The overdue bill for water systems is reaching alarming size, with economic consequences that will weigh on U.S. businesses for years to come.
An economic analysis on unmet public water and wastewater system needs commissioned by the American Society of Civil Engineers (ASCE) paints a grim future for the U.S. economy. The costs associated with unreliable delivery and inadequate treatment, the analysis shows, will combine to cut the nation’s gross domestic product by as much as $416 billion over the next decade if current spending levels remain unchanged.
Failure to Act: The Economic Impact of Current Investment Trends in Water and Wastewater Treatment Infrastructure is the second of four ASCE-commissioned assessments of infrastructure spending.
The analysis examines the economic consequences of aging drinking water, wastewater and wet weather management systems on businesses and households based on existing capital spending trends. Lacking any new investment in this infrastructure, the U.S. Environmental Protection Agency’s 2010 estimate of a $55 billion shortfall in maintenance and upgrade needs could balloon to $84 billion by 2020, and nearly double to $144 billion by 2040.
While the effects of this funding gap will vary, the report projects that businesses will face the added cost of dealing with water shortages, increased rates, conservation, and outlays for either self-reliance or relocation to areas with more reliable infrastructure. An increase in water-borne illnesses due to unreliable delivery and treatment services will likewise burden households with increased medical costs, leaving less money for discretionary spending.
Productivity will also suffer, according to the report, with a potential loss of nearly 700,000 jobs across all sectors of the economy by 2020. Twice as many jobs may be at risk by 2040.
The report notes that while current sustainable practices such as conservation, more efficient water use, and new treatment technologies could ease water demand, any gains will likely be offset by factors such as population growth in areas of the country where resources are less abundant.