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Friday, 04 September 2020 09:57

New report warns chronic under-investment in water infrastructure puts US economy at risk

A new report is warning that the United States is under-investing in its drinking water and wastewater systems —putting American households and the US economy at risk.

US WATER INFRASTRUCTURE UNDERINVESTMENT REPORT

The report - The Economic Benefits of Investing in Water Infrastructure: How a Failure to Act Would Affect the U.S. Economy Recovery - finds that as water infrastructure deteriorates and service disruptions increase, annual costs to American households due to water and wastewater failures will be seven times higher in 20 years than they are today —from $2 billion in 2019 to $14 billion by 2039.

According to the report by the American Society of Civil Engineers (ASCE) and Value of Water Campaign, America’s water infrastructure is aging, with many drinking water systems and wastewater treatment facilities nearing the end of their respective design lives (75-100 years), causing contamination and economic disruptions to communities.

Between 2012 and 2018, the rate of water main breaks in the U.S. rose by 27 percent to roughly 300,000 breaks per year— equivalent to a break more than every two minutes. The US lost an estimated $21.7 million of treated water in 2019 due to leaks, which is projected to reach $48 million by 2039 with current investment trends. In addition to the impact to households, American businesses most reliant on water will spend $250 billion in 2039 on water service disruptions.

Commenting on the report findings, ASCE President K.N. Gunalan “Guna”, Ph.D., P.E said:

“As a nation, we have put off crucial investment in our vital water resources for too long and we’re seeing the results play out now.”

“The 2019 investment gap of $81 billion outlined in this report has held back businesses, hurt American pocketbooks and threatened public safety. Investing in water infrastructure provides a path to economic recovery that we desperately need as a result of the COVID-19 pandemic. Our leaders must act now to ensure our systems do not continue to deteriorate and bear greater costs in years to come.”

Radhika Fox, CEO of the US Water Alliance, which coordinates the Value of Water Campaign, added:

“Investing in our water infrastructure as a nation allowed communities to flourish. It dramatically improved public health and set our economy up for success. At a time when so much is at stake, we cannot continue to ignore the urgency of the situation. Communities cannot shoulder the burden of capital improvements and maintaining aging water systems all by themselves. We have to come together as a nation and prioritize investing in our water infrastructure once again.”

Service disruptions to cost water-reliant businesses an estimated $116 billion by 2029 and rise to $264 billion by 2039 on current trajectory

In 2019, water service disruptions resulted in $51 billion economic loss for 11 water-reliant industries including education, health services, retail, construction and manufacturing.

The report warns that with the current trajectory, service disruptions will cost water-reliant businesses an estimated $116 billion by 2029 and will soar to $264 billion by 2039. With damage and flooding from increasing storms, in addition to water shutoffs and deteriorating infrastructure, production costs for businesses and prices for consumers are expected to climb. The report finds that more than $625 billion in business sales (gross output) would be lost over the next 10 years. By 2039, that number will near $3.9 trillion. Failing to invest would cause reductions in wages and disposable income; by 2039, 636,000 jobs would be lost annually.

However, the report concludes that if investment is increased to address the shortfalls now, the US GDP would grow by $4.5 trillion in 20 years. This investment would create 800,000 new jobs and household disposable income would rise by more than $2,000 per household.

A research team comprised of EBP, Downstream Strategies and the Interindustry Forecasting Project at the University of Maryland (INFORUM) worked with ASCE and the Value of Water Campaign to develop the analysis.

Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society.

Coordinated by the US Water Alliance, the Value of Water Campaign is building public and political will for investment in America’s water and wastewater infrastructure through best­in­class communications tools, high­impact events, media activities, and robust research and publications.

Click here to download the full report The Economic Benefits of Investing in Water Infrastructure: How a Failure to Act Would Affect the U.S. Economy Recovery 

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