MDIA p3-04-32 water 150620

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Water is a very important component of life. There is more water than land on planet earth. but most of it is highly saline. There is less freshwater, essential for human existence and for industrial processes and agriculture.

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MDIA p3-04-32 water 150620

  1. 1. MULTI DIMENSION IMPACT ACCOUNTING File: MDIA-p3-04-32-WATER-150620.odp Peter Burgess (c) All rights reserved MDIA WATER A COMPONENT OF NATURAL CAPITAL
  2. 2. MULTI DIMENSION IMPACT ACCOUNTING WORK-IN-PROGRESS. SLIDESET STILL IN DEVELOPMENT. UPDATES WILL BE POSTED OVER THE NEXT SEVERAL WEEKS
  3. 3. The IMPORTANCE of WATER Without WATER, a person is dead in less than three days. In a major drought, plants die, then animals and then people. Huge amounts of water are needed to grow almost everything. Huge amounts of water are needed to make almost everything. MULTI DIMENSION IMPACT ACCOUNTING
  4. 4. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun DROUGHT Crops fail
  5. 5. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun DROUGHT Water shortage in New Mexico
  6. 6. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun DROUGHT Camel carcass … Horn of Africa
  7. 7. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun DROUGHT Dead animals … Horn of Africa
  8. 8. The CHALLENGES To use water in a more efficient way so that: ● We have water we need for people; ● We have water to grow what we need; ● We have water to produce what we need To end water pollution from human activities: ● Runoff from agriculture; ● Effluent from urban areas; ● Wastewater from industrial activities. MULTI DIMENSION IMPACT ACCOUNTING
  9. 9. WATER, a product of NATURE ● Purified by natural systems; ● Historically a 'free' good; ● Now, increasingly there are shortages; ● Essential for all forms of life; ● People die after 3 days with no water; ● Huge amounts used in agriculture; ● Huge amounts used in industrial operations; ● And lots of wastewater and pollution issues to be addressed MULTI DIMENSION IMPACT ACCOUNTING
  10. 10. The next slide: WATER … Perhaps the most VALUABLE substance on the planet. MULTI DIMENSION IMPACT ACCOUNTING
  11. 11. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun WATER DRINKING WATER
  12. 12. The next 2 slides: BOTTLED WATER … One of the most PROFITABLE products on the planet … … as long as external negative IMPACTS are ignored MULTI DIMENSION IMPACT ACCOUNTING
  13. 13. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun WATER BOTTLED WATER
  14. 14. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun WATER BOTTLED WATER
  15. 15. The next slides: Freshwater ... ● Lakes; ● Rivers; ● Rain. Saltwater ... ● Oceans MULTI DIMENSION IMPACT ACCOUNTING “Water, water, everywhere … and not a drop to drink”
  16. 16. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun WATER - LAKES
  17. 17. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun WATER – RIVERS / STREAMS
  18. 18. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun WATER – RIVERS / STREAMS
  19. 19. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun WATER - RAIN
  20. 20. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun WATER - RAIN
  21. 21. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun WATER - OCEAN
  22. 22. The next slides: Water Shortages ● Dry river in Pakistan; ● Nearly empty reservoir in California ● Collecting water in North Kenya; ● Waiting for water in Myanmar. MULTI DIMENSION IMPACT ACCOUNTING
  23. 23. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER WATER SHORTAGE Pakistan … 2009
  24. 24. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER WATER SHORTAGE California … 2014
  25. 25. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER COLLECTING WATER
  26. 26. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER COLLECTING WATER Myanmar … 2011
  27. 27. The next slides: Too much water … floods MULTI DIMENSION IMPACT ACCOUNTING
  28. 28. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER FLOODS Myanmar … 2011
  29. 29. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER FLOODS
  30. 30. The next slides: Flood control measures ● River Thames in London; ● Dam in China; ● Dam in USA. MULTI DIMENSION IMPACT ACCOUNTING
  31. 31. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER FLOOD CONTROL Thames barrage
  32. 32. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER FLOOD CONTROL
  33. 33. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER FLOOD CONTROL
  34. 34. WATER POLLUTION MULTI DIMENSION IMPACT ACCOUNTING
  35. 35. WATER is an amazing solvent … and this is a huge problem because water dissolves both good things and very bad things. MULTI DIMENSION IMPACT ACCOUNTING
  36. 36. WATER POLLUTION comes from: Personal use … gray water; Storm water run off; Agriculture run off; Industrial process effluents; Industrial process leakages; Abandoned mines; Seepage from land fill (waste). MULTI DIMENSION IMPACT ACCOUNTING
  37. 37. The next slides: Water Pollution ● Polluted rivers … solid waste; ● Industrial waste water; ● Abandoned mines runoff; ● Deforestation; ● Sediment laden river in China MULTI DIMENSION IMPACT ACCOUNTING
  38. 38. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER RIVER POLLUTION … SOLID WASTE River Ganges in India
  39. 39. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER INDUSTRIAL WATER POLLUTION
  40. 40. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER ABANDONED MINE POLLUTION
  41. 41. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER DEFORESTATION
  42. 42. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER SEDIMENT LADEN RIVER
  43. 43. REMEDIATION MULTI DIMENSION IMPACT ACCOUNTING
  44. 44. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun NATURAL WATER TREATMENT REMEDIATING ABANDONED MINE DRAINAGE Pennsylvania
  45. 45. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPWater enters a stream … but is this clean water?
  46. 46. The WATER dimension of the socio-enviro-economic system depends on the characteristics of the water sources in the PLACE MULTI DIMENSION IMPACT ACCOUNTING
  47. 47. PROCESSES that use WATER should be efficient in the context of the PLACE. Post PROCESS water should not pollute the environment. MULTI DIMENSION IMPACT ACCOUNTING
  48. 48. The next slides: Water Cycle graphics MULTI DIMENSION IMPACT ACCOUNTING
  49. 49. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun WATER WATER FLOW
  50. 50. MULTI DIMENSION IMPACT ACCOUNTING
  51. 51. MULTI DIMENSION IMPACT ACCOUNTING
  52. 52. MULTI DIMENSION IMPACT ACCOUNTING
  53. 53. USES FOR WATER MULTI DIMENSION IMPACT ACCOUNTING
  54. 54. The main uses for WATER: Personal use … hydration; Personal use … washing, cooking, etc; Personal use … landscaping, etc; Agriculture … irrigation; Agriculture … livestock husbandry; Industrial process … manufacturing; Natural process support; Water transport losses; MULTI DIMENSION IMPACT ACCOUNTING
  55. 55. The main sources of WATER: Rain, rivers and surface reservoirs; Underground aquifers; Deep old water aquifers; Desalination systems. MULTI DIMENSION IMPACT ACCOUNTING
  56. 56. Unlike oil and gas, there is no global system of logistics to move water around the world. MULTI DIMENSION IMPACT ACCOUNTING
  57. 57. Transport is readily justified based on value … but not easily justified with the cost / pricing construct that has prevailed for a long time* MULTI DIMENSION IMPACT ACCOUNTING * See MDIA discussion on Bottled Water
  58. 58. FINANCIAL AND IMPACT ACCOUNTING FOR WATER MULTI DIMENSION IMPACT ACCOUNTING
  59. 59. So … how to do the accounting for impact for water? MULTI DIMENSION IMPACT ACCOUNTING
  60. 60. The amount paid for water is in the financial accounts. It is likely that the quantity of water going into the process is also recorded as a 'memo' item. MULTI DIMENSION IMPACT ACCOUNTING
  61. 61. It is less likely that the quantity of water leaving the process is recorded. Both the quantity of the water leaving the process and the quality of the water is required. MULTI DIMENSION IMPACT ACCOUNTING
  62. 62. The IMPACT is a function of these PROCESS parameters: the consumption of fresh water … i.e. fresh water in less water out; and, the quantity and quality of the water out. MULTI DIMENSION IMPACT ACCOUNTING
  63. 63. The IMPACT is also a function of water sources in the PLACE: The availability of water from sources that are replenished naturally (local rain, rivers etc.) The stocks of ancient water that may be mined MULTI DIMENSION IMPACT ACCOUNTING
  64. 64. And the IMPACT is also a function of water needs in the PLACE: The need for PEOPLE use – essential needs; The need for PEOPLE use – less-essential; The needs of AGRICULTURE; The needs of INDUSTRY. MULTI DIMENSION IMPACT ACCOUNTING
  65. 65. … the next slide is a graphic that puts much of this into the MDIA framework … MULTI DIMENSION IMPACT ACCOUNTING
  66. 66. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun Rain WATER EOP River Reservoir Old water Industrial Irrigated Agriculture People Use Fresh Water Mined Fresh Water Total Fresh Water Into Use IN IN Polluted Polluted Water Rain River Reservoir Old water Replenishment Rain / Water Flows Resource Depletion Environmental Degradation Polluted Polluted Water Polluted Water Fresh Mining & Industry Fresh Polluted Water
  67. 67. The valuation of RESOURCE DEPLETION associated with the mining of old water that does not replenish has to be quantified ... MULTI DIMENSION IMPACT ACCOUNTING
  68. 68. … and the reason for the agriculture and the industrial production is so that PEOPLE have the food and 'stuff' they need to maintain their lifestyle. MULTI DIMENSION IMPACT ACCOUNTING
  69. 69. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun WATER EOP Industrial Irrigated Agriculture People Use Polluted Polluted Water Rain River Reservoir Replenishment Rain / Water Flows Resource Depletion Environmental Degradation Polluted Polluted Water Polluted Water Fresh Mining & Industry Fresh Polluted Water Water from regular flows People Use Drives Everything Net Water Use Mined old water BOP Old water EOP Old water
  70. 70. Next step … QUANTIFICATION The next step is to quantify the VALUE of old water that is mined … the quantification of resource depletion; and To quantify the IMPACT or VALUE DESTRUCTION associated with fresh water becoming contaminated. MULTI DIMENSION IMPACT ACCOUNTING
  71. 71. RESOURCE DEPLETION - WATER If the VALUE (TrueValueWater or 'tvw') of water is defined as follows: The value of 1 (one) litre of fresh water = 1tvw Then the VALUE of resource depletion in tvw will be the product of: Number of litres mined X 1 MULTI DIMENSION IMPACT ACCOUNTING
  72. 72. RESOURCE DEGRADATION - WATER When the cost of remediating degraded water to fresh is $5 per litre Then the IMPACT of resource degradation will be: Litres degraded X $5 MULTI DIMENSION IMPACT ACCOUNTING
  73. 73. AND … When toxic water gets into freshwater (watershed or groundwater) the IMPACT may be quantified by reference to the amount of water impacted and the cost of full remediation of this amount of water Litres impacted X ($ remediation cost/litre) MULTI DIMENSION IMPACT ACCOUNTING
  74. 74. AND … To the extent that toxic water contaminates freshwater (watershed or groundwater) the IMPACT may also be quantified by reference to the amount of land impacted, the amount of groundwater impacted and the people population impacted. This is important because many business operations choose to ignore these matters when they are in remote locations with weak regulatory regime MULTI DIMENSION IMPACT ACCOUNTING
  75. 75. Requesting collaboration The prevailing metrics for our complex socio-enviro- economic system are inadequate. Conventional money accounting works for corporate profit performance, but does not work well for impact on society, impact on the environment or future risks. The work of MDIA is to enable metrics so that this complex system works better. MDIA needs to be a team effort. Please join in and help to make the world a better place. Please get in touch. Peter Burgess … peterbnyc@gmail.com MULTI DIMENSION IMPACT ACCOUNTING
  76. 76. Some links and contact information: Peter Burgess … peterbnyc@gmail.com Peter Burgess LinkedIn profile https://www.linkedin.com/in/peterburgess1 Link to TrueValueMetrics.org website http://www.truevaluemetrics.org/ Link to navigation for MDIA slidesets http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0200-Burgess-p3-Slidesets MULTI DIMENSION IMPACT ACCOUNTING

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