A novel approach to H2O stewardship
By Clayton MacDougald, Investment Manager – Water
The global agriculture sector uses 70% of all freshwater on Earth. That exceeds 8,000 km3 per year—which is more than 7.6 million Empire State Buildings. As climate change threatens the stability of water systems the world over, it is time for the sector to optimize its H2O footprint, especially as some reports estimate that nearly half of the water used in agriculture is wasted.
But agriculture is not the only player taking a hard look at its role in the global hydrosphere. Corporations across the spectrum are pledging to reduce water waste and help replenish the lakes, rivers and reservoirs that nourish the planet. This activity is giving rise to the concept of volumetric water benefits. These benefits allow companies to meet their ambitions by supporting nearby water conservation projects, which can take place on agricultural land where the potential for improvement is significant.
Leveraging technology in new and innovative ways can help agriculture become more water-savvy. This represents an opportunity for companies looking to meet water goals. Our newest portfolio company, Kilimo, is one of the leaders in supporting this trend. Here’s how.
Leveraging the cloud—and the clouds—to stimulate water efficiency in agriculture
Many crops—especially high-value ones like fruit and vegetables—are grown on farms that utilize drip irrigation. This entails laying down a network of pipes and tubes to ferry water to where it’s needed, in precise amounts. Unfortunately, most farmers use only rough approximations of water quantity, leading to far more being irrigated than is typically required.
What if there was a way for farmers to understand exactly how dry or moist their fields are? This would help them calibrate their water use. They could do this by installing sensors around their fields, but this can be expensive. A more scalable solution is to leverage existing data from weather stations and satellite analysis of the area. This can help produce specific readings of so-called evapotranspiration, or how much water the sun is turning into vapor. This is influenced by factors like cloud cover and relative humidity.
Feeding all this data into the cloud allows machine-learning algorithms to suggest water allocations in minute detail. This is what Kilimo does, and it doesn’t require a single piece of hardware except a computer or smartphone. Its recommendations can shave as much as 30% off a typical farm’s water use.
A two-stage solution
Benefits for water and agricultural systems would already be formidable if the solution stopped there. The next stage, however, aims to provide an incentive for farmers beyond face-value water and cost savings. This entails bringing large corporate buyers of volumetric water benefits into the mix.
This is not always a straightforward process. Companies’ interaction with water systems varies widely across geographies and industries, unlike with greenhouse gas emissions, where a ton of carbon dioxide is the same regardless of who emitted it or where it comes from. Companies that want to purchase a water benefit should prove that it is indeed replenishing a unit of water within the same localized basin.
Mechanisms to do this remain nascent. The World Resources Institute has published guidance for how to calculate water use in agriculture. These can be compared against past baselines to determine how much water has been saved. Companies that have made water commitments—including major players like Microsoft, Coca-Cola, Amazon, Intel, and Google—can leverage this methodology to reduce water risk.
A matchmaker for better water management
The next step is pairing buyers of water benefits with farms. Kilimo does this, offering a rare combination of nimble, wholly software-based water-saving recommendations and matchmaking between these two ends of the value chain. It even runs an online Academy to assist farmers in becoming smarter about water and is helping to develop universal standards for water-benefit measurement, reporting and verification, akin to those that already exist for greenhouse gas emissions.
As the twin trends of agricultural and corporate water stewardship accelerate, we at Emerald are excited to support companies like Kilimo that are forging unique business models at the intersection of these two developments. Watch this space for more on our work in helping create a more water-secure world.
Learn more:
Emerald invests in Kilimo to accelerate corporate investment in water conservation
Tech you should know about: AI-based sustainable irrigation & volumetric water benefits