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Climate & Energy
Scaling the Natural Infrastructure Approach to Source Water Protection
James Mulligan and Todd Gartner

Brown Bear on Tongass NFNatural ecosystems provide essential services for our communities. Forests and wetlands, for example, prevent silt and pollutants from entering streams and reservoirs that supply freshwater to downstream cities and businesses. This “natural infrastructure”1 also reduces peak storm flows and helps regulate the water cycle, protecting communities from both flood and drought risks. It also provides shade for critical aquatic habitat.2

While concrete-and-steel built infrastructure (e.g. filtration plants, reservoirs, and chillers) will continue to play a critical role in water treatment and storage, integrated approaches to water management that incorporate both natural and built components can reduce costs and enhance services. Such approaches are not yet standard practice in the water management industry, even as natural ecosystems and the services they provide continue to degrade nationwide. Rather than reverse this trend, many companies and governments continue to spend on concrete and steel to address water-related problems while investing in restoring or enhancing various types of natural infrastructure is rarely considered.

Despite America’s history of reliance on built infrastructure, investing in the conservation and improved management of natural ecosystems to secure and protect water systems is gaining attention as an effective means to solve water-related problems while keeping costs down and creating jobs. Natural infrastructure can also provide a suite of co-benefits for the air we breathe, the places we play, the wildlife we share our landscapes with, and the climate we live in.

Widespread Opportunity
Natural infrastructure is potentially viable in a variety of settings, including both healthy and degraded watersheds, and as an alternative to built infrastructure or as part of a “multi-barrier” approach. Investing in natural ecosystems can also be an effective strategy for regulatory compliance, for cost-avoidance or cost-reduction in a non-regulatory setting, and for meeting day-to-day water needs or reducing the risk of extreme and costly disruptive events like wildfire, or landslides.

Despite major political, regulatory, economic, and ecological differences in the most pressing water-related issues from watershed to watershed, the landscape plays a consistently critical role. A number of common themes related to opportunities for investing in natural infrastructure for source water protection can be gleaned from early efforts in this space. These basic characteristics that make a watershed particularly “ripe” for substantial natural infrastructure investments are found in watersheds across the country:3
  1. One or more clearly identified current or projected water-related issue(s). These issues can be purely economic—such as water quality degradation that threatens increased costs for drinking water treatment or other industrial processes.Or they can relate more directly to water security—for example, issues related to flood or drought risk like property damage, water supply shortages, or loss of reservoir storage capacity due to sedimentation. These issues can also be tied to regulatory drivers, like impending loss of a filtration avoidance waiver under the Safe Drinking Water Act, or non-compliance with the Clean Water Act or other regulations.
  2. Substantial economic value associated with those issues. For substantial investments to mobilize— and be worthwhile economically— there needs to be real economic value tied to current or emerging water-related issues in a watershed. In other words, there needs to be sizeable “willingness to pay” (in a pure economic sense) in the watershed to resolve or avoid the critical water-related issue at hand, typically by major beneficiaries like public utilities and their ratepayers in urban centers, major industrial entities that rely on abundant clean water, or large point sources that produce regulated effluents and may find it cost-effective to meet regulatory requirements through investments in natural infrastructure (water quality trading).
  3. A clear connection between the water-related issue(s) and ecological conditions on the landscape. Ecological conditions in hotspot watersheds include current or projected degradation or outright loss of ecosystems, typically due to development pressures, agriculture, or industrial forestry (including legacy impacts).
A variety of types of ecosystems can comprise natural infrastructure. For source water protection, however, forest-based natural infrastructure is particularly important. About 53 percent of the freshwater supply in the contiguous United States originates in forests,4 despite only covering about a third of the land area5 —and that water is widely recognized as clean compared with waterflow coming from other sources. Watersheds with more forest cover have been shown to have higher groundwater recharge, lower stormwater runoff, and lower levels of nutrients and sediment in streams than do areas dominated by urban and agricultural uses.6

Forest Importance to Surface Drinking Water and Watersheds with High Risk

The USDA Forest Service’s Forest to Faucet project modeled and mapped the continental United States’ forest land areas most important to surface drinking water supplies against watersheds with the highest risk (top 10 percent) due to development, insects and disease, and wildfire. The areas of overlap between these two variables, shown in the map above, give a high-level sense of where the ecological and economic conditions and opportunities for forest-based natural infrastructure investment may be most ripe. Note that wetlands and other ecosystems, not shown here, also play a critical role in protecting source water and may serve as the basis for viable natural infrastructure investment programs.

The kicker for the natural infrastructure approach is that it makes financial sense. The business case for investments in natural ecosystems has driven adoption of the approach in an increasing number of watersheds across the country. For example, the Denver Water Board in Denver, Colorado is investing up to $16.5 million to match Forest Service funds for thinning and other fire risk management measures in the forests that provide its source water.7 While no explicit, detailed cost-benefit analysis was conducted for the program, the utility incurred $26 million in costs in the aftermath of two devastating fires in 1996 and 2002 to manage post-fire sedimentation that clogged the utility’s water intakes, reduced reservoir storage capacity, and increased treatment costs. Fire suppression costs totaled an additional $47 million; the Forest Service has spent another $37 million on post-fire restoration and stabilization; and private insured property losses were an additional $38.7 million.8

The City of Medford, Oregon is investing $8 million in riparian forest restoration along 30 miles of stream bank to provide shade for aquatic habitat.9 The project is designed to meet the city’s Clean Water Act obligations related to stream temperature. Riparian forest also provides benefits for habitat, carbon sequestration, and water quality. The city’s alternatives, given its regulatory obligations, were to utilize lagoon storage for discharge (~$16 million) or to install mechanical chillers (~$20 million).10

Through application of an emerging methodology for “green-gray analysis” 11 —cost-benefit or cost-effectiveness analysis applied to natural (green) and built (gray) investment options—watershed stakeholders can assess the business case for the natural infrastructure approach in their regulatory, economic, and ecological contexts.

Barriers to Expanding Natural Infrastructure
Despite the growing number of success stories, the practice of natural infrastructure investment has yet to reach scale, leaving substantial opportunities for enhanced services and cost savings unrealized.12

The struggle to get to scale can be associated with a long list of institutional challenges,13 including knowledge gaps and old habits of defaulting to built infrastructure. For example:
  1. The science connecting conservation practices and quantifiable ecosystem services is robust but imperfect, requiring water resource managers to make decisions in the face of some level of uncertainty.
  2. While some utilities have rich histories of watershed protection, others face knowledge gaps among their ratepayers or even key internal decision makers regarding the importance of upstream rural landscapes and watersheds for urban prosperity. A recent Water Research Foundation survey found that among utilities, there is a general lack of perceived need for action and complacency about emerging threats to water resources. This gap in awareness extends to the general public, educators, municipal officials, planning boards, state agencies, businesses, and the media.14
  3. In a time of recent economic downturn, the public focus turns to job creation, which is often associated with built infrastructure projects, as decision makers are less familiar with the often-unappreciated jobs potential of natural infrastructure investments.
  4. Financial accounting standards currently do not incorporate natural capital in a way that would enable operations and maintenance spending on natural infrastructure by water utilities as part of normal business practices.
  5. Enabling regulatory agencies are under near-constant threat of litigation, often leading to a conservative stance that can act as an impediment to innovative solutions like natural infrastructure for water.
None of the barriers facing the natural infrastructure approach are unmanageable. And despite these barriers, the time is ripe to spread the word and publicize the advantages of this approach to stimulate a tipping point in investing in natural infrastructure for securing water supplies. The scientific foundation—while continually improving—clearly establishes the connections between natural infrastructure investments and many beneficial water resource outcomes. The business case for natural infrastructure has been consistently demonstrated, and a framework for green-gray financial analysis is available to decision makers to apply in their own watersheds. A growing network of experts is emerging to assist with program design and development—ensuring chances for scalability and long-term success, and a growing number of success stories are offering proof-of-concept and key lessons learned. Against a backdrop of aging water infrastructure and fiscal austerity, the opportunity for natural infrastructure to play an active role in the solution set for our water needs over the next several decades is very real.15

Key Strategies to Scale the Approach
To bring the natural infrastructure approach to scale, its merits must be credibly communicated beyond the conservation choir. It is the public utility managers, city government officials, and corporate leaders who make the majority of infrastructure decisions

As natural infrastructure practitioners work to reach our ultimate audience of decision makers, the following are good practices to live by:
  1. Identify, equip, and support local champions. Local actors with an open mind and capacity to influence can be effective change agents in their institutions— bringing the natural infrastructure approach to the attention of key decision makers far more effectively than the best studies, blog posts, and presentations by outside advocates. We have seen this time and again in watersheds where the natural infrastructure approach has taken hold. These local champions—the source water coordinator at a water utility or the conservation commissioner at a municipality—are not necessarily natural infrastructure experts and may need support to be successful.
  2. Don’t assume what’s actionable —ask. The practitioner community is rife with assumptions about what will—and what won’t— motivate decision makers to act. Moreover, experience has shown that the types and depth of information that decision makers need to act can vary considerably from watershed to watershed, seemingly depending on local political and economic factors. The solution is to ask.
  3. Conduct thorough and honest feasibility analyses. Conservation-minded stakeholders often get excited about the natural infrastructure approach as a new mechanism to leverage new dollars for conservation. However, the approach needs to be thoroughly vetted against local economic and ecological conditions to determine its viability in the local context. A pattern of squandered efforts to employ the approach where it does not fit could be a potential liability to broad-scale institutionalization in the watersheds where it does fit.
  4. Monitor, manage adaptively, and document outcomes. Robust monitoring and adaptive management mechanisms are essential for emerging natural infrastructure programs in order to ensure desired outcomes. Success and the ability to demonstrate success are both key to quelling skeptics and ensuring that early natural infrastructure efforts snowball into broad-scale institutionalization of the approach.
Looking Ahead
Ultimately, real progress will come on the backs of champions that can exert influence from within the institutions that govern water management. For the rest of us, the task is to identify, equip, and support these champions so they can be successful. Due in large part to these growing efforts nationwide, we are seeing increasing interest from water management entities and industry associations. This trend makes now a critical moment to double-down on efforts to harness natural infrastructure for source water protection.

James Mulligan is Executive Director of Green Community Ventures, a WRI partner. Todd Gartner is Senior Associate for the World Resources Institute’s People and Ecosystem Program.

1 Gartner, T. and J. Mulligan. 2013. “A Critical Moment to Harness Green Infrastructure—Not Concrete—To Secure Clean Water. World Resources Institute. Available online at http://insights.wri.org/news/2012/06 /green-vs-gray-infrastructure-whennature- better-concrete.

2 Talberth, J., E. Gray, E. Branosky, and T. Gartner. “Insights from the Field: Forests for Water.” World Resources Institute. Available online at http://pdf.wri.org/insights_from_the_fi eld_forests_for_water.pdf

3 Mulligan, J. 2013 (forthcoming). “Hotspot Watersheds—Identifying Opportunity” in Natural Infrastructure: Investing in Forested Landscapes for Source Water Protection. T. Gartner, J. Mulligan, R. Schmidt, and J. Gunn, eds. World Resources Institute.

4 Brown, T.C., Hobbins, M.T., and Ramirez, J.A. (2008). “Spatial Distribution of Water Supply in the Coterminus United States.” Journal of the American Water Resources Association.

5 Sedell, J., M. Sharpe, D. D. Apple, M, Copenhgen, M. Furniss. 2000. “Water and the Forest Service.” USDA Forest Service, Washington Office. FS-660.

6 Brett, M.T., G.B. Arhonditsis, S.E. Mueller, D.M. Hartley, J.D. Frodge and D.E. Funke. 2005. Non-Point-Source impacts on stream nutrient concentrations along a forest to urban gradient. Environmental Management 35(3): 330-342; B. Crosbie and P. Chow-Fraser. 1999. “Percentage Land Use in the Watershed Determines the Water and McMaster University; M. Matteo, T. Randhir, D. Bloniarz. 2006. “Watershed-scale impacts of forest buffers on water quality and runoff in urbanizing environment. Journal of Water Resources Planning and Management-Asce, 132(3): 144-152.

7 Denver Water. 2013. From Forests to Faucets: U.S. Forest Service and Denver Water Watershed Management. Available online at http://www.denverwater.org/supplyplanning/watersupply/partnershipUSFS/

8 Denver Water Board. 2013. “Denver Water Board — Wildfire Risk Management for Source Water” in Natural Infrastructure: Investing in Forested Landscapes for Source Water Protection. T. Gartner, J. Mulligan, R. Schmidt, and J. Gunn, eds. World Resources Institute.

9 Freeman, M. 2011. “A Chilling Effect.” Mail Tribune. Available online at http://www.mailtribune.com/apps/pbcs.dll/article?AID=/20111113/NE WS/111130318&cid=sitesearch

10 Sanneman, C. 2012. Willamette Partnership. Personal Communication.

11 Talberth, J. Gray, E. Yonavjak, L. Gartner, T. 2013. Green versus Gray: Nature’s Solutions to Infrastructure Demands. Solutions. Vol 4, No. 1.pp. http://the solutionsjournal.anu.edu.au/node/1241

12 Sklenar, Karen and Chi Ho Sham. 2012. Developing a Vision and Roadmap for Source Water Protection for U.S. Drinking Water Utilities. Water Research Foundation. Available online at http://www.waterrf.org/Public ReportLibrary/4176a.pdf

13 Gartner et al. Investing in Green Infrastructure for Source Water Protection. Forthcoming.

14 Sklenar, Karen and Chi Ho Sham. 2012. Developing a Vision and Roadmap for Source Water Protection for U.S. Drinking Water Utilities. Water Research Foundation. Available online at http://www.waterrf.org/Public ReportLibrary/4176a.pdf

15 Gartner, T., J. Mulligan, R. Schmidt, and J. Gunn, eds. 2013 (forthcoming). Natural Infrastructure: Investing in Forested Landscapes for Source Water Protection. World Resources Institute. World Resources Institute.
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