climate change

Climate Change, Inc.

April 8, 2014: 10:42 AM ET

The city that has already managed its water crises is selling its services to the world -- and stands to benefit from a changing climate.

By Ryan Bradley

Marina Bay, Singapore

Marina Bay, Singapore

FORTUNE -- Singapore's Marina Barrage is a series of gargantuan steel gates atop a dam that holds back the sea. Each gate is more than 100 feet wide and 15 feet deep. During torrential rains, huge hydraulic lifts open the gates and excess water pours out. Seven pumps, each able to drain an Olympic swimming pool in a minute, assist in draining the marina waters. This is not a typical sea gate, meant to protect a harbor and city from seaborne storm surge. The water inside the gate is the primary concern: It's fresh -- as in, not saltwater. It's drinkable.

The Marina reservoir is among Singapore's largest, boasting a surface area one-sixth the size of the entire island which, at about 250 square miles, is three-fifths the size of New York's five boroughs or just a touch larger than Chicago. It is only a stone's throw from many of the downtown tourist attractions of the city-state, which is the second-most densely populated nation in the world (its population: about 5.4 million). The Barrage is a feat of hydraulic engineering, and a highly visible one. Next to the sea gates, inside the building that houses the pumps tanks, is a museum that tells the story of Singapore's water, which also acts as an advertisement for Singaporean know-how, water-wise. Such knowledge -- of capturing, purifying, monitoring, and moving water -- brought in more than $7 billion in international contracts to Singapore between 2006 and 2012, according to the national water agency PUB (in a report called "Singapore as global hydrohub"). As the climate changes, the "hydrohub" business will only increase.

"Climate change is projected to reduce renewable surface water and groundwater resources significantly in most dry subtropical regions," the Intergovernmental Panel on Climate Change reported earlier this week. "This will exacerbate competition for water among agriculture, ecosystems, settlements, industry, and energy production."

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Climate change is a reality for both scientists and, increasingly, investors. Entire nations are the slowest to adapt, but Singapore isn't alone at the front of the pack. The Netherlands lives with water, and as a result has become the global expert in holding back the rising sea. The Dutch firm Arcadis has built seawalls the world over, even proposed a 6,000-foot modular structure across New York Harbor, for a cost of $6.5 billion. It should come as no surprise that Singapore and the Netherlands have a partnership -- the Singapore Delft Water Alliance -- to aid research and development in water issues, mainly infrastructure. Israel has learned to live without water, and its desalination technology is exported to nearly every water-poor nation that can afford it, Singapore included. (It is even applied to make snow, to help slow the retreating glaciers in Europe's Alps.) Notice a trend: Freshwater may be becoming scarce and growing scarcer, but the technology to capture and move it is readily available to the deep-pocketed.

"Water flows uphill to money," Marc Reisner wrote in his epic book about the development of the southwestern U.S., Cadillac Desert. Some of the schemes to move water to money seem, at first, absurd. Take Terry Spragg, who invented an enormous polyester bag to be filled with freshwater and then towed through oceans. (He calls it -- what else? -- The Spragg Bag.) Yet Spragg's logic is sound. "I'm just trying to solve a problem," he told journalist McKenzie Funk in the book Windfall: The Booming Business of Global Warming. "There's enough water in the world, just not in the right places."

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George Madhavan understands this issue acutely. Madhavan works for the PUB, and described the precarious nature of Singaporean water while we stood next to the Barrage. Much of the city-state's water is imported and arrives through pipes from Malaysia. It's an agreement that expired in 2011 and was renewed again until 2061, but every Singaporean I met felt the water scarcity and were acutely aware of the troubling fact that their water came from an often unfriendly neighbor. One businessmen I spoke with told me that "war in Singapore would almost only come about because of water." Nearly all the rest comes from the catchment area, which means reservoirs like the Marina. Singapore has 17 reservoirs; remarkably, they make up two-thirds of all the land surface on this engineered land. Even more remarkably, nearly a third of this catchment area was constructed in just the last few years. Every major river that flows into every major estuary is dammed and turned into catchment. The goal, said Madhavan, is to turn every stream, every rivulet into catchment, too. By 2060, he said, 90% of Singapore's surface area will capture freshwater.

The remain 15% to 20% of the country's water comes from two desalination plants and what the PUB calls NEWater -- a rebranded term for reclaimed water. That is, water from sewage. "We've banned the word, 'sewage,'" Madhavan joked. "No, but really, we don't use that word anymore." NEWater has been around for 11 years and is in no way unique to Singapore. (Its membranes that filter out microbes were developed in California.) Its process relies on reverse osmosis, which is used to reclaim wastewater throughout the world. The scale of NEWater, and the public outreach around it, though, is different. There's the branding, and even an adorable water droplet character named Water Wally, to get kids excited about the idea of sewage -- sorry, wastewater -- turned useful again. And the reclaimed water goes everywhere from factories to air conditioners to, yes, bottles, where it can be drunk. I tried some, and it taste more like nothing than most water, because it doesn't have any minerals. Unexciting, but certainly drinkable. The NEWater, Madhavan told me, could meet 30% of Singapore's water needs, if it came to that. The goal, again, by 2060, is to bring that number up to at least 50%.

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The reason was simple, he said. "Water is security." And when you have one authority handle the entire water loop, from source to tap and back again, "your whole mindset changes." One of the most impressive, and impressively hidden, projects the PUB oversees are the Deep Tunnel Sewerage System, a $3.4 billion "used water superhighway" nearly 20 miles and 160 feet beneath the island. "We are good at urban solutions," Madhavan said, and his words were repeated the next day at a meeting with the Singapore Business Federation, where I learned the PUB is working with Rio de Janeiro to bolster its water systems in preparation for the World Cup this summer, and then the Olympics, in 2016.

As we wandered the museum, and I pondered scale models of the Barrage, I saw a cutaway of those very deep, very large, very expensive sewer pipes, and thought of Australia and the Murray-Darling drought, which was followed by possibly even more devastating floods. Australia -- like Singapore, like the Netherlands, or Israel, or the American Southwest, or Bangladesh, or, honestly, most of the rest of the world -- if not now, then soon lives with a certain uncertainty regarding water, where it has become vital and not promised.

In Murray-Darling, the drought led to the creation of a water market, the thinking being that so scarce a resource would flow to the highest-value industries. Australia's wine did just fine, while wheat production fell to just 59% of what had been normal, and rice collapsed to just 1% of normal, prompting a global food crisis and protests in dozens of countries. Free-market solutions begin to collapse under the weight of water, which, like air, is a resource required for life, not just economic growth. Weeks later, I encountered this quote from Robert Johnson, a former commissioner of the Bureau of Reclamation and a water consultant for the Southern Nevada Water Authority: "You can almost always find water to meet needs. Why is water any different than other necessities for growth, like lumber, like electricity? Water is not the limiting factor in economic development."

To which the reasonable response is what Singapore is already so aware of: Lumber is renewable, so are certain forms of power for electricity, but water is not and never will be. We are stuck with exactly as much water on this lonely planet as we started out with. We can move it around and process it, but that's costly for a substance that's a prerequisite for life as we know it. Either we begin to think of water more like Singapore, as a vital resource central to our national security, and worth monitoring every drop; or we wait, and let the market do its work, and eventually pay Singapore to help fix our systems and make them more efficient.

As we finished the tour Madhavan led me down a wide staircase to the Barrage entrance, where there was a row of parked, gleaming black Mercedes-Benz sedans. "It's the Minister of Water from Myanmar," he said, "Here to learn about how our water works."

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