Water Company Investing in the 'Natural Infrastructure'

By investing in 'natural infrastructure', through conservation and restoration, EMASA  water company from Brazil controls soil erosion and the resulting sediment entering the Camboriú River.

Blog by Timm Kroeger and Claudio Klemz 

Balneário Camboriú is both a famous Brazilian beach destination and a water supply management puzzle. The resident population of the city is just 170,000, but swells to over 800,000 during the tourist season. Like many water utilities facing growing demand and the effects of climate change, the local water company, EMASA, must invest carefully to secure water for its fluctuating customer base.
 
Unlike many water utilities, however, EMASA is investing in the natural system where its water comes from.

By investing in “natural infrastructure” such as forests through conservation and restoration, EMASA controls soil erosion and the resulting sediment entering the Camboriú River. The result is reduced water treatment costs and water losses. As EMASA’s Environmental Engineer Rafaela Santos says, “This river is the only supply that we have to Camboriú and Balneário Camboriú municipalities, so it’s important that EMASA invests in actions to preserve this resource to last more time and with a better quality”.

Around the world there are a growing number of contractual arrangements—sometimes called “water funds”—between municipal water companies and upstream land owners aimed at improving source water quality or quantity.

Nevertheless, the potential of natural infrastructure options for improving water quality or flows far exceeds current spending. According to the Beyond the Source report—which analyzed 4,000 cities to demonstrate the health, climate, and biodiversity benefits of source water protection—costs can be fully offset by water treatment savings alone, in 1 out of 6 cities.
 
Mobilizing more investments hinges in part on the business case for water users, that is, the competitiveness of watershed conservation programs with conventional engineering solutions.
 
Yet, remarkably few credible examples of such business cases exist for watershed conservation. Furthermore, those interested in evaluating the business case in their own geography lack the examples and tools to do so in a robust manner.
 
To fill the gap, scientists from The Nature Conservancy constructed an analytical framework that provides a template for how to conduct a rigorous return on investment (ROI) analysis for watershed conservation programs.

This ROI framework connects interventions (forest conservation and restoration) in the watershed to changes in hydrologic outcomes (total suspended solids concentration) and associated economic values for specific water users, like EMASA.
 
Applying this ROI framework to the Camboriú watershed conservation program, they found that reductions in sediment treatment cost and water losses offset 80 percent of the water company’s investment in the program over a 30-year time horizon, and all of its investment over time horizons of 43 years or more.

However, because approximately one fifth of the total program costs are borne by others than EMASA, the program’s ROI as a sediment control measure is