(DC2) Uso Restrito na PwC - Confidencial Water: a precious asset June 2015 São Paulo´s water...

(DC2) Uso Restrito na PwC - Confidencial

Water: a precious asset

www.pwc.com/water

June 2015

São Paulo´s water challenge

PwC(DC2) Uso Restrito na PwC - Confidencial

Agenda

Why is water increasingly important?

What is the problem in São Paulo?

1

2

5


Why is water increasingly important?

1


Water is the number one concern for CEOs

WEF, Global Risks 2015


Global CEOs are increasingly concerned about long-term issues that affect ability to operate

5.0

4.5

4.0

Fiscal crisis

Weapons of mass destruction

5.0Imp

act

Likelihood

Natural catastrophes

Extreme weather

eventsWater crises

Source: World Economic Forum Global Risks Report (2009 – 2015)

4.0

Unemployment and underemployment

Failure of financial mechanism or institution

State collapse or crisis

Energy price shock

Terrorist attacks

Interstate conflict

Failure of critical infrastructure

Biodiversity loss and

ecosystem collapse

Climate change

Natural capital risks 2009

Natural capital risks 2015

Man-made environmental catastrophes

3.5 5.5

Asset bubble

Failure of national governanceUnmanageable

inflation

Deflation

Failure of climate-change adaptation

Note: Man-made environmental catastrophes was added in 2014

Economic risks 2015

Geopolitical risks 2015

Societal risks 2015


The water challenge: Limited supply, increasing demand

1900 20000

500

1000

1500

2000

2500

3000

3500

4000

4500

Saltwater 97.50%

Frozen 68.9%Ground-

wa-ter30.8%

Lakes & Rivers 0.3%

Source: UNEP Vital Water Graphics 2008.

Global water resources Water usage and population since 1900

Source: IWMI 2007; World Bank 2007.

Water usage per year has increased from about 500 cubic kilometers in 1900 to about 3,830 cubic kilometers in 2000

Population has increased from 1.6 billion in 1900 to 6 billion in 2000

What we have: Limited supply of a resource that is un-substitutable.

What we need:Increasing amount of water for increasing number of people.


Soon supply will not meet demand

By 2035, global energy consumption will increase 35% … increasing water consumption by 85%

Agricultural water consumption is expected to increase 19% (Source: UN Water stats)

Agricultural water consumption is expected to increase 19%

35%morefood

50%more

energy

40%morewater

http://www.unwater.org/statistics/statistics-detail/en/c/211409/


The water challenge: Too little, too much, too dirty

Water scarcity and drought

Floods and extreme weather events

Spills and impaired water quality

Too little

Too much

Too dirty


Climate change and resources scarcity


With development there is an increase in water consumption


Source: Water Footprint Network, 2012

When water impacts the bottom line • New guidelines to manage and disclose corporate water risk4

2.7 billion people experience severe water scarcity at least one month a year

95% of pathogens and germs eradicated when the backpack liner is placed in the sun for 60-90 minutesSODIS (solar disinfectant method) of liner nearly as effective as chlorination

✓ ✓


Too much

Proportion of average annual damages caused by reported natural disasters, 2011

Africa Americas Asia Europe Oceania0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OtherEarthquakeStormFloodDrought

Source: CRED, EM-DAT International Disaster Database, 2012Source: CRED, EM-DAT International Disaster Database, 2012

Estimated damage ($US billion) caused by reported natural disasters 1900-2011

Honshu Tsunami

Hurricane KatrinaKobe earthquake

Wenchuan earthquake

Floods and storms cause the majority of economic damage from disasters.


Too dirty

Relative threat from organic loading

Source: WWF-DEG Water Risk Filter 2012

Nutrient enrichment is the most widespread water quality problem.

One in six people does not have access to clean water


Water will become the focus for future infrastructure projects


What is the problem in Sao Paulo?

2


Overview of water distribution in Sao Paulo


Overview of water distribution in Sao Paulo – current situation

Source: http://www2.sabesp.com.br/mananciais/DivulgacaoSiteSabesp.aspx

Water distribution System

Stored Volume (May 19, 2015)

Water Production

(m³/s)Population served

Population served (%)

Cantareira 19,70% 33,00

6.500.000,00 34%

Alto Tietê 23,20% 15,00

4.500.000,00 24%

Guarapiranga 82,40% 15,00

4.900.000,00 26%

Alto Cotia 68,60% 1,20 410.000,00 2%

Rio Grande 96,30% 5,00

1.200.000,00 6%

Rio Claro 56,20% 4,00

1.500.000,00 8%


Overview of water distribution in Sao Paulo –situation of reservoirs in May 19th, 2015

Cantareira Alto Tietê Guarapiranga Alto Cotia Rio Grande Rio Claro0%

20%

40%

60%

80%

100%

20%23%

82%

69%

96%

56%


Overview of water distribution in Sao Paulo – current situation

Source: http://www2.sabesp.com.br/mananciais

Cantareira Alto Tietê Guarapiranga Alto Cotia Rio Grande Rio Claro -

50.00

100.00

150.00

200.00

250.00

300.00

Historical average rainfall level (mm) April rainfall (mm)


Why did the water become an issue for Sao Paulo? 1. Insufficient analysis of the hydrological regime of the region:

The Cantareira System studies started during 1960’s decade. In that time, there was no pluviometric station in the region with long historical rainfall series register. There were only five station, with registers for a short period of time – only one of them had data for more than 30 years.

The studies have not taken into consideration the cyclical effects that occur in long periods of time.

Source: http://revistadae.com.br/downloads/edicoes/Revista-DAE-198.pdf


Why did the water become an issue for Sao Paulo? The precipitation varies around its historical average: we can have extreme floods during an year and face a drought period on the sequent year.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

100

200

300

400

500

600 Accumulated Rainfall (mm) - Cantareira System

2010 20112012 20132014 Historical Average (calculated in 2014)

Source: http://www2.sabesp.com.br/mananciais


Why did the water become an issue for Sao Paulo? 2. Amazon deforestation and the Flying Rivers effect:

The Amazon forest attracts the humidity of the ocean to the continent. This humidity falls as rain over the forest. Through the evapotranspiration of the trees, the forest sends the water back to the atmosphere as steam. This steam flows to the West, South and Southeast, where the rain falls. This steam is called Flying Rivers. When the deforestation occurs, the forest evapotranspiration capacity decreases and the rain does not arrive to the Brazilian farthest regions.

Source: http://planetasustentavel.abril.com.br/imagem/superinteressante-o-brasil-secou-infografico-rios-voadores-560.jpg Source: http://planetasustentavel.abril.com.br/imagem/superinteressante-o-brasil-secou-infografico-nossa-agua-

vem-da-amazonia-rbg-560.jpg


3. Increase in demand and large water losses:

Why did the water become an issue for Sao Paulo?

Great Sao Paulo Region population in 1960: 9 million

people

Great Sao Paulo Region population

in 2014: 21 million

people

Around

25% of the

water is lost during distribution


What has already being done?Use of the water stored in the system’s technical reserve

The technical reserve is a reservoir of 400 million of cubic meters located under the floodgates of Cantareira System dams. The water of the technical reserve was pumped to the upper levels of the reservoir, increasing the level of the system in more than 20%.

Source: http://www.climatempo.com.br/destaques/wp-content/uploads/2014/05/INFO_CANTAREIRA_OK.jpg


What has already being done?

Discount

Discounts of 30% over the invoice value are being applied for those who save 20% or more of water

Use of other systems

The Rio Grande and Guarapiranga systems are supplying more than 3 million people that were supplied by Cantareira system.

Public awareness campaigns

Public awareness campaigns showing the importance of saving water started to be transmitted in the media.

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rce: h

ttp://sa

besp

.com

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(DC2) Uso Restrito na PwC - Confidencial

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

© 2015 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

150313-105450-MC-OS

For further information please contact:

Carlos [email protected]://www.pwc.com.br/pt/sustentabilidade/index.jhtml

Gustavo [email protected]

mailto:[email protected]

http://www.pwc.com.br/pt/sustentabilidade/index.jhtml



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(DC2) Uso Restrito na PwC - Confidencial Water: a precious asset June 2015 São Paulo´s water...

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