Black Death, Drowned Rat or Mighty Mouse?
by China Water Risk 17 February, 2020
Black Death, Drowned Rat or Mighty Mouse? How will the Year of the Rat unfold? Will it bring more diseases or will we get sunk like a drowned rat by water and climate risks? As the first animal of the Chinese zodiac, the Rat sets the tone for the next 12 years, so stay ahead of the curve and prosper like a Mighty Mouse with our 5 trends for the Year of the Rat.
As we see less snow at ski resorts, uncontrollable fires, extreme flooding in the UK and sea level rise accelerate in the US, we smell a rat. The sneaking suspicion that climate change manifests in water threats grows … and we are only at +1.2°C of warming! Worse still, world leaders are failing to steer us to 2°C.
So with Asia’s carbon diet set to grow, we must be bold and innovate to break out of “development as usual”. One way to fast track this is to start talking about climate impacts on Asia’s limited water resources. We turn to water gurus Prof Asit Biswas and Dr Cecilia Tortajada for ideas on how to make water issues matter to world leaders.
Growing water threats mean that the financial sector is ripe for disruption, especially since banks say they’re on top of climate risks with TCFD scenarios, yet these barely touch on water risks. Like blind mice, their loanbooks and collateral are horribly exposed to systemic shocks, which everyone knows is coming – Moody’s just published a report saying sea level rise poses a long-term credit threat to some sovereigns and the Bank for International Settlements warns of multiple “green swan risks”.
Finance has a key role to play to green our future but with banks appearing not to give a rat’s arse, lending a cool US$1.9trn to fossil fuels since the Paris Agreement, we see regulators stepping in to steer the sector away from future perils. Here, all eyes on the NGFS meeting in Bangkok this April. But there are bright spots ahead in ESG and green finance winds are gusting.
The Metal Rat rewards those who adapt with riches. But big risks bring big fund raising opportunities – Singapore’s SGD100bn adaptation overhaul needs funding, as do the plans to protect Miami. Think about it… 80 airports globally are threatened by just 1m of sea level rise. There’s clear rich fee generation potential in building resilience to water risks already baked into the system. Don’t just take our word – Dr Ma Jun, the Chair of China’s Green Finance Committee & NGFS Workstream 1 and Chaoni Huang, APAC head of Sustainable Capital at BNP Paribas both believe it can be Asia’s most effective weapon.
The story of the year so far has been the outbreak of COVID-19. But even with the health emergency plus an economic slowdown, China is determined to tai-chi its way toward an eco-civilisation. The cheese will slowly be moved bit by bit as China experiments with pilots galore by sector, by province, by region and by basin. Polices, regulations and laws may be delayed or tweaked, but not derailed. Top polluters will feel the pain – already, regulations in the paper industry have led to material production cuts.
Plus, expect stern reprimand and spring clean of wet markets and the wildlife trade; note that the MEE has already set technical guidelines for medical waste from COVID-19. Public snitching will also rise thanks to monitoring apps and social credit scores. Beware enforcement is not just a paper tiger; companies that fail to adapt to find the cheese will starve.
Yet many fashion and electronics brands are still going in circles and not circular. Blatant greenwashing also pervades, but with this now being exposed in mainstream media, can a new-style circular rat race emerge? There’s hope with Gen Z demanding more sustainable goods and the emergence of circular funds. So like the resourceful Rat, relish in making the most out of rubbish and green billionaires will be made. Advances are here already – Camille Rollin from the Race for Water Foundation shares with us their new tech solution to convert plastic waste to energy.
Shocking emissions of our digital lifestyle also mean we must examine our own online habits. With the rise of AI, eBanks and digital currencies, we took a closer look at what big tech brands are doing to green clouds and data centres – maybe, we will see green clouds one day.
Too optimistic? Remember, Rats are the ultimate survivors, eking out an existence in the crappiest of environments. Given our recent failure at COP25 and the need for radical change to even meet the Paris Agreement, we need to channel the Rat’s flexibility to adapt and survive. With less legacy systems and urgent challenges ahead, we expect Asia to stop sitting on the sidelines and step up in building a low carbon future with water for all.
The Metal Rat demands bold decisions and bold innovations. With 10 years left to make a difference, we’re long past the time for cat and mouse games. Think Speedy Gonzales and enough with the Mickey Mouse bullshit.
Happy Lunar New Year!