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Globally, government agencies are at a nexus in how to plan for and address society’s dependence on infrastructure to sustain economies, support and protect people, and implement strategies to provide for an appropriate level of reinvestment. Partnerships with the private financial world would help develop an effective framework for investments and acceptance of risk.
To begin, even the definition of critical infrastructure depends on one’s individual perspective. For many, family and home infrastructure are at the center. Keeping this “family system” safe and functioning is a daily need depending on clean and available water, energy, and shelter. In order to maintain the family system function, there is a need to periodically repair, reinvest, and protect the home “infrastructure.”
Sustaining Basic Needs
Critical infrastructure on the town and city level is more expansive and expensive. The water and energy infrastructure needs must be able to deliver basic commodities to homes and businesses in a safe, reliable, and consistent manner. The ongoing domestic water supply incident in Flint, Michigan, which began in 2014, exemplifies the problems that can manifest if the municipal sector does not maintain and sustain its infrastructure. Roads and bridges that connect homes to stores, hospitals, schools, fire and police departments, and jobs are critical elements. Without them, the sustainability and integrity of a town or city would diminish quickly.
On a regional and national level, critical infrastructure gets bigger, more complex, and not any less important. With a growing reliance on the internet and the need to protect against floods and droughts, coastal storms, and other disasters, all of the following would be considered critical to the safety and economy of the nation: electrical grid structures; natural gas pipelines; oil delivery and refineries; regional transportation linkages and connections; airports; harbors and ports; inland waterway systems with locks and dams to regulate flows; hydropower production; and integrity of the data “cloud.”
The nation is infrastructure critical at many levels, which vary on a day-to-day basis. Adding to the equation are the unknown effects that future extreme weather events will have on seasonal, sub-seasonal, and daily temperatures and precipitation, as well as the additional compounding stresses that will result. An example is the challenges that many traditional power plants are having with cooling water. As temperatures warm, the intake water for cooling is higher, resulting in less-efficient power production.
Historically, the U.S. federal government has funded construction and long-term maintenance of much of the primary land and water infrastructure. This federal support, includes the construction of the interstate system, the electrical grid, the inland waterways system, dams; maintenance of harbors and ports; development and safety of airports and railroads; funding for the building of water treatment and distribution facilities; and flood control along rivers. Strategic investments have allowed the nation and economy to grow.
The Crossroad of Need Versus Desire
Today, the nation is faced with a staggering amount of investment dollars required to replace and upgrade infrastructure while facing a future of increased public demand and a dwindling supply of federal dollars. The federal agencies that have traditionally supported energy and water infrastructure development – the Department of Energy, Bureau of Reclamation, U.S. Army Corps of Engineers (USACE), and Environmental Protection Agency – are finding more of their budgets allocated to operations and maintenance rather than construction. So, clearly, reinvestment requires a new approach.
The first step is determining what is “needed” in respect to critical infrastructure versus what is “desired.” Infrastructure priorities must be identified before being able to move forward with replacements, upgrades, or in some cases divestments. One approach is to perform risk-based assessments of existing infrastructure to determine what is critical to existing and planned needs. An assessment must include an expansive dialogue with stakeholders and incumbent federal and state agencies to determine how to define critical infrastructure and the reasons why. Often, this is the most difficult step as it challenges established or historic perspectives that are hard to let go.
A transparent metric-based risk assessment can support logic-based infrastructure investment decisions – for example, the assessment report and process that Congress directed the USACE to accomplish following Hurricane Sandy. Specifically, the USACE developed infrastructure system rebuilding principles that embrace risk reduction assessments. Many of the lessons learned from Hurricane Sandy were then captured in the USACE’s January 2015 report, entitled “North Atlantic Coast Comprehensive Study: Resilient Adaptation to Increasing Risk,” a report required by Congress in the Disaster Relief Appropriations Act.
Next is to determine if the infrastructure needs can be addressed through alternative approaches to regional or local management actions. As an example, to improve water supply availability or flood control flexibility, perhaps what is needed is a policy change to the operational rulebooks that govern how specific dams are operated. Alternatively, perhaps allowing water to be temporarily stored in aquifer recharge basins may preclude having to build new dams or costly development of new levees or flood control structures. From a power perspective, decentralizing the electrical grid may meet the same need as hardening the protection around a power plant challenged by rising sea levels. The point is that all options should be considered, not just the physical replacement.
Lastly, and perhaps the most difficult, is how to pay and contract for updating or replacing infrastructure. Initial development came when the public and politicians in the United States were willing to invest both political and financial capital into rebuilding the infrastructure. Today, the cost of replacement is beyond what Congress is willing to support and, as a result, the reinvestment approach is more focused on “fix when fails” and dependent on supplemental appropriations, which is not a sustainable or predictable equation. This is where innovative financing is needed through public-private-partnerships, Water and Transportation Investment Funds, municipal and state bonding, insurance, mutual funds, and strategic federal and state investments.
The key to success will be to build partnerships with the private financial world to develop the framework that provides a clear path to return on investments and acceptance of risk. To implement any approach that partners with the private sector requires an update to how the government does business, specifically procurement and contracting. Including new approaches that recognize and embrace partnerships are needed to effectively pivot to the changing needs of the nation.
Determining the path forward on addressing reinvestment in critical infrastructure is not easy. Extreme weather events and the impacts of an uncertain environment all require flexibility and resilience in planning and thinking. Development of a strategic infrastructure path forward requires a partnership between the federal, private, stakeholder, and academic worlds.