This week, a report titled Restoring Flows: Financing the Next Generation of Water Systems was released by Ceres and American Rivers. Innovators from around the country, including Fund-supported teams, are testing a variety of financing scenarios to set an early foundation for the critical work to come in the water systems space. Thanks to the Russell Family Foundation for sponsoring this work.
Building on the Johnson Foundation’s Charting New Waters convening, and by analyzing work already underway by those who have a head start, this report charts the pathways of cooperation that will be required to forge innovative thinking about our freshwater systems.
We are pleased that the report identifies several Fund-supported teams as leaders in the financing space. These teams are gaining traction and we hope to expand our impact with future investments. We have been working to promote these teams' work—visiting with environmental groups, trade associations, and charitable foundations—to build shared-expertise on how we can pay for our infrastructure gap, how we can build the next generation business models to deliver what we need, and how we can work together on an issue that is nationally—if not globally—critical, even though the answers must work locally. If you haven’t seen it yet, I strongly recommend the Johnson Foundation report on financing sustainable water infrastructure.
Along those lines, the Fund hosted a recent workshop that explored how the next generation of water utilities can lead in ecosystem management innovations. You can read a summary report here. Some of the insights from this workshop have already been incorporated in our programming.
The Fund has invested in three teams to test some of the ideas discussed at the workshop. One team is exploring how distributed technologies can be bundled, managed and financed. While this work is at an early stage, it could well be a very positive disruptive force in the utility space. Another project is looking at new ways to target, finance and deliver conservation impacts in the rural environment. This work too, might catalyze new business models in the region’s food and fiber belt. A third effort is looking at how to facilitate water conservation in industrial customers of water utilities (including creative efforts in stormwater management), to drive positive ecological change, and navigate the many challenges (rates, disappearing user savings, and roi requirements).
We are looking for efforts to fill out this portfolio of work.
We would be interested in projects that test technologies, novel insights, new products, new revenue or financing models, or new combinations of services that have the promise of catalyzing change in the institutions that currently “manage” some aspect of freshwater.
Ideally, each would be a fairly substantial effort, work in a number of strategically important places, and be true collaborations (rather than large teams of a prime contractor with many subcontractors).
Here's how you can help. In the comments below, or via e-mail, give us your advice on any of the following:
What ideas should we test?
Who is ready to lead such a project?
Where should we signal our interest in supporting such work?
What if anything has changed on the landscape that should alter our course?
(If you are reading this from our main Resource Room page, you will need to click here to go to the blog page to comment.)
If you are a local, state or federal conservation professional, you may find this interesting.
In this recent article, the Great Lakes Echo takes a look at absentee landowners in the Great Lakes and the difficulties natural resource agencies face in communicating with them about conservation issues. Accounting for approximately half of all agricultural landowners in the Great Lakes states, those who lease out their agricultural land have largely gone unaccounted for in state and federal conservation programs.
This article reports on observations from a Fund-supported project that tested different communication techniques for reaching absentee agricultural landowners in parts of Michigan, Wisconsin, and New York. The project’s goal was to improve water quality and reduce the negative impacts of agriculture on streams and rivers by finding effective methods for reaching and educating absentee landowners on conservation practices.
The team found that conservation was a priority for this group, yet many absentee landowners have little or no experience in working with conservation programs or practices.
Through outreach and education, the team worked with absentee owners, their operators, and conservation officials to install over 480 acres of vegetative filter strips. This reduced the input of 696 tons of sediment, 1,152 pounds of phosphorus and 2,280 pounds of nitrogen into the Great Lakes in the first year.
The team not only kept nutrients and sediment out of the Great Lakes, but they deployed the tools that will allow this impact to become greater each year. One such design—a toolkit for natural resource professionals that provides advice and recommendations on how to promote conservation topics to absentee landowners—can be downloaded via the Center for Absentee Landowners’ website.
Take a moment to read more on this interesting project here.
A new report, Financing Sustainable Water Infrastructure, is now available on the Johnson Foundation at Wingspread's website. I recommend this to anyone who is interested in what our water service sector will become, how it might be supported financially, and what has to change between now and then. The webinar introducing the report was recorded and can be accessed here.
This report summarizes a series of web-facilitated and in-person meetings focused on how to finance the new needs of water management entities (drinking water, storm water, waste water, and possibly other water management utilities). I was honored to be asked to participate in these sessions and did my best to share the expert advice the Fund has received on these issues and the lessons that Fund-supported teams have learned by exploring financial and market-based tools in this sector. This work has been substantial and the learning impressive. Some of these approaches have blossomed. Others have not worked. Some are still a work in progress.
If you want to learn more, a few resources follow.
Ecosystem Services
The Fund has sponsored a number of teams exploring how to identify, package, and exchange water-based ecological services like nutrient removal, sediment control and flow restoration. Case studies produced by a team led by the Environmental Trading Network identify how to structure effective water quality trading programs, how to creatively use assets of state revolving fund programs and how to think strategically about storm water projects. Their work is nicely summarized here.
Alternate Financing Approaches
Two Fund-supported teams evaluated how the cost of financing and/or the cost of subsidies for water infrastructure can be lowered. These teams identified that a number of mechanisms could lower financing costs.
At the federal level, tax credit bonds can substantially lower the costs of water infrastructure to the federal government, as well as lower the costs to those who take on this debt. More on this approach can be found here and in this report (pdf format).
At the local level, use of tax increment financing might allow new sources of capital to flow to restoration activities. More on this approach is available here (pdf format).
Interestingly, neither project could attract partners to test how these approaches would work on the ground. The teams felt (oversimplifying here), that slightly less expensive financing did not overcome the barriers to action. Financing appears to be necessary, but not by itself sufficient, for the sector to become more sustainable.
New Transaction Models
The Fund has recently supported two teams that are designing and testing new ways to reduce the impacts of run-off in urban and rural settings.
One team is exploring how to pay for the performance of practices of agricultural producers. Many farms undertake conservation practices like buffer strips and grassed drainage swales to keep nutrients and soils on the land, rather than in the water. This team looks to design payments for what those practices do in the way of improved stream health, so that producers receive higher payments for better performance. More is available here.
Another team is designing a series of investment grade, coordinated, integrated, distributed storm water management practices in three Great Lakes urban centers. They want to develop a series of site-based rainwater harvesting and management systems, bundle their performance, find private financing, and negotiate sales agreements to public or private entities that will benefit from storm water management. They expect to create a template for such transactions, and an electronic platform to reduce the transaction costs of creating and selling these services. More is available here.
We Want to Hear from You
The Fund is very interested in working with teams to help shape the future of water management in and around the Great Lakes. If you have a new idea you want to try, drop us a note, and let's start a conversation!
David Lodge’s Fund-supported work in mapping global shipping connections was highlighted by the American Museum of Natural History as part of the documentary series Science Bulletins: Current research about the natural world. This video, which includes an interview with Lodge as well as the innovative visualizations he created to explain his research, is also available on the Museum’s website.
David Lodge is professor of biological sciences at the University of Notre Dame. He is a preeminent authority of invasive species biology. With a grant from the Great Lakes Protection Fund, Lodge and his team are investigating global shipping patterns and developing new genetic probes that can be used to detect invasive species from high risk ports.
The Great Lakes Protection Fund is a private, nonprofit corporation formed in 1989 by the Governors of the Great Lakes states. It is a permanent environmental endowment that supports collaborative actions to improve the health of the Great Lakes ecosystem.
To date, the Fund has made 243 grants and program related investments representing more than $62.6 million to support the creative work of collaborative teams that test new ideas, take risks, and share what they learn.
