(The original publisher is Public Policy Institute of California March 25, 2024)
Does the public sector need help from the private sector to address the freshwater crisis? This is the controversial new book by Stanford Law and Environmental and Social Sciences Professor Burton “Buzz” Thompson It's a paper. Liquid assets: How businesses and governments can work together to solve the freshwater crisis. (Buzz is also a member of the PPIC Water Policy Center's research network.) We sat down with him to find out more.
How is the private sector currently involved with water?
The private sector is already involved with water in a variety of ways, some more controversial than others. Private water supply and water marketing are the most controversial because they influence how water is distributed, that is, who gets it and who doesn't. But the private sector is also offering new technologies to reduce the cost of critical processes such as recycling and desalination. And many private companies, the largest consumers of water, have adopted corporate water management programs to reduce water usage.
We think of the Sustainable Groundwater Management Act (SGMA) as a public program, and it is. Parliament passes laws and public authorities implement them. But if you look closely, you'll see personal handprints all over SGMA's success. The private sector has been instrumental in passing the SGMA, implementing it, and addressing its impacts.
Charitable foundations helped lay the groundwork that led to the passage of the SGMA, funding the development of new data and modeling tools. Private consultants provided the scientific and technical knowledge necessary for implementation. Nonprofit organizations such as the Environmental Defense Fund (EDF) and the Nature Conservancy Fund help monitor whether SGMA implementation complies with the law. We have also helped develop programs to help transition some farms to other land uses, including local groundwater markets and multipurpose land reuse programs.
Why did you decide to write about this topic now?
I have worked in the water industry for about 40 years. It is clear that the water crisis is growing and multifaceted, including climate change, aging infrastructure, and over-consumption of groundwater. The public sector, full of dedicated and intelligent officials, is struggling to meet all these challenges. The more I looked at the public sector, the more I realized that we needed help from the private sector.
For example, cities want to do more water recycling, but in many cities they would have to lay new pipes or dig roads, and people wouldn't like that. San Francisco's Epic Cleantec has developed a modular device that recycles water on-site so that roads don't have to be excavated. Many small water utilities, often serving low-income areas, struggle to finance new infrastructure. Nonprofits like Water Finance Exchange and Moonshot Missions are trying to provide financing to small water suppliers.
If the public sector is struggling, private organizations can try to help. But the public sector must be willing to lend a hand, and the private sector must recognize that it cannot contribute without the public sector.
What are some of the changes you are advocating for and why?
New technologies are needed to solve current challenges, and the United States is facing a technology shortage. We are not getting new technology out there and adopting it fast enough.
Places like Singapore are making great progress on issues such as desalination and recycling by working with the private sector. Singapore funds innovation and allows companies to use public infrastructure to test new technologies. These technologies have become an export industry, adding $2 billion to Singapore's economy and employing 14,000 people. Governments should develop regulations that encourage the development of new technologies and work with private companies to test and adopt them.
But governments also need to ensure that private companies do not negatively impact the public interest in water. The petroleum industry generates huge amounts of produced water. For example, the Permian Basin produces about 4 barrels of water for every barrel of oil. Companies recycle that water for reuse, but the government's role is to ensure that the reuse is safe, as the state of California used produced water in agriculture in Kern County. It is an important role of government to monitor the private sector to protect the public interest.
What is holding back engagement between the public and private sectors?
The public sector is conservative by nature and should be conservative when it comes to fresh water. It's tough when your iPhone breaks down. If the system that supplies San Francisco with water fails, it could become a public health crisis. But in many cases it is too conservative. Government agencies do not have the same incentive to adopt new and creative ideas as the private sector.
The public sector is also highly fragmented. Many small utilities do not have the funds to replace their current infrastructure and often do not have research and development programs that typically work with the private sector. They cannot invest in new technology. This makes it difficult to take advantage of what the private sector can offer.
The energy sector operates very differently, with the majority of private companies developing new technologies and deploying them with public support. From 2001 to 2014, the U.S. government provided approximately $8 billion in funding for the development of new energy technologies. In the water sector, it was $28 million. If you want to know how to solve water problems, you can look at what the energy sector has been doing.
What gives you hope?
I taught a class on “The Business of Water” at Stanford University for seven years and brought in dozens of companies working on water. Their enthusiasm, dedication and creativity give me confidence that we can work with the public sector to help solve major water challenges.
