Speech by Jack Carnell Managing Director South Staffordshire Water Company to the Chartered Institute of Water and Environmental Management on the 19th January 2009
"This isnít the first time Iíve ever spoken about climate change, so if youíve heard me before I apologise. However, I donít apologise for being controversial. At the outset, I take just one fact to be true: that climate change is real and, along with world poverty, is one of the two biggest threats facing us today.
I also put it to you that climate change is something we like to talk about, whilst doing something about it seems to be in short supply. On a global scale the nearest analogy that I can find is that in 1939 (after the invasion of Poland but prior to Dunkirk), England and Germany were perceived as going through some phoney war. It wasnít until real people lost their lives and that those people were our people that we started to believe that this was a global crisis. The truth is that we simply havenít declared war on climate change. Let me suggest a few reasons for this.
Many people blame the Chinese Ė whatís the point of us trying to reduce our carbon footprint when they are making it worse. (In actual fact they arenít ďmaking it worseĒ in a negative sense, they are just developing their economy. In truth they take it far more seriously than we do). On top of that many believe that the Americans donít take it seriously at all, particularly under the Bush presidency. Well, at the final analysis there is very little that you and I can do about what goes on in China and America, but there are things that we can about what goes on in our own industries.
I find it rather both laudable and absurd, for example, that the Government had just toughened its carbon reduction target from 60 % in 2050 to 80%. Itís a bit like Kidderminster Town football club saying that its target for promotion to the first division has just been changed to the Premier league. Both targets are unrealistic. The simple facts are that the levels of carbon now omitted in the UK are similar to those 18 years ago when the targets were initially based. Is this at all surprising when our Regulators state openly that ď. . . the Water Industry has not been set carbon reduction targetsĒ. In other words, we wont fund it unless the economics stack up. Well, ladies and gentlemen, wars arenít based on economics Ė but on social and political imperative. This is no different.
There is of course some evidence of change. Car tax has gone up for large emission vehicles and you can pay an offset charge when you buy a 4 x 4 or an airline ticket. Hands up all the people in the room who have ever paid the transatlantic charge of around £30 for an economy ticket when they go on their annual holiday. Ask yourself why you donít, and I expect that the reasons are because you donít need to, you donít think it will make a difference, you donít know where the money will go or you just donít care. By contrast how many of us would happily put money to a charity or poppy appeal ? Is it, perhaps, because we can bond emotionally with the issue, but we donít bond with the ďidea of it getting a bit warmer and England becoming a thoroughly nice place to come for your holidayĒ.
At the national May Day summit last year I was privileged to listen to Al Gore, author or the Inconvenient Truth, talk about why he believes climate change is so important. The one message I took away with me was the very clear assertion that this has nothing whatsoever to do with saving the planet. The planet doesnít give a damn, it couldnít care less. The planet saw the creation of dinosaurs, millions of year of their survival, then their destruction by meteor. It didnít shed a single tear. The fact is that our attempts to reduce carbon footprint has no other meaning than our survival and that of our children. I suspect, therefore, that we will only declare war when it is our own survival or that of our children that comes under threat and we donít feel it yet. It is very similar in a way to the global crisis that we know happens every day in Africa and the third world, with 5,000 children dying of water borne diseases every day. But most of this happens 1,000 of miles away and we donít experience the pain personally. Iíve had the privilege of going to Africa and I can say with 100% confidence that a global crisis exists, but climate change is less obvious to the naked eye. With the advent of climate change the crisis facing the third world will escalate rapidly, but again those of us in colder climates may not really see or feel it, certainly not initially. But feel it we will as mass migration starts to bite and wars begin to be fought over the availability of water, rather than the availability of oil.
Many of you know that the water industry is responsible for, depending on how you measure it, up to 2% of all greenhouse gas emissions. We therefore have a huge opportunity, as well as a legacy, for change. In simple terms every household that we supply uses a tonne of water in two days and every drop of water has to be pumped many hundreds of feet in the air before it gets to customers.
What many of you wont know is that South Staffs Water has the highest carbon footprint of any water company in the UK. This isnít because we are sloppy, in fact, we have been top of Ofwatís League Table for energy use for almost a decade, it is simply because we have got more hills than anyone else. As a mission our Company firmly embeds the challenge of carbon and we now talk openly about the need to secure our 3Cís (customers, carbon and costs).
So then, what can we do ? Well we either adapt or mitigate. To mitigate we need to explore renewable sources such as hydroelectric an combined heat and power, but there is a limit to how far we can go. The problem with electricity is that you cant store it satisfactorily which, for example, means that wind energy only works when it is windy and wave energy only works when there is a wave to drive it. Recently Ofwat announced that the water industry would not be funded for the development and promotion of wind power, even when it is for its own use. I have to say that I find that extremely disappointing. So, then for those of use who cant mitigate where do we turn. At the end of the day most of the carbon footprint for a ďwater only companyĒ is in the pumping of water. Thus, we must pump less water or redesign the network, and yet as we sit here water is incredibly cheap across much of the world. South Staffsí bill example for sits at £118 per year. A similar amount through a typical familyís consumption of a Sunday newspaper. A tonne of water costs 80p and only 20% of my customers are metered. For the other 80% on Rateable Value do you think they will reduce their water consumption if we ask them nicely ?
The real challenge is that we have to introduce a price signal into a product which is very cheap. So what level then would encourage customers to think twice before taking a bath or watering the garden ? And what massive income would this generate for a company that doesnít actually need it to run its business ? Ultimately the answer has to lie in a combination of legislation for new homes, the marketing of water efficiency products being sold in electrical stores, smart metering on a national scale and a tariffs system that penalises excess and protects the poor. We also need to remember that before attempting to drive down our carbon footprint we remain first and foremost a service which protects against water borne disease. For example when my own company was created in 1853 male life expectancy was 39 years, the same level as the worst parts of Africa are today. This is not a situation that we want to see deteriorate.
So we will ultimately see considerable conflicting pressures. From the need to maintain an essential public service, but with carbon reduction targets of 80% by 2050. So far we have not been shown as a special case. The current per capita consumption in the UK is about 150 l/p/d If we do nothing else then an 80% reduction means that we all need to survive on 30 l/p/d by 2050. Whilst necessity is of course the mother of invention, it is hard to see that we could ever goes this far. In fact, at such low levels of water use our mains networks and our sewerage systems would be massively over capacity, bringing their own problems of stagnation, bacteriological contamination and blockage.
So in summary, we have a fantastic opportunity, but an incredible challenge. I call in particular on Government and Regulators to take a more positive role in climate change and become more a part of the solution rather than the problem.
Targets need enforcing, not just setting. Real incentives need laying down Ė not just at the periphery such as leakage levels or water efficiency. I believe that these issues are far more important than current distractions such as industry competition which seem to be far more pressing on our agenda.
I would call also on the Government to drive house builders to more urgent change to domestic appliances, to be far more vocal and aggressive in keeping the public both informed and incentivised to reducing carbon footprint so that ultimately we can declare war on this unseen menace."