Connect with us

Reports

China: A Watershed Moment for Water Governance

MD Staff

Published

on

Effective management of water resources is central to China’s economic prosperity. Despite significant investments in water management and infrastructure, more tangible innovative policies and incentives are required to strengthen and better integrate water management at both national and regional levels. Providing more water for environmental uses, expanding the use of market mechanisms to driver water efficiency and adopting transformational approaches to fight water pollutions are among the key tasks for the rapidly growing economy. In facing these challenges, the Chinese experience will make important contributions to the global discourse, says a new a report jointly launched by the World Bank and the Development Research Center (DRC) of China’s State Council today.

The joint study Watershed: A New Era of Water Governance in China closely examines the key water management issues in the context of China’s rapid development and recommends a new approach to the governance of water. This is aligned with the goals of the ecological civilization and its aims to balance economic growth against increasing water demand under conditions of water scarcity.

“China’s water governance faces a rapidly changing context with increasingly serious challenges, with more complicated problems and more ambitious goals,” said Wang Yiming, Vice Minister of the Development Research Center. “The study makes an important contribution to enhancing the framework for China’s water management and provides a practical set of tools and policy guidance. We believe these recommendations will be substantially helpful to further enhance the level and capacity of China’s water governance.”

 “Water is key to the realization of China’s sustainable development. This study leverages the Chinese experience to combine with the Bank’s global knowledge in providing a framework for enhancing water governance in support of sustainable social and economic development,” said Victoria Kwakwa, World Bank Vice President for East Asia and the Pacific. “The Chinese experience in managing the development of water resources also has important lessons for other transitioning economies and informing efforts to address global risks to economic progress, poverty eradication, peace and security, and sustainable development.”

Despite being the world’s second-largest economy and being home to 21 percent of the global population, China has only 6 percent of the world’s freshwater resources. In the past 50 years, China has made significant investments in water management and infrastructure, which has led to significant achievements in water supply, irrigation, flood control and hydropower generation. However, the country is still facing acute challenges with respect to both water quantity and quality. Rapid urbanization is driving increasing demand for water from all sectors. Water pollution poses significant risks to human health. Ecosystem services are under severe pressure from urbanization and growing water demands. Drought and local water scarcity affects large parts of the country due to the uneven distribution of water resources and variable rainfall. Small and medium sized cities and rural areas remain unevenly served by water supply, sanitation, and flood protection infrastructure.

China has implemented a series of reforms and pilots in recent years. These have been designed to address the many water-related challenges, including water scarcity, water pollution, ecological degradation, and increased risks and impacts of floods and droughts. The Strictest Water Resources Management System established three major control objectives, known as the Three Red Lines Three Red Lines, and the construction of an “ecological civilization” has become one of the government’s highest policy priorities. The 19th Party Congress in October 2017 further highlighted the goal of building a “beautiful China” to meet increasing public demand for improved environmental quality.

As China pursues a new growth model within the context of an ecological civilization, the report recommends a new water governance strategy that built around five key water governance reform priorities:

Enhance the legislative foundation for water governance. The Water Law, which was last revised in 2002, should be updated to reflect the new principles and challenges. China has established many water quality standards but more work is needed for enforcement and addressing cross jurisdictional issues. The market has an important role to play. As one of the world’s most important and active arenas for public-private partnerships (PPPs) in the water sector, China would benefit from further strengthening and codifying the existing regulations concerning PPPs.

Strengthen national and basin water governance. Reflecting the cross-sectoral nature of water, China could consider creating a high-level, inter-agency mechanism with representatives from the primary ministries concerned with different aspects of water governance. This would help contribute to coordinated policy efforts, reach consensus, identify national strategic priorities and provide guidance to river basin planning. The river basin agencies provide an integrated management for water resources, water ecological environment and the catchment landscape, and should be given enhanced authority and clarity in the key areas of planning, coordination, implementation, enforcement, and financing. Formally linking provincial River and Lake Chiefs with the river basin agencies will help to institutionalize the River and Lake Chief System.

Improve and optimize economic policy instruments. The further development and implementation of economic instruments, such as water pricing and water rights trading, will promote more sustainable and efficient water use. More empirical evidence is also needed to assess the effectiveness of these instruments and adapt. The report suggests four ways to improve target setting of the Three Red Lines to strengthen the effectiveness of China’s Most Stringent System for Water Resource Management. Innovative financing mechanisms can also be better aligned to help sub-national areas meet national targets.

Strengthen adaptive capacity to climate and environmental change. Already faced with scarce water resources, the prospects of global climate change increase the sense of urgency in implementation. China should expand the use of green infrastructure approaches for flood management and experiment with water pollutant discharge permit trading. The report highlights the need to sharpen policy focus on non-point source pollution and explore alternative financial mechanisms, and suggests to explore the development of the Red Line targets for ecological water flows.

Improve data collection and information sharing. The establishment of a national water information sharing platform will help to foster coordination and collaboration including water resources and water ecological environment across agencies and support entrepreneurship, innovation, and scientific discovery in the water sector. The report calls for a greater role of public awareness and participation, which will not only help ease the task of monitoring water quality but also contribute to the goal of a “water-saving society”.

The study was jointly produced by World Bank and the Development Research Center of the State Council, with active involvement of domestic and international research institutions and great support from the relevant government ministries.

Read the Policy Brief of Watershed: A New Era of Water Governance in China

Continue Reading
Comments

Reports

Oil Market Report: Heeding the warnings

MD Staff

Published

on

In last month’s Report, we noted that since the middle of the year oil supply had increased sharply, with gains in the Middle East, Russia and the United States more than compensating for falls in production in Iran, Venezuela and elsewhere. New data show that the pace has accelerated, and this higher output, in combination with Iranian sanctions waivers issued by the US and steady demand growth, implies a stock build in 4Q18 of 0.7 mb/d. Already, OECD stocks have increased for four months in a row, with products back above the five-year average. In 1H19, based on our outlook for non-OPEC production and global demand, and assuming flat OPEC production (i.e. losses from Iran/Venezuela are offset by others), the implied stock build is currently 2 mb/d.

In the August edition of this Report we described the replacement of Iranian and Venezuelan barrels as “challenging”, and that there was a danger of prices rising too high too fast. Producers have heeded the warnings and more than met the challenge and today, the Big Three, Russia, Saudi Arabia and the United States, all see output at record levels. Total non-OPEC production in August, the latest month for which we have consolidated data, was 3.5 mb/d higher than a year ago, with the United States contributing an extraordinary 3.0 mb/d. Russia’s crude output has hit a new record of 11.4 mb/d, with companies suggesting that they could produce even more.

In early October, the price of Brent crude oil reached a four-year high above $86/bbl, reflecting the legitimate fears of market tightness. In our view, this was a dangerous “red zone” and it justified calls for producers to raise output. Today, the price has fallen to a more reasonable level close to $70/bbl, well below where it was in May before the US announced its change of policy on Iran. Lower prices are clearly a benefit to consumers, especially hard-pressed ones in developing countries that are suffering from the additional handicap of weak national currencies. For now, forecasts of oil demand growth remain solid with an increase of 1.3 mb/d this year and an increase to 1.4 mb/d in 2019, even though the macro-economic outlook is uncertain.

We should also recognise the interests of the producers. For many countries, even though their output might have increased, prices falling too far are unwelcome. Ministers from the Vienna Agreement countries will meet in early December, but we have already seen suggestions from leading producers that supply could be cut soon if customers, seeing ample supply, rising stocks, and slumping refining margins, request lower volumes.

Although the oil market appears to be more relaxed than it was a few weeks ago, and there might be a sense of “mission accomplished” that producers have met the challenge of replacing lost barrels, such is the volatility of events that rising stocks should be welcomed as a form of insurance, rather than a threat. The United States remains committed to reducing Iranian oil exports to zero from the 1.8 mb/d seen today; there are concerns as to the stability of production in Libya, Nigeria and Venezuela; and the tanker collision last week in Norwegian waters, although modest in impact, is another reminder of the vulnerability of the system to accidents.

The response to the call by the IEA and others to increase production is a reminder that the oil industry works best when it works together. Regular contacts between key players are essential in creating understanding, and even though oil diplomacy has succeeded so far this year, it needs to be maintained to ensure market stability.

IEA

Continue Reading

Reports

Organisations are not doing enough to prepare for the future of work

MD Staff

Published

on

While the majority of businesses recognise which capabilities are important for their future success, many are failing to take the actions needed today to build or even introduce them into their organisations. These actions include using data analytics to make workforce decisions and creating a compelling work experience for employees.

This gap will put them at risk in the future when it comes to attracting, developing and retaining the talent they need to succeed.

These are some of the key findings of PwC’s latest Future of Work report, produced in collaboration with Lynda Gratton, Professor of Management Practice at London Business School. The report is based on a survey of 1,246 business and HR leaders from 79 countries. It focuses on 45 capabilities and identifies where organisations are most ‘at risk’ by looking at the number of respondents who say a capability is important to the future of their business but indicate that they’re are not yet taking action.

Carol Stubbings, Joint Global Leader, People and Organisation, PwC UK, says:“Technology and trends such as rising life expectancy, social and environmental pressures and the gig economy are transforming the world of work. Companies that understand and act on these workforce changes now will be the ones that thrive in the future.”

The untapped potential of data and analytics

The survey finds that companies are struggling to use data and advanced analytics to make better decisions about the workforce. The top three ‘at risk’ capabilities all relate to workforce analytics and their use in improving the working environment and people’s behaviours.

Although more than 60% of respondents say using data analytics in workforce decisions is important, only 27% actually use it. In addition, only 38% use data analytics to predict and monitor skills gaps in the workforce, while just 31% use sophisticated workforce planning and predictive analytics and only 28% use data analytics to help limit bias in hiring and to craft incentives tailored to individuals.

Participants in North America report stronger progress than their counterparts in other parts of the world, especially Asia and Western Europe. Almost all industries are finding it difficult to make headway with data and analytics. The exception is health where data is used in skills identification and tackling biases in hiring and reward.

Bhushan Sethi, Joint Global Leader, People and Organisation, PwC US, says:“Companies are increasingly pursuing data-driven talent decisions, whether it’s to anticipate and remediate skills gaps, eliminate bias in hiring or performance and rewards decisions, or leverage business scenario planning to ultimately determine the workforce mix.

“The survey findings highlight the need for organisations to invest in digital tools to drive people decisions. We see this as a ‘no regrets’ move in preparing for the future. But this requires the baseline data to be accurate, and the challenge today is that jobs don’t reflect what people do. Many companies don’t have accurate data on who does what and where, and few have an inventory of their people’s skills for development purposes. This is where using data and analytics can make a real difference.”

Creating the right people experience is vital

Six of the top ten ‘at risk’ capabilities relate to the people experience. One area organisations can do more is around managing workloads. While 76% of respondents believe this is important, only 50% say they are doing something about it – making this the #6 ‘at risk’ capability globally. This is particularly an issue in the Middle East and North America where it tops the list, and Asia where it ranks #3. It is much less of a risk in Western Europe (11th).

Many people work in extremely demanding work cultures. While the corporate response in recent years has been to provide company wellness initiatives, sustainable change will only occur if work itself is redesigned so that it delivers vitality and an environment conducive to maintaining productive energy levels.

Organisations should also focus on easing concerns around the future of work. Carol Stubbings comments:“With all the talk about artificial intelligence, automation and robots taking jobs, many people are anxious and forming their own narrative around the future of work. Organisations should take the lead and own the story, by creating and communicating a strong narrative that covers what the future of work means for the company and its people, and how they will be more transparent around plans and decisions based on purpose.”

Some of the other ‘at risk’ capabilities that relate to the people experience include:

  • Adaptability and agility: while 78% of respondents believe that developing adaptability and agility in their workers is important, just 52% say their talent practices are designed to nurture this. This will be increasingly important as workers will need to adapt to and thrive through change.
  • Intrapreneurship: Only 56% of respondents say they have avenues present for employees to offer innovative ideas and support them in turning these ideas into action. Organisations that fail to create opportunities for their ‘intrapreneurs’ risk losing innovative team members and their ideas.
  • Autonomy: Providing autonomy over where and when people work is increasingly important in attracting and retaining talent. While 70% of respondents believe this is important, only 45% currently give their employees a high degree of autonomy.

The report warns organisations need to be mindful of unintended consequences. Bhushan Sethi explains:“Organisations must think carefully about the impact of initiatives such as encouraging off-site working. In some cases, this can result in employees feeling they need to be on call 24/7 to prove themselves. There can also be a fine line between autonomy and isolation. Getting this wrong will sap vitality and social resilience. At the same time, too much surveillance can erode autonomy and trust.”

Missing out on good ideas and flexible talent

The way people work and their relationships with organisations are becoming more fluid. The numbers of contractors, freelancers and portfolio workers are on the rise, and more and more partnerships between large organisations and smaller start-ups are providing ready access to innovation and talent on demand.

Identifying where and how to engage this flexible talent will become increasingly important for organisations, yet few are prepared for this shift. Only 8% of respondents strongly agree their organisations are able to engage easily with this valuable resource as and when they are needed. In addition, 58% of respondents say they have no capability to use open innovation and crowdsourced ideas and only 9% agree strongly that they can do this.

It’s clear that organisations need to do more to take advantage of the ideas and skills from the wider market – not just from their traditional employee base.

Other key findings from PwC’s Workforce of the Future report include:

  • HR leaders are more comfortable about their efforts to prepare the workforce of the future compared to non-HR leaders. In 42 of the 45 capabilities, a higher percentage of business leaders than HR saw their organisation at risk.
  • HR’s ability to navigate the technology landscape is a top ‘at risk’ capability for organisations.  But HR and other leaders don’t see it the same way: 41% of HR Leaders are confident that their HR departments are up to speed in this area, but only a quarter of business leaders agree.
  • The good news is that the capabilities that respondents rate as the most important are the ones where they are taking the most action. There is no overlap between the top ten ‘at risk’ capabilities and the top ten considered extremely high in importance.
Continue Reading

Reports

Making power systems more flexible as global energy transition accelerates

MD Staff

Published

on

The global energy landscape is witnessing a rapid and disruptive change driven by an unprecedented growth in renewables. Last year alone, a record-breaking 168 GW of renewable energy capacity were added globally – the sixth consecutive year in which additions from renewables have exceeded those from conventional sources. Today, a quarter of the world’s electricity comes from renewables.

But, the recent IPCC report has sent a clear signal and called for a scaling up of renewables both in the power and in end use sectors such as transport and buildings. This echoes IRENA’s own analysis which estimates that avoiding the worst effects of global warming will require to source 85% of global power and two-thirds of total energy supply from renewables by 2050. Around 60% of electricity would come from so called variable renewable energy (VRE) like solar and wind.

Experiences from frontrunner countries show that flexibility in the power system can help integrating solar and wind into the market.

Flexibility can be found in different parts of the power system including generation, grid, storage and end-users.

With today’s report on Power system flexibility for the energy transition and a new tool to assess the flexibility of the power system – the FlexTool – IRENA opens a new work stream that support its members in finding the most cost-effective mix of flexibility solutions. The tool has been applied jointly with IRENA members Colombia, Panama, Uruguay and Thailand to assess the flexibility of their power system based on the latest national plans.

Figure 1. Flexible Power System – Accelerated uptake of wind and solar 

Claudia Cabrera from the Ministry of Industry, Energy and Mining (MIEM) of Uruguay, who presented the Uruguayan FlexTool analysis during the 16th meeting of the IRENA Council, said: “The FlexTool can assess in an integrated manner sector coupling alternatives, which is an aspect of great importance in an electric system like the Uruguayan characterized by energy surpluses. Therefore, the IRENA FlexTool can complement the existing planning toolkit by providing additional insights on flexibility and options to further increase it.” The Uruguayan FlexTool analysis concluded that Uruguay’s power system is flexible enough to accommodate the actual and future deployment of VRE resulting from the country’s long-term generation expansion plan.

Dolf Gielen, Director of IRENA’s Innovation and Technology Center added: “The new report showcases flexibility in all parts of the energy system. Findings show that the smooth integration of variable renewable energy into power systems requires innovations. Beyond technological solutions, flexibility can be unlocked through market design, operational practices and new business models.”

Demand has a significant potential to contribute to the flexibility of the power system – from quickly responding to supply shortages to following price signals in order to consume energy when it is cheaper, and the grid does not face congestion. A central element of flexibility is sector-coupling, the coupling of energy demand for heat, fuels and mobility by using power to heat (e.g. heat pumps), power to gas (e.g. hydrogen from renewable electricity) and power to mobility. Electric vehicles for example can act as battery storage devices if regulations and technologies are aligned and provide short term storage and grid services.

For more information, see Power system flexibility for the energy transition, including an Overview for Policy Makers, IRENA Flextool Methodology (coming soon) and two case studies.

IRENA

Continue Reading

Latest

Trending

Copyright © 2018 Modern Diplomacy