How the boring stuff will save the planet
And how we need to address climate related systems failure
Artificial intelligence, carbon capture, desalination, carbon markets, electric vehicles— the future is saved! Well, almost. The exciting innovations in climate technology grab headlines and spark interest from venture capital. The coverage of these emerging technologies is a boon to the climate tech space and, as evident with the warming climate, the tide raises all boats.
But what about the boring stuff? You know those things that would never be part of Tony Stark or Elon Musk’s media showcase. Fissures exist in our political and economic systems. These once tiny cracks grew over decades and much of the flashy technology ignores them completely.
These are the archaic government records systems, the inability to efficiently verify mineral and water right ownership, regulatory friction and lack of data to move water where its needed, and a lack of education in the agricultural finance and food & beverage sectors on how to properly incorporate climate risk into their operations.
Did we create a bunch of solutions that don’t actually address the customer’s problem?
What do I mean by boring?
By boring I don’t mean old technologies or even the technologies themselves. It's about application. It’s the power of blockchain, but that power is mostly viewed by the lens of cryptocurrency and synonymous with Bitcoin. The boring aspects are the ones the general public is unaware of, and in many cases, venture capital and regulators as well.
I made the case for the necessity of private capital in water. My recent exposure to online climate meetups, fellowships, and schools showed me an over allocation of talent and interest in solar power, carbon capture, and retail investor focused ESG investing. These are important. But they feel crowded, popular, and sort of like the clicks in highschool— insulated.
Boring means solutions using typical and bleeding edge technologies to solve the largely ignored failures in the current system. It's doing the hard thing: working with a broken system to repair it. Below are potential breaks in our water systems and the boring solutions we should consider to preserve our most precious resource.
If you keep a budget, even using an automated application to help you along, you invariably will need to check your records. This is often in the form of some sort of receipt describing what the transaction data, parties, items, and amount paid for. This is a record and it is critical and yet so common that it mostly lurks in our subconscious only surfacing during tax season, for U.S. citizens, and for most of us during a review of our budget.
Important but unnoticed.
Records are the backbone of our society that is built on ownership. In many countries, owning a thing like a car or real estate comes with a variety of requirements, fees, annual taxes, and legal rights. None of these matter if there is no record of it.
Debts and credit fuel the modern capitalist society and those are reliant on records too. The use of water and energy in a home is also reliant on records. But they all contain some or all of the basic elements that live in your receipt: data, parties, item(s), place (if relevant), and price.
So why are our water resources treated as second class citizens?
Water rights are a mess in many jurisdictions adding friction to moving water. Along many rivers, water users have virtual water but lack the real water they will provide for their farm, homes, or industrial use. If we are unsure of how much we actually have, how are we going to fairly distribute it? How are we ever going to build in flexible water management solutions like water markets if we cannot quantify or record the water everyone is starting with and what the result of moving water is?
Could blockchain save the day?
Yes and no. Blockchain provides a method to record data on a secure ledger providing a more authentic, secure record with much faster times to upload and download then today’s typical title search. Currently, systems like water rights have an incomplete digital database with a messy physical records situation. Often water rights due diligence requires legal or engineering assistance to verify the record; cost prohibitive for many.
For water, the foundational issue, as described in a recent UC Berkeley Study, Piloting A Water Rights Information System, is getting records that are in non-digital formats, dispersed across county courthouses and government records departments into a database.
Getting each record scanned with Optical Character Recognition (OCR) is time consuming and expensive. If there were a solution to digitize enough of the record but require less time and expertise, there might be a way to organize the massive backlog of water right related data for the past 100 years or so.
Starting a process of building what is essentially a water title organization is one way to speed up organization efforts, create a business model, and direct capital to solving the records problem. Like land title companies, having records related services is a viable busniess.
Where there is a business model, there is a higher chance of a funded solution.
Another fundamental element in adapting to climate change that is overlooked is trust.
Trust is often thought of as something built through reputation. While this is true, trust can also be part of a system. For example, when you purchase something online, you trust that you will receive the item described on the website.
In the water sector, knowing water you wish to buy is coming from a legitimate seller is a similar proposition. However, as noted above, researching and verifying that the water goods sold are legitimate is a time consuming and expensive friction point.
So the question remains: why?
If the same focus spent on carbon markets and cryptocurrency was harnessed and distributed to verifying water right authenticity, a major hurdle in water markets would be lifted granting the ability to move water to areas that need it the most in a cost-effective manner, most notably during times of drought.
However regulation and the slow creation of water markets makes a viable business model a challenge. At least a traditional challenge. If you think about challenges in a place like California, you can also see the opportunities that are marching towards a solution to the trickle in water market adoption.
Groundwater markets like the Environmental Defense Fund’s pilot in Rosedale-Rio Bravo and the work put in by The Nature Conservancy at Fox Canyon provide a change conditions. There is a confluence between the need for water markets as a flexible option both to benefit the environment and to benefit urban and agricultural water users. These conditions are swelling into a movement towards policy making that embraces flexible water management, which means the final and key ingredient is trust.
Trust in a system.
Something blockchain can provide is a third-party verification that the participants in a market system have what they intend to sell and the buyer received what they expected. With water, there is also the need to understand other characteristics about the water like salinity, beneficial purpose, and if there is a restriction on the place of use. There needs to be inquiries to the database or inputs from government agencies that would be sensitive to privacy issues.
The blockchain technology can handle privacy and anonymous market participants because it is core to the technology. Encryption and keys to unlock data are what can build trust that individual information is protected and only the parts needed for regulatory and transactional purposes are revealed to the appropriate parties.
Then to build trust, the data needs to be organized, accessible, protected by encryption, and then we can call it day?
Though trust through authentication is critical, you have to build and spread a repeatable process that all stakeholders agree on. This is where the human element is essential. Stakeholder meetings, reviews of policies at local, regional, and state government levels are required for a process to take shape.
This is what NGOs, consultants and universities are great at, and why some of the first attempts to push things like water right records improvements, water markets, climate risk come from those sources. They can only go so far. It is up to governments and the private sector to scale beneficial processes and fill in gaps that may exist.
Partnerships expand the pie.
For example, with blockchain for water markets, there could be a collaboration between climate technology companies, local and state governments, universities, and NGOs to each tackle a piece of the systemic flexible water management problem. NGOs and government could work with stakeholders to fully address their needs, universities could assist with the use of interns and intellectuals to review processes, and climate technology could put all of it to practice.
There is a better way to confront systemic problems.
Doing what matters
These are fundamental and yet remain boring concepts. Partnerships, communication, records, trust, and process. Still awake?
But it is the outcome that is the exciting part. Like a building demolition and remodel, there are some painful moments and unexpected issues, but these are part of the process of building resilience in our foundations. If we get the foundational, systemic work right, just think how much more capacity there will be to implement the flashy climate technologies of tomorrow!
Instead of leaving you with pure excitement, I hope you think more deeply about other systemic changes that boring technologies or applications of new technologies on the mundane problems we face everyday that will provide a foundation to build and implement the next wave of technologies.
I am always open to chat about these and other climate change business, policy, and tech topics. Reach out and let’s take action!