Natural Investment in Water Quality

October hunting trip.2013-74A few weeks ago I posted an item regarding the release of World Resources Institute’s new report on natural infrastructure, specifically, forested landscapes, as a cost-effective means of providing clean and safe drinking water while avoiding unnecessary treatment and capital costs, not to mention generating numerous ancillary environmental and social benefits.

At the time, I promised a more detailed review, Saving Forests, Protecting Water Quality, which, I am happy to report, will be published by The Environmental Forum of the Environmental Law Institute.  In fact, the review discusses both the WRI report and a new book out of Yale University which covers the same material but from the perspective of communities and utilities in the Northeast such as Boston which manages massive acreages of forest, paid for out of water rates.

Before discussing these publications in greater detail, I would point out that forest protection and management, as a source water protection tool, is not a new idea.  Rather it is one that has been around for some time but is back in vogue due to concern over aging infrastructure, reduced water consumption (Not a bad thing in and of itself, but it does have negative consequences for water rate structures that are based on volume pricing.), sprawl and development, and a growing population.

Our friend, Howard Neukrug, Commissioner of Water for the City of Philadelphia, reminds me that Philly bought up 9,000 acres in 1812 for the purposes of protecting its source of potable water, making it a city park.  And, in 1889, per WRI’s report, the City of Seattle began acquiring the forested Cedar River Watershed to provide and filter the community’s water.  I have had the opportunity to visit this tract of land which, even today, the Seattle Public Utilities protects and works at removing old timber roads to reduce sedimentation into its reservoir.

Today, Seattle would have to pay upfront cost of $200 million to build a filtration plant with annual operating and maintenance costs of $3.6 million if the forest was not there, calculates WRI.

Manchester, New Hampshire, gets its drinking water from a beautiful lake around which it owns 8,000 acres.  It has to make payment in lieu of taxes to local jurisdictions within its watershed but has recently gotten some relief from the legislature on its previous expenditures of over $800,000 per year.  It also generates about $150,000 to $200,000 from sustainable forestry according to staff with whom I have spoken.  Also, the South Central Connecticut Regional Water Authority owns 27,000 acres of forest which it manages carefully, for instance, to reduce nutrient loadings.

In the current intellectual climate, there is increasing appreciation of the idea of nature’s or natural services; the usefulness and cost-effectiveness of payments for such services, as a complement, not a substitute, to traditional structural or engineered approaches; and the concept of “beneficiary pays” as it relates to financing the protection and enhancement of these services.

According to the 2008 report of the National Research Council of the National Academies, Hydrologic Effects of a Changing Forest Landscape, “the forests cycle water from precipitation through soil and ultimately deliver it as streamflow that is used to supply nearly two-thirds of the clean water supply in the United States.”  Changes in forested headwaters, including tributary streams feeding into rivers, “influence the quantity and quality of downstream water sources; in this way, forests and water are closely interwined.”

Protecting or maintaining natural infrastructure should not be viewed as antagonistic to traditional gray infrastructure.  This is not an either-or proposition.  Society will always need well-financed, effective, and well-engineered gray infrastructure.  But, as economists are always telling us, the action is at the margin, and great benefits-economic and environmental-are to be found in the complementarity of green and gray solutions.

The mother of all such efforts is the New York City source water protection initiative to protect its Up State watersheds.  Instead of spending $8-10 billion on a new filtration plant, it is spending less than $2 billion on land protection and a variety of forest and agricultural best practices.  The “avoided costs” are huge.  This eminently sensible program was enabled by a “filtration avoidance waiver” authorized under the Safe Drinking Water Act.  These and many other cases, as well as the lessons derived from them, are discussed in several new publications.

Todd Gartner and his colleagues at the World Resources Institute assemble, review, and synthesize the work product of 56 experts with experience in source water protection across the American landscape, in Natural Infrastructure: Investing in Forested Landscapes for Source Water Protection in the United States (2013), “the most comprehensive publication of its kind to date.”  The report may be downloaded, gratis, from WRI’s website.  Full disclosure: this reviewer co-authored the “Forward” to the report with WRI’s president, Andrew Steer and serves as national source water protection coordinator for the U.S. Endowment for Forestry and Communities which, among other things, tries to foster partnerships between water utilities and forest interests to the benefit of both.  The Endowment funded some of the research documented in WRI’s report.

WRI’s Natural Infrastructure report does an excellent job of outlining the business case, scientific underpinnings, and means of identifying and seizing opportunities to work with utilities, stakeholders, political leaders, and conservation organizations to design, finance, and implement forest management measures, at scale, to defer or avoid expensive investments in gray infrastructure and reduce ongoing treatment costs.  Whether utilizing fee simple purchases, acquisition of conservation easements, or subsidizing sustainable forest practices by private landowners, water quality goals are achieved, in tandem, with habitat protection, natural hydrologic flow regime, and sequestration of carbon.  The value-added proposition extends far beyond cost-effectiveness to encompass a suite of environmental and conservation benefits.

Source water protection under the Safe Drinking Water Act is the analogue to watershed protection under the Clean Water Act but is more tightly focused on potable water.  It is part of a “multi-barrier” approach to protecting water supplies up to and including water treatment.  It is preventative in nature which is less expensive than treatment after the fact.  Jim Taft, executive director of the Association of State Drinking Water Administrators and contributor to the report, describes a recent study by EPA of six communities which concluded that “on average, every $1 spent on source-water protection saved an average of $27 in water treatment costs (Winecki 2012).”  Several other studies have also confirmed “that improved source water quality relates to lower treatment and chemical costs (Holmes 1988; Postel 2005; Dearmont, et al. 1998; Espey, et al. 1997; Forster, et al. 1987; Holmes 1998; Dearmont, et al. 1998; Forster and Murray 2001; freeman, et al. 2008).”

In the Upper Neuse River Basin, in North Carolina’s Piedmont region, the city of Raleigh established a “nutrient impact fee,” a one-time charge collected on new water and sewer hook-ups.  This was followed by a permanent watershed protection fee on public water bills of one penny per 100 gallons which generates $1.8 million per year.  These measures have generated $7.5 million since 2005 to address water quality issues within its watershed.  Durham, NC, increased its water rates to fund land protection in 2011 to protect areas upstream of its two water supply reservoirs.  Growth and development, with resulting loss of forests and other natural amenities are key drivers in this watershed.

In the western United States, communities are experiencing increased dredging and treatment costs resulting from drought, climate variability, beetle infestation, and sedimentation after colossal forest fires and big precipitation events. Denver Water spent more than $26 million in the aftermath of the Buffalo Creek and Hayman fires.  The utility is now matching the U.S. Forest Service’s $16.5 million, investment, totaling $33 million, toward forest treatment and watershed protection.  Comparable investments are now underway in similarly plagued communities such as Salt Lake City, San Francisco, and Flagstaff.

Another volume, this one emanating from Yale University, is Natural and Engineered Solutions for Drinking Water Supplies: Lessons from the Northeastern United States and Directions for Global Watershed Management (2013), edited by Emily Alcott, et al., which takes a very deep dive into the cases of six cities, two of which are also discussed in the WRI report.  It evaluates how New York; Boston and Worcester, Massachusetts; New Haven and Bridgeport, Connecticut; and Portland, Maine have sought to protect and manage upland forests for the benefit of clean and safe drinking water under varying regulatory, social, and economic circumstances.

The findings of this latter report are consistent with WRI’s in confirming that it makes environmental and economic sense to protect and manage these forests to produce downstream services, i.e., clean water.  In doing so, a community can minimize land development and unnecessary engineering or filtration costs.

Utility managers usually acknowledge, intellectually, the benefits of forested landscapes.  But, when deciding, again, at the margin, whether to put that next discretionary dollar into the facility or onto the landscape, well, it is hard to resist defaulting to the engineered solution.  Their justifiable concern with environmental compliance and frugal ratepayers causes them to choose the gray option more often than not.  To the benefit of ratepayers and the environment, these attitudes are changing as evidenced by these two important contributions to the literature on source water protection and forests.

 

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