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Bottled Water, Choice and Privatization

Geoffrey Segal
July 2, 2007, 7:09am

My colleague recently wrote about a ban the City of San Francisco enacted on bottled water at city events. San Francisco Mayor Gavin Newsom projected the move as a budget saver -- saving the city some $500,000 a year. If the story ended there, I'd be more than happy (and don't get me wrong, the city ought to be finding more $500k saving opportunities). Unfortunately, the story doesn't end there. The bottled water industry is being demonized on ideological grounds against profit and private property. The convenient example of bottled water is also being used as a springboard to attack water privatization and public-private partnerships. Indeed, Food and Water Watch, an offshoot of Ralph Nader's Public Citizen has issued a new report about how bad bottled water is for us -- its not healthy, its expensive and its bad for the environment. However, nearly half of their press release is focused on municipal water and sewer operations:
Our nation's public water and sewer infrastructure is old and in the coming years will need billions of dollars of investment to maintain and further improve treatment, storage, and distribution. Each year we fall more than $20 billion short of what is needed to maintain our public water and sewage systems. "It's time for Congress to establish a clean water trust fund that would give communities the financial help they need to invest in healthy and safe drinking water for every American and for future generations."
They're right i.e., our nations water and wastewater infrastructure does need significant investment. FWW's solution is a massive federal bailout (i.e., increased federal taxes and spending) -- while dismissing any role for the private sector to play (not even counting how this lets local governments off the hook for their years of mismanagement, poor administration and giveaways to unions running the water and sewer systems). FWW ignores that it was President Clinton's Environmental Protection Agency endorsed privatization as a means by which local governments can meet environmental standards. Indeed the EPA wrote, "[Privatization case studies] provide concrete examples to local officials of how successful partnerships and other models can be used by communities to provide needed environmental services more efficiently." They also ignore that more than 40 percent of drinking water systems in the United States are private, regulated utilities–there are more than 25,000. To be fair many of these are small ancillary systems that the government has no interest in owning or running. Further, there are more than 2,500 partnerships where a private company is providing operational functions for local government. Nationally, the rate of private participation has been impressive in the last 15 years, growing by more than 85 percent. Research suggests that these systems are in far better condition than their public sector counterparts. Anti private sector supporters have largely ignored experience, data, and the importance of competition. The private sector has demonstrated time and again that they have a role to play in the delivery of water and sewer services here at home and abroad. Their experience, innovation, and capital are vital pieces to ensuring access to clean safe drinking water worldwide. Private activity bonds (which FWW fought - calling for public spending over "private profits") and long-term concessions similar to toll roads are both effective and promising tools to bring billions of capital into our water and wastewater infrastructure. They're a vital, important tool in the policy makers tool box and they shouldn't be dismissed out of ideology. For more, check out Reason's water privatization work here. Now, let's deconstruct their specific issues with bottled water. Yes, bottled water is expensive -- more than tap. But those bottles are so damn convenient. And did I mention there are different flavors now! And not to mention the ones with bubbles. That's where choice comes in -- no one is forced to buy bottled water and we shouldn't stop others from making their own choice either. As far as health and safety -- the bottled water industry, is regulated and tested for safety. Think back to the last time someone got sick from drinking bottled water....I'll give you a few minutes...oh wait, you don't hear those stories all that often (if ever - I Googled it and couldn't find any). But you do hear about people getting sick from tap water. This isn't to say that all municipal water is bad, in fact, most of it is quite good. Unfortunately, not all of us can live near Yosemite snow melt and we ought to have choices and not be publicly ridiculed for making them. Also, let's not forget how instrumental the bottled water industry was in getting fresh water into New Orleans after Katrina while muni water systems were down. Environmental concerns i.e., the energy it takes to make the bottles and landfill space they utilize is the strongest leg FWW can stand on. However, there are a lot of consumer products that require a lot of energy to make and utilize but we don't stop making them. When it comes to plastic bottles, most cities have aggressive recycling programs that should offset some of the environmental harm. I live in Arlington, VA and until the city can figure out how to deliver mandarin orange sparking water to my tap, its bottled water for me (thankfully I have that choice)! I also don't know about the condition of my local water system but if they do need billions in upgrades I hope they seek private partners rather than jacking up my taxes and fees.


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