If we want to solve it, Europe’s water crisis should be treated at the local level

In some European countries, we will need to stop thinking that we have an automatic right to cheap, plentiful water which we can use to clean our streets, wash our cars, or fill our swimming pools whenever we wish, Mark Smith writes.

Last Thursday, the Spanish government held an extraordinary meeting about the economic impact of the drought currently ravaging the country. 

Spain has experienced drought more severely and for longer than other European counties, but the whole of Europe is set for a worse summer drought than that of 2022, already its worst for 70 years.

On the face of it, it might seem obvious that our leaders should be looking at this drought as a pan-European problem or even a pan-European, Middle Eastern and African one. 

East Africa is currently ravaged by drought, with 700 million people in the region anticipated to be displaced by water shortages by 2030. 

Meanwhile, low-lying desert countries like the United Arab Emirates are being menaced by rising sea levels and increasing their reliance on high-emitting desalination programmes.

Is water in Europe really that abundant?

Climate change is increasingly manifesting itself as a water crisis; in the case of Spain, it is droughts, but we’re also experiencing more floods and storms. 

People in Andalucia are certainly experiencing the climate crisis for what it is — a water crisis. 

Until we reverse the global emissions that are causing climate change, the medium-term solution for Spain and Europe involves managing water. This is where the solution becomes much less global.

When it comes to water management, we hear a lot about water scarcity issues. But in fact, what we mostly have is overconsumption combined with water access problems. 

There is a prevalent attitude in Europe that water is plentiful and cheap, which persists right up until it is no longer available.

An old boat is photographed half-buried after the water level has dropped at the Sau reservoir, about 100 km north of Barcelona, 20 Marrch 2023

Indeed, there is a prevalent attitude in Europe that water is plentiful and cheap, which persists right up until it is no longer available. 

There are definitely parts of the world that are genuinely running out of water. Andalucia, home to the only desert in the EU, is one of them. 

But even in southern Spain and in other desert regions such as parts of East Africa, water exists, and we know its location. We just don’t have access to water — or rather, we don’t have clean access to it.

Drought is not resolved by pumping more groundwater

For example, in Andalucia — where the reservoirs are at record low levels – communities are increasingly looking to exploit groundwater reserves to maintain their current consumption levels.

There is a proliferation of private wells being drilled and exploited to maintain lifestyle choices. 

The groundwater is pumped and consumed, but since the resources are not recharged during drought, the groundwater is continually being depleted. 

Typically, the reaction to this situation is — rather than addressing the politically and socially difficult topics of ever-increasing demand — to continue to pump the groundwater. 

Rather than talking about how to handle the water crisis at a European level … we need to be talking about what the water crisis looks like in the specific local areas we are dealing with.

Local residents carrying an image of Jesus Christ take part in a procession asking for rain in Perelada, a rural village in the northeast of Catalonia, Girona, 27 April 2023

This ultimately means the water table goes down, and the water becomes more contaminated, especially near the coastal regions with saline intrusion. 

Eventually, the water either dries up or becomes untreatable and is no longer drinkable and then there really is a water crisis.

In turn, rather than talking about how to handle the water crisis at a European level, or even at a national level as Spain is now doing, we need to be talking about what the water crisis looks like in the specific local areas we are dealing with.

You can’t simply zap it from one part of the country to another, either

This is mainly because even with the best water infrastructure in the world — something which Japan has the privilege of possessing, though the Netherlands comes a close second — water cannot be easily moved around between regions. 

Water is heavy: every time you push it, it costs money and burns fuel. Unlike electricity, you can’t just zap it from Madrid to Malaga. 

For this reason, all local communities need to look at what water actually exists in the area where they are. Communities have to tackle demand as well as supply.

If the demand is too high for the region, difficult decisions need to be made because we cannot solve the problem through endless large desalination plants and pipelines.

View of La Baells reservoir in Berga, about 112 km north of Barcelona, April 2023

If the demand is too high for the region, difficult decisions need to be made because we cannot solve the problem through endless large desalination plants and pipelines. 

In Spain, plans are afoot to create a 100-kilometre transfer pipeline from Manilva and a 142-km pipeline from the Cordoba province to supply water to Costa del Sol. 

However, these projects are expensive and disruptive, will take years to build, and will inevitably contribute to Spain’s greenhouse gas emissions. 

Our right to plentiful water is not a given

It is crucial that the solution to a community’s water crisis must not in itself contribute to the underlying cause of that crisis, climate change.

Thankfully, in most parts of the world, there is sufficient water for everyday use, but it’s often undervalued and overexploited, and it ultimately becomes polluted and unusable. 

What we have is not a planet-wide water shortage problem but a geographically sensitive clean water access problem, and this problem is growing globally.

Now, every region of Europe needs to be looking urgently at what water resources are available and how they can be managed, cleaned and accessed, all at the local level.

A tourist walks crossing a stretch between the mainland and the San Biagio island in Manerba, on the Garda Lake, April 2023

Now, every region of Europe needs to be looking urgently at what water resources are available and how they can be managed, cleaned and accessed, all at the local level. 

This may well mean that in some European countries, we will need to stop thinking that we have an automatic right to cheap, plentiful water which we can use to clean our streets, wash our cars, fill our swimming pools or water our decorative municipal floral displays whenever we wish. 

Otherwise, what is happening in Spain will cease to be the exception and become the norm.

Mark Smith is a strategic business development director for the water sector at the environmental and engineering business, the RSK Group. He is a former chief executive of the UK’s Water Research Group and chair of the Future Water Association.

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Florida’s DeSantis Waging Toothless Campaign Against Digital Dollars, Lawyers Say #prizmabet

The political movement to use state commerce rules to stop central bank digital currencies is based in legal nonsense that has no power to ban anything, experts contend.

The state-level campaign against a U.S. digital dollar made its first foray into established law with Governor Ron DeSantis’ signature on Florida’s effort to block the use of virtual government-backed money in business transactions.

But the Florida governor’s rhetoric that his state is banning central bank digital currencies (CBDCs) as “government overreach and woke corporate monitoring” may not amount to much on paper. Legal experts in this facet of commercial law suggest the state’s effort is nonsensical and potentially harmful for the digital assets sector DeSantis said he’s trying to protect.

“They didn’t ban anything,” said Carla Reyes, an assistant professor at Southern Methodist University’s Dedman School of Law, who has done work in both digital assets law and the Uniform Commercial Code (UCC) that Florida is focused on. “The law does exactly zero of the things that it says that it does.”

The state’s new tweak “expressly prohibits the use of a federally adopted CBDC by excluding it from the definition of money within Florida’s Uniform Commercial Code,” according to the governor’s office. From introduction to his signature last week took just 43 days.

DeSantis – one of the Republican Party’s early favorites as a potential presidential candidate next year – turned his May 12 signing of the law into a political event, claiming it as the start of a potential multi-state push from Republican state lawmakers to counter a digital dollar well before the federal government decides whether to issue it or not. North Carolina has also been considering a measure to oppose a U.S. CBDC, and South Dakota Gov. Kristi Noem recently vetoed a bill to update its UCC in a way she argued would have allowed for CBDCs and “a potential future overreach by the federal government.”

“We’re on offense in the state of Florida,” DeSantis said at a press conference, standing behind a sign reading “Big Brother’s Digital Dollar,” referencing George Orwell’s tale of supreme government control, “1984.” The new law – effective in July – declared digital dollars won’t be considered money in the state’s version of the commercial code.

The UCC represents an accord among states, which have largely adopted this common set of rules for buying and selling of goods and conducting other financial transactions across state borders. Florida has officially thrown its CBDC wrench into that standardization, saying digital dollars aren’t money as defined in the code. But it doesn’t really ban CBDC use in interstate commerce, just puts those assets in another category than money, lawyers say.

“I could still buy a computer using CBDCs if that’s what they wanted me to pay in,” said Reyes, who said the government-backed assets would now fall into the bucket of “general intangibles” under the UCC. “The UCC doesn’t have the power to ban people from using any type of exchange. That’s not what it does.”

CBDC Opposition

DeSantis called the CBDC “a massive transfer of power from individual consumers to a central authority,” and he said the federal government would “have the ability to control where that money is going,” citing a future government’s ability to stop gun purchases or halt somebody from buying too much gasoline.

Though DeSantis and other Florida Republicans suggest the U.S. is definitely heading toward issuing a digital dollar, that view isn’t yet reflected by what’s happening. While the administration of President Joe Biden is under orders to develop the concept of a U.S. CBDC, no federal entity has yet declared support for issuing it.

The Federal Reserve would be in charge of the digital dollar, and officials including Chair Jerome Powell have said the central bank won’t act without backing from the White House and Congress. The Fed also doesn’t want to be in the retail CBDC business, so officials have declared that it won’t administer individual accounts and that people’s transactions would have to be managed by banks or in other outside digital wallets.

DeSantis acknowledged that if Congress eventually authorizes a U.S. CBDC, the state may have to back down. But more than that, Andrea Tosato, a legal scholar who has advised on UCC amendments and teaches at University of Pennsylvania’s Carey Law School, said that any federal law on this point will automatically override state law.

If that happens, though, it won’t have anything significant to override in Florida, he and Reyes suggested.

The UCC Reality

The UCC represents longstanding, battle-tested standards for basic transactions, and they‘re meant to be “super boring” and nonpolitical, Tosato said. The Florida effort to use it as a shield against digital dollars is “painting the UCC as something that it is not.”

The UCC gives both sides of transactions basic legal protections, Tosato explained, but it doesn’t tell them what they can or can’t exchange. That’s the job of regulations or criminal codes.

When one digs into “the rabbit hole and the craziness of what was done with this Florida bill,” Tosato said, “there is no light-bulb moment. It makes no sense.”

The governor’s office didn’t respond to a request for comment on these points. DeSantis suggested during his press conference that he wasn’t just protecting people’s financial privacy but was also seeking to defend crypto from federal government interference.

“I think they want to crowd out and eliminate other types of digital assets like cryptocurrency, because they can’t control that,” he said.

While Florida rewrites its single-state corner of the 50-state standards, though, it’s also rebuffing a set of amendments suggested last year that were meant to set standards for the interstate use of cryptocurrencies, including in such examples as the use of bitcoin as collateral in lending. That could have been a foundation for digital assets in commerce, Tosato argued, and other states have been moving forward to adopt the changes.

Even the way Florida defines a CBDC could be problematic. Its new law says a CBDC is a government-issued digital currency “that is made directly available to a consumer,” but Tosato contends that doesn’t reflect any of the current or planned CBDCs, which generally have service providers manage the accounts or wallets for using the virtual currency.

“There is no CBDC anywhere that is issued directly to consumers,” Tosato said.

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As DeSantis and his allies celebrate their CBDC ban, Tosato says they’ve compromised the UCC’s crypto modernization and are misrepresenting the meaning of their overhaul of Florida law.

“It’s done in a way that makes no sense and is completely broken,” he said.

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Bittrex Küresel CEO Says #prizmabet Firm Will Fight SEC Charges, Did Not Serve U.S. Customers

The Securities and Exchange Commission has accused Bermuda-regulated Bittrex Küresel of failing to register as a securities exchange in a lawsuit targeting U.S.-based Bittrex Inc.

The U.S. Securities and Exchange Commission (SEC) is “mistaken” in charging crypto exchange Bittrex Küresel GmbH with breach of local securities law, its Chief Executive Officer Oliver Linch said during a phone interview with CoinDesk on Monday.

On April 17, the SEC charged Bittrex Inc. and its former CEO William Shihara for operating an unregistered securities exchange, broker and clearing agency in the country. In the same complaint, the regulator accused Bittrex Küresel GmbH of failing to register as a securities exchange “in connection with its operation of a single shared order book” with U.S.’ Bittrex.

The regulator alleged both Bittrex and Bittrex Küresel should have registered as an exchange because they “brought together” securities orders of multiple buyers and sellers “using established, non-discretionary methods under which such orders interacted.”

“Bittrex also provides Bittrex Küresel with the technology to operate its trading platform, including a single matching engine and order book that Bittrex Küresel shares with Bittrex, both of which are maintained by Bittrex personnel in the United States,” the complaint said.

The complaint added that the “design and functionality of the Bittrex Platform is similar to those of properly registered national securities exchanges,” from its display and order book to order matching and trading rules.

“We’ve not really seen an explanation as to what the SEC’s thinking is there, why that is of significance,” Linch said referring to allegations of a shared order book. “Suffice to say we think that they’re mistaken in the way they conceive of it legally and in terms of facts.”

Bittrex Küresel didn’t know it was the subject of an SEC probe until it received notice that the agency had “reached a preliminary conclusion,” according to Linch. He added the regulator didn’t give the firm an opportunity to “explain the facts.”

‘Never’ served U.S. customers

Linch, who was appointed Bittrex Küresel CEO last year, said the firm “never purported to offer services,” in the U.S. and that it will “vigorously” defend its position that it does not have any customers in the country.

The SEC is facing questions from the industry after a string of recent enforcement actions and notices of scrutiny prompted a couple of firms, including Bittrex Inc., to shutter some or all operations in the country. The industry has criticized the SEC for choosing to regulate by enforcement instead of providing regulatory clarity to firms.

After filing suit against Bittrex, SEC Chair Gary Gensler said the agency’s action “makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity,” as the complaint alleged Bittrex’s former CEO Shihara worked with crypto issuers to remove wording that indicated the assets in question were securities.

While it was a “sad day” for Bittrex, its shuttering does not affect his firm’s operations globally, Linch said.

“Bittrex was an entirely separate meşru entity and only provided services in the U.S. and only served U.S. customers. And they’re the ones that have had to shut down their operations… Küresel continues on providing the services to rest-of-world clients as it ever has,” he said.

The SEC has said it believes Binance.US is operating an unregistered securities exchange. While its küresel counterpart Binance maintains the U.S. entity is separate and distinct, with the action against Bittrex Küresel, it’s unclear if the regulator will also take aim at other players in the industry.

Linch didn’t comment on specific firms but praised crypto regulatory regimes in other jurisdictions.

“What we’re seeing is a growing realization that the most successful regulatory regimes are ones that have created a framework for crypto on a bespoke basis,” Linch said. “Now, that’s why we’re regulated in Liechtenstein in Bermuda, because what those jurisdictions did really early on, is really get to grips with crypto, what the product is, what services, what the risks are, and say to people, ‘okay, well, we can identify and manage. Here’s how you do it safely.’”

Last week, SEC’s Gensler faced tough questions from U.S. lawmakers on his handling of the crypto sector, while the European Parliament voted through its landmark crypto licensing regime.

The Markets in Crypto Assets (MiCA) framework will apply to the European Union’s 27 member states as well as the three additional states – Liechtenstein, Norway and Iceland – that make up the European Economic Area. The regime sets out requirements for crypto service providers and issuers that must be implemented on a national level.

In addition to the EU, jurisdictions from Dubai to Hong Kong are looking to supervise crypto in a holistic way, Linch said, adding that his years of experience as a financial regulatory lawyer in the U.K. taught him that bad cases make for bad law.

“Ultimately, this is for Congress to sort. If it wants to set up a regulatory regime, set up a regulatory regime,” Linch said of the U.S.

The SEC declined to comment “beyond the public filings.”

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Edited by Parikshit Mishra.

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