and leveraging technological advancements, we can develop comprehensive solutions to address the multifaceted challenges of water management and climate resilience.

In our interconnected and increasingly multipolar world, the need for systemic thinking also means returning to the fundamental purpose of our societies – collective well-being, the health of people and the planet, and sustainable development for all. The time to rethink and engage in water resilience is now. The solution to overcoming all challenges, as Laozi said, is to “be like water”.