Lacking the needed environmental intelligence – will we build $26 Trillion of pipes to nowhere?

“When the well’s dry, we know the worth of water.” – Benjamin Franklin (1706-1790), Poor Richard’s Almanac, 1746

California’s Lake Cachuma, at only 7% of capacity.

The November 5, 2016 print edition of The Economist included Liquidity Crisis, an article on water scarcity, making three crisp points: As water becomes ever more scant the world needs to conserve it, use it more efficiently and establish clear rights over who owns the stuff.

The article merits a complete read, but starts out in this vein:

Where water is available, when and in what condition matters hugely. About 97% of the water on earth is salty; the rest is replenished through seasonal rainfall or is stored in underground wells known as aquifers. Humans, who once settled where water was plentiful, are now inclined to shift around to places that are less well endowed, pulled by other economic forces.

Climate change is making some parts of the planet much drier and others far wetter. As people get richer, they use more water. They also “consume” more of it, which means using it in such a way that it is not quickly returned to the source from which it was extracted. (For example, if it is lost through evaporation or turned into a tomato.) The big drivers of this are the world’s increased desire for grain, meat, manufactured goods and electricity. Crops, cows, power stations and factories all need lots of water.

To make matters worse, few places price water properly. Usually, it is artificially cheap, because politicians are scared to charge much for something essential that falls from the sky. This means that consumers have little incentive to conserve it and investors have little incentive to build pipes and other infrastructure to bring it to where it is needed most. In South Africa, for example, households get some water free. In Sri Lanka they pay initially a nominal 4 cents for a cubic metre. By contrast, in Adelaide in Australia, which takes water conservation seriously, an initial batch costs $1.75 per cubic metre. Globally, spending on water infrastructure faces a huge funding shortfall. A hole of $26trn will open up between 2010 and 2030, estimates the World Economic Forum, a think-tank.

from The Economist article

It is typical of The Economist that every word matters. And the article goes on – worth the read. But this last figure – that the world needs to play catch-up in water infrastructure to the tune of $26T before the year 2030 – ought to bring us up short.

Three points come immediately to mind. First, compare with the more familiar (at least here in the United States) and much smaller dollar figure that comes to us from the American Society of Civil Engineers Infrastructure Report Card: America needs $3.6T investment in infrastructure (of all kinds[1]) between now and 2020. Second, large though it is, $26T compares with $80-100T global yearly GDP which works out to, say, $1300T between now and 2030. The needed water infrastructure makes claim on 2% of that total. For water – the foundation of all life itself? In reality, $26T may be a small price to pay – entirely manageable.

That brings us to the third point. $26T is manageable – but by no means negligible. It’s important to make the investment wisely. We can’t fly blind as we build these assets. We can’t afford to build pipes to nowhere – to where there is no water to be had, or to where there is no compelling necessity for its use.

We need environmental intelligence.

How capable is that environmental intelligence now?

To oversimplify: it turns out after centuries of scientific advance made in parallel with the rest of human progress, we generally know how much water we have worldwide. We know how much is stored in the oceans. We know how much is stored in lakes, rivers, and stream, in ice, in the atmosphere, and even underground. We know when and where we use that water – how much we all drink, what we use for agriculture, for energy, for transportation, and so on. We have good estimates on the quality of that water – which water is contaminated, and in what ways. We have a good bead on present-day mismatch between water supply and demand worldwide. And finally, we know something about how all these pieces of the puzzle are trending[2]…

…at the moment.

But because so much of water infrastructure investment is long-term, to invest wisely requires a predictive understanding of how water supply and water use are trending over the next several decades, out to mid-century and beyond. Again, to oversimplify: we lack such predictive capability, at least to the requisite specificity (and minimal uncertainty).

Countries worldwide, including the United States, are racing to develop that intelligence. A few domestic examples – out of many: NOAA, USGS, and the US Army Corps of Engineers have joined forces with academia to establish a National Water Center, and develop a National Water Model. Agencies and research groups worldwide are scrambling to advance climate modeling and outlooks to the point where they can provide quantitative estimates of future global water storage and supply. New satellite technologies are improving our estimates of water storage and trends in underground aquifers (GRACE) and in ice (ICESat-2).

That’s the supply side of the equation. To foresee demand requires we understand where population increase, economic growth, and technology advance are taking us. We also need enough social science to connect these trends to individual and group behavior: how will peoples and nations respond to water scarcity? Where will they move? Will they see anticipate what’s coming, and respond in good order? Or will they be blindsided and respond in crisis? Will refugee populations bloom?

The reality? At the current pace of geoscience, social science, and engineering with respect to these matters, we’re likely to gain the intelligence we require only in time to look at the return on our water infrastructure investments through the rear-view mirror – and realize belatedly at, say, mid-century, what we should have done differently between now and then.

Minimal value in that[3].

But we’re tantalizingly close to learning what we need to know in time to make a real difference; to see what’s coming. Worldwide, something like $20B/year is being invested in the Earth observations, science, and services, to provide environmental intelligence with respect to water. Suppose we were to double that, to take $20B a year – a mere 1% of the $2T/year water infrastructure bill we’re told is coming due – to make a corresponding investment in environmental intelligence infrastructure.

Our ROI[4] on the $2T/year would dramatically improve. And the public would not just tolerate but actively support the needed work.

Seems worth a try.

In closing, note that the challenge goes beyond environmental intelligence to include policy. For us here in the United States, think of policy (again, with great oversimplification) as entering in three ways. First, as The Economist article points out, it’s vital to price water appropriately in order to sift through the value propositions represented by all the options. This means keeping the price of water low for basic human consumption – protecting the public good and especially the needs of the poor. But it also means pricing the use of water for energy and agricultural production fully – eliminating subsidies – to better guide choices about when and where to produce what foodstuffs, compare renewable versus non-renewable energy options, investments in electrical grids, etc. Second, as the post-election U.S. ponders options for funding infrastructure investments and putting people to work it is important we find the right balance between public and private funding of that infrastructure. And finally, it requires that we innovate – that we view our country as a development laboratory where we can explore investment options and strategies with an eye toward how we might develop expertise, products and services, and market these internationally – a chance to do well while doing good.

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[1] Including, but not limited to: energy, roads and bridges, ports, waste management, levees, drinking water, transit, rail, aviation, and more. Note that much of this ASCE figure is itself for water infrastructure.

[2] That’s how those folks at The Economist can write their article now.

[3] Living on the Real World: How Thinking and Acting Like Meteorologists Will Help Save the Planet, (AMS 2014) covers this in Chapter 5.2 The Value of Knowing (pp 70-75).

[4] Return on investment.