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WQ Market Monthly

April 20, 2011

Water Photo

From the Editors

The last two months yielded a surge in news from those working on water-related ecosystem services with a few distinct themes showcasing the issues. Topping the list is the Green vs Grey Infrastructure question, which has taken center stage with more solid evidence that investing in natural infrastructure has real economic and financial payoffs, in addition to the core ecosystem services benefits. This is timely information given the budget woes here in the US and the tight budgets for all manner of government services across the globe.


The stories below yield real data, tools and examples where policy makers are choosing green infrastructure solutions to improve water quality or quantity outcomes. It has made us increasingly curious about the use of more traditional financial mechanisms available to fund green infrastructure (such as US EPA funded State Revolving Funds for wastewater and drinking water). Stay tuned for more in-depth coverage of what our investigation yields.


We congratulate our Biodiversity colleagues here at EM who last month re-launchedSpeciesBanking.com, expanding globally to include biodiversity compensation mechanisms around the world.


Lastly, we thank those dedicated readers who stepped up to help support us with their voluntary donations to W.E.T., and ask those who have not yet donated to contribute today. Your donation will not only help us keep the lights on but will enable us to continue providing the quality reporting on water markets that you have come to rely on hitting your inbox every other month. It’s as easy as aCLICK.


— The Ecosystem Marketplace Team

For questions or comments, please contact newsletter@ecosystemmarketplace.com


News

DOMESTIC MARKETS

US Forest Landowners Earn Private Sector Support via Ecosystem Service Markets

A new report issued by Ecosystem Marketplace and the US Forest Service shows that US landowners earn at least $1.9 billion per year from financing mechanisms that reward them for their stewardship.


Taking Stock: Payments for Forest Ecosystem Services in the United Statescompiles data on a wide range of PES mechanisms – from government conservation incentive programs, to voluntary markets, to compliance-driven ecosystem service markets such as wetland mitigation credits. More than 80% of all forest-based PES money in the US came from non-governmental sources, including payments for wetland mitigation, hunting leases, conservation easements, and carbon offsets. The remaining 20% came from government incentive programs such as the Conservation Reserve Program (CRP) or Environmental Quality Incentive Program (EQIP).


Learn more and download the report.


Putting Public Forestlands to Work in the South

The World Resources Institute has a new issue brief exploring how public forestlands can be revenue generators for state and local governments in the US South. Forests at Work: A New Model for Local Land Protection considers income streams from recreational services, timber production, and even payments for water quality, endangered species habitat preservation, and carbon sequestration, showing how a "working forests" management approach can give a boost to public conservation funding.


In one example, net financial benefits for dollar spent are compared for different management regimes for forestland in a suburban North Carolina county. Under a traditional land purchase-and-conservation scenario, the county gets back 86 cents for every $1.00 spent. Compare that to a managed "working forest" acquired through a conservation easement: in this scenario, for every $1.00 spent, the county receives $1.37 in revenues from ecosystem services.


Read the issue brief here.


California Looks Down Under for Water Use Solutions

At the brilliantly-named “Intelligent Use of Water Conference” last month, as farmers and water resource managers sat down to ponder California’s ever-growing water conundrum, Andrew Gregson of the Australian New South Wales Irrigators Council made his case for water rights markets. “It was the capacity to trade water that kept the permanent crops alive” during Australia’s twelve-year drought, he told his audience. But, as the New York Times Green blog points out, making California's water management regime look more like Australia's is no small task. While California has superior infrastructure for storing water supplies, Australia is literally a century ahead in terms of a rational system for water rights allocation, and has better frameworks for monitoring use and supplies as well.


Read the New York Times’ blog post here.


City of Modesto Hatches a Plan to Sell Treated Wastewater to Parched Farmers

Meanwhile in California, a new plan to sell purified wastewater to irrigate farmland near Modesto, California, is awaiting a go-ahead from federal regulators at the Bureau of Reclamation. Under the proposal, treated wastewater would be sold to irrigators instead of discharged. While it's not as cheap as water from the Sacramento-San Joaquin Delta, water district manager Bill Harrison says, it makes up for that in reliability. Delta water deliveries are often patchy due to drought conditions.


Get the story at Environmental Leader.


Water Infrastructure Funding Dries Up Along the US-Mexico Border

Between budget woes in Washington and a new GAO reportcharging that federal agencies’ handling of water and wastewater infrastructure projects has been “uncoordinated and fragmented,” prospects for more funding from the federal government are looking slim. EPA’s budget for water infrastructure projects near the US border has shrunk from $100 million in 2001 to $17 million in 2010. At a recent meeting between the White House Council on Environmental Quality Chairwoman Nancy Sutley and the Good Neighbor Environmental Board, which works on border-region environmental issues, Sutley was noncommittal when pressed by the board for continued funding for water projects.


Read more at E&E News.


San Antonio Saves the Aquifer by Saving the Ranchlands

A New York Times piece highlights San Antonio, Texas’ strategy to protect the water supplies in its aquifer – by protecting the land above it. But buying up land would be prohibitively expensive. Instead, San Antonio is paying for conservation easements on ranchland surrounding the city; landowners can continue ranching but agree to limit wells and increasing impervious cover that help aid groundwater recharge by reducing surface runoff. At the moment, more ranchers are interested in the program than the city's ability to buy easements, says Kristyl Smith, a consultant for the program. Nearly 97,000 acres have been placed under easement, at a cost of about $135 million in public funds.


Read more at the New York Times.


Ashland, Oregon Compares Effluent Cooling Technologies to Tree Planting; Trees are Winning

The city of Ashland, Oregon, required by the Oregon Department of Environmental Quality to limit warm treated effluent discharges into its river system, found that cooling equipment would cost ten to twelve million dollars over twenty years to install and operate. On the other hand, riparian restoration (in this case, planting shade trees) along eight miles of Ashland's Bear Creek would only cost $3.4 million over the same period. That made city officials’ ears perk up, and they’re now seriously considering it. "I think you had me initially at 'lower cost,'" says Councilor Greg Lemhouse. The strategy has already proven successful up in the Portland area, where more than half a million trees and shrubs have been planted along the Tualatin River to cool the water there.


Learn more from the Ashland Daily Tidings.


Chesapeake TMDL Opponents Cite Cost, Flexibility Concerns

As for our regular roundup on Chesapeake Bay news, recent lawsuits against the Environmental Protection Agency (EPA) in both the Bay and Florida are challenging EPA’s authority to require that states set and stick to quantitative pollution targets. These targets act as de facto caps on pollution and can help set the stage for water quality trading.


The good news is local leaders around the Chesapeake have backed away from lawsuit threats in favor of more dialogue with EPA. Municipalities are still worried about the costs of limiting polluted stormwater runoff and having enough flexibility in meeting their Total Maximum Daily Load targets. But a lawsuit is “off the table,” says Dwight Farmer, executive director of Virginia’s Hampton Roads Planning District Commission. A meeting with new EPA Bay czar Jeff Corbin and a number of environmental officials was “incredibly positive, and we just need to keep talking, keep working through these issues," said Farmer.


Congressional Republicans and the National Farm Bureau are still largely unhappy with the TMDL;a recent Ag subcommittee hearing turned into an all-out airing of grievances.


POLICY UPDATES

GE Makes the Case for Incentives for Water Reuse and Recycling

General Electric has released a white paper arguing for stronger incentives for urban and industrial users to reuse and recycle water. The paper, presented at the GE water summit "From Used to Useful" in Saudi Arabia on April 5th and 6th, outlines a number of major barriers. It also considers a range of policy options including water pricing and discharge fees, water quality and quantity trading, tax and grant incentives, and public-private partnerships.


Learn more at Sustainable Plant and download a copy of the paper.


GREEN INFRASTRUCTURE ROUNDUP

World Water Day 2011 Takes on the Urban Water Challenge


Green infrastructure was a popular theme on World Water Day on March 22nd, which took urban water challenges as its theme this year. An article in the Proceedings of the National Academy of Sciences (PNAS) journal recently reported that 1 billion urban residents will face perennial water shortages by 2050.


Download the PNAS paper here.


A new UN Environment Program report Green Hills, Blue Cities pointed to green infrastructure as the key to water security’s keeping pace with population growth in African cities. Likewise, Dow Chemical’s VP for sustainability Dr. Neil Hawkins referenced an ecosystems approach for the private sector in helping to ensure a sustainable water supply in cities around the world..


US Cities Facing a Flood of Water Challenges are Looking to Swap Grey for Green


The Clean Water America Alliance has announced the winners of its 2011 US Water Prize, and as WaterWorld notes, many of the winners share a commitment to an integrated approach that links land use, industry, and water quality. This means looking beyond traditional water resources management. Los Angeles, for example, is investing in water recycling and green infrastructure like bioswales and wetlands to capture and filter polluted stormwater runoff. And New York City has tackled water quality issues at the source, investing in land conservation and agricultural best management practices in its upper watershed, and is installing urban green infrastructure as well.


Learn more at WaterWorld.


It’s Back to Nature in New York City


New York City has also just launched a new plan to revitalize the city's waterfront that focuses on maximizing the benefits of healthy natural systems. The strategy includes core goals of improving water quality in the city’s waterways, restoring degraded waterfront areas, and protecting existing natural ecosystems through ongoing conservation acquisitions of wetlands and upper watershed habitats. The waterfront plan builds on the NYC Green Infrastructure Plan, released last September, which found that a mix of grey and green infrastructure ($2.9 and $2.4 billion respectively) for stormwater management was much more cost-effective than traditional grey infrastructure alone, which would have cost the city $6.8 billion.


Money Grows on These Trees


The World Resources Institute also recently compared green and grey infrastructure, and found that cities can often get more bang for their buck investing in forests instead of human-engineered solutions like treatment plants. Nitrogen pollution in the Chesapeake Bay, for example, can be tackled through wastewater treatment plant upgrades (an estimated $8.56/lb nitrogen), or through planting and restoring forest buffers ($3.10/lb).


Learn more here.


On City Rooftops, A Growing Trend


Green roof installations were up 29 percent in 2010, according to a Green Roofs for Healthy Cities survey. Green roofs can help control polluted runoff by absorbing rainwater, not to mention helping to cool the air and provide green space in the urban setting. Chicago and Washington DC are leading the pack.

Meet Your New Neighbors: Porous Sidewalks and Water-Filtering Plants


And finally, here’s a great video from Sustainable Communities and Smart Growth, a Washington DC group, offering a neighborhood tour of how green infrastructure investments can control runoff and protect water quality.


GLOBAL MARKETS

New Guide to Corporate Ecosystem Valuation Launched

The World Business Council for Sustainable Development has released its new Guide to Corporate Ecosystem Valuation (CEV). The guide, the first major attempt to package approaches to ecosystem valuation specifically for business, offers private sector actors a framework for understanding how – and how much – their businesses depend on ecosystem services. The report's goal is to clarify ways in which CEV can aid in corporate decision-making and inform existing analytical approaches like internal accounting, risk assessments, or share price valuation.


Learn more and download a copy of the guide.


New Tools to Help Companies Evaluate their Water Footprints

The Water Footprint Network has released its new Water Footprint Assessment Manual. The manual represents the most complete resource to date on footprint calculation methodologies, whether for a single product or an entire river basin. It also includes resources to help decision-makers reduce their water footprints.


Download a copy of the manual here.


Meanwhile, Quantis is putting together the first-ever comprehensive database of water footprints. The database will cover a range of manufacturing sectors, processes, and regions. Danone’s water division’s head of environment Jean-Christophe Bligny expects the project to help “identify ways in which environmental impacts can be reduced, instigate policies safeguarding water resources and improve water footprints throughout our products' life cycles."


Read more at PR Newswire.


New Resource in the Works to Help Companies Evaluate Local Water Risk

The Global Environmental Management Initiative (GEMI) is partnering with the World Business Council for Sustainable Development (WBCSD) to develop a tool that will help businesses understand their local water risks and opportunities to mitigate those risks. The Local Water Tool is a complement to WBCSD's Global Water Tool, which focuses on risk assessment at a larger scale. “Companies can utilize the WBCSD Global Water Tool to identify and prioritize risks in their portfolios," explains Bill Lechner, vice president of global environment health and safety and security at the Scotts Miracle-Gro Company and co-chair of the Local Water Tool project. "Companies can then employ the GEMI Local Water Tool to further evaluate the high risk locations and plan actions to manage the risks.” The tool is expected to be launched in early 2012.


Learn more atEnvironmental Leader.


Standard and Poor's to Revise Credit Ratings to Include Climate Risk

Standard and Poor's plans to begin including climate risk considerations in its corporate credit ratings. In an interview with Environmental Finance, S&P's global head of carbon markets Michael Wilkins said that the decision was motivated by increasingly tough climate change policy. S&P will begin screening companies for climate risk by mid-year. Its exact methodologies are still being worked out; whether water-related risks will be considered as ‘climate risk’ may in turn depend on policy signals.


Get the story atEnvironmental Finance(free registration required).


Puma Pioneers Environmental Profit and Loss Statement to Account for Ecosystem Impacts

Puma, a maker of fitness apparel, plans to include an 'Environmental Profit and Loss' statement in its reporting. The new accounting method was developed with support from Trucost and PricewaterhouseCoopers, and will allow Puma to see what kind of economic impacts its operations have on ecosystems, and to better integrate environmental considerations into its accounting system.


Learn more at Environmental Leader.


Bulgaria Seeks to Take the Lead in Europe on Aqua-Environmental Payments

At a national conference in late February organized by the World Wide Fund for nature (WWF) and the Bulgarian State Fisheries Agency, attendees considered how best to implement a payments for ecosystem services (PES) system to protect the country's aquatic ecosystems. A compensation mechanism to the fisheries sector, in exchange for sustainable fishing practices that would protect water and habitat resources, would benefit Bulgaria in multiple ways, says Irene Lucius, Head of Policy at the WWF Danube-Carpathian Program. It would “move away from stimulating growth in production only, but instead promote the whole array of ecosystem services that provide sustainable income for rural entrepreneurs and communities.” And it would make Bulgaria a frontrunner in the use of PES: “There is a real chance for Bulgaria to leapfrog many EU countries," said Lucius.


Learn more at WWF.


Jakarta Debates a PWS Program to Protect Its Water Source

The World Wide Fund for nature (WWF)-Indonesia is pushing for an 'environmental service fee' on water users to fund restoration in the catchment upstream of Jakarta, in order to address water supply shortages in the city. Siltation from upstream land-use changes and waste dumping in waterways has clogged the Jatiluhur dam, which supplies Jakarta with most of its water, repeatedly. WWF-Indonesia argues that payments for watershed protection have worked in other parts of the country like Lombok. The idea isn’t without its critics as the city water operator PAM Jaya's President Director Mauritz Napitupulu thinks Jakarta's water woes are too complicated and upstream degradation too inevitable for an environmental service fee to work.


The Jakarta Globe reports.


New Plan to Safeguard Watershed Services in Northern Kenya Announced

The European Commission, the United Nations Environment Program, and the Government of Kenya have announced a new partnership to restore the Mau Forest Complex of northern Kenya in order to protect the watershed services created by its Yala and Nyando rivers. The Mau forest is estimated to generate around $1.5 billion worth of services to the Kenyan economy, including drinking water supplies, hydropower, tourism, and agriculture.


Read the press release here.


Farmers and National Power Corporation Sign Watershed Payment Deal in the Philippines

The National Power Corporation and farmers in the Lanao provinces have signed a Memorandum of Agreement for a watershed payment mechanism. Payments, administered through the NPC’s Watershed Management Division-Mindanao Generation, will compensate farmers for reforestation, agroforestry, and forest maintenance activities in the Lake Lanao watershed, to improve flow regulation and decrease sedimentation downstream.


Read more from the Philippine News Agency.


CITATION CORNER - THE LATEST JOURNAL ARTICLES

Benefits of Investing in Water and Sanitation

Author: Organization for Economic Cooperation and Development (OECD)

This paper examines benefit-to-cost ratios for the provision of water supply, sanitation and wastewater services in developing countries, in terms of benefits to public health, the economy and the environment, finding ratios as high as seven-to-one in some cases. It also explores reasons that the benefits of water services are often overlooked by policy-makers.


Read the abstract and download the paper here.


National Water Resources Challenges Facing the U.S. Army Corps of Engineers

Authors: Committee on U.S. Army Corps of Engineers Water Resources Science, Engineering, and Planning; National Research Council


The U.S. Army Corps of Engineers (Corps) is responsible for construction, operations, and maintenance of much of the nation's water resources infrastructure. This paper surveys the key water resources challenges facing the Corps, the limits of what might be expected today from the Corps, and future prospects for the agency.


Read the paper here.


SCIENCE AND TECHNOLOGY

Visualizing Your Water Footprint

The winners of the Urban Water Design Challenge, sponsored by Circle of Blue and Visualizing.org, were Harvard Grad School of Design students Joseph Bergen and Nicki Huang. Their submission allows viewers to scroll over a world map to compare indicators like urban population, water supply, water usage, and 'virtual water' embedded in different goods used.


Check out the winning graphic at Circle of Blue, calculate your own water footprint at Visualizing.org, and check out another neat infographic by Visualizing.org that compares countries’ footprints with their biocapacity (e.g. use of renewable resources).


EPA Mapping Tool Tracks Clean Water Act Violations across the US

EPA has updated a tool that allows users to map Clean Water Act (CWA) violation trends and state actions to enforce the CWA. “The release of this tool removes traditional barriers that have limited access to Clean Water Act information and helps improve public awareness of the important work that remains in protecting our nation’s waters,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance.


Read the press release and try out the mapping tool.



EVENTS

Upcoming Events

National Mitigation and Ecosystem Banking Conference

April 26-29, 2011

Baltimore, Maryland

http://www.mitigationbankingconference.com/


The Oregon Water Conference 2011: Evaluating and Managing Water Resources in a Climate of Uncertainty

May 24-25, 2011

Corvallis, OR

http://www.towc2011.org/


2011 American Water Resources Association Summer Specialty Conference

Integrated Water Resource Management: The Emperor’s New Clothes or Indispensable Process?

June 27-29, 2011

Snowbird, Utah

http://www.awra.org/meetings/Summer2011/


4th Annual Ecosystem Markets Conference (sponsored by the American Forest Foundation and the World Resources Institute)

June 28 - July 1, 2011

Madison, Wisconsin

http://ecomarketconference.com/


World Water Week: Responding to Global Changes - Water in an Urbanising World

August 21-27, 2011

Stockholm, Sweden

http://www.worldwaterweek.org


8th International Conference on Urban Watershed Management

September 6-8, 2011

Beijing, China

http://iwlearn.net/events/the-8th-international-conference-on-urban-watershed-management


14th Annual International River Symposium

September 26-29, 2011

Brisbane, Australia

http://www.riversymposium.com/





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