Mountain region resources at risk
- Accelerated snowmelt and erratic rainfall create water challenges for downstream communities
- Climate change threatens economically valuable mountain species
Mountains provide freshwater for more than half of the world. Melted Himalayan snow – which feeds major rivers sustaining cities like Shanghai, Delhi, and Ho Chi Minh – is under threat from rising temperatures, faster melt times, and erratic rainfall patterns.
Instead of the steady release of water throughout the year, downstream communities in Nepal live under pressure from flash floods from burgeoning glacial lakes. By building canals with small hydropower generators, the country is mitigating flood risks and harnessing clean energy for cooking and lighting needs However, dams may be insufficient to fully curb flood risks. These structures could also disrupt sediment flow and fish migration, threatening revenues of over US$2 billion from fisheries and aquaculture.
In addition, while dams could aid with flood risks, they pose a risk to endangered fish such as the Mekong giant catfish which could lose their habitats and spawning grounds. Low water flow, combined with blocked migration routes may push species which need free-flowing rivers to extinction.
Mountains host biodiversity with economic significance for agriculture and medicine. However, changes in the water cycle contribute to the decline of various mountain species, leading to a loss of potential commercially important discoveries. For instance, though the global market for ginseng was valued at about US$8 billion in 2022, prolonged exposure to high temperatures inhibits growth of ginseng plants which could lead to a drop in future yields.
The global coffee market was estimated at US$127 billion in 2022. Unfortunately, climbing temperatures and unpredictable weather will halve the suitable land for growing coffee globally. In 2021, Singapore imported US$65.5 million in coffee – mainly from Switzerland (19%), Indonesia (16%), the United States (15%), Malaysia (10%), and Brazil (4.74%). Imagine not being able to have your morning coffee – what are we willing to give up, in exchange for continued access to these resources?
From the invigorating taste of ginseng to the rich aroma of coffee, mountain regions are precious resources. Water is critical for the survival of people, the planet, and prosperity. This is why our ESG Research Objectives focus on progress towards global climate and nature goals. Through PCM ESG Objective 3 (Measuring Positive Change and Impact), we support companies which contribute to UN SDG 6 (Clean Water and Sanitation) and ensure the availability and sustainable management of water. Our investments in agricultural and food and beverage producers are dependent on mountain ecosystem services including water purification and flood control. We need sustainable management of already stressed water resources to maintain the delicate balance of mountain ecosystems.
This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs.
The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.
The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. This advertisement has not been reviewed by the Monetary Authority of Singapore.