Aging water infrastructure will cost U.S. businesses $147 billion over the next decade, says a new report from the American Society of Civil Engineers.
America’s water and wastewater infrastructure systems are aging and overburdened, with many of them built around the turn of the previous century. Unless new investments are made, unreliable and insufficient water infrastructure will cost the average American household $900 a year in higher water rates and lower wages by 2020. American businesses can expect an additional $147 billion in increased costs, and the economy will lose 700,000 jobs by 2020.
The report, “Failure to Act: The Economic Impact of Current Investment Trends in Water and Wastewater Treatment Infrastructure,” shows that a modest investment in drinking water, wastewater and wet weather management can prevent these economic losses. The analysis showed that by 2020, the gap between what is being spent on water infrastructure and what is needed to meet the nation’s basic needs will reach $84 billion.
The report was completed by the Economic Development Research Group (EDR) along with Downstream Strategies and is the first study of its kind to link the condition of America’s water infrastructure to economic performance.
“We’ve all seen the impact aging water and wastewater infrastructure has on our daily lives. From broken water mains to ‘boil water’ alerts, failing to invest in this vital part of our country’s infrastructure has clear economic consequences,” said EDR’s Steven Landau, the lead author of the report. “The longer we wait to make needed repairs and upgrades, the more acute these problems become and the higher the costs to American families and businesses.”
Annual capital investment in water infrastructure is approximately $36.4 billion. In order to meet the needs of the growing American population for clean, available water, the annual investment must increase to $91 billion, the report claims. An additional $9.4 billion per year between now and 2020 would avoid $21 billion per year in costs to households and businesses.
“Clean water is fundamental to our economy and our health. We depend on water infrastructure, but our drinking water and wastewater systems are aging,” said Andrew Herrmann, ASCE president. “Some of our water systems are 100 years old and in desperate need of replacement. When those systems fail, they disrupt businesses and families and cost all of us more in the end. The need is clearly there.”
The report identifies three sectors of the economy that will bear the brunt of the impact. Retail, restaurants and bars, and construction businesses face the greatest job losses as a result of aging water infrastructure, driven by a combination of less disposable income, increased water costs and the higher costs of water-based goods.
Other solutions can help minimize these impacts. If households and businesses adopt sustainability practices such as improved efficiency through process or equipment changes, water reclamation or green infrastructure to address wet weather management, the economic impact could be lessened. The report’s projections assume needs and available funding based on current trends and do not adjust for possible costs associated with climate change, changes in regulations or other factors.