The Ultimate Big Fish
By Elizabeth Cutright
For water utilities balancing ever-increasing demand with diminishing supply, the large-scale water user can be the ultimate big fish. In fact, what many water purveyors are discovering is that working with industrial and large-scale commercial consumers to aid in the establishment of smart corporate water resource management can benefit the entire community.
In the corporate world, “water risk” is the new catchphrase. Because the global economy relies upon water resources for manufacturing, energy generation, fuel processing, and product transportation, any disruption of the water cycle translates into real costs for the private sector. And because the water cycle does not recognize borders, efforts to control and optimize corporate water resource management have expanded on an international scale.
“Water is a critical issue,” Gavin Power, Deputy Director of the UN Global Compact, recently told Bloomberg Businessweek. “Most companies are doing nothing about it. This is a market failure.”
But plenty of businesses are starting to take water efficiency seriously. As part of the UN’s Global Compact for improved water resource management practices, 45 companies–responsible for manufacturing everything from jeans to soft drinks–have signed on to work more actively with governments and public authorities in “responsible and transparent ways to help solve the global water crisis.” According to UN statements regarding the compact, because of the fundamental role water plays in agriculture and industry, it’s imperative that the world’s leading manufacturers commit to advanced corporate water management.
The Chinese government is also ramping up water efficiency efforts. Earlier this year, the government of China announced the introduction of a new progressive pricing scheme aimed at encouraging water efficiency and reuse. While rural residents–in particular, farmers who depend on water for their livelihoods–will receive price discounts (as long as usage falls within set quotas), water-intensive industries will be subject to the higher rates as their use increases beyond set benchmarks. The new pricing set points are part of a larger plan developed by the National Development and Reform Commission to limit China’s water use to 635 billion cubic meters per year, while also reducing the nation’s water consumption (per unit of industrial output) to 30% by 2015.
In a similar vein, Australia recently announced the passage of the Water Efficiency Labeling and Standards Amendment (Scheme Enhancements) Bill 2012. Known as the WELS scheme, the water efficiency labeling program awards a rating of zero to six stars on a variety of consumer products–including washing machines, dishwashers, and toilets–in order to influence customer purchases. Similar to EPA’s Energy Star program, the WELS scheme also sets minimum water efficiency standards for toilets and washing machines.
Meanwhile back in the US, a new bill introduced in the Senate aims to incentivize water efficiency. The Expanding Industrial Energy and Water Efficiency Incentives Act (introduced by US Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, D-NM), awards incentives to industrial and manufacturing facilities employing a wide variety of energy-efficient and water efficient standards and equipment. The hope is that the bill will exponentially reduce industrial water consumption while also increasing energy efficiency.
When sources have been tapped out and demand keeps rising, one of the oldest tricks in the book is matching price to usage. This can work in one of two ways–through incentives or penalization. Whether it’s public water utilities, stakeholder organizations, or private interests, managing resources means managing costs. As such, efficiency-related programs and projects are often sought and implemented by companies and private interests with a stake in reducing the bottom line and staying out of the red.
We all know we don’t pay enough for water. And although rate structures designed to penalize big water users (and wasters) can be effective, there will always be those customers who’s pockets are big enough to absorb any price tag. And while billing penalties and tiered rate structures can work as valuable deterrents against water waste, by the time the bill is in the mail, the water’s already been wasted.
In the end, water efficiency makes the most sense in anticipation of future shortages and conveyance challenges. Which is why it’s important for water utilities, stakeholder organizations, and private commercial and industrial interests to work together to preemptively manage our scarce water resources.
Author’s Bio: Elizabeth Cutright is a previous editor of Water Efficiency magazine.