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Enforcement of regulation can be a challenge, especially in countries with limited resources. The goal is that regulations must be clear and based on the latest information and science. Industry is susceptible to changes in rules and regulations whether they are unexpected or the result of political changes. Regulators and organizations are working on ways for companies to calculate and disclose their water and energy footprints and efficiencies and these efforts could lead to industry rankings, adding leverage regarding reputational risk. Many organizations, such as the WWF, the UN CEO Water Mandate and the Alliance for Water Stewardship, are working to increase the awareness, leadership and engagement of the private sector so that companies consider more fully the water risks they face – physical, regulatory and reputational. On a global scale, the recently designed Energy Architecture Performance Index is a tool designed for policy- and decision-makers to manage and monitor the challenges associated with the transition to ‘a new energy architecture’ (WEF, 2012b, p. 8). It measures energy’s contribution to the economy, sustainability, and access and security, ranking countries accordingly. 8.5 Opportunities and trade-offs The private management structure of industry gives it the flexibility to effect changes, which can be rapid, and improve efficiency in water and energy use within itself and its immediate sphere of influence − working from inside the water and energy ‘boxes’. For governments and regulators, outside-the-box opportunities exist to provide enabling environments and institutional frameworks to assist industry efforts. Opportunities for energy efficiency in industry have existed for a long time. Beyond the quest for more cost- efficient energy use, the most recent driver is the emphasis on climate change, where a reduction in GHG emissions is strongly linked to energy use and efficiency. Water use and efficiency opportunities are now following suit, driven in part by climate change and the scarcity of water resources it is projected to produce. However, there may be a rebound effect. Although energy efficiency means the same production can be delivered with less energy, it also means more can be produced with the same amount of energy. The same effect can be true for water (Ercin and Hoekstra, 2012). New and developing technology is available to improve industry water productivity and energy efficiency. While it is often the case that more efficient or less use of water translates into energy savings because of the need to heat, cool, move and treat water, the opposite is less likely to be the case – that more efficient use of energy means less use of water (unless embedded water to produce the energy is factored in). Closed-loop dry cooling systems are an example of both water and energy savings combined. Enforcement of regulation can be a challenge, especially in countries with limited resources. The goal is that regulations must be clear and based on the latest information and science. In most cases, the main trade-offs are whether energy savings trump water savings (or vice versa), and whether gaining an improvement in water can come at the expense of energy (or vice versa). This is where water productivity intersects with energy efficiency. For example, alternative tailing disposal (ATD) mining techniques may reduce water use but they require more energy to dewater and transport the filtered, thickened or paste- like material (Watson, 2010). Recycling water is strongly encouraged yet the energy used for treatment per cubic metre is considerably more than that for supplying fresh water (Figure 2.2). These trade-offs highlight the need for balanced optimization, as industry is concerned with its overall costs. Such cost–benefit interactions are easiest to measure at the plant level. In the short term, investments may be perceived as a high and risky cost in the light of longer term gains such as lower operation and maintenance costs. But many investments in water productivity have shown positive returns in as little as three years (McKinsey & Company, 2009b). Industry must consider the full range of inputs in the trade-off between where products are produced and where they are sold (McKinsey & Company, 2012). Trade- offs are made not only between water and energy but between both of them in regards to labour availability, raw materials, transportation, markets and so on. Industry’s priority is productivity, so compromises will be made in business interests, and water and energy efficiencies have to be optimized under the specific circumstances. Capital for investment is frequently limited and industry WWDR 2014 INDUSTRY 75PDF Image | Water and Energy
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