Ed Ballard, the Wall Street Journal's climate and energy editor, takes the Sunday edition of What's News through what a summer of record heat has done to the water supply on both sides of the Atlantic. Luke Vargas moves him from the Colorado River cuts to Europe's shrinking rivers, then through the fixes that are supposed to close the gap between supply and demand — precision irrigation, leak sensors, desalination — and the question of who pays for them.
👤 Guest: Ed Ballard, climate and energy editor at The Wall Street Journal
🎙️ Host: Luke Vargas
👥 Also on: Tom Fairless (The Wall Street Journal), Sam Jackson (Ecologi), Ram Lisaey (Orbia Netafim), Martin Conroy (KBI Global Investors)
📰 Published: 30 August 2026
🔴 YouTube | 🟢 Spotify | 🟣 Apple Podcasts | 🔗 Show notes | ⏱️ 17 min | ✅ Time saved: 6 min
Key Takeaways
The Colorado system is close to the level where the dams cannot release water on demand at all
Below that, the decades-old apportionment system stops existing and "the scary prospect is there'll be some sort of chaotic process for deciding who gets water"
The river was over-allocated from the start, and Rockies snowfall has fallen since
Low rivers are already showing up as lost industrial output in Europe, not as a future risk
The Rhine is at record lows, and a Hungarian nuclear plant went offline because the Danube could not cool it
European climate politics has changed, but water is arriving in earnings calls
"Nobody has a more direct incentive than the private sector" — which does not mean the money or the know-how is there
The U.S. data center backlash is climate politics under another name
People are motivated by electricity bills and local water, not by the climate agenda
Agriculture is where the water goes, and most of it is still poured onto fields
Vargas said 70% of the world's water goes to agriculture and that just 15% of farmers use sprinklers or drip lines
Leak detection is the cheap fix nobody has rolled out
More than a third of drinking water is lost before it reaches a tap, by some estimates
Desalination is the expensive end of the menu, and it raises the price of water
There are 5,000 operational plants in the Middle East, and the technology is now reaching the U.S. West Coast
Water infrastructure has been starved of money for a generation because it is invisible
"water as a sector has been underinvested in for at least 25 to 30 years" — Martin Conroy
The private sector will not fund the most useful interventions
"Only 2% of funding for water-related projects in the developing world comes from the private sector"
Sponge cities prevent floods and generate no return
Europe's Summer Was Different, and the Future Turned Up Early
Asked whether this summer really was different, Ballard said it was, in Europe especially — in the sheer number of heat records broken and in the run of successive heat waves. What changed alongside it was that people began to read the weather as climate change reaching their own lives.
"Everybody is getting an air conditioner if they didn't already have one." Homes and infrastructure, he said, are simply not equipped for the conditions now arriving
"it feels like the future has arrived and we were expecting it to arrive at a more convenient moment"
The Colorado Is Near the Level Where the Dams Cannot Release Water at All
Vargas set up the U.S. West with a montage of news clips: the Bureau of Reclamation's plan forcing cuts on the lower basin states of Nevada, Arizona and California, no restrictions on the upper basin states of Colorado, Utah, Wyoming and New Mexico, the nation's two largest reservoirs both at record lows this month, and Nevada suing the federal government over the plan.
Ballard said the problem was built in at the start. "there was more water accounted for in the plan than the Colorado regularly supplied", and the gap has widened as snowfall over the Rockies has diminished and consumption has risen in the fast-growing cities of the Southwest.
Lake Mead and Lake Powell are approaching two separate thresholds: "they're not so far above the level where they won't be able to generate hydropower and below that level where they won't be able to actually discharge water on demand at all"
If the dams reach that second level, the apportionment system that has run for decades stops existing. He said "the scary prospect is there'll be some sort of chaotic process for deciding who gets water"
The point of the negotiations is to have a deliberative process instead — "which farmers in which states, which crops are most important"
Europe's Rivers Are Already Costing Industrial Output
The show played a clip of Tom Fairless, a Journal correspondent, on the Rhine. "So the Rhine is actually a real competitive edge usually for Germany." It is a cheap way to move goods the length of the country, and a lack of rainfall plus the early disappearance of the snow mass in the Swiss Alps has pushed it to record lows this year.
"the ability to transport these bulk goods is severely constricted, which reduces industrial output" — Tom Fairless
The grid is the second effect: "in Hungary, this nuclear plant was forced to shut down because it's usually cooled by the Danube River and they didn't have enough water" — Tom Fairless
Ballard added the Po in Italy, at perilously low levels and threatening a major agricultural region
El Niño Is Back, and It Lands on Food Prices
Ballard said the weather phenomenon is associated with both droughts and floods, and that its effects are the next thing to watch.
"India's monsoon, for example, is 13% below usual levels and that's bad news for agricultural production"
He relayed a Bloomberg finding rather than his own: "A recent report from Bloomberg said that droughts due to El Niño can cause up to two percentage points of food price inflation in some countries, especially in Asia."
The Policy Response Is Water-Bombing Planes and a Barbecue Ban
Asked whether governments and businesses are responding, Ballard said the action is real but emergency-shaped.
In France, "they promised to buy more water-bombing planes of the kind they didn't have enough of when forests around Bordeaux were on fire"
In the U.K., after its own wildfires: "There's been a temporary ban on disposable barbecues, but perhaps not the kind of deep, far-reaching infrastructure change that would allow countries to get ahead of these risks."
Businesses Are Counting the Cost Before Politics Does
Vargas read the show's own research at him. The U.S. government has warned that drought — currently across 95% of the Intermountain West — could lead to significant negative direct and indirect economic impacts for agriculture. A report this month from Triodos Bank concluded that this summer's extreme heat sapped the EU of around 1% of GDP. And Ecologi, a U.K. climate action group, polled 1,600 British businesses before the summer.
Sam Jackson of Ecologi, in a recorded clip: "84% of the businesses that we surveyed told us that they could identify climate related or nature related impacts on their business in the past two years" "70% of those told us that these impacts had cost them more than 1% of their revenue in the past year and 40% said that it cost more than 6% of their revenue in the past year" — Sam Jackson
Asked whether business rather than public pressure now drives the agenda, Ballard said the politics have changed in the U.K. and elsewhere in Europe, not least because "the target we were shooting for, this stopping warming at 1.5 degrees is basically here, it's on us"
"certainly water issues showing up more in earnings calls in Europe. Nobody has a more direct incentive than the private sector." He hedged it immediately: that does not mean companies have the funds or the know-how to make interventions that really improve their resilience
The Data Center Backlash Is Climate Politics Without the Label
Vargas asked whether the anti-AI push and the data center blowback in the U.S. carry elements of climate protest. Ballard agreed, and said the interesting part is that it is happening while "climate politics itself is totally in abeyance in the U.S." — not a priority, and opposed outright by the Trump administration.
"perhaps we see in the data center protests something that has a family resemblance with climate politics"
What drives it is immediate and local: people worried about electricity bills going up, and about not having enough water in their communities or their water being harmed
Those, he said, are really powerful motivators
Agriculture Is Where the Water Goes, and Most of It Is Still Flooded onto Fields
After the break, Vargas started the demand side with the biggest user. He said Ram Lisaey, director of global agronomy at Orbia Netafim, which makes precision irrigation products, told him 70% of all water globally goes into agriculture, and that "the majority of farmers are still flooding their fields around the world compared to just 15% of whom are using either sprinklers or drip lines to get water exactly where it needs to be".
Lisaey, in a recorded clip, on the size of the prize from switching: "When you switch from any other kind of irrigation into precision irrigation, the numbers are not fraction of a percent."
Vargas added that Lisaey put the return on investment for precision irrigation as fairly quick, for farmers willing to pony up the money
"It's hard to think of someone with a bigger incentive to save water than a farmer in a water-stressed region." — Ballard
The problem is not less water, it is worse-timed water: "it's not like there's less water now, it's just sort of behaving in a less convenient way" More intense downpours that run off the soil and go to waste, combined with more protracted droughts
Many farmers will struggle to find the capital for something like precision agriculture, especially in poorer parts of the world. "So I guess the challenge will be financing it."
Leak Sensors Are Cheap; Rolling Them Out Is Not
Vargas ran quickly through the other demand-side technologies, starting with leak detection. "By some estimates, more than a third of drinking water is lost before it even reaches people's taps." He also pointed to data centers and chip makers moving to closed-loop water systems rather than drawing on municipal supply, and to capturing rainwater instead of letting it run back to the ocean — which, as he noted, means a big retrofit of the built environment.
Ballard agreed the price tag is not the obstacle: "I don't think there's necessarily a huge price tag attached to fixing some sensors to pipes to tell you when water's getting lost, but that doesn't mean it'll be an easy thing to roll out necessarily."
Desalination Is the Expensive End of the Hierarchy
Turning to supply-side fixes, Ballard called desalination a potentially fascinating growth area for Middle Eastern economies, which could not support their populations without it.
"There are 5,000 operational plants in the Middle East and it's starting to be deployed further afield on the U.S. West Coast."
He pointed to a Journal story from last year on doing desalination underwater, in the ocean itself, to make the process more efficient
"If saving water is at the easier end of this hierarchy of interventions, desalination's at the higher end."
It changes what water costs, and who can afford to pay: a data center may make sense as a customer for desalinated water at a higher price A farm does not have the same option — there are fewer people around to collectively fund a plant than there are in a town
Only 2% of Developing-World Water Funding Comes From the Private Sector
Vargas put the question of who pays to Martin Conroy, a senior portfolio manager at KBI Global Investors, which has run a water fund since 2012. In a recorded clip, Conroy said "water as a sector has been underinvested in for at least 25 to 30 years" because the infrastructure is out of sight and out of mind, and has always ranked below more visible investments such as transportation.
Many geographies have now reached a crisis point, he said, and closing the gap will take equity investors, debt investors and government money, including public-private partnerships
Ballard said more investment is inevitable, but hard: it is difficult to generate a return from even the most useful water projects
Sponge cities are his example of the mismatch — more vegetation in a town or a street to soak up water, effective at preventing floods, and almost impossible to earn a return on
"Only 2% of funding for water-related projects in the developing world comes from the private sector"
Public money is where the rest has to come from, and there every essential-sounding project competes with other essential-sounding projects: "maybe you have to decide whether to spend money on a new desalination plant or a new battleship, and these are not going to be easy decisions"
Ballard's bottom line is that the water crisis is now an allocation problem rather than a forecasting one: the technologies to save, move and manufacture water exist, and what decides whether they get built is who is willing to pay for infrastructure that mostly does not pay a return.
Products, Companies & Tools Mentioned
Orbia Netafim (Israeli precision-irrigation maker; its global agronomy director gave the show the 70% agriculture figure and said the savings from switching are not a fraction of a percent)
KBI Global Investors (Has run a water fund since 2012 investing in companies addressing water challenges; its senior portfolio manager said the sector has been underinvested for 25 to 30 years)
Ecologi (U.K. climate action group whose pre-summer poll of 1,600 British businesses supplied the survey figures Vargas read out)
Triodos Bank (Its report this month, cited by Vargas, put the cost of this summer's heat at around 1% of EU GDP)
Bureau of Reclamation (Author of the plan imposing cuts on the lower basin states, and the target of Nevada's lawsuit)
Lake Mead and Lake Powell (The two reservoirs whose levels decide whether the Colorado system can generate hydropower or release water on demand)
Bloomberg (Source of the report on El Niño droughts and food price inflation that Ballard relayed)
Books & Resources Mentioned
WSJ Climate & Energy newsletter – Ed Ballard (The guest's weekly newsletter for the Journal, named when Vargas introduced him)
The World Is Running Out of Clean Water. This Technology Promises to Fix It. (The Journal story on deep-sea desalination that Ballard referred to)
Water Crisis Deepens on the Colorado River (From the show notes; the reporting behind the Colorado segment)
El Niño Is the Next Risk Hanging Over the Global Economy (From the show notes; the El Niño and food price argument)
Heat Waves Are Becoming a Chronic Drag on the Economy (From the show notes; the economic cost of the summer)
Why the Middle East's Desalination Plants Are Critical (From the show notes; background on the 5,000 plants)
Extreme Weather Is Hammering Europe's Summer Harvest, EU Says (From the show notes; the European agricultural damage)
San Diego Now Has So Much Water That It's Selling It (From the show notes; the other side of the Western water story)
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