Water, particularly in the Western United States, has always been inextricably linked to the economy. Historical investments in infrastructure like the Hoover Dam and the California Aqueducts have been used to create whole new industries and the communities to support them. However, today these communities are under serious pressure from rapidly growing populations, dwindling federal investments in new infrastructure and the impacts of climate change via 18 years of ongoing drought.
For most Americans, water is something we “solved” a long time ago. “Water crisis? That’s like the California Drought, lead pipes in Flint Michigan or the dams breaking in New Orleans, right?”
Few of us would think of the Great Recession as a water crisis. Yet for communities trying to respond to more than a decade of drought while their tax base evaporates, many utility operators and city officials were — and are — in crisis management mode. Further loss of revenue caused by mandatory conservation has only exacerbated the situation.
This nexus of water and economics is what brought together a small group of large water consumers and management agencies in Nevada to accelerate the deployment of new technology solutions. The result was WaterStart, where I now serve as Executive Director.
The crux of our water dilemma is: how do we address the challenge of resource conservation without bankrupting the infrastructure that makes it safe for folks to drink water?
Nevada has always been — and always will be — the driest state in the country. As such, it has become progressive about how it manages its resources. The result has been the creation of conservation programs that have led to a 30 percent reduction of overall consumption, despite the population doubling during that same period. This is no small accomplishment considering consumption is historically the primary revenue source for water agencies.
The cost of water in the U.S. is growing at a faster pace than income and inflation. While environmentalists like myself may be inclined to argue that higher prices will drive consumption down, the reality is that when we pay our water bill, we aren’t really paying for the water itself. This is because water isn’t just H20 — it’s the infrastructure we build to manage it, the chemicals we use to treat it, and the energy we use to move, heat and cool it.
Drastically reducing consumption through large-scale (imposed) behavior change has proved to be fairly easy to achieve during a crisis. We saw this in California two years ago. The more important and complex challenge is: How do we sustain revenue loss over time without driving our water agencies to bankruptcy?
There are more than 55,000 regulated drinking water utilities in the U.S. that are set up to finance water resource capital projects — think dams and pipes — rather than finance repairs to existing infrastructure. There’s a huge disconnect between how these utilities operate, what their challenges are, and how they are paid for. If the only way to fund new meters is by raising bills, then communities become apprehensive about investing in their own infrastructure.
The real opportunity today is not in water resource management, but rather water demand management.
A New Model for Innovation
Typically, we like to think about water technology as dams, desalination and pipelines. In Nevada, we have continued to invest in these big, charismatic mega solutions, such as the indirect potable reuse infrastructure that recycles water to return to Lake Mead. These large-scale, innovative approaches have managed to drastically extend our access to water resources over the past 20 years.
Today, however, we are shifting our focus to opportunities to manage demand (i.e. how we use water) through investments of a similar scale of potential.
The City Center complex, developed by MGM Resorts in 2009, represents the kind of opportunity for innovation in demand management. With this project — which was the largest privately funded construction project in the history of the United States — MGM Resorts set new standards for the performance of high efficiency water fixtures. Every sink, toilet and shower had to effectively reduce water consumption without compromising the guests’ experience. These standards have driven a shift in the water fixture industry that benefits communities as well as individual consumers. Today, with other major resort companies following suite, laundry facilities and commercial kitchens on the “Strip” only consume 3 percent of the broader Las Vegas community’s water (Source: Southern Nevada Water Authority).
However, one roadblock to innovation is that the water and utility industry is notoriously risk averse. How do we solve for this?
To de-risk the process, our team at WaterStart created two tools to address three basic criteria:
- We worked with our members to identify what they needed but couldn’t find. These priorities determined the types of technology companies we would recruit. The list has now grown to include more than 50 priorities, including the removal of contaminants from groundwater and advanced irrigation control systems. Certain priorities may surprise you, such as applications for the development of “as-built” electrical drawings, or electronic access management for remote facilities. We have quickly come to understand that technologies used to improve the operations of water systems also enables them to be more resilient in the face of larger environmental and economic forces.
- We created our own pilot fund to spread the risks out across our stakeholders. Once we had a sense of what was missing, we needed a way to deploy and evaluate technology solutions. Installing new technologies for the first time is by far the biggest hurdle. There are many risks associated with trying new things, so we structured the fund similar to an investment syndicate: each stakeholder commits to fund pilots but is free to choose projects based on their own needs and criteria.
The criteria for each stakeholder comes down to a combination of three factors: effectively solving specific priorities; driving further research between industry and scientists; and creating jobs. With this structure, we can bring together funds from public and private entities interested in installing the technologies, as well as from the public agencies interested in the economic benefits of attracting tech companies to the state —all while further improving how we manage water.
As a result of this approach, we reduce the risk for everyone by increasing the chance of success. This is particularly true for tech companies who assume great risk in starting up in the first place, let alone attempting to expand into new markets. All this enables us to be more than just customers. We are leveraging the demand for new solutions to grow and diversify our economic base through a new water innovation ecosystem.
Innovation Intended for a Large Stage
For the second year in a row, “water crisis” was listed by the World Economic Forum as being among the top five biggest risks to the global economy.
As we’ve seen, water is a fundamentally local issue with risks intrinsically linked to local supply and economic constraints. The Clean Water Act and Safe Drinking Water Act were both structured to enable this dynamic and, as a result, there are now more than 55,000 drinking water utilities in the U.S., each left largely on their own to comply with regulations and fulfill their charters to the communities they serve.
There is much to learn from international regions who face similar pressures. Israel is one example of a growing economy faced with serious water limitations. They have invested heavily in massive infrastructure projects, creating a national water utility that delivers water from one side of the country to another. They have invested in technologies that optimize the operation of their infrastructure and developed a globally recognized water innovation ecosystem. We’ve piloted four Israeli technologies at WaterStart and since developed a strategic partnership to jointly fund more. As a small economy dependent on exports, the partnership has created a win-win.
These growing international relationships serve to further accelerate the pace of recruiting and deploying effective solutions. The creation of shared priorities lists enables companies and organizations to develop new global partnerships in which they engage large consumer and management agencies to share the solutions they have deployed and learn from those they have adopted. This summer WaterStart will begin piloting solutions on an international play field based on shared priorities. These partnerships allow for the further acceleration of technologies that can help many access more, safer, and cheaper water.
Nevada is making progress, but we still have a long way to go. After more than a decade of leak detection programs, the level of “unaccounted-for” water in both Las Vegas and Reno is less than 5 percent. Nationally, the average is estimated to be around 20 percent.
Water projects — from the Hoover Dam to Las Vegas’s new Third Intake — have long served local and regional communities by creating immediate employment opportunities to build infrastructure that in turn enables the development of whole industries such as agriculture and tourism. Technology offers these same economic opportunities: Allowing less water to go further; delivering safer water from more complex sources; and enabling communities to prosper by maintaining access to affordable water.
WaterStart has so far compiled a list of more 50 water innovation priorities, launched a global search for solutions that led more than 250 tech companies to apply to partner with us, and funded 20 pilot programs, leading to the expansion of 11 tech companies into the U.S. Our model relies heavily on relationship building and identifying internal champions within each stakeholder’s operation who guide and advocate for technology solutions. Such programs are successful because each partner has a feeling of ownership in improving their own processes.
Environmental Defense Fund works with businesses, government & communities to create lasting solutions to the most serious enviro problems. #FourthWave