Water Agencies Seek Inclusion in Climate Legislation
For some time we have been hearing about changing precipitation patterns, rising sea levels, and other various ways that climate change will severely impact our nation’s hydrologic systems. In the debate over climate legislation water groups are advocating for congressional funds to assist with mitigating the effects on water supplies of a changing climate. Although water groups are pleased to have been included in funding proposed in the most recent version of Lieberman-Warner, the amendment offered up by Senator Boxer is not specific about what portion of the $136 billion in funding that drinking, waste, storm-water utilities would be eligible for under the energy block grant program. In the last few weeks, water groups have stepped up their efforts and sent letters to Senator Boxer and Congress pushing for assistance and inclusion in a cap and trade program.
The May 16th letter sent by the National Association of Clean Water Agencies (NACWA) seeks “clearly designated federal funding” to assist wastewater treatment agencies with:
- adaptation and public health risk;
- proactive climate change mitigation projects; and
- furthering efforts to establish wastewater industry GHG offsets.
On May 20th eight water groups followed-up NACWA’s effort with a letter outlining three broad objectives they are calling on Congress to implement:
- develop an applied research program focusing on climate change and water resources;
- increase federal funding and support for both water infrastructure and climate change impacts; and
- provide support and incentives for water utilities to reduce greenhouse gas emissions.
In an earlier post, we blogged about obtaining GHG credits through managed water supply systems and concluded that water utilities should be proactive in developing strategies for dealing with nitrogen oxide and methane emissions that are almost certain to be regulated under federal climate legislation. Now industry groups, such as NACWA, are actively pursuing inclusion in whatever allocation or cap and trade program our future holds.
Obtaining GHG Credits Through Managing Water Supply Systems
Most recent climate-oriented discussions of water supply and quality have focused on the potential for altered precipitation, stream flows, groundwater recharge, and other impacts of regional climate change. These impacts are more likely than not to be severe in some locales, and thought is being given to the development of new infrastructure to address these changes (see related item on climate adaptation). But in addition to these obvious impacts on water supply and quality, it is now apparent that "non-trivial" greenhouse gas emissions are associated with the treatment of drinking water and sewage. [summary]
Most recent climate-oriented discussions of water supply and quality have focused on the potential for altered precipitation, stream flows, groundwater recharge, and other impacts of regional climate change. These impacts are more likely than not to be severe in some locales, and thought is being given to the development of new infrastructure to address these changes (see related item on climate adaptation). But in addition to these obvious impacts on water supply and quality, it is now apparent that "non-trivial" greenhouse gas emissions are associated with the treatment of drinking water and sewage.
Nitrogen oxide and methane emissions from drinking water and wastewater facilities almost certainly will be regulated under federal climate legislation. These facilities, which are most often publicly owned, are a perhaps unexpected addition to the list of economic sectors economically impacted by climate legislation, although our climate practice has failed to identify a single sector that is not affected in one way or another, including banking, insurance, and entertainment. Thus it is not too early for states, municipalities, local water districts, and the companies that work for them in drinking water and sewage treatment businesses to consider what their obligations may be under pending climate legislation.
As a target of climate regulation, water and sewage treatment facility operators need, beginning now, to develop their strategies to address the advantages and disadvantages of early action, cap-and-trade, legislatively allocated emissions rights, reverse auction benefits, and the like. Complaining of "unfunded mandates" imposed on state and local governments due to federal requirements may achieve some traction; however, much more can be achieved by thoughtful attention to the upside as well as the downside of the legislative debate over GHG control legislation.
Consider for a moment what a proactive water supplier or sewage treatment operator might achieve by up-front, prompt investment in infrastructure to reduce GHG emissions for the express purpose of generating marketable GHG reduction credits. The economics are critical, but it might be possible for the operator to sell these emissions rights into the voluntary emissions reductions (VER) market that exists in the U.S. today. It could then go on, importantly, to use the reductions later in any legal cap-and-trade scheme. Proceeds could be used to partially offset capital investment. The reputational gain with the public of undertaking such a program right now should also be considered.
A water supplier or sewage treatment operator would need to create the program expressly for the GHG reduction purpose, to avoid the problem of "additionality," i.e., the infrastructure investment would not have been made anyway for some other purpose so that the GHG reductions would have happened as a byproduct of some other objective.
We mentioned the economics of such a plan. Trifling returns on huge investment would scuttle the project. But keep in mind that the global warming potential (GWP) of methane and nitrogen oxides are much higher than that for carbon dioxide, the runaway GHG of usual interest. Methane is already captured and burned at some water utilities, but it still is a GHG of some interest because there is so much of it, and because its GWP is 56 to 72 times that of CO2 in a twenty year time horizon (the factor varies depending on what residence period, conditions, and source one cites). Nitrous oxide's GWP for twenty years is 310 times that for CO2, again subject to the caveat. (To refine the GWP that would apply requires some technical work, but the rough-and-ready conclusion is that whatever VER price carbon dioxide would command, methane and NOX VER prices would be a high multiple.)
Also keep in mind that unlike some GHG credit generation efforts, culinary water and sewage treatment facilities would keep on producing credits year after year. Production of VERs would keep pace with the quantity of drinking and waste water treated. By contrast, biomass VER generation, e.g., planting trees, only gives a one-time collection of VERs, although if the trees are sustainably harvested, some additional credits might accumulate for the wood used in building and furniture that sequestered the carbon semi-permanently.
Water managers have their hands full with tight budgets, other federal mandates, and, in some areas, drought, destructive invasive species like quagga mussels, endangered species protection, new contaminants like pharmaceuticals and disinfection byproducts (all benefits that also create risks, and the usual metals and minerals contamination). But the climate threat must be faced down by water and sewage utilities, not only doing their part, but finding opportunities to do so in the most beneficial and cost-effective manner.
