Building a Clean Water Economy

[Cross-posted from The Independent, Aug. 23, 2017]

Imagine an investment opportunity with a guaranteed return of at least 400 percent within a year. You put in a dollar and get back five over twelve months. Year after year. Guaranteed. Completely legal. No strings attached.

Would you take it? My hunch is many might jump at the chance.

But here’s the catch: you pay the upfront costs, but the benefits are spread out over the year in dozens of ways. For every $1 you pay now, you’ll get $5 back across savings on other purchases, avoided living expenses, and a myriad of less visible returns broadly shared with your community. Some people won’t pay, but still get the community benefits. Others will get back much more than you. Still interested?

A similar decision is at the heart of building a clean water economy. From essential uses for drinking, agriculture, fisheries, manufacturing, and recreation, to the lifeblood of nutrient cycling, complex food webs, and ecosystem health, clean water is at the base of a healthy economy. The supply, delivery, and maintenance of clean water is supported by extensive private and public infrastructure, and high return investments abound.

For example, our engineered water systems have leaks to plug, plants to upgrade, and septic systems to fix. The American Water Works Association estimates the cost of repairing our nation’s public water infrastructure at $1.3 trillion over ten years. Imagine the national jobs and income generated in a trillion-dollar national public works project. Restoration and conservation of soils, wetlands, and streams can be even more cost effective, restoring the ecological functioning of nature’s clean water infrastructure. Investments in open land, sustainable agriculture, and riparian corridors have the additional benefits to wildlife habitat, public recreation, and storm protection.

Such investments in clean water generate economic activity and business savings many times over capital costs. A 2016 assessment of our nation’s water and wastewater infrastructure by the American Society of Civil Engineers found a growing gap between current spending and need of $82 billion per year at all levels of government.

If the investment gap was closed, the study estimates over $220 billion of economic activity and 1.3 million jobs would be created over a decade. The avoided costs to business alone of providing clean and safe water to customers would more than offset the capital costs over the investment period, with sustained annual savings as high as $407 billion through 2040.

The political rhetoric around these investments is usually framed around costs, particularly the regulatory costs of enforcing current clean water rules or mandating new ones. However, historical analysis of environmental regulation also reveals high investment returns. The Bush Office of Management and Budget found historical benefits of environmental regulations outweighing costs by as much as 5 to 1. The Obama budget office followed with a similar study, finding benefit/cost ratios even higher for recent environmental regulations.

The economic logic for investing in a clean water economy is sound, but here’s the rub. When legislation such as the Clean Water Act was passed, access to clean water was viewed as a public right, not a private privilege. When clean water was central to a bipartisan political agenda, investing federal and state tax revenue in infrastructure and watershed protection was a public duty, not a private burden. Ultimately a clean water culture is required to build a clean water economy.

The challenge to communities that still hold clean water as a human right and moral obligation is that federal and state funding is a shadow of historic levels. Building and maintaining a clean water economy is falling increasingly on regional planning boards, local municipalities, and landowners and rate payers. Fortunately, these are the people who most benefit from safe drinking water, healthy streams and lakes, and local jobs and income created in communities worth visiting, raising families, and calling home.

Jon D. Erickson is an ecological economist and the David Blittersdorf Professor of Sustainability Science and Policy at the University of Vermont.

Published by Jon Erickson

Blittersdorf Professor of Sustainability Science & Policy University of Vermont

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