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Food & Water Watch

By Elizabeth Schuster

Monday, I participated in a meeting hosted by the White House Council on Environmental Quality and the Environmental Protection Agency on financing water infrastructure.  

Photo courtesy of Shutterstock

Although I applaud the administration’s efforts to convene a discussion about the enormous need to invest in our nation’s aging infrastructure, I was discouraged that much of the meeting focused on promoting public-private partnerships and attracting more private financing for public water systems.   

Throughout the meeting, a misleading notion was continually raised that using private capital to fund water systems somehow constitutes an innovative approach to financing. This couldn’t be further from the truth. Time and again, municipalities and consumers have suffered under privatized water systems.  

As if attempting to package and sell privatization as a new trendy approach isn’t alarming enough, the chief financial officer of American Water, the nation’s largest water company, added insult to injury when she asked about the status of the company’s proposal that the Internal Revenue Service modify its rules to allow companies that take over privatized municipal water systems to retain public tax benefits on the system’s existing debt. 

Why not just give private companies like American Water the same tax-exempt status on bonds as public utilities? That’s actually another proposal out there these days. Apparently, this so-called “innovative” private financing requires government tax breaks and special treatment to compete with traditional public financing.

This is not the first time American Water has floated this proposal to the federal government. In response to a Freedom Of Information Act request filed by Food & Water Watch in November 2012, we learned that American Water’s proposal had made it to the Treasury Department in September. Then in March of this year, the company included its proposal in testimony submitted to the House Appropriations subcommittee. Talk about persistence.  

Modifying the tax code to allow private companies like American Water to receive the same tax benefits on its financing as our public, local governments would not level the playing field.  It would give companies an unfair and unjustified advantage. Worse, unlike with local governments, there is no guarantee that lowering the borrowing costs for private companies will result in greater investments in our water systems or lower water rates for consumers. The companies could just pocket most of the savings, using the lower debt costs to rationalize higher returns. That means we would sacrifice tax revenue to pad the profits of the water privatization industry. 

We have to keep tabs on their next moves and continue to protect our water systems. At the end of the day, privatizing our public water systems is not an innovative approach to delivering clean, safe, affordable water to U.S. communities. Instead, we should stick to a tried and true method—keeping water in public hands. If we want to talk actual innovation, why not establish a steady source of federal funding for community water systems so no municipality ever has to entertain the notion of privatizing its water. 

Visit EcoWatch’s WATER page for more related news on this topic.

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Clean Water Action

A much-anticipated study says separating the Great Lakes and Mississippi River basins to prevent the spread of Asian carp and other invasive species is not only possible, but a natural step toward much-needed action to improve Chicago’s water infrastructure.

Great Lakes environmental groups reacting to the study, released Jan. 31 by the Great Lakes Commission and Great Lakes-St. Lawrence Cities Initiative, commended the authors’ factual analysis concluding that separation is possible and that it must include essential upgrades to sewage, flood control and waterborne transportation while preventing the transfer of invasive species.

“The study is unprecedented in its scope and ambition, re-envisioning the Chicago Area Waterways System (CAWS) as a system that not only prevents invasive species from devastating the Great Lakes and Mississippi River and all their tributaries, but also makes sorely-needed improvements to core functions like moving people and goods, managing stormwater and maintaining water quality,” the partner groups said in a statement.

The study refocuses the Great Lakes region on a long-term permanent solution and away from stopgap measures that, on their own, will ultimately fail to stop the Asian carp’s march to Lake Michigan.

The authors note that restoring the natural divide between the Great Lakes and Mississippi River basins at Chicago can coordinate with efforts already under way by the city of Chicago, the state of Illinois and the Metropolitan Water Reclamation District to improve water quality and reduce flooding.

The marauding bighead and silver carp are the poster fish for the ecological and economic havoc in the offing when invading species travel between the Great Lakes and Mississippi. Research estimates that the annual cost to the Great Lakes region from invasive species introduced by shipping is upwards of $200 million per year.

"Tens of thousands of constituents have spoken to their members of Congress through a postcard campaign asking for immediate action to stop the Asian carp,” said Cheryl Mendoza, associate director for Freshwater Future. “This study provides decision makers with the path to the permanent solution Great Lakes citizens have been asking for."

Since 2009, multiple hits of Asian carp DNA have been found lakeward of an electric barrier in the CAWS meant to keep the fish out of Lake Michigan and the Great Lakes. More recently, carp DNA has been reported in waters open to Lake Michigan.

Joel Brammeier, president and CEO of the Alliance for the Great Lakes, says the study is the most specific evaluation to date of what it would take to achieve hydrologic separation at the CAWS. “Chicago and Illinois have been under a spotlight as the carp close in on Lake Michigan,” says Brammeier. “This report shines that light in a new direction—toward the transformation of the Chicago waterway into a resource of which everyone in the city, the state and the country can be proud.”

Since 2008, environmentalists have called for separating the artificially conjoined Great Lakes and Mississippi River basins—the only permanent solution on the table and one that has come to be embraced by states, cities and members of Congress alike.

“Separation is a modern 21st century solution for a 21st century problem,” says Jennifer Nalbone, director of Navigation and Invasive Species for Great Lakes United. “This study points the way to a solution that not only benefits the Great Lakes states, but also Canadian and Mississippi River stakeholders. Most of North America will ecologically and economically benefit from separating the two basins.”

The GLC-GLSLCI study clearly demonstrates that separation is possible, providing detailed background on three separation options that allow elected officials and community leaders to move the discussion to the next level. As any separation is intrinsically tied to the multiple uses of the waterway system, it is imperative the Chicago region be an engaged partner.

“The study has the potential to be a game-changer in the effort to restore and protect the Great Lakes,” says Jeff Skelding, director of the Healing Our Waters-Great Lakes Coalition. “It proves we have affordable solutions to the Asian carp crisis that benefit both our environment and economy. This report should put an end to excuse-making and foot-dragging and light a fire under the U.S. Army Corps of Engineers to do its job so the nation can move forward on a solution to protect the Great Lakes and the jobs that depend on them.”

To that end, the partner groups stress that the study is a beginning, not an end, and should not be interpreted as a strict set of policy recommendations. Until separation is complete, they say strong interim protections must be implemented to protect against an Asian carp invasion, and note the study includes such measures within its long-term vision for separation. The groups also urge Congress to pass the Stop Asian Carp Act.

A plodding U.S. Army Corps of Engineers’ study of the problem—the Great Lakes and Mississippi River Interbasin Study—could be expedited by incorporating findings from the GLC-GLSLCI study and starting separation planning now, the groups say.

“The study is a revelation. It puts solutions on the table that are both feasible and affordable,” says Marc Smith, senior policy manager with the National Wildlife Federation. “The onus is clearly now on the U.S. Army Corps of Engineers to expedite its own study so the nation can stop talking about ‘if’ a solution is possible, and instead focus on ‘when’ people can be put to work to solve this problem once and for all.”

Thom Cmar, attorney for the Natural Resources Defense Council, concurs. “We have a unique opportunity here because we know the invasion is under way and we know how to stop it.

“Not only can a barrier stop the spread of Asian carp and the rest of the harmful invasives moving on the waterway, it can also help revitalize the festering mess on the Chicago River—but only if we have the political will to act quickly, before it’s too late,” says Cmar, author of a 2010 study examining potential impacts of anti-invasive species barriers on Chicago’s waterways.

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American Rivers

Innovative financing and pricing flexibility are key to preparing the nation’s aging freshwater systems to handle growing demand and environmental challenges, according to a Charting New Waters report released Jan. 26 by The Johnson Foundation at Wingspread, American Rivers and Ceres.

The Financing Sustainable Water Infrastructure report, is the product of a meeting convened by The Johnson Foundation, in collaboration with American Rivers and Ceres, which brought together a group of experts to discuss ways to drive funding toward the infrastructure needed for the 21st century.

Largely built on systems developed during the 19th and early 20th centuries, U.S. water infrastructure faces profound problems of aging components, outdated technology and inflexible governance systems ill-equipped to handle current consumption, environmental and economic problems.

Presently, about 6 billion gallons of expensive, treated water is being lost in the U.S. each day due to leaky and aging pipes—some 14 percent of the nation’s daily water use. This pervasive water waste is underscored by the fact the American Society of Civil Engineers gives the nation’s water systems a D-, the lowest grade of any infrastructure including roads and bridges.

The report concludes that rebuilding and operating our water systems as they are presently built would be enormously inefficient. One major problem is the very nature of the systems themselves—where drinking water, stormwater and wastewater are built, financed and operated as entirely distinct units rather than as more efficient, interconnected systems. Another major problem is myopic, inflexible water-pricing systems that fail to distinguish between various water uses and generally undervalue water.

In order to achieve more sustainable, resilient and cost-effective freshwater systems, the report recommends bold new approaches for financing and operating public water systems, including:

• Local water solutions that can improve efficiencies, including green infrastructure, closed-loop systems and water recycling
• Flexible water pricing and revenue structures that distinguish between drinking water and various other types of water, such as lawn water and toilet water
• System-wide, full-cost accounting of water services and financing mechanisms
• Less reliance on state and federal funding and more reliance on private, market-based financing mechanisms that can support local, customer-supported solutions.

“While the deteriorating state of the nation’s water infrastructure is not a secret, we have lacked workable strategies and policies to finance the changes needed,” said Lynn Broaddus, director, Environment Programs at The Johnson Foundation. “This report addresses the critical linkage between financing and sustainability that was initially raised by the Charting New Waters consensus report in 2010. It’s not enough to pay for new water infrastructure—we need the financing to actually drive a new, sustainable water infrastructure that will take care of generations to come.”
 
Jeffrey Odefey, director of Stormwater Programs at American Rivers, said, “Clean water and resilient ecosystems are absolutely vital to our health, our communities, and economy. This timely report lays out clear directions to ensure that our communities grow into the future with safe, reliable water supplies and healthy rivers and streams.”

Sharlene Leurig, senior manager of Water and Insurance Programs at Ceres, said, “This report makes clear that our nation's water infrastructure system is broken and dramatic changes are needed. Rethinking how we finance and operate our vast water systems is not a choice, it's a must. We have the engineering and land use tools we need to ensure our water systems can stand up to 21st century challenges. The key will be partnerships and cooperation between business, government and public interest groups to finance these new tools.”

The Johnson Foundation is releasing this report as part of its work with Charting New Waters, an effort it formally launched in 2010 dedicated to catalyzing new solutions to U.S. freshwater challenges. Charting New Waters is composed of a diverse group of leaders from business, agriculture, academia and environmental organizations that have publicly committed to improving U.S. freshwater resources by advancing the principles and recommendations of the group. 

The initial phase of work led to the release of Charting New Waters: A Call to Action to Address U.S. Freshwater Challenges, a consensus report issued on Sept. 15, 2010. Download the report here.

As part of its ongoing Charting New Waters effort, The Johnson Foundation is also hosting a series of Regional Freshwater Forums that convene experts to examine freshwater challenges, successes, innovations and potential solutions that can bridge geographies and inform national policy. The first Forum took place in Denver, Colo., in October 2011.

For more information, click here.

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The Johnson Foundation at Wingspread is dedicated to serving as a catalyst for change by bringing together leading thinkers and inspiring new solutions on major environmental and regional issues. For additional information about Charting New Waters, or to learn more about The Johnson Foundation at Wingspread, visit www.johnsonfdn.org.

Ceres is an advocate for sustainability leadership. It leads a national coalition of investors and public interest groups working with companies to address sustainability challenges such as global climate change and water scarcity. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling about $10 trillion. For more information, visit www.ceres.org.

World Wildlife Fund Global

A new World Wildlife Fund (WWF) study finds that many Yangtze River Basin lakes are shrinking dramatically and could dry up completely if measures aren’t taken to stem the impacts of climate change, increased industrialization and urbanization along China’s longest river.

The Yangtze Conservation and Development Report 2011 (YCDR 2011) shows that lower water levels, rapid urbanization and large water infrastructure projects across the Yangtze Basin are impacting the overall health of many lakes along the 6,300 km river, which supports the livelihoods of nearly one-third of China’s population.

“Lake ecosystems in the Yangtze River Basin are showing tell-tale signs of degradation, and problems like water eutrophication from industrial runoff are on the rise. We are also seeing a decline in flood retention capacity and insufficient water supply. These changes are putting increased pressure on many of the species found in the Yangtze, including the finless porpoise and Chinese carps,” said Yang Guishan, president of the Nanjing Institute of Geography and Limnology, Chinese Academy of Sciences.

Climate change in the Upper Yangtze

While water resources will increase over the short term, the YCDR 2011 predicts that the long-term impacts of climate change will result in massive water shortages in headwater regions.

“Over the short term, increased glacial melt in the Qinghai-Tibetan plateau means more water. But after the glaciers are gone—and with them the source of the Yangtze River—available water resources will decline. The lack of water could cause lakes that depend on glacial melt to shrink or dry up completely,” said Yang Guishan.

Pollution, population and land reclamation

From 1950-2010, the central and lower reaches of the Yangtze lost approximately two thirds of its lakes due to increased land reclamation for agriculture and industrial development. This has resulted in a water storage capacity loss roughly equivalent to 20 million Olympic-sized swimming pools—and means that smaller floods now have the potential to inflict much more damage.

Meanwhile, population growth and rapid economic development—particularly in the central and lower Yangtze—as well as excessive fish farming has resulted in more serious water pollution issues and increased instances of eutrophication, a process where excessive nutrients diminish water quality in lakes or other bodies of water.

Water quality monitoring data from 2007-2010 in the central and lower Yangtze shows that 77 percent of the 77 lakes with an area of 10 km or more could not provide safe drinking water, while more than 88 percent were in various stages of eutrophication. Meanwhile, in 2009 alone, more than 33 billion tonnes of sewage was discharged into the Yangtze River Basin, nearly a 22 percent rise from 2003.

Solutions

Similar to the diagnosis offered in the previous two editions of the YCDR, the 2011 update points out that more work still needs to be done to ensure the future health of the Yangtze River:

“The Yangtze Conservation and Development Report 2011 shows that a comprehensive action plan is an absolute necessity to ensure the future of this irreplaceable resource,” said Jim Grandoville, CEO of WWF China. “WWF will be working with partners and seek solutions towards the protection and sustainable usage of the lakes along the Yangtze.”

The report also emphasizes the importance of mitigating the accumulative impacts of large infrastructure projects such as the Three Gorges Dam and South to North Water Transfer Project on the Yangtze River, especially downstream.

Known as the “Yangtze health check," this is the third edition of the Yangtze Conservation and Development Report. It is jointly developed by WWF, the Nanjing Institute of Geography and Limnology, Chinese Academy of Sciences and the National Development Bank.

For more information, click here.

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