Getting Money Smart About Green Infrastructure

A bioswale in the Elmhurst neighborhood of Queens. Photo: Clarence Eckerson Jr./www.streetfilms.org

By Alice Cowman, Climate and Society ’13

New York. A torrential downpour. Suddenly, the edges of pavements are gushing rivers. Did you ever stop to think – where does this stormwater go? Stormwater, in an ever-expanding concrete world, is increasingly causing pollution headaches for local authorities.  My internship at EKO Asset Management Partners (EKO) has been focused on innovative finance structures for eco-friendly solutions for stormwater problems. Surprisingly, my background in public private partnership finance structures has come into use in bringing greenery back to cities.

Stormwater Problems and Green Infrastructure Solutions

Over 800 cities in the U.S. have combined sewer systems. This means that sewage and urban water runoff are directed to the same collection system.  Extreme rainfall can cause this system to overflow and a mixture of untreated sewage and polluted urban runoff spills into the water system, impacting water quality. Traditionally, grey infrastructure such as detention tanks that hold stormwater runoff have been used to control this problem. Green infrastructure, which has nothing to do with St Patrick’s Day much to my initial Gaelic disappointment, is increasingly being used as a cost effective alternative by local authorities. Green infrastructure leverages nature to solve the stormwater problem. Bioswales, rain gardens and downspouts all channel rainwater into the earth, rather than along impervious surfaces,  decreasing stormwater runoff before it causes water quality problems.

Money Matters

Sounds like a great idea – trees and gardens will save the day and as an added bonus will make everything look prettier. However, long- term maintenance, performance monitoring and, as a result, dollars are required for these types of investments. A recently completed report (pdf) by Natlab (a collaboration between National Resource Defense Council, the Nature Conservancy and EKO) for Philadelphia Water District (PWD), looked at the possibility of leveraging private capital for green infrastructure. Initially, an incentive needs to be created and this can only be achieved by charging for the impact of development on the environment. Many cities including Philadelphia are starting to do this though stormwater fees. These fees are charged, mainly to non-residential customers, on the basis of the area of impervious surface they have created. Credits are then given to those that implement stormwater mitigation strategies through green infrastructure.

Once you have an income stream in place, you can then start devising innovative ways to encourage the private sector to get involved through, for example, off-site mitigation schemes which would allow non-residential customers to invest in cheaper residential schemes such as downspouts for credit toward their stormwater fee. In addition, local authorities are encouraged look at long-term performance fee-based arrangements with contractors (i.e. a public private partnership structure) to more efficiently implement green infrastructure solutions and devolve risk away from the public sector. The Natlab report gained widespread recognition and PWD is now in the next stage of implementation of the recommendations.

Photo: Clarence Eckerson Jr/www.streetfilms.org

Looking Long-term

With climate change set to increase the occurrence of extreme events, stormwater is an issue that local authorities are increasingly concerned with. New York has recently announced a $19.5 billion climate resiliency plan. 50 acres of green infrastructure is planned to absorb 32 million cubic feet of stormwater per year. As it currently stands, there seems to be a funding shortfall in the report and only short-term maintenance plans. My internship has been spent working with partners, such as engineering firms, to encourage local authorities to incorporate innovative finance structures such as those already researched in the Philadelphia context.

As Hurricane Sandy has again shown, humans are a reactive species. Green infrastructure is a great idea, which can quickly go bad, if local authorities are not mindful of funding and maintenance over the long-term.  My work at EKO has emphasized the need to be proactive and look at longer time horizons if some real resilience to extreme events heralded by climate change is to be achieved and afforded.

For more on how bioswales are working in Indianapolis, check out this short video by Streetfilms.