 Hi, I'm Alan Hoffman from the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. I'm one of those feds who apparently controls the water supply of the United States, and if I have to leave, suddenly it's because we have an emergency on the water supply. I wish I had known that in advance, but okay. I guess Mike has the other part, Mike O'Neill. We'll talk later. I'll give you a share of that. This is panel one entitled Knowledge Gaps in Research in Education. Now in his keynote address, David did address the issue of education, which is a very, very critical need. I can speak of that from the point of view of energy. I'm an energy guy. I'm a renewable energy guy who got into water at the end of the Clinton Administration because water is a very important part of the peace process in the Middle East. My knowledge of renewable energy was part of the motivation for sending me over to Jordan. I got hooked on the importance of the issue, so that's why I'm standing in front of you today. I've been doing a lot of water and water energy stuff ever since. Water is going to become a much more important part of the U.S. government's activities in the future. It already is, and there are lots of agencies and departments that address water issues. Right now, officially, there is no department or agency that addresses water at the nexus between water and energy, and there is some legislation that is trying to change that, but we'll see what happens with the Congress. In addition, I just want to mention that the realization that adaptation to climate change is going to be a very critical need that we're beyond just thinking that we can mitigate it, but we really have to adapt to it. There's been a lot of interagency work on how the U.S. government should address these issues, and a report as a first step has gone to the President on October 5th which basically, which is available by the way publicly, and basically says that each department and agency in the federal government has to figure out how to address these issues. That's a very important first step. Our panel this morning is going to address the educational needs, how do we educate not only the public, but the decision makers both here and around the world, because this is a global issue, although it has many, many direct implications for the United States. The whole question of research, we have to do a lot of research if we're going to deal with these issues properly. Just to give you one example, we really don't know how global climate change is going to change precipitation patterns. Our infrastructure is based on historical patterns. That's the old stationarity concept that, you know, the past 50 years and project what the next 50 years will be. Well, the reality is that the past 50 years are not going to really be a very good guide to the next 50 years, the non-stationarity requirement. And so we're trying to figure out as best we know how and somewhat desperately how the precipitation patterns and the water patterns are going to change. So we have a lot of research to do in that area, just on global climate change, but there's a whole bunch of stuff that gets into where do you provide the water as needed to provide the energy that people will need. And energy and water are the basic elements of a sustainable society. You need both, and the reality is you cannot separate energy and water issues at all. People tried for the longest time because they didn't want to think about putting them together, but when you stop to think about it, energy and water issues are inseparable. And that realization has sort of gained public credence only in the last couple of years. It shouldn't have taken that long, but that's the reality. And now people are talking about the nexus, and they're also talking about doing water and energy activities together. And so there's a whole bunch of research needs that need to be identified. We have a very distinguished panel this morning to address the issues of research needs and educational needs. I'm not going to do more than give you their names and titles. Their bios are in the materials that were handed out to you. We have Pete Klopp, who's a senior fellow at World Resources Institute. We have David Reed from World Wildlife Foundation and Ed Link from the University of Maryland Department of Civil and Environmental Engineering. I'm going to ask each of the speakers to take no more than 15 minutes to address these issues as they see them, and then we will open it up for questions to the audience. Pete, do you want to go first? Good morning and thank you for being here and listening to me for 15 minutes. My name is Pete Klopp. I'm from the Netherlands, so pardon the accent. I started off in water engineering, moved on to water economics, and now I start to try to get my mind around water and finance. And there's a logic to it, even though it all just happened, it was never by design. David certainly opened up a whole can of worms there for us this morning. And I'm going to take it down a notch, I'm afraid. I think in essence what he was saying is that we should go all out in trying to get the prices right, pricing in externality as well. That's a lot easier said than done, obviously. And I'm going to hopefully talk meaningfully about what we can do in the meantime because getting those prices right is easier said and done. It won't happen for a while. I'm also trying to stick to the script, though, and trying to address the questions that we got beforehand from the moderator of the panel, thinking about knowledge gaps. I don't know why my slide only has the edges cut off, which is unfortunate, but I took great pains in putting our motto at least on the facade of the Lincoln Memorial. And this is my particular take on knowledge gaps here that what we try to do, that's the finance part of my background in the work I'm currently doing, is educate the investment community, the private investment community about water. And I think it's fair to say that they are lagging most of you in their understanding and appreciation of where and how this has the potential to buy them in the ass. Also, by the way, I'm going to say one more thing about David. I admire his ability to write a book in Amsterdam and not succumb to the temptations of the place. And keep on the straight and narrow thinking about water. Excellent. Here's another man who is trying to keep on the straight and narrow. This is Governor Perdue in Georgia, in a prayer breakfast for water. When two years ago, Georgia was in this terrible drought that had Atlanta in just two months from absolute drought. That's not just shortage, that's acute drought. They were gathering on the steps of the state capital. Praying for rain. Now, sure enough, two months later it started raining. And that's certainly one way to go about water management. And who knows, maybe there's people in Georgia that think that this is the way to go about it and you don't need actual knowledge then either. You just need more belief. But I'm trying to say that there is a perception gap there. There's people at high levels of government that just don't quite see the urgency and the importance of meaningful water resources management the way we do. In the investment community there's another gap. It's the incentive gap. And maybe David alluded to this already. The horizontal bar there is how we're all going to hell in a handbasket. The green line tells us how interesting that process is going to develop in the financial markets. And I've got an anecdote to illustrate this. It's the clop curve. I thought if I can't fix all the world's problems, at least I want my own curve. And you can use it at your heart's desire because we don't actually protect our property rights. It's all in the public domain. So I was at Goldman and I was projecting all these water problems. And then the guy says, okay, you're telling me there's a crisis coming up in 2025? So I nodded. I thought, great, he got a point. Then he said, well, call me in 2024 and he walked right out of the door. So that's the environment we're trying to preach the gospel in. This is certainly not a done deal. There's very many people out there that don't think there's much of a problem at all. And if there's a problem, we'll solve it when we get there. There's also conceptual gaps. And again, David talked about this already. Is water the next oil? No, it's not because its price doesn't reflect scarcity value. As a consequence, there's underinvestment and poor incentives to actually use the stuff efficiently. So it's not oil. Is it then carbon? No, it's also not carbon because carbon is this perfect global commodity. But water is not because it's unique, locally unique. It's got spatial, temporal, social, environmental attributes that carbon simply doesn't have. There's a what and where and how to water that carbon or CO2 emissions simply lacks. It doesn't matter where you emit carbon, but it does matter a whole lot where you use or pollute water. There's data gaps for sure. And this is almost, I don't know whether this works in English, but in Dutch you would say this is kicking in an open door. There's always going to be more data needed. But look what we do in water. There's plenty of global databases that have water scarcity or other water related statistics at the country level. And sure at the country level, things get more dire with time. But they get really dire with more granularity. And this is the key point. That we got to go local if we are really going to get our minds around water risk, which is the key point that I hope you'll take away from my presentation here. There's another gap. There's a disclosure gap. Companies, at least some companies, disclose their water use and water pollution. But they do it in a way that hardly resonates with investors at all. They don't read these glossy sustainability reports that are full of beautiful, happy stories and numbers. But there's no context, so there's no way to compare or make sense of those numbers. It's like the telephone book. There's many numbers, but there's just no meaning. So it's the meaning we try to add to this. And for more meaning, I think there's also going to be a shift required. And again, you see that little balloon in the top left. That's the question that this slide is trying to address. But we've got to think differently, at least from a company investor angle about water. It's not just happy stories about impact on or less impact on the environment, being nice to the neighbors, doing good community stuff. All that is great. And we should definitely encourage companies to continue doing so. But for investors, that's not what they're looking for. They're looking for how is water going to impact that company. It's operations, it's supply change and perhaps it's product markets. So it's not impact on, it's impact by. It's not the corporate social responsibility reports, CSR in the top right. It's the 10K filing that matters. So if education and knowledge comes in here, it's trying to add more focus to our thinking about water and try to organize our data, our intelligence around this idea of water risk. And of course, one man's risk is another man's opportunity. So they go hand in hand. But first we've got to understand these risks. I won't go through this, it's too much detail perhaps and I can certainly distribute this presentation later on. But what it tries to say is that water has this potential to either affect your supply chain, your production process or your product markets. And it can either be a physical risk, a regulatory risk or a reputational risk. Depending the risk profile a particular company or sector has, it's one or the other is more or less important. And there's many companies that are already experiencing this. This is not just a hypothetical threat that organizations like the World Resources Institute love making up, to make our lives more complicated. No, it's not, it's a real problem. And therefore real opportunities down the road. Now what we do is at least two different things. We do sector level research and we take deep dives. In specific issues, and it was mentioned already, we look at water constraints on power generation in places like India. There's almost no limit to the amount of power it needs. There are certainly limits to the amount of water it has. And these are going to come to a head pretty soon, if they're not doing this already in fact. Whether or not this is translating into a material or financially material water risk is a different thing altogether. Water dependence sure is an important factor here. Water security is another important one. But whether or not as a stakeholder in a particular power plant you're going to lose money depends on the regulatory regime. And there's a lot we can fix there. Because right now many of these power plants in India at least will return your money no matter what, even if they don't produce power thanks to water shortages. Which is odd. It kind of takes away any incentive you may have had in managing your operations carefully. So the result of this is that many of these plants are either existing or being planned in areas that are at risk of running out of water or at least are going to face increasingly, well increasing decision for that scarce water. It's these kind of overlays simple as they are that are huge eye-openers for that specific audience that we're targeting for knowledge, information and intelligence. Then we also do apart from the deep dives, the sector level research, we do also tool development. There's many tools out there and you may think the last thing we need is another tool. Except that this is a great tool. We call it aqueduct. And you know it may answer some part of the question that is raised in that balloon again. It's important for experts to work together. It's important to integrate water and energy planning. But we all know that none of that is easy. It just won't happen because we wanted to happen. I mean several of us have been around in the water space at least for four decades. And we've been talking about integrated water resources management for a long, long time already. We've never really pulled it off because maybe it's too complicated. Now I think there is partly, and the knowledge management around it is partly tricky, because we've never quite found a lever, a gearing to make this feed of itself. You know there's plenty of models and they're scattered all over the world. There's just no way to connect them. There's plenty of research projects, but there's just no way to connect them. Now we think that there may be ways to connect them that are slightly different than just framing and designing another interdisciplinary huge research effort. We've been thinking about this with Goldman Sachs and GE. And it's called aqueduct. It's really a database of local or localized water risk information with a couple of applications that are going to help companies to report on water risk, not just impact on the environment, but impact by the environment. There's applications about these simple overlays. There's applications that can weight the different indicators that we track for the risk profile of a particular sector. There's all of that. I won't go into much detail because it will take too long. The basic idea is this, that we track these different indicators and we aggregate them. You can aggregate or disaggregate them in a tool online that we built. We've done a prototype for the Yellow River in China looking at the power sector. So there's all these different risk drivers that you can group in either physical, cost, or disruption risks. You can aggregate them as I said but we've done so for 132 different units, geographic units within the Yellow River basin. So the best way to think about this is a water risk atlas but a pretty granular one. And we believe that is the key. We've got to go local with our information and our knowledge. We also try with the help of Coca-Cola, which has done this internally for their own proprietary purposes. We've thought about how you keep a risk atlas, a risk database well, they've done it internally and they call that the water risk collector. So there's a top-down water risk atlas that is being refreshed from the bottom up. Coca-Cola does that through its facilities. We'll do it through a kind of a wiki mechanism. Ultimately that information, the context, combined with the footprint information on the right, is going to help companies and their investors think about water risk and report on water risk. And now here comes the clincher. I'll skip this, I'll move straight to this clincher in fact. Bloomberg is a partner of the World Resources Institute and it's interested in putting environmental risk information, including water risk information, on its platform. I think this is a great breakthrough. Not because all answers are going to be coming from the private sector but because the private sector can act as a force to actually get serious about reducing those water risks. We did an overlay of power plants in the southeast on top of water scarcity map. And here is what you can do with that. You can rank companies, power companies, by their relative exposure to these water shortages. This way we believe you may have found a mechanism that acts as a pool for integrated data collection as well as a push to investors to take this stuff on board. To really start, and companies by the way, to really start thinking about what water risk can do to the portfolio or at the company level, what water risk can do to that ranking you find yourself in. So we believe that rather than thinking about more data, more knowledge management, more research projects, what we need to do is think about a mechanism that can keep that whole machinery or can grow that machinery, can integrate all these different efforts in a way that at least for the private sector, for this particular audience, Bloomberg does. For us, this is the platform. One second if you don't mind. The question of course that we were asked by Bloomberg, and this goes back to the club curve at the beginning, is in fact the market demand for this stuff already. Well, I think the jury is still out. And that's because, you know, outside this room there's a whole world that doesn't quite believe this is urgent. But there's interesting signs though that at least have persuaded Bloomberg that it's worth investing in this, together with Golden GE. There's research efforts, and recently Ceres came out with a publication on water risk and bond ratings that some of you may have seen. There's regulatory pressure, especially of course the SEC guidance from earlier this year. There's all these voluntary initiatives. The carpet disclosure project will come out with a water disclosure project November 12th. It's first results. And there's all that emerging corporate evidence. All that adds up to a market demand for actionable information. And by extension hopefully a corporate investor demand for more meaningful water policy, water management, including getting those prices right. But it'll be some time before we get there. But this could be one way to bring that day nearer. Thank you. I think we'll hold the questions until all three speakers have made their remarks and then we'll just open it up for broad discussion. Ed, do you want to come next? University of Maryland is going to give us his views on these issues. Good morning. In a recent issue of the National Geographic called Our Thirsty World it stated that we have 366 million trillion gallons of water. Just about exactly the same amount the dinosaurs had. Hopefully we don't meet the same end. 97% of that is salty. Of the rest of it almost 70% is locked up in snow and ice. 30% is in groundwater and only about 0.3% is readily available for use. So we have at least a supply problem. Because we also are faced with a very dramatic increase in demand and typically as has been stated we have the demand in areas where we don't have the water. This makes for an interesting career for a lot of us that have been in water management. Truth in lending, I spent 34 years in the Army Corps of Engineers. All of it in the unreal world of research and development. So I do come from a federal background and I would like to in one respect defend our honor in the sense that I think we've got the only chance not working for a profit of trying to at least create a framework where the market system can work effectively. I agree wholeheartedly with the market system. But in the decade that I've been out of the government and working both with industry and academia I haven't seen the market work to perfection. I haven't seen industry able to walk away from the profit motive quite as much as myself as a private citizen would like to see. So I think there's a need, certainly a big need for a change in the way industry and government and the private sector work to solve these problems. But I think there's a big role to be played by the government agencies. We've got to figure out how to do that role. We're not doing it now. We're also faced with lots of change in a situation where we have a $375 billion worth of infrastructure nestled behind levees 100,000 miles of levees. Most of which we don't even have mapped as to where they are let alone what their condition is. And we're losing 60,000 acres of wetlands each year. So we have a lot of challenges. So what are the issues? What are the big issues in my perception? A lot of my perceptions are going to be based on the last five years that I spent trying to figure out what went wrong in New Orleans. And some efforts in the Central Valley of California, which was brought up earlier this morning and what the Dutch are doing to face climate change in the future. Number one, the biggest issue that we're faced with is a policy issue, not a scientific knowledge issue. Our policies have been developed in very narrow silos. They typically do not address multiple sectors like water and energy and agriculture or food and environment. And I think there was one thing I could fix with my magic wand if I were Harry Potter it would be policy. Because I think that will drive changes in the way government contributes that can also drive more of a market approach to dealing with some of these issues. But right now I think policy is our biggest barrier. It's not adaptive, it's still one size fits all in most cases and it's way too narrow and way too deep in most cases. The other major issue we face is change. We've talked about climate change but if you really take a holistic look at risk in the United States, the biggest contributor to increasing risk is not mother nature changing, it's the population demographics. We're shoving more and more people into areas with no water. We're shoving more people into the coastlines of the United States and so risk is increasing not because of the probability of a hazard, it's increasing because of the probability of loss. And that has been demonstrated pretty clearly I think. But when we talk about our standards we have the de facto 100 year floodplain standard in the United States compared to say the Dutch who are currently rocking in around 1 in 10,000 and are looking carefully at whether or not they should go to 1 in 1 million or 1 in 100,000 as a criteria for flood protection. But what the public doesn't understand and I think what many people don't understand is just how uncertain that 100 year floodline is. It's got an order of magnitude of uncertainty. And so what have we done? People believe that this is a solid line etched on earth and if you're reading the papers now around the country and especially in places like California and Louisiana, you're seeing a huge outcry because of the change in the floodmaps, FEMA's new floodmaps that have moved those lines and the decertification of a lot of levees because of new standards and new evaluations, much of which was learned from Katrina. So now we have this huge outcry of whoa, wait a minute, you idiots in the federal government cannot change this line. You're putting economic pressure on the local developers, you're putting economic pressure on individuals who now are faced with either not being able to get flood insurance or they're faced with having to have flood insurance. So that's a huge issue. Why are these things changing? It's complex as you might as you already know. Hurricane Katrina for example if you looked at it 40 years ago using the hurricane central pressure deficit, the typical measure of intensity, it would have been about a thousand year meteorological event. In 1979 after a few more severe events occurred to build up the historical database, that exact same storm would have been a 285 year event. In 2005 when it struck New Orleans Hurricane Katrina was a 100 year event. So which is right? Well none of those are right because in new analysis shows that Katrina was actually about a 400 year event based not just on central pressure but based on the joint probability of other parameters that are important to a generation of surge. So we have this metric of how often do these things occur flopping all over the place. That's part of our standard. That's part of our standard. $15 billion have just been spent or will be spent as of next year in New Orleans generating a system that will supposedly defend New Orleans against a 1% chance surge event. $15 billion and we know that 1% surge event is not correct. We know that it's not correct. We know it's uncertain. I did the uncertainty analysis. It's an order of magnitude uncertain. Now what do you do about that? What do you do about that? Well you better understand the uncertainty. You better understand the uncertainty and you better factor that uncertainty into any design or any action that you take. So the core did that in fact plus their heart. The core used the 90th percentile surge data to set the elevations for this new system instead of the most likely value which is the 50th percentile if you're into probabilities and that's a very conservative call but without that New Orleans would be much more at risk than even it will be after next year. So a lot of change to worry about. California the reservoirs in the Sierras that drain into the rivers that flood the central valley of California that we talked about are having 100 year floods just about every four to five years. 100 year floods based on historical record. Recent projections show that the 100 year inflow to most of those reservoirs is up about 50% of what it was when the reservoirs were designed. So there's a change in the whole water regime in California in the Sierras that negates the analysis and the design of all of that infrastructure that is supposed to be allowing that water to be managed. Managed not just for floods also managed for environmental purposes and water supply and so forth. So that change presents a huge challenge and then we've got sea level rise. Sea level rise is about one to three millimeters per year in New England. It's about three to five millimeters per year right now in the mid-Atlantic along here. It's five to ten millimeters per year in New Orleans mostly because that whole area is sinking faster than sea level is going up. If you go to Alaska and Puerto Rico it's actually sea levels coming down. In Alaska it's more than five millimeters per year of sea level going down. So it's a high it's very variable but it is an issue that a creeping oozing kind of a hazard that we've got to deal with environmentally and by infrastructure and so on and it's not easy to deal with when the political climate is dealing with the election cycle and the water issue in this case is a life cycle issue which is a much different time frame. So you might say how sensitive are we to climate change? How sensitive are we to things like sea level rise and more intense storms? I think that's an area where we need a lot more research but it's not research and projecting how big the storms are going to get in the future. The perfect storm movie so to speak. It's research on understanding what our sensitivities are. For example in New Orleans we created 152 hurricane future climatology to look at risk for the future of New Orleans. That included storms from about 50 year type events to 10,000 year type events. So we doubled it. We said what would happen if we doubled this? What if it got twice as bad which even the most ardent climate change extremist would say yeah that's a pretty tough test and what we found was that the increase in surge levels in wave conditions at the 500 year frequency level was about 10%. It's not a 100% problem. It's a 10% problem. That's an extremely important piece of information. That bounds the decision framework for what you might do about that. And we need a lot more analysis like that that's based on models and analysis that is technically credible and has the resolution. I love the map of the resolution of the water problems going from a national basis to a regional basis to a watershed basis because that granularity is what is critical in an analysis like this. The other big challenge we have was talked about earlier is valuing things. What do we value right now? When we look at we value flood damages we typically value direct damages in New Orleans Katrina created $20 billion in direct property damage. But the real damage was social, cultural losses, environmental losses and indirect economic losses. The indirect economic losses alone turned out to be $200 billion. The social, cultural losses, only 8 of 73 neighborhoods in the entire region were not flooded and most of those neighborhoods that were flooded, all of the social services are gone. Why would you move your family back there? The real difficulty and recovery in New Orleans was not rebuilding homes. It was rebuilding neighborhoods. And we have no practice for rebuilding neighborhoods. Huge issue and yet when we compute risk, when we analyze consequences and I don't care whether it's from a flood or from a drought or from some other action we're going to do to affect the water regime. We're stuck right now with some fairly simplistic direct computations and metrics. One of the big issues we face in all of this is communication. We communicated risk in New Orleans by printing maps showing the probability of flooding to different depths for the entire region. And we did this to inform the local governmental officials who had to make decisions. But the real use came by providing them to the public. And we found these maps tacked on doors next to real estate signs. It said with an X, here I am I'm not in a high flood risk zone by my house. I mean this was something we hadn't even thought about. But power to the public. When the public had the same information as the local government officials they began to get action that was action related to the systematic information understanding the holistic risk scenario for New Orleans. And it was only after the public had that information that those types of decisions started to get made. We have a big problem I think when talking about policy, of having policy informed by science. It's very difficult to get policy people in a room with scientists and scientists in a room with policy people. And better yet try to get some practitioners in the middle. I think this is a symptom that we've got to fix. It's a vertical integration problem similar to the vertical integration problem between the federal authorities, state authorities, and local authorities. I bring up one case, land use. Local authorities have all the local governments have all the authority for land use. Federal government has no authority for land use. So why do we end up, for example, in the area that was flooded in 1993 by the upper-miss floods, we now have 28,000 new homes, a 23% increase in population and 6,600 acres of industrial development in the areas that were flooded and the levies are no better than they were prior to the 1993 flood. What's going on? That's a local government decision. That's local governments focusing on development. Natomas County and California exactly the same thing. Levies were decertified. The local federal congressional representatives were able to create a delay in the time of the effective date of the decertification of the levies and gave all the developers a month to run to the courthouse and file petitions for new developments prior to the decertification. That's a local decision, not a federal decision. So turning everything over to the local governments to manage water is a great idea and I'm all for moving it down away from the feds, but not until the local governments have a reward system that's different from the one that they're reacting to now. In the educational, one word on education since I'm an educator now, Maryland has been trying very hard to create cross cutting programs. We have a new program between engineering and public policy. We're now giving masters and PhD degrees in that area very fruitful, very positive development. Maryland's also created a series of undergraduate courses called iCourses that are looking at integrative topics and innovative topics to expose freshmen and sophomores to this concept of you can't just be a specialist in one area, you've got to understand the entire domain that you're working in. But you try to get research funded in an area that's a cross cutting area. Everyone talks big about it, but I have submitted a lot of proposals to the typical funding agencies. Nobody wants to fund it, but you go in with a deep discipline oriented proposal and your chances for funding are much higher. So we've got to walk our talk. Thank you. David Reid will now talk to us from the perspective of WWF and his office in policy. Good morning all. Great pleasure to be with you today. I will confess that Pete Klopp and I conspired in our preparatory thoughts to disagree on everything, even our assumptions. We wanted to have controversy on and I'm very disappointed Pete to let you know that I embrace a great deal of what you said. And even worse I find myself enlarged in agreement with what Ed has had to say to you today. So I'm looking for controversy and provocation. I'm not sure I'm going to do that to start off. But what I would like to do is I want to address three points today. The first is to identify the new context in which we have to organize and develop knowledge about water management, new context. Second, discuss some of the limitations of our current knowledge and how that knowledge above all is presented to policy makers. And third, end with a few recommendations that I'm glad to say. We're going to coincide very much with the president's task force on adaptation that have recently come out that Alan alluded to. First, the context is very simple. The context is framed by climate change. I will differ a little bit with what Ed had to say here in which our question of water management is fundamental, I'll say fundamental to our policies to our institutions and the incentives that we need in place. Just very briefly climate change will be detrimental to virtually all freshwater ecosystems by 2020. Most water ecosystems will be profoundly transformed by mid-century and human enterprise will be profoundly affected through water supply, fisheries, sanitation, agriculture and many other sectors. New context, that's point one. I could go in much greater detail but I think that should suffice for the moment. The second point then is just to offer a few observations on how knowledge and information is organized and presented at the present time and here are two factors that I think were really up, two issues were really up against as we try to embrace this concept of knowledge, management on water in the context, this new context of climate change. The first is that the knowledge gap that's alluded to in the introduction by CSIS in fact is created I think by the limited information and also how we package information for policy makers. A simple example, it's a well known example. It's Colorado, it's 1922, the compact of 1922 and basically what you have is a decision that was made about water management allocation storage that was based on data collected in 1910s that was actually there was greater abundance of water than at almost any period in recorded history and in fact that of great abundance, particularly eastern slope of Colorado was attributable to changes in ocean currents and upwellings, in ocean upwellings at that time. So we used that data to construct that compact that led to an urbanization and a developmental process that is very much with us today. In addition to which, so that is the information, the faulty information but coupled with that is that decision making was basically at that point made on the question of who is there first. First in time, that's to say who got there first, was actually had the first in rate and so that became much of the legal foundation for allocation in this context of faulty information. So it's true that that policy still prevails to a large extent today. We're trying to modify it but we have created a series of patterns about knowledge that remain with us very much today. And you'll say well really that we're more informed, we're better at making decisions today. Let me give another example. The World Bank is actually developing its energy policy at the present time, very controversial and it is soon to be submitted to the executive board. Now this energy policy comes right on the heels of one of the most controversial projects that the World Bank has approved, ever approved and that was this approval of a coal-fired power plant to South Africa. We will find, most likely, given that civil society, particularly in this country, is leading a campaign to reduce and keep back the funding, U.S. Congressional funding for the general capital increase unless, unless there's a shift away from coal-fired power plants. So it's very likely we're going to see a significant change in World Bank energy policy. But then you pose the question, how is the bank going to allocate and invest its $20 billion a year if it's not going to do so through large infrastructure projects? The answer is hydro. And so we're now looking, despite the fact the World Bank did not sign on to embrace the World Commission on Dan's report from the 1990s and it is now basically looking at mega infrastructure projects, water infrastructure projects in Africa and elsewhere. So we're saying, yes, the same miscalculations, the data is there but it's how we're presenting that information and the basis for decision-making that really is faulty, particularly in this new context of climate change. So my second point about knowledge gaps is, yes, there is lack of scientific information in some cases, but again it is how we are framing that information that I think we need greatest work on. So for instance in the context of climate change, what is the time frame? Other speakers have referred to this. How will disruptions present themselves? How do we take data and integrate it into an interpretive and explanatory system for policy makers? How do we present to such a way that it's actionable, as Pete referred to, for policy makers to make long-term decisions? I believe really that we still operate on the assumption that we're operating in fixed climatic conditions and we tend therefore to use incomplete data. But even worse, we're still grounded as part of the discussion this afternoon. We'll refer to intersectoral planning that is not fully integrated. So you say, okay, 90 years ago, Colorado, 90 years ago, we're not going to repeat that mistake today. We are much smarter. We know what climate change is about. We know it's coming. But let me give an example of how we continue to use old context and methods and knowledge for making fundamental policy decisions about water management. And I'll take the example of the Koshy Basin, the eastern part of Nepal. I'm trying to mix domestic and international issues. This is an area where there are 20 million people that live between India, China and Himalayas. They is one of the least developed countries in the world, Nepal. It has most of its residents live on subsistence agriculture. And there's very limited natural resources in which to develop the country. But it does have great hydro electric capabilities. But despite the recognition of the potential impacts of climate change, investments have moved forward in making what was called simply investments in maladaptation. Most of the farmers in the area have shifted from four crops a year to two crops a year. The dry season is longer. It is drier. The reliable monsoon weather cycles are more sporadic. They come earlier. They come later. And as a consequence, the hydro plants and projects that were planned are no longer capable of responding to the impacts that I've just referred to. And this knowledge was available 15, 20 years ago. So what you have in fact are these, what we thought were environmentally friendly, run of the river, medium size of small hydro plants that in fact are now facing the fact that they have their three to four kilometers of dry riverbed during the dry season. The fish have disappeared. The energy availability for Kathmandu have diminished oftentimes as much as six hours a day to the capital. And so this example I'm offering again is this concept of how do we think ahead knowing that the changes that are coming, we don't know them. How do we build good planning in the context of uncertainty? So yes, more data. I believe that is very important. But it's really how we organize that information. We don't understand in this context for instance what are tipping points? What happens when there's the cumulative impacts and changes reach a point where the fundamental dynamics of an ecosystem begin to break down and are disrupted, no? Take example, the simple example, the Murray Darling river basin on Australia. We did not know how to monitor measure. We had some of the data, some of the information, but it was not integrated and it was not holistic. We don't understand the vectors or the assets that need to be assessed in this context of tipping points. We don't understand exactly how it's referred to, how to factor in risk. Not just risk, but catastrophic risk into this equation. We talk about 100 year floods or 50 year floods. Those 50 year floods in many parts of the world are not in 20 year cycles. Or the 20 year cycle of drought and flood is now in 7 year cycle. And so what you have is the inability of populations to respond to rebuild. If it only comes once every 50 years, populations communities can rebuild. But if it's coming every 7 years, they can't. It's quite a different phenomena and situation that we're dealing with now. So this concept of preparing for these changes in a context of the unknown is really what we're up against. And the great challenge that I think that we are facing. I'll add two more points before I close this point. Two more notes. We do not recognize very often that in this country 70% of water goes for agriculture. And that the energy, industry and households by and large pay their fair share or reasonably priced for the water. And those users in fact are the ones that are subsidizing agricultural use that is basically not paying for its full cost. As some of the examples from David and others pointed out. Political economy. The second point is that we are not looking at the trade offs. We do not understand that in fact if you want to keep have that water flowing through your spigot, it means then perhaps increased fees. It means more defensive measures being put in place by local governments. Or it means changing their land use planning for entire regions. I will close that second point. The third point, recommendations. Again I was very pleased that Alan referred to the president's task force and adaptation and rejoined many of the framework that is offered there. I recommend it very much to your attention. The theme of what I said it is not so much scientific information but how we manage and organize that information that creates these quote knowledge gaps. And so my recommendations are quite pretty simple. To move from sector planning to ecosystem planning. Ecosystem planning that analyzes a wider range of environmental solutions and services in that universe. And is premised on increasing resilience. Increased resilience of all these diverse factors that contribute to the integrity and the sustainability of the ecosystem. Second, that we move from static analysis to risk based planning and analysis. Particularly that we have to consider catastrophic risk and move that discussion. Move that discussion of catastrophic risk and risk into the public discourse. The third point then is understanding. Maladaptation. Just going out there and doing something is not necessarily the best thing as an example and they apologize. We have to move from short term responses to long term responses that are based on uncertainty and that is not an easy thing to do. The fourth recommendation I would make then is that we have to essentially in creating new knowledge it means creating new institutions. Creating the way institutions operate and think the rationale, the logic behind decision making. And then the fifth point I would like to make is it's very important for us to begin rendering and putting into the public discourse the question of trade-offs. Of costs and benefits of options. And to enlarge the ownership of these trade-offs and the decisions made in that context. So my final point then is called a zinger if you will. Is that well believe it or not we do have an awful lot of information. And most of the modelers, the people that I talk with say to me our information will improve but only marginally in the next 30 years and our models will only improve marginally in the next 30 years. So what we really have to do is we have to learn how to build programs and make decisions in this context of inadequate information but we have to organize that information that we have in much more cogent and actionable terms. So thank you very much. Before I open it up I want to make just a few observations from the point of view of somebody who's been in the energy field probably too long. The issue of water today is very very similar in my mind to the issue of energy over the years. I got into the energy field a long time ago and I would make certain statements to the effect that there's no energy shortage in the world. There's a lot of energy available if we want to get to it. The sun for example puts in 6 million quads a year into our atmosphere. We only use 500 and some odd quads. So it's not a question of is there enough energy. It's a question of can you provide energy at a cost that people can afford. And when you get into water as I did about 10 years ago I only realized it's exactly the same statement. We are a water rich planet. There's no shortage of water in the world but there is a shortage of potable water that people can afford to buy. And if you look at water issues and energy issues they're almost identical in terms of the policy implications and I won't go into that now but there's one difference. One difference. There is no substitute for water. If you don't have water you die. With energy you can substitute one form of energy for another. That's a big difference but other than that if you look at the policy environment or the implications of our water issues and our energy issues they're almost identical and I just want to throw that thought out. I also want to support the point that our speakers have made all four speakers so far this morning. We have undervalued not only our water resources we've undervalued our energy resources. I mean we have lived through an era in this country of low energy costs. The rest of the world thinks we're absolutely crazy but everybody likes having low cost energy. The problem is there is a price to be paid and there is a price to be paid for undervaluing water and we're beginning to see that price right now. With those general comments I'd like to open it up to questions. I would ask that everybody use the microphone. State who you are your affiliation and speak up because the microphones are not turned up too much. Right over here. My name is Marty Apple. There's a person going to drop on this. You're going to have to speak up a little bit. I'm the Martin Apple and I'm going to ask a following question. I think what we're doing is trying to solve something by going in a circle and I'd like to try and see a way out. I like the idea of using risk management as a system because it does for the first time begin to pull us away from the things that we've gone in circles about. But here's another way to look at it from game theory and on each of the tables there should be one of these little... and essentially it looks like this. Somebody says there's a crisis and the people who are decision makers have to determine whether or not it's true and they don't know how. Most of the world's political decision makers are an inch deep and a mile wide in what they know. Most of the people giving them the information are just the opposite. So there's a gap there and the gap has two elements. The people who are a mile deep want good policy for them. The people who are the mile wide want good science for their policy. And that's a gap they haven't bridged. And here's one of the reasons. If there's a crisis, somebody tells them there's a crisis and it's not true and they act now they waste their political capital and if they waste their political capital why should people trust them again? If they don't take action now then they can say I was saved. I didn't waste my political capital. The third part of this Game Theory box is what if it is true and they acted now? Well then they're lucky. But there's no way to really know in their own minds because they're not deep enough how much their actions really count. Is there a question in there somewhere? I just want to summarize this because this is the model that I think should be thinking about. If there's no action and it's true that there's a crisis then there's big damage but how do we convey that this action that we're asking them to take would have solved it? If we can do that I think we're out of the conundrum. Thank you. Any comments from the panel? I just want to add just one very quick point. Your point is well taken about the two communities not overlapping enough but I'll say starting in 1973 the legislative branch of the US Congress started a new program to bring scientists to work on the hill in a fellowship program. That fellowship program is now 36 years old. The class this year is over 200 scientists coming to work on the hill to bridge the gap that you're talking about. Now that's not enough I agree but there are some attempts to bridge that gap when that program started in 1973 there were seven fellows today there's over 200 in the agencies. Right originally it was all hill but not today most of its agency. Kat do you want to get a microphone? Hi my name is Kat Schreyer I've been co-director of the DC Area Water Issues program free weekly public program on various issues related to water in DC I've been working on water issues for a couple of decades now and one of the main issues when it comes to knowledge water knowledge is we don't fund and we don't value communication of that knowledge to broader audiences. We are very much driven towards deliverables towards a study, a report a model and once that's done that's done that's the end of the project determining how to take that information and re summarize it and think about what the ramifications are for different targeted public and get that information out. Websites are fine that's helpful that's important and people that has very quickly become part of the expectation is that someone can find something on the web but that ongoing communication with the public is not nearly being funded that's not where the money is and it's very difficult to measure the value of just building an ongoing communication with the public providing a form that people can trust. We talk to the public in very limited fashion when it's associated with a project if it's a scoping meeting for an environmental impact assessment for example where it may be suspect because it's sort of pushing a project as a perception. How are we ensuring that we are incorporating in the funding of water knowledge the development of programs the delivery of programs addressing some of the institutional factors that Ed mentioned the difficulty in getting funding for multidisciplinary programs and that's true in water communication you can't talk about this because that's our program those kind of constraints on public communication on water programs so I don't know how we can shift that but there's a lot more money going into very nice neat packaged little deliverables as opposed to developing ongoing programs associated with these programs that we have Thursdays at UDC Who would like to come? Pete? I do sympathize with you enormously because I find that we're very often stuck in that mode. Another report is the end of the story and that should be the beginning of the story which is frankly the reason that we thought about teaming up at Bloomberg before we even started doing anything at all. Now that's not the same thing as reaching out to the public doesn't look at Bloomberg terminals but at least it's doing justice perhaps to what you're arguing for that think about the impact your knowledge gathering is supposed to be having rather than producing knowledge for the sake of producing knowledge and I think the water community has been guilty of that just like any other close knit if not inbred there I say this scientific community you know we've been producing water models galore it's just that nobody cares a hoot about those they're just gathering dust they're too complicated and there's no audience there's no use for that beyond the people who produced it so yeah I'm all for it it's not funny to get it out I can give you ten dollars I'm sorry I hope you heard all that we need leadership on these issues and if you want to get the political leadership you got to get their attention on elections and it took a much too long on the energy stuff we have a national security issue energy is our biggest national security issue and look how long it took us to get the attention of the politicians question you got to use the microphone please you also need for people of value someone taking that leadership to talk about water and agency from DOE to invest some of their time away from some other countries well the leadership right now on energy is coming from the president he gets it and he's he can't do it by himself but if you want a statement of what our need is listen to what the president says we haven't had that for a long time in this country yeah I'm Dr. Sam Hancock of emerald planet and I have a question looking at we generate much data it's a lot of information that's made available either in think tanks institutions and some to the public but how can we take that and make it actionable so that the politicians which is what this really boils down to having the political will to bring changes and to lead within their own local communities and states how do we take that information and then translate that into some kind of action and then policy that's going to transcend all the stove pipes that we have across local jurisdictions even across nations anybody want to go yeah I'll take a shot at that spent a lot of time in the Pentagon and one of the things the Pentagon does extremely well is gaming and I applaud the idea of gaming with regard to understanding investigating what really is going on what are the what's plausible what's implausible we had an initiative decade ago called for future the issue was what would what should a military installation look like down the road and this had ramifications far beyond construction dollars it had a lot of real estate issues that were near and dear to the heart of folks that live near the military installations noise issues and ecosystems issues on and on and on the way that became a success was involving people from the hill in some high level games to examine alternatives not trying to predict the future yogi bearer proved to us that you can't do that but looking at the range of possible futures and understanding how sensitive you are to those understanding what types of actions at the policy level because again I think policy is broken and nothing else will get fixed until it gets fixed and we came away from that with a lot of insights on the hill and a lot of support on the hill to pretty dramatically change the way the military installation community is managed, funded and focus on energy net zero energy policy in place right now considers ecosystems considers water and it considers the readiness of the military it's pretty good model to follow I think you're calling for leadership is perhaps too easy an answer to this you know it's almost always true I think you know it's important first of all to build a rationale that hangs together for audiences that matter the business community the security community you know these people are being listened to environment for the sake of environment water for the sake of water forget it at least you know that's what I believe right now I think there's one thing that made you know I'm from the Netherlands this is supposed to be one of these friendly European countries well we've made a lurch to the right climate is in the government agreement between different political parties but only in the sense of business climate climate for top sports yeah that's there but interestingly water is there too why because there's an opportunity there you know the Dutch you know that the first thing is tulips the second second thing is probably dope and the third thing is water you know we are known for water so there's an exporting opportunity that keeps it alive even though the interest goes comes and goes you know there's nobody in Atlanta right now worried about water two years ago they were praying for it I think that's just a fact of life you're going to live with that but the opportunities the flip side of risk are probably more constant and I think the business community can argue for that the frequency and the intensity of water events is increasing and I think part of what we have to do is to use those events in such a way that we're able to present a broader framework around it that this is not these are not isolated events but in fact are linked to climate change two I think we need to use those events to highlight the choices that we have to make as a society or just as a community on whatever level the event is taking place and three I think it becomes an opportunity then to increase the ownership of those choices now that's a long term proposition but again unfortunately the frequency of these events is increasing and it's then taking those events and projecting them out and trying to capture other people who also feel threatened by those threats and those probabilities do we have time for one more question one more question I wanted to just ask a question about you're talking about risks and so forth and it's sort of been brought up in different ways but in terms of trade-offs and the trade-offs in water resources and all the sort of dynamics we're seeing not just the climate change but one of the things I've been sort of interested in is California tightens up and this water gets transferred whether they're imperfect markets or not but gets transferred to the urban areas and what's happening to the agricultural sector where's the rice production going and where is the food production going and we know it was alluded to earlier that food production is needing to go up we need to produce a lot more food in the world in the next 20 years unfortunately that's not for the Goldman Sachs timeline but it's going to happen in the next 20 years or so where's it going this and the Arkansas rice production is tracked up pretty significantly but unfortunately so is California's rice production so I don't quite understand that one but I then see these trade-offs and say what you're saying about the hydropower and say what's happening in the Mekong at the moment or in the Kosi we've basically been looking at this we're saying no to hydropower in these parts of the world through the World Bank through these mechanisms now it's like in Laos not so much in Nepal but in Ethiopia they've basically said we need to do this we need the energy the trade-off for them is so what we've seen happen now in Laos is just announced a large end stream dam in the middle of the Mekong which everyone has been trying to say this isn't a good idea but they're saying we don't want the World Bank involved we don't want the we want to go ahead and do this but they've decided the trade-off for them in terms of food security downstream and the environment is worth doing there's sort of dynamics that is a very complicated question I realize but just your thoughts on what this trade-off really means and David I'm really glad you brought up the Mekong the fact is that it's not just one dam on the Mekong main stream but in fact it's 21 dams and when you said they've done a strategic environmental assessment of the one dam in Laos but they have not done the strategic assessment for the full Mekong and what does this mean for migration of fish what does it mean for migration of people what does it mean for an enormous set of variables water supply variability so forth so I obviously don't have an answer but what I do know is that the framework for decision making about one dam or even two dams is inadequate and they have to look at what fact the five dams that China is building in the Tibetan Plateau are far more significant for the entire Mekong than one than five dams in Laos itself so it's this complexity of issues that we're having to deal with and these are trans-boundary issues and we have to move to that scale I don't want to render us impotent by the magnitude of the challenge but we just at least have to recognize that that is the framework in which we're dealing with looking out where the funding is coming from and it's coming from our 401Ks it's coming from Laos which is not just China the whole situation seems to be very rapid What I was going to say is that the Yellow River obviously is all in China so you don't have these trans-boundary issues but interesting things that are happening there is that because what scares the of course is obvious for all to see what the Yellow River basin is in deep trouble indeed new facilities along the Yellow River now have to free up the water they're going to need from the bigger water users which is in many cases agriculture so what you're going to see is that with increased awareness of the risk of running dry there's at least you know interesting ideas about transferring water from one sector low value to a higher value adding sector and I think you can worry about food production but this could at least as the Murray Darling in Australia shows be in some cases at least a win-win case you can free up water and agriculture invest in higher efficiencies not reduce farmer incomes perhaps even increase them and yet free up water and I think that's the way to go you know there's 70% of the world's water is in agriculture that's where the solutions are going to come from well that's the story about the banks there was a Dillinger who was asked why he robs banks he said that's because that's where the money is same thing with water it's in agriculture okay we can continue this discussion either on the sidelines or at our lunchtime breakout groups but join me in thanking our panel for an excellent job