Wednesday, February 1, 2012

Choose Your Own Solution, Find a Problem

Have you heard of the tragic water problem in the US?

No, no, not the one about using too much water or too much development in drought areas.

No, not the one about too many pharmaceuticals in our waste water skewing sex ratios in fish and amphibians downstream.

No, not the leaching of fracking chemicals, pesticides, or mercury into groundwater and streams.

Reported in the magazine, Environmental Finance, the problem is the "nation's crumbling infrastructure."
No single piece of US infrastructure is more in need of new commitment than its water systems. Built on platforms developed during the 19th and early 20th centuries, the country’s water infrastructure is aging, its technology outdated and its governance systems ill-equipped to handle rising demand and environmental challenges. No wonder the American Society of Civil Engineers gives the nation’s water systems a D-, the lowest grade of any of part of the nation’s crumbling infrastructure. 
Government is ill-equipped?!  That is quite the loaded statement and nicely preludes the following.    

The answer as proposed by the Johnson Foundation, American Rivers, and Ceres, an "investment theme."  You know, climate change, adaptation, green, affordable housing... themes, like a Mardi Gras dinner or poker night.

The article, written by Ceres, goes on to explain that
But as yet there has been very little attention from the investment community on how to tap into that theme in the US. 
In addition, the rate-paying public and locally elected officials must come to grips with the temporary nature of federal subsidies for infrastructure. Once these subsidies expire, ratepayers are left holding the bag for funding further maintenance, inspection and upkeep, which can be politically unpopular. 
We all love cheap, reliable water, but we don’t love paying for what it’s really worth. The fact is that we pay so little for it today that, in many places, the systems that deliver that water are failing. 
This is an interesting twist as what is described here is not an infrastructure problem but a problem of social and political culture that is resistant to a presented "solution."  Further, as the claim goes, we pay less for water than "what it is really worth" and THEREFORE the infrastructure system is "failing." That is, it is not failing because of age as initially suggested.

I have little doubt that the nation has numerous water problems.  But, I do doubt that a problem is the inability of investors to harness "US water" as a theme or the ineptitude of government.

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