Droughts are nothing new. So why didn't São Paulo's water provider have a back-up plan?

A water protester on the outskirts of the city. Image: Getty.

São Paulo’s ongoing water crisis has left many of the city’s 20m or more residents without tap water for days on end. Brazil’s largest metropolis is into its third month of water rationing, and some citizens have even taken to drilling through their basements to reach groundwater. Most commentators agree that the crisis is to blame on multiple factors, but few have questioned the role of the water company in charge: Sabesp.

The utility, responsible for water and waste in São Paulo and the surrounding state of the same name, has clearly failed its public service remit. Yet, it’s not even clear whether public service is the highest priority for part-privatised Sabesp, whose directors have just awarded themselves bumper bonuses despite millions of their customers going thirsty. São Paulo’s water will go from crisis to crisis so long as Sabesp prioritises profits over long-term investment.

Clearly there are human-induced environmental factors at play: climate change, deforestation of the Amazon, pollution, as well as overconsumption. The pressures we put on nature are likely to increase water shortages worldwide, perhaps eventually leading to conflicts and wars.

But droughts are nothing new. Historical records going back hundreds of years show how cities and regions have struggled with extreme water shortages. Periods without rain happened long before our current struggles with climate change. But if that is the case, shouldn’t it be the responsibility of water utilities to plan for such events, putting in place contingency measures to manage possible water shortages?

Previous water levels are marked on the pillars of a bridge over the Atibainha reservoir. Image: Getty.

São Paulo’s extraordinary growth in recent decades has overloaded the Cantareira, the city’s water supply system. But the rapid increase in water usage was hardly a surprise; it’s something that could have been managed and planned for. Sabesp has failed to do exactly that.

A profit-making public monopoly

One of the world’s largest water utilities, Sabesp was founded as a public institution in 1973. Since part-privatisation in 1994 the state of São Paulo has maintained at least half of the company’s voting capital, though shares are also traded on the New York and São Paulo stock exchanges.

While The Economist and others were keen to point out that Sabesp is “majority-owned by the state government”, this doesn’t tell the whole story. The utility is neither a public organisation concerned with providing a public service, nor a private company facing competition from other companies and controlled by regulatory agencies. Just like the “natural monopolies” enjoyed by water companies in the UK, Sabesp has a publicly guaranteed monopoly, yet its profits are part-privatised – earlier this year it paid out R$252m (US$83m) in dividends.

Residents collect rainwater in buckets. Image: Getty.

São Paulo’s water is just one of many public utilities that have been privatised throughout the world over the past few decades. Governments have followed the ideological belief that, in order to conserve and manage water properly, it is essential to put a price on what used to be a public good. In 1992, the UN adopted the Dublin Principles, declaring that putting a price on water and establishing a “participatory approach” – which is about involving users, planners and policy-makers at all levels – was the best way to reach a sustainable and equitable governance of water. The principles were quickly adopted by Brazil’s government, and implemented first in, you guessed it, São Paulo.

"Many of the necessary measures to prevent the current crisis were not implemented because they would be unprofitable to Sabesp’s shareholders"

The Dublin Principles call for the establishment of “basin committees”, formed of government, water companies, local residents and civil society. These committees are supposed to be responsible for deciding on water use in a particular watershed. Yet, 23 years after this mechanism was supposedly implemented by Law 7663 in São Paulo – and after 17 years of a similar rule at the national level – we still do not know who participated in these committees. On paper these committees exist, but in practice they are not empowered by state structures.

Dysfunctional governance in São Paulo state has left the part-privatised utility, Sabesp, to mainly follow the principles of the market and the interests of its private shareholders. This inevitably skews its strategy towards the short-term.

When deciding whether to make the necessary investments to prepare for possible water shortages, Sabesp has had to choose whether to safeguard the public supply or increase the value of its shares. The company did invest US$4bn from 2005-2013, but that is still not enough. Many of the necessary measures to prevent the current crisis – such as upgrading the Cantareira system – were not implemented because they would be unprofitable to Sabesp’s shareholders .

The company’s lack of transparency since the crisis kicked off highlights its planning failure. For many months Sabesp denied that water was being rationed. Then state governor, Geraldo Alckmin, acknowledged that there was lack of water, but said they were “isolated and private” cases. Then a bonus offered to those who economised water in their daily use, later turned into a fine for those who “waste” water.

The most essential resource of all has now become a struggle in São Paulo. And ever-deepening inequality has turned a water crisis into a social and economic crisis – communities on the periphery of the city and slums were inevitably the first to have their water rationed.

Responsibility for this crisis lies with Sabesp and two decades of running water supply as a for-profit service. It is a failure of public-private partnership. As climate change and other environmental factors make water crises more likely, we better rethink the way water is managed worldwide.

Steffen Böhm is Professor in Management and Sustainability, and Director, Essex Sustainability Institute at University of Essex.

Rafael Kruter Flores is Lecturer in Administration and Organization Studies at Universidade Federal do Rio Grande do Sul.

This article was originally published on The Conversation. Read the original article.The Conversation

 
 
 
 

Seven climate change myths put about by big oil companies

Oil is good for you! Image: Getty.

Since the start of this year, major players within the fossil fuel industry – “big oil” – have made some big announcements regarding climate change. BP revealed plans to reduce its greenhouse gas emissions by acquiring additional renewable energy companies. Royal Dutch Shell defended its $1-$2bn green energy annual budget. Even ExxonMobil, until recently relatively dismissive of the basic science behind climate change, included a section dedicated to reducing emissions in its yearly outlook for energy report.

But this idea of a “green” oil company producing “clean” fossil fuels is one that I would call a dangerous myth. Such myths obscure the irreconcilability between burning fossil fuels and environmental protection – yet they continue to be perpetuated to the detriment of our planet.

Myth 1: Climate change can be solved with the same thinking that created it

Measures put in place now to address climate change must be sustainable in the long run. A hasty, sticking plaster approach based on quick fixes and repurposed ideas will not suffice.

Yet this is precisely what some fossil fuel companies intend to do. To address climate change, major oil and gas companies are mostly doing what they have historically excelled at – more technology, more efficiency, and producing more fossil fuels.

But like the irresponsible gambler that cannot stop doubling down during a losing streak, the industry’s bet on more, more, more only means more ecological destruction. Irrespective of how efficient fossil fuel production becomes, that the industry’s core product can be 100 per cent environmentally sustainable is an illusion.

A potential glimmer of hope is carbon capture and storage (CCS), a process that sucks carbon out of the air and sends it back underground. But despite being praised by big oil as a silver bullet solution for climate change, CCS is yet another sticking plaster approach. Even CCS advocates suggest that it cannot currently be employed on a global, mass scale.

Myth 2: Climate change won’t spell the end of the fossil fuel industry

According to a recent report, climate change is one factor among several that has resulted in the end of big oil’s golden years – a time when oil was plenty, money quick, and the men at the top celebrated as cowboy capitalists.

Now, to ensure we do not surpass the dangerous 2°C threshold, we must realise that there is simply no place for “producers” of fossil fuels. After all, as scientists, financial experts, and activists have warned, if we want to avoid dangerous climate change, the proven reserves of the world’s biggest fossil fuel companies cannot be consumed.

Myth 3: Renewables investment means oil companies are seriously tackling climate change

Compared to overall capital expenditures, oil companies renewables’ investment is a miniscule drop in the barrel. Even then, as companies such as BP have demonstrated before, they will divest from renewables as soon as market conditions change.

Big oil companies’ green investments only produce tiny reductions in their overall greenhouse gas emissions. BP calls these effects “real sustainable reductions” – but they accounted for only 0.3 per cent of their total emissions reductions in 2016, 0.1 per cent in 2015, 0.1 per cent in 2014, and so on.


Myth 4: Hard climate regulation is not an option

One of the oil industry’s biggest fears regarding climate change is regulation. It is of such importance that BP recently hinted at big oil’s exodus from the EU if climate regulation took effect. Let’s be clear, we are talking about “command-and-control” regulation here, such as pollution limits, and not business-friendly tools such as carbon pricing or market-based quota systems.

There are many commercial reasons why the fossil fuel industry would prefer the latter over the former. Notably, regulation may result in a direct impact on the bottom line of fossil fuel companies given incurred costs. But climate regulation is – in combination with market-based mechanisms – required to address climate change. This is a widely accepted proposition advocated by mainstream economists, NGOs and most governments.

Myth 5: Without cheap fossil fuels, the developing world will stop

Total’s ex-CEO, the late Christoph de Margerie, once remarked: “Without access to energy, there is no development.” Although this is probably true, that this energy must come from fossil fuels is not. Consider, for example, how for 300 days last year Costa Rica relied entirely on renewable energy for its electricity needs. Even China, the world’s biggest polluter, is simultaneously the biggest investor in domestic renewables projects.

As the World Bank has highlighted, in contrast to big oil’s claims about producing more fossil fuels to end poverty, the sad truth is that by burning even the current fossil fuel stockpile, climate change will place millions of people back into poverty. The UN concurs, signalling that climate change will result in reduced crop yields, more waterborne diseases, higher food prices and greater civil unrest in developing parts of the world.

Myth 6: Big oil must be involved in climate policy-making

Fossil fuel companies insist that their involvement in climate policy-making is necessary, so much so that they have become part of the wallpaper at international environmental conferences. This neglects that fossil fuels are, in fact, a pretty large part of the problem. Big oil attends international environmental conferences for two reasons: lobbying and self-promotion.

Some UN organisations already recognise the risk of corporations hijacking the policy-making process. The World Health Organisation, for instance, forbids the tobacco industry from attending its conferences. The UN’s climate change arm, the UNFCCC, should take note.

Myth 7: Nature can and must be “tamed” to address climate change

If you mess with mother nature, she bites back. As scientists reiterate, natural systems are complex, unpredictable, and even hostile when disrupted.

Climate change is a prime example. Small changes in the chemical makeup of the atmosphere may have drastic implications for Earth’s inhabitants.

The ConversationFossil fuel companies reject that natural systems are fragile – as evidenced by their expansive operations in ecologically vulnerable areas such as the Arctic. The “wild” aspect of nature is considered something to be controlled and dominated. This myth merely serves as a way to boost egos. As independent scientist James Lovelock wrote, “The idea that humans are yet intelligent enough to serve as stewards of the Earth is among the most hubristic ever.”

George Ferns, Lecturer in Management, Employment and Organisation, Cardiff University.

This article was originally published on The Conversation. Read the original article.