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Western states agree to reduce water consumption through 2026

Image source: U.S. Geological Survey. 2010. “Water use data for the Nation” [Image]. Environmental Defense Fund. Available at: https://blogs.edf.org/growingreturns/2019/10/24/colorado-river-basin-story-map-highlights-importance-of-managing-water-below-the-ground/

The Colorado River basin provides drinking water and hydropower to over 40 million people and 30 Tribal Nations across the Western United States including Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming. The U.S. Office of Congressional and Legislative Affairs reports that the Colorado River Basin’s 22-year drought period is the longest in more than 100 years of recordkeeping.

On May 22, 2023, the Lower Basin states (California, Arizona, and Nevada) reached consensus on a  historic conservation plan to cut water usage from the basin by 13 percent for the next three years. In exchange, the Biden Administration will provide $1.2 billion in federal funds from the Inflation Reduction Act for water conservation programs, infrastructure and groundwater storage. The Biden Administration also announced up to $233 million in funding for the Gila River Indian Community for a water pipeline project and a conservation and efficiency program to move towards a long-term solution to save the Colorado River basin. While it is not entirely clear what populations will be most impacted by the states’ conservation plan, a 2020 study by Nature Sustainability suggests the largest reduction in water use will come from the agriculture industry.

While the Lower Basin states’ conservation plan must still pass through several steps of regulatory approval, it is a positive step towards mitigating irreversible depletion of the Colorado River basin. All seven basin states must come to a long-term agreement that equitably distributes water delivery reductions because the health of the Colorado River basin is a vital component of the economic, environmental, and social prosperity of the Western United States and surrounding regions.

Jay Bonner

Researcher


This is a part of the AEC Blog series

tags: Jay Bonner
Tuesday 06.20.23
Posted by Liz Stanton
 

Sustainable Finance: Potential and Shortcomings

Sustainable Finance, or “green finance”, refers to emerging investment decisions that incorporate an economic activity's environmental, social and governance (ESG) impacts into the overall value of an investment or project. Traditionally, investment profits have not accounted for negative externalities such as environmental impacts of operations or unfair compensation. Sustainable finance aims to stimulate positive social externalities by incentivizing consumers to invest in companies that utilize an internal sustainability framework, or corporate social responsibility objectives, to measure ESG impacts.

Source: Olsen, H.F. 2021. What is ESG? [image]. Fiduciary Trust. Available at: https://www.fiduciary-trust.com/insights/sustainable-investing/

Financial brokers like Fidelity have begun promoting green investments to help consumers navigate the sustainable finance market. On the same note, a recent study revealed a demand for ESG-conscious products, showing 50 percent of U.S. Gen Z shoppers are willing to pay more for products that they believe are produced by companies with sustainable production practices. As a reflection of this trend, global sustainable finance investments saw a 55 percent increase from 2016 to 2020 across five major financial markets. In addition, Refinitiv’s 2021 Global Risk and Compliance report, reviewing changes in the financial risk landscape, found that 43 percent of compliance and risk professionals agreed that the global pandemic has heightened the importance of ESG factors in decision making.

Source: Refinitiv. n.d. Where there’s green, there’s growth [figure]. Available at: https://www.refinitiv.com/en/resources/special-report/cop26-data-driven-approach-tackle-climate-change#cities

The sustainable finance industry faces challenges in addressing unsustainable economic growth and the neglected impacts of consumption that have been normalized by capitalism and industrialism. In addition, a study conducted by Euromoney found that regional and global leaders of sustainable finance identified challenges in standardized risk metrics, green finance incentives and a more structured approach to a full transition to green finance.

The corporate and investment bank BBVA  identified sustainable finance as an important factor in the future of finance to address environmental risks and economic impacts as consequences of climate change, but there are still bridges that need to be built to create a global financial system that considers economic and social risks while minimizing negative environmental impacts.

Jay Bonner

Assistant Researcher and Office Manager


This is a part of the AEC Blog series

tags: Jay Bonner
Tuesday 11.15.22
Posted by Liz Stanton