Drinking Water (35 page)
Buried beneath streets and fields, these pipes don’t provoke a second thought from the average citizen until they burst and faucets run dry, yet these water mains are breaking down at an alarming rate. The EPA estimates that $335 billion will be needed simply to maintain the current water infrastructure over the next few decades, not to mention upgrading the system. While a rough estimate, we may be losing up to six billion gallons of water daily simply from leaking pipes. It costs about $200 per foot of replacement pipe, $1 million every mile, so they don’t come cheap. New York City’s Third Water Tunnel, currently scheduled for completion in 2020, will span more than sixty miles and meet the growing water demands of more than nine million area residents, but it comes with a six-billion-dollar price tag. Expensive, but what’s the alternative?
To date, the primary option has been to bury our heads in the sand and do very little. We are starving our water system of funds, and have been doing so for years. Part of the reason is the invisibility of the water system, part is the lack of public understanding over how antiquated our infrastructure has become, and part is the belligerent refusal to pay for what the system really costs.
The obvious answer to inefficient water use and system maintenance is the same: raise water rates. When we have to pay more for something, whether gas or electricity, we either use less or do more with what we have. We drive less. We use more energy efficient appliances. We turn off the lights when leaving a room. The market signals make clear the benefits of efficiency, and we respond. And even with increased efficiency, raising water rates would still generate additional resources for needed infrastructure repairs and upgrades.
Raising water rates, though, seems almost as taboo in America as talk of raising taxes. Most people seem to assume that cheap water should be ours by right and that government, somehow, should find the means to pay for it on its own. We have taken the
ready availability of water for granted in the past and intend to do so in the future.
To those in the water business, our unwillingness to make the proper level of investment is foolhardy. George Hawkins, the head of the District of Columbia Water and Sewer Authority, makes a telling comparison: “People pay more for their cell phones and cable television than for water. You can go a day without a phone or TV. You can’t go a day without water.” When he approached the District of Columbia’s City Council to ask for a modest rate raise, though, he was raked over the coals. Jim Graham, a council member, proclaimed, “This rate hike is outrageous. Subway systems need repairs, and so do roads, but you don’t see fares or tolls skyrocketing. Providing inexpensive, reliable water is a fundamental obligation of government. If they can’t do that, they need to reform themselves, instead of just charging more.” Graham was unhelpfully silent on how a water utility can reform itself to provide the money necessary for maintenance and upgrades on a decaying system.
This is not the case across the country, of course. Some cities have embraced the importance of conservation and water pricing in an era of scarcity. Las Vegas is perhaps the best example. In order to supply the opulent fountains and water shows that grace the Strip in a city with an average rainfall of four inches per year, the water is reused and expensive. Major corporations are starting to get the idea, as well. In June 2008, the CEO of the soft drink giant Coca-Cola stated that the company would become “water neutral.” Every liter of water used to produce its drinks would be offset by water conservation and recycling programs. It’s not clear how this will work in practice, but such a major commitment merits attention. Water is the company’s most important raw material. In 2006, Coke used 290 billion liters of water to produce its beverages. The company was badly burned by protests in Kerala, India, charging that local wells had dried up because the company’s operations had depleted the groundwater supplies. Even if Coke falls short of its goal, water conservation and recycling will necessarily remain major priorities. A report by the bank JP Morgan similarly concluded that water shortages pose threats that need to be addressed
in corporate planning. As the lead author, Marc Levinson, made clear, “These are real business risks. This is not something far off in the future.”
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EYOND TECHNOLOGIES THAT PRODUCE WATER, MOVE WATER, AND
increase our efficiency of use, the last approach to consider for water provision is greater reliance on natural capital. New Yorkers love to brag about the quality of their tap water. In fact, they like to brag about a lot of things, but tap water is high on the list. New York City’s water system provides over one billion gallons of drinking water to almost nine million New Yorkers every day. And it really is good tap water, often beating out bottled water in blind taste tests. The reason, though, is that it doesn’t come from New York City. New York solved its drinking water problems in the early twentieth century through a massive engineering project, drawing water from the Catskill and Delaware watersheds located 125 miles north and west of the city and sending it through massive pipes to city reservoirs. In the late 1980s, however, New York City was forced to reassess its drinking water strategy. Congress passed an amendment to the Safe Drinking Water Act in 1986, requiring large municipalities taking their drinking water from surface water sources (i.e., reservoirs, rivers, lakes, and such) to pretreat the water prior to distribution in the water mains. When officials in New York City’s Department of Environmental Protection did the calculations, they figured it was going to cost about six billion dollars to actually build a water treatment plant and hundreds of millions of dollars to operate it every year. The EPA said it would only cost three billion dollars to build, but this is still a big number. It is a lot of water for a lot of people.
New York was fretting over this cost when a clever city official named Al Appleton took a close look at the law and realized that there was a waiver provision. The law essentially said that if you could demonstrate to the EPA that there were other ways to provide safe drinking water, then you did not have to build the treatment plant. Appleton and some other folks started thinking, Since
we’re getting our water from the Catskills and Delaware watersheds, maybe we should think about how land management up there provides water quality in New York City and how we can influence their land management practices.
In 1905, recognizing the significance of the Catskills and Delaware watersheds to New York City’s drinking water, the state assembly had granted New York City the power to regulate polluting activities in these areas. This created the unusual situation, to say the least, of a city with land use controls over communities more than a hundred miles away. In the early 1990s, acting on Appleton’s strategy, the administration of Mayor David Dinkins announced new watershed rules for the Catskills and Delaware watersheds that would improve water quality, such as limits on the amount of paved surface on a property, buffers up to a thousand feet wide around reservoirs and up to five hundred feet from stream channels, and prohibitions on spreading manure within a hundred feet of a watercourse. Not surprisingly, the efforts of “rich city folk” in New York City to regulate, without prior consultation, how upstate farmers and landholders managed their properties were met with intense political opposition.
Faced with the concern of the EPA that New York City could not ensure catchment management would work, the governor of New York state stepped in and organized a stakeholder consultation process. Conducted over two years with more than a hundred fifty meetings, the group finally came up with a complex Memorandum of Agreement signed by sixty towns, ten villages, seven counties, and environmental groups that essentially exchanged payments from New York City for specific land management practices. One participant described the exhaustive process as similar to a “rolling Thanksgiving dinner with relatives you only want to see once a year.”
The Memorandum of Agreement provided for $1.5 billion of spending commitments over ten years, funded by taxes on water bills (which New York City residents voted to allow) and municipal bonds. Of this, $250 million was targeted to acquisition of title and conservation easements in critical areas. $240 million was provided
for “partnership programs.” These ranged from new sewage treatment infrastructure, storm water infrastructure to environmental education, and purchasing 125,000 acres around reservoirs.
The bottom line is that, for the cost at the time of a $600 million “green bond,” New York City ensured that its water remained legal under the Safe Drinking Water Act. A major review by the EPA in 2002 persuaded the agency to extend the waiver treatment of surface waters for a further five years and then again in 2007. The expectation is they will waive them again in 2012.
The Catskills story is often held out as the poster child for an “ecosystem services” approach to providing clean water because it presents the core idea so neatly. New York City’s managers needed to deliver clean water. They could get it one of two ways: through “built capital”—where they would build a treatment plant, engineer it, and run the water through it—or by investing in what you might call “natural capital”—where they could change the landscape practices where the water flowed to ensure the service of water purification. They found that if they invested in the natural capital rather than the built capital, they got a better deal, purely in financial terms. Obviously, there are a lot of other nature conservation benefits, in addition to the public education benefit of water users better understanding where their water comes from. Since the Catskills story was first made popular in the late 1990s, it has been held out as the prime example for why we should think differently about the provision of basic amenities.
There is a broader economic goal underpinning this approach. By making payments for ecosystem services, landowners’ visions of value start to shift away from traditional commodity crops of agriculture and toward service provision. In addition to grain, corn, and timber, landowners currently may provide ecosystem services such as controlling floods, conserving nature, and cleaning water—but they do so for free. If they could be paid for some of these services, farmers would think differently and farms would look different—if a landowner is receiving multiple income streams, the land will be managed differently. Right now, farmlands are largely managed for monocultures. That is hardly surprising, since that’s
how farmers get paid. We have gotten very good at growing soybeans because there is a ready market for them. One can imagine a world, though, where farmers are paid for more than the produce they bring to market. A greater focus on natural capital to ensure freshwater supplies—through landowners planting riparian buffers or maintaining vegetation in critical watersheds, for example—would lead to regular payments for these valuable services. If you can change the landowners’ balance sheet, you can change the landscape.
The approach of paying for ecosystem services has worked not only in New York City but also around the globe. A 2010 study reported 216 payments and $9.2 billion in transactions for watershed services protecting 289 million hectares. Most of these programs were in Latin America, where water trust funds have become an important mechanism to conserve land and protect watersheds. The Quito water fund, for example, was created by the joint efforts of the municipal drinking water provider, the electrical utility, a local brewery, and a water bottling company. These partners have committed resources toward an eighty-year trust fund. The six-million-dollar fund’s investment returns, supplemented by foreign aid from nongovernmental groups and development agencies, pay for conservation projects. These have ranged from strengthening protected areas and restoring degraded lands to supporting sustainable farming practices and reforestation. The primary goal in all these has been improved water quality, though there are significant additional benefits in terms of conservation and poverty alleviation. Quito’s example is being followed in other Andean cities, including Lima, Cartagena, and Bogotá.
In Tanzania, CARE International has teamed with the World Wildlife Fund and other partners to create the Equitable Payment for Water Services program. Based in the Ruvu and Sigi river basins, the program aims to protect the primary water sources for the cities of Dar es Salaam and Tanga. To serve its four million residents and businesses, the Dar es Salaam Water and Sewerage Corporation has to spend roughly two million dollars every year treating water from the Ruvu River because of its high sediment load. Much as New
York City paid landowners in the Catskills to change their land management practices, the Tanzanian program pays upper watershed farmers to improve their soil conservation activities. In practice, this means reducing farmland expansion, logging, and mining. The public water utility (and Coca-Cola, which also contributes) benefits by avoiding the cost of treating water loaded with eroded soil. The farmers benefit by being compensated for the loss of income from forgoing traditional activities. The larger community benefits from the injected resources that contribute to poverty reduction. By 2008, more than four hundred fifty farmers were receiving payments.
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ENJAMIN
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RANKLIN IS REPUTED TO HAVE OBSERVED,
“W
HEN THE
well’s dry, we know the worth of water.” This insight is as relevant today as it was in 1774. Cities that are thirsty and have the means will pay whatever it takes to obtain safe drinking water. A long line of entrepreneurs has already taken notice, hoping to profit from this undeniable demand. Whether money is to be made through pipelines, tankers, icebergs, desalination plants, treated sewage, LifeStraws, or some other innovative technology still on a drawing board remains to be seen. The clear message is that creative technologies and payment schemes for making, moving, and purifying water will only grow in importance in the coming decades.
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RE COMPANIES REALLY GOING TO MINE WATER IN OUTER SPACE?
