Investor Report Scrutinizes Water Supply Reliability

The investor site 24/7 Wall St. has posted this article, with a list of the American cities that they believe face the most significant long-term water supply uncertainty.  Or as they put it, “The Ten Biggest American Cities that are Running out of Water.”  The report is based in part on NRDC’s report “Evaluating Sustainability of Projected Water Demands under Future Climate Change Scenarios” and on a new Ceres report that I wrote about here. 

There are several interesting aspects of this analysis. 

First, like the Ceres report, it discusses water issues in economic terms.  Their conclusions show how important water issues are from an economic perspective. 

A number of industries rely on regular access to water. Some people would be out of work if these industries had poor prospects for continued operation. The other important trouble that very low water supplies creates is that cities have sold bonds based on their needs for infrastructure to move, clean, and supply water. Credit ratings agencies may not have taken drought issues into account at the level that they should. Extreme disruptions of the water supply of any city would have severe financial consequences.

The ten cities on this list are the ones with the most acute exposure to problems which could cause large imbalances of water supply and demand. There are a number of metropolitan areas which could face similar problems but their risks are not quite as high. The water problem for US cities is, although it may not be evident, one of the largest issues that faces urban areas over the next ten years.

Second, the cities on this list are not confined to the dry West.  Atlanta and Orlando are in the relatively rainy South.  In the past, the water community spoke of “Western water issues,” reflecting a belief that concerns regarding water supply were confined to the dry region west of the hundredth meridian.  Increasingly, today, this is no longer true.  The water supply concerns long associated with California and the Southwest have gone national – and international. 

Third, Los Angeles is the first city on the list.  Southern California has hit “peak water” on its three major sources of imported water – the Los Angeles Aqueduct (which taps into the Mono Lake Basin and the Owens River), the Colorado River Aqueduct and the State Water Project (which imports water from the San Francisco Bay-Delta).  All of these sources also face likely impacts from the drying impacts of climate change.  With a significant number of creative water managers, Southern California is one of the nation’s most fertile regions for innovation.   (Southern California is also where NRDC’s national water efficiency program is based.)  

The City of Los Angeles is well aware of the water supply risks the city faces.  Here’s the city’s water supply plan.  That plan proposes to reduce their reliance on imported water by investing in more reliable sources – conservation, groundwater management, wastewater recycling and capturing urban stormwater.  Those sources are not just environmentally preferable.  As this report highlights, they also make hard-nosed business sense.