Adaptation through Water 2025

Climate change has already generated significant impact and is manifesting primarily through more frequent and severe extreme weather events. Severe weather events include floods, droughts, wildfires, heatwaves, storms and others. Their incidence has increased five-fold since the early 1990s and their costs have climbed to over $300 billion globally in each of the last five years. Southeast Asia is already among the most vulnerable regions to extreme weather: for example, Viet Nam is among the most exposed countries in the world to flood risk and the frequency of drought in Thailand is higher than anywhere else. Overall, Southeast Asian countries could lose 18-25% of their GDP due to climate change. This region needs to prepare quickly for the impacts of climate change, yet these efforts are under-prioritized and under-supported. A major reason for the lack of support is the difficulty in grasping adaptation. It is perceived as broad and all-encompassing, without resonating clearly with any specific constituency. Moreover, because it is difficult to measure, the returns on investment in climate adaptation are challenging to define. Water as a proxy for adaptation Water is the vector through which most climate impacts are felt. Firstly, it is self-evident that the supply and management of water is affected by climate change and that changes in water supply affect people. Rising temperatures dry out reservoirs, rising sea levels threaten freshwater systems with saline intrusion, and climate-driven floods or storms can overwhelm wastewater discharge systems. It is clear that interventions to strengthen freshwater and sanitation systems, known as the “engineered water cycle”, can lessen the impacts of climate change. Secondly and more broadly, climate change has negative impacts on people because it undermines or overwhelms key systems. These include agriculture, infrastructure, nature and the environment, health, energy and industries. With the exception of natural ecosystems, which are strongly affected by warming oceans and average surface temperature changes, the biggest threat to these systems from climate change in the immediate term comes from extreme weather. In its recent report, the Global Commission on the Economics of Water (GCEW) made clear that “90% of all extreme weather events are related to water”. The GCEW is referring to the natural water cycle – the continuous movement of water within the earth and its atmosphere. The commission argues that the natural water cycle should be treated as a public good to be managed in the service of minimizing the negative impacts of climate change. This paper defines adaptation through water (AtW) as influencing the natural or engineered water cycles to minimize the negative impacts of climate change. AtW as a uniting vision for adaptation in the region Businesses are increasingly focused on water, whether through investments, business continuity planning or sustainability initiatives. Water is also an emerging topic of concern on international agendas. AtW provides a framework through which to unite public and private efforts on water in the service of climate adaptation. To that end, this paper describes a framework for action on AtW. It focuses on four key solution areas that can drive tangible impact. All are equally important and sector-agnostic; all apply to end-users and others in their value chains, as well as to solution providers and investors: –Flood damage reduction: Reduce the physical asset damage and business interruption from flood and water-related hazards. –Water optimization and circularity: Enhance alternative water sources, improve water-use efficiency across all ecosystems and develop holistic planning around water circularity. –Financing AtW: Develop financial frameworks and tools that allow commercial capital to be deployed for AtW projects across industries and sectors. –Water and nature innovation: Develop and promote innovative technologies across industries, and leverage advanced data analytics and AI applications in all water-related ecosystems. The business opportunities in these areas are large. For example, fortifying Southeast Asia’s adaptation and resilience to the various types of flooding beyond existing methods will take an investment of roughly $13 billion by 2030. The paper then offers a series of case studies that illustrate what has been possible in these areas and that could hold lessons for the region. Public-private collaborations offer the most viable, effective way to deliver the resources, solutions and innovation that adaptation and resilience require. As the risks and magnitude of climate impacts continue to mount, the case for action is growing, and delayed response increases costs and complexities. Partnerships focused on AtW offer a pathway for Southeast Asia to accelerate and scale-up climate adaptation. Adaptation through Water: Mobilizing the Private Sector for Climate Adaptation in Southeast Asia 5