America’s water management systems are on the brink of failing. In 2021 the American Society of Civil Engineering gave the country’s 16,000 wastewater treatment plants a D+ grade. Our drinking water did slightly better, with a C- grade.[i]
The US is drowning in wastewater while running dry on clean drinking water, we need to invest in better. Without immediate and sweeping public and private investment in innovative and scalable solutions, we risk pushing our systems beyond their stress limits and into collapse.
By investing in companies that are well-positioned to bring solutions alongside fundamentally sound financial growth, we can reduce these risks, strengthen portfolios, and improve economic outcomes for affected communities.
The State of Water and Sanitation in the US
The clean water and sanitation infrastructure in the US is old, weak, and underfunded. The resulting failures of these systems disproportionately impact communities of color. So, not only is our water mismanagement an environmental risk, but it’s also a social one.
We are one of the wealthiest countries in the world, and we must stop failing our population.
Clean Water
Water main breaks are increasing in frequency. Between 2012 and 2018, the rate of breaks surged by 27%.[ii] As a result, drinking water systems lose six billion gallons of treated water daily. These are considered ‘non-revenue water loss,’ which amounted to a total loss of $7.6 billion in 2019.[iii]
Disproportionate Impact
Urban communities of color bear the brunt of the clean water issues faced in the US, significantly increasing health and economic costs in these areas.
Majority-Black cities like Jackson, Mississippi, Flint, Michigan, Benton Harbor, Michigan, and West Baltimore, Maryland, suffer the consequences of our under-investment in clean water.
In September of last year, Jackson, Mississippi, was hit by historic flooding, which overwhelmed the weakened water treatment plans. Not only were parts of the city without safe drinking water for weeks, but five months later, more than half of the city’s schools didn’t have running water because extreme cold had re-damaged the system. [iv]
The old pipes of Flint and Benton Harbor leached toxic levels of lead into the water supply. Almost 100,000 Flint residents were exposed to lead in the roughly two years it was flowing through the pipes, many of whom consumed dangerous levels.[v] Further, the related outbreaks of Legionnaire disease killed 12 people.[vi]
In 2022 in West Baltimore, more than 1,500 homes were told to boil or avoid using their water because of detected E. Coli bacteria.[vii] The source was ultimately found to be outdated water treatment infrastructure.[viii]
Complicated by COVID
A lesser-known impact of the COVID pandemic is how fewer events and increased operational costs affected our water systems. The National Association of Clean Water Agencies estimated a $16.8 billion impact on wastewater utilities.[ix]
At the same time, the American Water Works Association and the Association of Metropolitan Water Agencies estimate a total financial loss of $13.9 billion (~17%) by 2021.[x]
The full scope of COVID’s economic impact is unknown. Still, at a time when under-investment is rampant and aging infrastructure is increasingly failing, water agencies cannot afford this revenue loss.
Sanitation and Wastewater
While urban centers struggle with clean drinking water, sanitation challenges hit hardest in rural areas. People across the US in hard-to-reach, overlooked, and underfunded communities lack access to healthy sanitation services and suffer ill-health effects, critically undermining their ability to thrive.
In the US, over two million people live without indoor plumbing, which creates deleterious living conditions.[xi] This overwhelmingly rural challenge often hits hardest in historically under-served non-white areas. For instance, Native Americans are 19 times more likely than white households to lack indoor plumbing.[xii]
Additionally, in Lowndes County, Alabama, where 72% of the citizens identify as Black or African American, more than a third of collected samples tested positive for hookworms. [xiii] Hookworms are intestinal parasites associated with poor sanitation in developing countries, causing iron deficiency, impaired cognitive development, and stunting in children.
Compounded by Our Climate Crises
In areas where sewer systems are functional, some are combined with stormwater drains, which are increasingly problematic. These systems were designed using now-outdated population estimates and for pre-climate change weather patterns.
With increasingly frequent and intense storms, these combined systems are over-stressed, resulting in wastewater overflows into rivers and lakes. As of 2020, these overflows cost the US over $32 billion in compliance across 60 municipalities.[xiv]
We need systems that meet current (and future) population measures and have more robust storm management mechanisms.
Pay Now, Or Pay a Lot Later
The US heavily invested in our water systems just after World War Two and again in 1972, after we passed the Clean Water Act. By 2040 most of those pipes will need upgrading or replacing, and many are already failing due to under-funding.
In 2019, the US spent $48 billion on water investment at the local, state, and federal levels, which was $81 billion shy of the total need ($129 billion).[xv]
While water investment demands grow, the Federal government is steadily reducing the proportional amount it spends in the sector, risking future economic losses in preventable diseases, lost productivity, and environmental pollution.[xvi]
Opportunities for Investment
Our water sector desperately needs solutions. With incredible technological advances, companies are rising to the challenge, presenting exciting and scalable opportunities.
More sophisticated sensors designed to detect and help utilities manage leaks can prevent non-revenue water loss. New systems to detect flow rates can help municipalities anticipate overflows and take steps to prevent and divert waste from contaminating our natural resources.
Advances in micro-biology are being deployed in wastewater plants to create new purification methods on industrial scales, increasing access to and delivery of safe drinking water.
Our water system isn’t beyond help. The challenges we’re facing result from underfunding and mismanagement, but with innovative technologies, dedicated resources, and public-private cooperation, we can ensure everyone in the US receives the clean water and sanitation services they deserve.
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[i] Bryn Nelson, “The Water Crisis No One In America Is Fixing,” Time, February, 16, 2022. https://time.com/6255560/water-sanitation-crisis-ohio-train-derailment/#:~:text=A%202021%20analysis%2C%20“The%20widespread,in%20communities%20with%20unclean%20water.
[ii] The American Society of Civil Engineers, Value of Water Campaign, “The Economic Benefits of Investing in Water Infrastructure,” 2020. https://www.uswateralliance.org/sites/uswateralliance.org/files/publications/VOW%20Economic%20Paper_1.pdf
[iii] The American Society of Civil Engineers, Value of Water Campaign, “The Economic Benefits of Investing in Water Infrastructure,” 2020. https://www.uswateralliance.org/sites/uswateralliance.org/files/publications/VOW%20Economic%20Paper_1.pdf
[iv] Bryn Nelson, “The Water Crisis No One In America Is Fixing,” Time, February, 16, 2022. https://time.com/6255560/water-sanitation-crisis-ohio-train-derailment/#:~:text=A%202021%20analysis%2C%20“The%20widespread,in%20communities%20with%20unclean%20water.
[v] Michael Ray, “Flint water crisis,” Britannica, May 5, 2023. https://www.britannica.com/event/Flint-water-crisis
[vi] Michael Ray, “Flint water crisis,” Britannica, May 5, 2023. https://www.britannica.com/event/Flint-water-crisis
[vii] Amanda Holpuch, “Fearing E. Coli, West Baltimore Boils Water in Latest Crisis,” New York Times, September 7, 2022. https://www.nytimes.com/2022/09/07/us/e-coli-baltimore-water.html
[viii] Bryn Nelson, “The Water Crisis No One In America Is Fixing,” Time, February, 16, 2022. https://time.com/6255560/water-sanitation-crisis-ohio-train-derailment/#:~:text=A%202021%20analysis%2C%20“The%20widespread,in%20communities%20with%20unclean%20water.
[ix] The American Society of Civil Engineers, Value of Water Campaign, “The Economic Benefits of Investing in Water Infrastructure,” 2020. https://www.uswateralliance.org/sites/uswateralliance.org/files/publications/VOW%20Economic%20Paper_1.pdf
[x] The American Society of Civil Engineers, Value of Water Campaign, “The Economic Benefits of Investing in Water Infrastructure,” 2020. https://www.uswateralliance.org/sites/uswateralliance.org/files/publications/VOW%20Economic%20Paper_1.pdf
[xi] Bryn Nelson, “The Water Crisis No One In America Is Fixing,” Time, February, 16, 2022. https://time.com/6255560/water-sanitation-crisis-ohio-train-derailment/#:~:text=A%202021%20analysis%2C%20“The%20widespread,in%20communities%20with%20unclean%20water.
[xii] The American Society of Civil Engineers, Value of Water Campaign, “The Economic Benefits of Investing in Water Infrastructure,” 2020. https://www.uswateralliance.org/sites/uswateralliance.org/files/publications/VOW%20Economic%20Paper_1.pdf
[xiii] Bryn Nelson, “The Water Crisis No One In America Is Fixing,” Time, February, 16, 2022. https://time.com/6255560/water-sanitation-crisis-ohio-train-derailment/#:~:text=A%202021%20analysis%2C%20“The%20widespread,in%20communities%20with%20unclean%20water.
[xiv] The American Society of Civil Engineers, Value of Water Campaign, “The Economic Benefits of Investing in Water Infrastructure,” 2020. https://www.uswateralliance.org/sites/uswateralliance.org/files/publications/VOW%20Economic%20Paper_1.pdf
[xv] The American Society of Civil Engineers, Value of Water Campaign, “The Economic Benefits of Investing in Water Infrastructure,” 2020. https://www.uswateralliance.org/sites/uswateralliance.org/files/publications/VOW%20Economic%20Paper_1.pdf
[xvi] The American Society of Civil Engineers, Value of Water Campaign, “The Economic Benefits of Investing in Water Infrastructure,” 2020. https://www.uswateralliance.org/sites/uswateralliance.org/files/publications/VOW%20Economic%20Paper_1.pdf