Presentation outlineI. Challenges for Sustainable Development Climate change as a planetary boundary Eco Footprint Environmental Risk and Economy

II. Green Economy and Water Status of Water Supply and Demand Green Growth and Decoupling

III. Water- Energy-Food (WEF) Nexus Water and Energy Water and Food

IV. Water and Economic Effect Water Market ; Current and the future Water Industry and Economic Effects Opportunity for the BIG Business

2

Climate change as a planetary boundary problem

Source: Stockholm Resilience Centre WebsiteKojima Satoshi, “ Challenges for Sustainable Development” ChungAng university Workshop presentation paper, 2015.2.9

Planetary boundary

Exceeding boundary indicates potential of irreversible catastrophic change of ecosystems.

I. Challenges for Sustainable Development

3

Eco Foot Print; Beyond the limits

Ecological Footprint: Total area of land required to sustainably produce, assimilate foods, energy, and the other materials consumed in a country.

Korea

WWF(2006) Living Planet Report 2006

Korea’s per capita footprint is about 4 times larger than the world average World total footprint is 1.2 times more than the total global surface.

4

Natural Disaster and Loss, 2014

Climate Disaster and Economic Cost Science ; Cost of Climate Change will be 1.2 trillion dollar per year.Every Year in the world, 50 Billion Dollar will be paid for the insurance damage

Source: Science, “ Climate Change the greening of Insurance,” 2012.12.24MuniRe, “Natural catastrophes 2013, Analyses, assessments, positions 2014 issue,” 2015 Report 5

2013, 890 loss had registered with US$ 135bn and insured losses of US$ 35bn. 2013 can be described as a relatively moderateyear but still exceeded the ten-year (790) and 30-year (630) average

6

World Economic Forum (2014) Most Risk in the future ; - Climate change, Extreme Weather Event, Water Crisis, Unemployment

Environmental Risk And Economy

7

2015 Global Risks Co-Relation Map

8

In 2011 the United Nations Environment Programme(UNEP) reported, “if nothing changes, humanity will demand 140 billion tons of minerals, ores, fossil fuels and biomass every year by 2050. This is three times our current rate of resource consumption, and far beyond what the Earth can supply. We need to fairly rapidly learn to decouple natural resource use and environmental impacts from economic growth.”

Coping most successfully with resource depletion requires a broad range of strategies. These include ; - improved recycling, the end of our disposable culture, - a return to taking care of things and repairing them - and making investments in renewable energy sources

II. Green Economy and Water

9

Water Situation Report from WRI and Aqueduct, (2014)

Food and Beverage Water in Asia is getting serious ; India, china, Central Asia

10

Agricultural Water in Asia ; central Asia, Northern china, Northern India is most risk countries

Mining Water in Asia ; India, Northern China, Vietnam and Central Asia is most risk countries

11

Reasons of Water Shortage - Asymmetric distribution of water - Bad Water quality - Increasing water consumption per capita (Population Increase)

12

Evidence of Decoupling; Gross Domestic Production and Material Productivity, 1980-2010

13

Source: UNEP Green Economy Report (2011)

Projected trends in annual GDP growth rate from 2010 to 2050

UNEP assumptions

Green scenario A: 1-2% of global GDP channeled to green investment.

Focus: agriculture, buildings, energy (supply), fisheries, forestry, industry, tourism, transport, waste & water

Green scenario B: 2 % of global GDP is invested, prioritizing energy and CC.

BAU: 1-2% of global GDP invested across the economy

14

III. Water- Energy-Food (WEF) Nexus

15

Minimum Consumption per Year ; 2,000 liter, But Population increase 80 Million per year. In 2025, 8 billion people (30 % more than 2000)

At present, 900 million people could not access drinking water. In 2025, 34% of total world population(2.7 billion people) will face lack ofdrinking water Rate of Urbanization (1950), 29.1%/ year, (2007) 49.4%, (2025) 57.2% Water withdraw (1950) 1,480km3 - 2007 3,840 km3 2025, 5000 km3

Population and Water Consumption Map of Water Shortage

16

17,652

6,2305,521 5,131

3,910 3,846

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Water (Irrigation& Pumping)

PetroleumRefining

Electrical &Electronics

Food Products Chemical & AlliedProducts

Oil & GasExtraction

mill

ion

kW-h

High Priority Priority Only In Collaboration

Water and Energy

17

18

19

20

21

WATER ENERGY

* Membrane replacement, Chemicals, Labor,

Maintenance

Energy~33%

Capital ~33%

Other O&M*~33%

Membrane

Capital31%

Energy45%

Other24%

Thermal (MED)

22

23

24

World Water Market will be increasing from 535 billion dollars (2012) to 689 billion dollars (2018), 865 billion dollars (2025)

- World Water Market achieve 3% growth compared to 2013. But- After 2015, Annual yearly growth rate will be expected 5% Average Annual Growth Rate is 402% from 2012 - 2018 Asia, South America, Middle East ·Africa ·Eastern Europe;

Market Share is increasing (’10 19% -> ’17 21%)

Region 2009 2010 2011 2012 2013 AAGR

United States 287.5 289.7 305.7 320.3 328.0 3.4%

Western Europe 244.8 254.4 259.0 261.2 265.7 2.1%

Japan 100.1 104.0 103.3 106.9 109.1 2.2%

Rest of Asia 64.3 71.8 78.0 84.1 91.0 9.1%

Mexico 11.70 12.39 12.96 13.48 14.05 4.7%

Rest of Latin America 24.8 27.0 28.5 29.8 31.6 6.3%

Canada 19.6 20.2 21.0 21.6 22.5 3.5%

Australia/New Zealand 12.9 13.3 13.6 14.2 14.7 3.3%

Central & E. Europe 12.8 13.2 13.7 14.1 14.7 3.5%

Middle East 13.9 16.0 17.5 18.9 20.3 3.5%

Africa 8.3 9.5 10.3 11.1 12.0 10.0%

Total 801 832 864 896 924 9.7%

(Unit; billion $ U.S)

IV. Water and Economic Effect

Source; Environmental Business Journal 2014 Snapshot Survey, 2014

Water Market Situation

Rank of Growth Prospects by Global Geographic Region; 2014

Source; Environmental Business Journal 2014 Snapshot Survey, 2014

Size of Market is 5th ; (1) Petro. 1,358 billion $, (2) Automobile 1160 billion $, (3) Electricity 600-800 billion $, (4) IT 600- 650 billion $(5) Water Market ; 550-600 billion $, (6) Tele Commun. 500-600

26

The Global Environmental Market by Region 2008-2012, $ bil. and Growth

Source; Environmental Business Journal 2014 Snapshot Survey, 2014 27

Environmental Market in Asia Pacific (1999-2014)(Unit; billion $ U.S)

Source; Environmental Business Journal 2014 Snapshot Survey, 2014 28

Global Environmental Market by Segment 2004- 2014e, ($ bil.)

29

Water and Waste water Markets of 12 “ Best Prospects” countries (2013)

30

World Water Market and Management Situation , 2013

Source; GWI, “World Water Market Situation, 2014”, 2014 31

China Water Market and the Future - Water Supply is relative good and water treatment rate is 41.6% - 500 million people can have service for the water treatment, but water

pollution is still problem- Water market (2013), 58 billion dollars. 8.2% Up compared to 2012- In 2014, 63 billion dollars. 8.4% Up compared to 2013- In 2018년 ), 91.1 billion dollars will be (AAGR , 9% )

32

China Water Market and Future

33

Evaluation of Attractive Water Market based on Value Chain by RegionClock wise; Parts, water and Water treatment management, Industry, and Desalination

Source; KEB, “ Korean Water Industry and Its Foreign investment Strategy,” 2014.2 34

- 22 countries ; EU (9,) U.S.A (1), Brazil, (2), China (9), Philippines (1)

10 Million Population Served Water Companies

35

NO. Company Country Sale(Mill.) Population(10000)

% of Foreign Busine

ss

36

Source; KEB, “ Korean Water Industry and Its Foreign investment Strategy,” 2014.2

Business Performance Comparison in Value Chain of Water industry, 2012

37

From 2014 to 2023, operating and capital expenditures of the Water Industry in the U.S.A will generate $52 billion per year

National economic contribution of $524 billion over the 10 years. - Create approximately 289,000 permanent jobs.

Every $1 million in direct spending by the utilities supports 16 jobs throughout all sectors of the economy

Economic Impact of Utilities Employment Labor Income Output

Source; WERF “NATIONAL ECONOMIC & LABOR IMPACTS OF THE WATER UTI LITY SECTOR; EXECUTIVE REPORT,” 2014.9

Employment Labor income Output

Aggregate Impact over 10 years

2.9 million job-years $189 billion $524 billion

Annual Impact 289,000 jobs $19 billion/year $52 billion/year

$1M = 5 Jobs (Direct) + 11 jobs (Indirect and induced) = 16 Jobs (Total)

Water Industry and Economic Effect ; National Cases

Case 1: U.S.A

The total economic impact of the sector in 2012/13 is estimated to be £15.2 billion.

This activity supports 127,000 jobs directly or indirectly. - 4,000 construction jobs, 3,000 jobs in transport and 14,000 jobs in distribution. - 4.5 billion on investing in assets (tackle leakage, flooding, drought.) In 2012/13, companies spent £5 billion on operating expenditure. In 2012/13, the industry took on almost 200 apprentices in a wide range of

roles. Well over £1 billion was spent on reducing the risk of sewer flooding. Overall cost on average to consumers for water and sewerage is around £1 a

day.

Case 2: UK

Source; Deloitt, UK, “Tapping into growth: Economic impacts of water and sewage sector in UK. “ 2014.9

Sector TOT. Water &sewage

Business Service

Other service

transport distribution Hotelscatering

Const. other

GVA

(ℒ bn)

15.2 8.7 3 0.6 0.2 0.7 0.2 0.3 1.3

Jobs 127K 42000 34000 12000 2800 14000 4400 4000 15000

Uk Water and Sewage sector economic impact; GVA and jobs

In 2010, 800 million people worldwide were without improved access to water and 2.5 billion people were without access to sanitation ;

World Bank and the Country Evaluation Analysis (CEA) uses Disability Adjusted Life Years (DALYs). DALYs measure the years of healthy life lost to illness and premature mortality, with a weighting function that adjusts for the impacts of death and illness at different ages. (Marie, etc. 2014)

India, uncontrolled pumping of groundwater for irrigation has led to unsustainable exploitation rates. Almost 60% of Indian districts are facing groundwater problems either quality and/or quantity, overdraft in the west.

Case 3: India,

40

Africa and Latin America stand to gain the equivalent of 5% or more of their annual GDP

Economic benefit of providing universal access to Brazil, Russia, India and China would amount to more than USD125 billion per annum, about 1% of their joint 2010 GDP.

Case 4: Africa, Latin America

41

(Shah, 2013) have shown that between 2002 and 2008, - water loss; about 109 cubic km of water, decline water table ;

3-5 cm per annum

Costs of Water Degradation as per cent of GDP

42

Absolute annual economic gains per region (in million USD2010)

Capital cost range for improved access to water supply and sanitation

Providing universal access to water for all poorly-serviced populations will cost at least USD175 billion(low cost tech.) until 2050

Additional USD550 billion require for universal access to sanitation (Right Table) until 2050

Benefit of achieving MDG gains amount to more than USD 56 billion per annum between now and 2015

Achieving universal access generate USD220 billion annually. (Left Table)

Source; Marie-Agnes Jouanjean, Josephine Tucker, Dirk Willem te Velde, “ Understanding the effects of resource degradation on socio-economic outcomes in developing countries,“ 2014.3 43

Case 1. Philippines Angat Project – K water ; - 218 MW Capacity, - Total Investment ; 469 Million US $

- Performance; Most of Supply for the Philippines Electricity and water

Water Industry and Economic Effect ; A Country Cases

Case 2. Pakistan patrind Project – K water ; - 150 MW Capacity, - Total Investment ; 436 Million US $

- Performance; First PPP Electricity and Water Project

Source, : Ko jaemyung, “ ODA Strategy Seminar,” 2015.2.12 44

Case 3; Philippines Jalaur River Multipurpose, USD 208 Million- Increase irrigation, productivity, regional tourisim, etc- Hire local people

Source, : Ko jaemyung, “ ODA Strategy Seminar,” 2015.2.12 45

Case 4; GMS (Greater Mekong Subregion, 4200 Km)

Source, : Ko jaemyung, “ ODA Strategy Seminar,” 2015.2.12 46

Opportunity for the BIG Business

Improved water supply/sanitation/management boost up economic growth And Contributes to poverty reduction.

- Poor countries enjoyed annual average growth of 3.7%. (SIWI, 2007) Economic growth is boosted when water storage capacity is improved. Investing in water; increase production& productivity within economic sectors. Economic benefits of improved water supply/sanitation> investment costs Water Industry is BIG industry in the future such as ;

1. Drinking Water (10% of Global Demand) ; - Smart Water Grid , Prevention of Leaking, Saving

2. Industrial water (20% of Global Demand) ; Water Saving Technology 3. Agricultural Water (70% of Global Demand) ; Irrigation 4. Common Area;

- Low Cost Desalination. - Small and Medium Scale Dam Contruction, Large Hydro, - Waste Water treatment- Water Saving Plant- Water Collection System in Urban Area

47

www.gwptoolbox.org

www.odi.org

Deloitte, Water/UK, “ Tapping into growth; economic Impact of the Water and sewage sector in the UK,“ 2014.3

Frontier Economic, HSBC, “ Exploring the links between water and economic growth ; A report prepared for HSBC by Frontier Economics: Executive Summary,” June 2012.

Global Water Partnership, “Water in the Green Economy, “ PERSPECTIVES PAPER, 2012.6

KIM, Jeongin, Chang Sukwon “ Water-energy-Food Nexus,” K-Water policy Forum presentation paper, 2013.11

KIM, Jeongin, “Green Growth Main Features and Key Progress: Green Growth Policy of Korea,” IETC, CIFAL, 2013.4.4

KIM, Jeongin,, “ Energy Self-Reliance Village in Korea,”

KIM, Jeongin,, “Resource Constraints in ASIA and It’s Impact ,” BASF Asia-Pacific Region workshop, 2

Marie-Agnes Jouanjean, Josephine Tucker, Dirk Willem te Velde, “ Understanding the effects of resourcedegradation on socio-economic outcomes in developing countries,“ 2014.3

SEI, “Understanding Nexus,” 2012.10

Shah, M., “ Water: Towards a Paradigm Shift in the Twelfth Plan,” Special Article, Economic and Political Weekly, Vol 03. 2013

References

48

Thank you for your kind attention

jeongin@cau.ac.kr

Source : United Nations ESCAP Report

49