New report offers grim details on underinvestment in U.S. water infrastructure

A new economic study finds that cost of water and wastewater failures will be significantly higher in 20 years for American households.

According to the new report released last week by the American Society of Civil Engineers (ASCE) and Value of Water Campaign, the United States is underinvesting in its drinking water and wastewater systems, putting American households and the economy at risk. The report, “The Economic Benefits of Investing in Water Infrastructure: How a Failure to Act Would Affect the U.S. Economy Recovery,” finds that as water infrastructure deteriorates and service disruptions increase, annual costs to American households due to water and wastewater failures will be seven times higher in 20 years than they are today —from $2 billion in 2019 to $14 billion by 2039.

America’s water infrastructure is aging, with many drinking water systems and wastewater treatment facilities nearing the end of their respective design lives (75-100 years), causing contamination and economic disruptions to communities. Between 2012 and 2018, the rate of water main breaks in the United States rose by 27 percent to roughly 300,000 breaks per year— equivalent to a break more than every two minutes. The United States lost an estimated $21.7 million of treated water in 2019 due to leaks, which is projected to reach $48 million by 2039 with current investment trends. In addition to the impact to households, American businesses most reliant on water will spend $250 billion in 2039 on water service disruptions.

“As a nation, we have deferred crucial investment in our vital water resources for too long and we’re seeing the adverse results play out now,” said ASCE President K.N. Gunalan “Guna,” Ph.D., P.E. “The 2019 investment gap of $81 billion outlined in this report has held back businesses, hurt American pocketbooks and above all, threatened public safety. In addition, investing in water infrastructure now will provide a path to economic recovery that we desperately need as a result of the COVID-19 pandemic. Our leaders must act immediately to ensure our systems do not continue to deteriorate and bare greater costs in years to come.”

In 2019, water service disruptions resulted in $51 billion economic loss for 11 water-reliant industries such as education, health services, retail, construction, manufacturing and more. With the current trajectory, service disruptions will cost water-reliant businesses an estimated $116 billion by 2029 and will soar to $264 billion by 2039.

“Investing in our water infrastructure as a nation allowed communities to flourish,” added Radhika Fox, CEO of the US Water Alliance, which coordinates the Value of Water Campaign. “It dramatically improved public health and set our economy up for success. At a time when so much is at stake, we cannot continue to ignore the urgency of the situation. Communities cannot shoulder the burden of capital improvements and maintaining aging water systems all by themselves. We have to come together as a nation and prioritize investing in our water infrastructure once again.”

If investment is increased to address these shortfalls now, the U.S. GDP would grow by $4.5 trillion in 20 years.

With damage and flooding from increasing storms, in addition to water shutoffs and deteriorating infrastructure, production costs for businesses and prices for consumers are also expected to climb. The report finds that more than $625 billion in business sales (gross output) would be lost over the next 10 years. By 2039, that number will near $3.9 trillion. Failing to invest would cause reductions in wages and disposable income; by 2039, 636,000 jobs would be lost annually.

The report also notes that the future does not have to look this bleak. If investment is increased to address these shortfalls now, the U.S. GDP would grow by $4.5 trillion in 20 years. This investment would create 800,000 new jobs and household disposable income would rise by more than $2,000 per household.

A research team comprised of EBP, Downstream Strategies and the Interindustry Forecasting Project at the University of Maryland (INFORUM) worked with ASCE and the Value of Water Campaign to develop this analysis. The next report in the Failure to Act series, The Economic Impact of Current Investment Trends in Electricity Infrastructure: How a Failure to Act Would Affect the U.S. Economy Recovery, will be released on Sept. 1, 2020.

Click here for more information on ASCE’s Failure to Act series, and click here to read the full report.

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