Water Resources

• Pages: 257-272
• Author: Michael P. Vandenbergh,Sarah E. Light,James Salzman

257

Chapter 12

WATER RESOURCES

A recent issue of Reader’s Digest features a picture of a glass of

water with a question superimposed in bold type: “How Safe Is Our

Water?” To make sure the interested reader is left with no doubt, an

arrowconnectsaproductwarningin brightredtypetotheglass,

saying,“MAYCONTAIN:ROCKETFUEL,BIRTHCONTROL

PILLS,ARSENIC,ANDMORESHOCKINGINGREDIENTS.”The

same month’s cover of the trendy magazine Fast Company features a

head shot of the movie star Matt Damon. No mention is made of his

current starring role or love life. Instead, the attention-grabbing title

reads, “Matt Damon and His Global War for Water.”

There is likely little overlap in the audiences ofReader’s Digest

andFastCompany(indeed,itwouldbehardtocomeupwithtwo

titles less likely to be bought by the same person), but editors of both

clearly think that their readers care about water. And they’re right.

Few human actions and conditions are truly universal. Some people

choose to eat red meat; some eat only fish; some eat no meat at all.

But everyone drinks water.

And just as water is central to the well-being of people so, too, is

itcentraltotheviabilityofmanyprivateorganizations.Startwith

water quality. Consider for a moment how the beverage giants Coca

ColaandCoorsBrewingdependoncleanwaterfortheirproducts.

Theentirebottledwatermarketwasthreatenedin thelate1980s

when benzene was found in Perrier bottled water. Water quantity is

central to industries’ business models, as well. Hydropower utilities

cannot produce electricity without a reliable source of water held in

theirreservoirs.Farmersmustfallowtheirfieldswhenwateris

scarce. And environmental groups understand well that the birds,

fish, and plants in natural systems all depend on water.

Governmentsareequallyawareofthedualnecessitiesfor

provision of adequate water quality and quantity. It is no coincidence

thatcomprehensiveandcomplexlawshavebeenpassedtogovern

water management and treatment. For the past fifty years, the Clean

Water Act has prohibited the discharge of pollutants from pipes into

navigablewaterswithouta permit.Whenoneofthisbook’sco-

authorscapsizedin aboatin theCharlesRiverofBostonin the

1970s, the fetid waters caused rashes. Today, people happily play in

the same waters with no worries at all.

Despite this significant progress, challenges to water quality

still remain. Roughly one-third of assessed waterbodies remain out

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PEG IN ACTION: TOXICS, WASTE, WATER,

AND NATURAL RESOURCES

Pt. III

of compliance with water quality standards. Water quality remains

an even greater challenge in poorer countries with less investment in

infrastructure. Our water laws also generally fail to provide

significant protection of water sources. Preventing contamination

and development of watersheds requires land use regulation. This is

politically difficult and weakly addressed in both the Clean Water

Act and the Safe Drinking Water Act. Hence the need for private

water governance in both the United States and abroad.

This chapter focuses on two of the policy instruments in the PEG

toolkit: Payments and Prescription.

I.Payments

A.The Manhattan Company

We tend to assume that government must be central to providing

drinking water but that is a fairly recent development. For much of

European history, water was provided by private actors. This was

equally true in the early days of New York. At the time of European

settlement, residents relied for water on a pond known as the

“Collect” (the anglicized pronunciation of the original Dutch name,

Kalch-Hook). Over time, the Collect, once the best source of drinking

water on Manhattan, had become polluted by the tanneries and

slaughterhouses on its banks. Peter Kalm, a Swedish botanist

visiting New York in 1748, observed that the well water was so

terrible horses from out of town refused to drink it.

To those with an entrepreneurial spirit, the poor maintenance of

the public wells and the increasingly disgusting state of the Collect

posed not a problem but a business opportunity. People with means

began to purchase water from springs outside of town and from

deeper wells. The best known of these wells, located near the main

settlement, became a popular source of water for tea and other

kitchen uses. Water sold from the pump and other sources became

generically known as Tea Water. “Tea Water Men” purchased water

directly from pump owners and carted it throughout the city for sale

in buckets and barrels at a healthy profit. By the middle of the

eighteenth century, sale of Tea Water had become the best and

dominant source of New York drinking water. It was only available

to the wealthy, however, and useless in fighting fires.

New York had been badly hit by yellow fever in 1795, and many

blamed the disease on the city’s foul water and fouler streets. The

state legislature decided to take action. In Albany, Assemblyman

Aaron Burr teamed with Alexander Hamilton, recently retired as the

nation’s first Secretary of the Treasury (and an unlikely Broadway

musical star two centuries later) to transform the city’s request for

public financing powers into a private project. This is the same Aaron