Q&A: The Business Side of Water Conservation

June 27, 2017
Water usage in the kitchen.
John Chacon/California Department of Water Resources

Adrian Covert, vice president of public policy for the Bay Area Council, discussed opportunities for the business community in advocating for improved stormwater capture and creating viable water markets as well as how smart land use planning can result in significant water conservation.

Water Foundation (WF): Can you tell us a little bit about the Bay Area Council and the work that you do, particularly around water?

Adrian Covert (AC): Sure. Well, the Bay Area Council is a 70-year-old, membership-driven, multi-sector, regional business association. The council represents the leading economic voices across all sectors of the Bay Area economy. Tech, biotech, engineering, finance, international trade, and utilities, including energy and water utilities. The council’s core mission is to look out for the region and to make sure that the policies are in place at a regional level in the Bay Area to make the Bay Area succeed, which is important because the Bay Area is a single metropolitan region—we see the Bay Area as a single metropolitan region of about 7 million people—when most people think of it as 9 counties with 101 cities.

And the Bay Area Council’s position on water—it’s kind of in a unique place. The council’s position on water is essentially focused on two things: expanding our water supply to make sure that we’re resilient in the face of drought and to make sure that we have water for growth, and the ecosystems that make California such an attractive place to live, work, play and do business are healthy.

WF: How do you do that?

AC: The council has a number of policy committees led by our members, and our water committee monitors and engages and leads and creates policies to help defend the San Francisco Bay against sea level rise and flood damage during extreme storm events. And we lead policies on both fronts from the same committee. The committee gets a lot of engagement from the tech sector, the engineering sector and the water agencies. So it’s kind of a mini-clearinghouse between water agencies and the private sector for policy.

WF: What issues is the Bay Area Council focused on currently?

AC: So today on water supply issues, the committee is focused on a couple different things. The committee has been focused on getting more financial resources to update California’s aging water infrastructure. The committee sees this as a big problem. California has six major water systems, and on average they’re about 75-years-old. The state has nearly doubled in size since the completion of the last major water project. And so when you look at the aging infrastructure, the doubling of the population, and the decline of ecosystems that has resulted from infrastructure put in place decades before ecological health was considered important by the public as a mainstream issue, and then climate change, you’re seeing the confluence of pressures on our water system that the system wasn’t designed to respond to. So I think our water system does overall pretty well at providing affordable, reliable and clean, healthy water supply for most Californians, so I don’t want to say that the system is all bad. In fact, we just survived a record drought of four years. Some scientists say it was the driest four-year period in 1,200 years. We were able to do it while growing our population and growing our economy. It’s not all bad.

But there are key areas where we’re failing. We’re failing to manage our ecosystems properly. That failure is spilling over into water supply reliability challenges. Too many Californians lack access to clean and safe drinking water. That’s a moral failure on the part of our state. And we need to do a better job at making our local cities and communities reliant on local sources so that some water can be left back in the environment. Tying all of these things together is going to be the real challenge over the next generation.

We need to do a better job at making our local cities and communities reliant on local sources so that some water can be left back in the environment.

WF: On the infrastructure point, the Bay Area recently approved a measure to improve to water quality and flood protection and protect the bay. Can you tell us a little more about that?

AC: Yeah, absolutely. In the Bay, tremendous amount of energy is being dedicated towards improving the health of the Bay ecosystem. Last year, 70 percent of Bay Area voters approved a first-of-its-kind regional parcel tax, taxing themselves in order to make sure that the bay is healthier, safer and cleaner for their kids than it was when they found it. This is something that we’ve never done in the Bay Area before: a full 9-county ballot measure for every county that touches San Francisco Bay. And this parcel tax will raise $500 million over 20 years. It’s going to be funding wetland restoration, pollution runoff prevention, flood protection and expanded coastal access. So Bay Area voters in a really big way have voted with their wallets and their actual vote to make the statement that stormwater runoff and protecting our local ecosystems from pollution is important to them. That was a campaign that had brought together a broad coalition of environmental and business groups, including the Bay Area Council, which played a major role in forming, shaping, funding and passing that ballot measure.

WF: And that was a two-thirds vote to pass that, right?

AC: Two-thirds needed and we got over 70 percent approval.

WF: That’s a statement.

AC: One of the ways we did it was to make sure it was a broad-based tax. Flat, broad-based and that made sure it was low for everybody, and that everyone bought into it, and it was clear for everyone to understand.

WF: That was $12 for the parcel tax?

AC: Twelve bucks. A dollar a month.

WF: And the stormwater management piece is such key part of improving regional resiliency.

AC: It’s a huge opportunity. Look at the Los Angeles basin. Herculean, legendary efforts have been put in to bring water from far-flung areas into Los Angeles. Meanwhile, the basin itself was designed to take water that actually falls on it and whisk it to the ocean as quickly as possible. It’s pretty staggering when you think about it. One analysis indicated that the stormwater capture for Southern California could provide upwards of 300,000 acre-feet per year if they invested in capturing it.

WF: What’s another opportunity that we can seize on in California?

AC: In California an exciting opportunity I think is through developing a transparent water market, facilitating trading between water agencies and farmers to make sure that water can go where it’s needed and people who have excess supplies are able to trade water they’re not using, without fear of losing permanent rights to it.

I’ll give you one local example: in the Bay Area, the city of East Palo Alto recently had to impose a building moratorium on all new construction. This has put at risk the development of new affordable housing and a new charter school, open to the public, fully funded by Priscilla Chan and Mark Zuckerberg. This would be a huge asset for East Palo Alto, traditionally an economically disadvantaged community. But the project has been stalled because East Palo Alto has run out of water. Now when you dive a little deeper, the water shortage that East Palo Alto is facing is a paper shortage. The communities surrounding it have plenty of water, there’s plenty of water in the region to get to East Palo Alto. But there isn’t a market mechanism in place for them to access that water. Luckily the communities of Palo Alto and Mountain View have excess water that they’re not using and are not planning on using for the next 30 years of planning. They’re going to have this unused allocation, this unused right from SFPUC (San Francisco Public Utilities Commission), the wholesaler that they get their water from. And luckily they are willing to sit down, and they’re currently sitting down with East Palo Alto to transfer a portion. But that’s an ad hoc conversation that occurred after a moratorium was put in place. It would be much better and much more efficient if there was a regional market that was just set up so that cites and water agencies can trade and move water around so that places that want to grow and housing have the water supplies to do it. On a state level, that would obviously have a big impact.

WF: What are the obstacles to create markets like that?

AC: Traditionally one of them has been a marketplace. You know a set of agreed upon facts and data to make market exchanges possible. In regular markets the government will set rules on methods of exchange or whatever. California did not have—there’s certain data you would need to have to make a market work. How much water is available? Where is it available? Is the infrastructure in place to get it to you? Are you connected to the supply? Are there environmental obstacles between you and the supply? Those are the kinds of information that are needed to make a decision about a water transfer, and that takes a lot of resources for a local agency to assemble today. So right now you could say we do have a water market, but it’s only accessible to the most resourceful agencies and farmers who have the staff and have the lawyers and have the teams of analysts to put that all together. By getting the state involved in getting some sort of online data marketplace, clearinghouse, where all the state’s data on flow and storage and connections and infrastructure was put in place, agencies could put on the market their supplies and people could make exchanges. That would expand the market dramatically to medium and small-sized players. So data has been a problem. That’s why the Bay Area Council sponsored AB 1755 last year to put the state on the path towards creating an open data platform for its water data.

WF: Shifting gears, what’s a water issue that people aren’t talking about that they should be?

AC: One thing that is really critical—actually this is a huge issue that people aren’t talking about—is land use. It’s a huge issue. One of the things that San Francisco does right, that the Bay Area does right, is our water use is the lowest per capita in California. And how did we do it? It’s not just that SFPUC is a great water agency, which they are. It’s not just that the Bay Area is a cool, coastal climate, which it is. It’s those two things, but it’s also that we have the best planning. We’re a high-density residential area. So outdoor water use is low. We don’t have lawns. We have instead opulent, shared, public parks. Golden Gate Park is a beautiful park. That kind of model of living is what makes extreme water conservation possible. One thing that we need to start looking at more is increasingly dense housing, not just to bring down the cost of housing, and because of carbon benefits of the transit-oriented development, but it also is the way to save the most water with the most people. The size of the Bay Area economy, with its per capita water supply use rates—you know, no one has looked hard at this, but I can guarantee that the Bay Area squeezes more economic value per gallon of water used than any other region in the United States. That’s because of our economic success, but also paired with our land use policies. So that’s something we’ve got to start looking at.

One thing that we need to start looking at more is increasingly dense housing, not just to bring down the cost of housing, and because of carbon benefits of the transit-oriented development, but it also is the way to save the most water with the most people.

WF: That’s really interesting and could possibly be exported other places in the state and across the West.

AC: Normally when people talk about dense planning it’s because of energy and carbon efficiency. The thing that they’re not talking about is the water efficiency, which also has huge carbon benefits as well because it takes so much energy to move and treat water long distances.

WF: That’s definitely a story that hasn’t been told yet, and we could talk all day about it, but that’s all the time we have for today. Thanks so much for your time, Adrian.

AC: My pleasure. Thanks.