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April 16, 2015

Water: Commerce, human welfare & the environment


Once thought to be infinitely available, water is increasingly seen as something corporations must take responsibility for preserving, not just because socially conscious green policies help polish corporate reputations, but because they help the bottom line.

Brett Crawford, Katz Graduate School of Business faculty member, convened an April 7 panel discussion at the University Club called, “The Business of River Conservation: Finding the Middle Ground for Commerce, Environment and Human Welfare,” in the hopes of discussing water’s worth beyond the extreme views of conservation or profits at any cost. The three panelists, all from environmental groups, demonstrated that the participation of businesses in changing man’s impact on water resources was not only necessary, but achievable.

The need is clear, they said. This month, California Gov. Jerry Brown called for a 25 percent reduction in the use of water in his state, due to depleted reservoirs and the snow packs that feed them. The problem in western Pennsylvania and surrounding Eastern states is not water quantity but rather quality. Here, sewers overflow into streams and rivers during heavy rains, and industrial byproducts spill into the waterways, as in a recent West Virginia accident.

According to panelist Laura Ziemer, senior counsel and water policy adviser to Trout Unlimited, “Good access to high quality water, not only for the present day but for the future, that’s where there’s a universality” between conservationists, businesses and government. She pointed out that New York City invested millions of dollars to clean and maintain its upstream watershed “because it was cheaper than building a plant to remove the pollutants” once they reached drinking water treatment facilities nearer Manhattan.

Christopher Williams, senior vice president of water conservation for American Rivers, said his group has partnered with businesses and municipalities to improve urban water quality and reduce flooding by installing green infrastructure, which helps percolate water into the ground in a wider area than traditional paving and sidewalks.


“For a long time, water was considered a free resource,” said Williams. “You could take your bucket out, scoop it up — it was always coming down the hill.” Rivers still provide two-thirds of drinking water in many cities and, nationally, 9 percent of our energy through hydroelectricity. “Rivers were the first roads and still today, pound for pound, rivers are the most economical way to transport goods,” he noted. Of course, river water also remains vital to agricultural irrigation and the manufacture of many goods, and is much prized for recreation.

But around the recent turn of the millennium, corporations began to make headlines for harming or using up local water supplies. Consequently, they started to look at their water footprint — how much water does a business actually use and where does it come from? CEOs began developing company policies for water use, “in ways that one, were constructive, and two, seemed to be constructive …,” Williams said, to avoid being subject to government regulation that might impose tougher standards on water consumption and disposal.

Coca-Cola — a company that has contributed to Williams’ and Ziemer’s group projects — now pays attention to the local water source for every one of its plants, Williams pointed out. “These companies are starting to make real investments, partnering with conservation groups, to conserve these natural systems, because it’s the right thing to do, and because it’s important to the bottom line. This is a very positive development [yet] a lot more needs to happen to engage these business communities in a way they need to be engaged. But it’s a very good start.”


“Why do we have rivers without water?” asked Ziemer, describing one successful river restoration project in Montana undertaken by her group and local ranchers.

In Montana, most of the water in Bear Creek, a tributary of the Sun River, had been diverted since 1900 by local farmers, thanks to their legal purchase of water rights. “So what did people do for the next 100 years?” she asked. “How do you overcome that legal business” of historical river allocation to agriculture?

Knowing her group, Trout Unlimited, needed to surmount the long-term antagonism between ranchers and conservationists and anglers, she enlisted the ranchers in talks over several years. Eventually, their meetings convinced the leader of the local irrigation district that not only did it make sense to replace his old, inefficient and leaky infrastructure, leaving water to restore the river, but the health of local waterways was good for everyone.

“You learn a lot about each other’s needs, and how to meet each other’s needs, and that in itself does a lot to create a middle ground,” she said.


Panelist Jeff Thompson, until recently the executive director of CalTrout, called the water crisis in his home state “one of the best things California could have hoped for. It will cause significant change” in what he termed the current senseless water usage.

While California agriculture is responsible for about 25 percent of the produce on our tables, and a significant percentage of the world’s almond supply, he noted, the industry uses 80 percent of California’s water but only contributes 2 percent to the state’s GDP.

The diversion of spring runoff to reservoirs has destroyed most of the state’s natural salmon habitat, Thompson said. “We’re now at the point where we have to drive fish around the state to maintain a commercial fishery,” from hatcheries to spots where the adult fish can thrive.

“California is going to have to make some very difficult decisions about how it is going to manage that resource,” he said. “You’ve got to hope that the crisis is going to change things.”

He also said the state seemed unwilling to regulate water use and wastewater disposal from local fracking, and was unable to regulate the underground economy of pot farming, which uses twice as much water as growing wine grapes and employs large amounts of herbicides and rodenticides, “creating havoc close to what the timber industry did 50 to 60 years ago.”


The business of water thus is overdue to change, the panelists said.

“There’s already pricing pressure starting to come online and I think you’ll see more of that,” said Williams, adding that “if you start pricing water to its scarcity value, you’ll start to marginalize a lot of people” who can’t afford to pay for this resource.

“It’s not as regulated as it could be,” said Thompson. But increasing the price of water to equal its true value will push people to make smarter decisions about conservation, he believes.

“There’s very little liquidity in the water market, pun intended,” Ziemer said. “It’s hard to transfer water from one use to another and from one place to another” — in fact, moving water from source to use is more energy intensive than most other industrial processes.

But places like Pittsburgh, with three rivers and lots of precipitation, may prove too tempting, and eventually cheap enough, as sources of the liquid gold in the future, just as we now pipe oil across the nation.

“There will definitely be people out West who will want to figure out how to get hold of some of the water you have out here,” said Thompson. “There’ll be people who want to take it out of here. It’s only a matter of time.”

—Marty Levine