How Water Offsets Can Fix the Drought (and Save Energy)

Posted in: Drought, United States Water News, Water Conservation, Water Technology
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Water offsets could be one way to reconcile broken pricing schemes in the face of severe drought. Photo Credit: Shutterstock.

Article courtesy of Jeremy Faludi | April 24, 2015 | GreenBiz | Shared as educational material

Everyone in California is aware of the record drought we find ourselves faced with.  However, most of the solutions being proposed will cost Californians significant amounts of money without significantly reducing water use.

One method to help save water in California that could provide more savings at less cost than many other measures: water offsets.

Roughly 80 percent of the state’s water is used for agricultural irrigation, and half of that water is wasted — evaporating before it ever sees the crops — making irrigation a far more effective way to address water scarcity than reducing urban water use.

And farmers are not solely to blame; it’s the state’s underlying water rights and pricing systems that encourage waste. Still, these systems are not likely to be adequately reformed anytime soon.

In the meantime, water offsets could act as a patch to work around these misaligned incentives, connecting those who pay too much for their water with those that do not pay enough. The goal would be having Californians invest their money in the most effective water-saving systems.

Green architects design buildings to save water in many ways, and spend significant amounts of money to do so.  But the amount of money spent on installing low-flow sinks, faucets, and showers in a building could actually save three to nine times as much water if it were spent buying part of a drip irrigation system for a Central Valley farmer.

Farmers generally do not have the money to pay for such systems — and even if they did, the price they pay for water is so low that the investment would not pay off.  Urban water prices, however, are significantly higher.

That’s where building design comes in; buildings applying for LEED certification have several points to earn related to water savings, and builders by definition have capital available to invest in a project. For over a decade, LEED-certified buildings and others have paid for “renewable energy credits.”

These credits are money paid to an electricity generation company to install new windmills or solar panels equivalent to the amount of energy the building uses. While the building itself uses normal grid electricity, the new renewable energy generation matches the building’s power use, so that on a global scale it is as if the building had those solar panels or windmills on its roof.

The difference is that it’s usually more cost-effective. Rooftop wind systems generate far less electricity per dollar spent than two-hundred-foot-high towers on windy plains. The same is true for water use.

Forging new financial models

Eight years ago, I proposed water offsets and ran rough calculations for how much more water would be saved by a new building owner buying a drip irrigation system for a farmer, as opposed to buying low-flow fixtures for the new building at hand.

At the time, the multiplier was 3.5x or more; $6,000 could buy 20 waterless urinals, which would save about 340,000 gallons per year, or the same $6,000 could buy ten acres of drip irrigation system, which would save about 1.2 million gallons per year.

And that was before the drought.

Now the difference between drip irrigation and traditional irrigation will be even larger, due to more evaporation losses over drier lands. Other calculations I ran with dry locations, such as Arizona, suggested that water offsets could save 8 or 9 times more water there than the same investment in a building’s low-flow fixtures.

Such calculations will certainly not be exact today, so I encourage experts to re-run the numbers on likely savings. If even half of the benefit described here could be gained by water offsets, it would radically improve the effectiveness of water reduction.

Indeed, variations of this model actually exist today.

The nonprofit Bonneville Environmental Foundation (BEF) offers “water restoration certificates” that can include either habitat restoration or installation of water-saving irrigation systems. They are a credible organization already used by LEED practitioners for carbon credits and renewable energy credits.

Water offsets from them and others need not be limited to new building construction; just as with carbon offsets, anyone can buy them, and each individual’s small payment would provide a small percentage of a large installation of drip irrigation.

Or, more similarly to the building industry, urban water utilities considering installing water-saving equipment could instead pay for a farmer’s drip irrigation and negotiate with the state for credit towards their water reduction mandate.

In addition to the water savings, water offsets also save electricity; 2-to-3 percent of California’s entire electricity generation is used just to pump water from Northern California to Southern California.

This does not count pumping from the Hoover Dam, nor does it count the fact that 90% of farm electricity is used to pump water for irrigation, according to the National Resources Defense Council’s report “Energy Down the Drain: The Hidden Costs of California’s Water Supply (PDF).”

The $6,000 drip irrigation system described above might save 850 kilowatt-hours per year.  This is not large, but significant; it could help defray the cost of the system slightly, making it even more cost-effective.

Ideally, water offsets might also help culturally connect urbanites and farmers, so they can build political alliances rather than battling.

Water offsets will not be a “silver bullet” for California’s water shortage, but they could be a highly effective and affordable part of the solution — far less expensive than building large desalination plants, far less onerous to California citizens than extreme privation measures and easily scalable.

At the very least, It is worth experimenting with, and could create new markets for investment while also helping us bear our record drought.

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