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David Brodwin's blog

The High Cost of Dirty Water

Recently the Environmental Protection Agency issued a new rule to protect America's lakes, rivers and streams. The latest rule prevents the pollution of smaller streams, ditches and wetlands which drain into major rivers. The rule was needed because polluters have changed their practices in response to the Clean Water Act. Prevented from dumping directly into navigable rivers and streams, they move their dumping upstream. A polluter can legally dump toxic waste into a ditch that flows into a navigable river.

Of course, the companies that pollute oppose the new rule. They argue that these regulations, like most regulations, are bad for jobs and bad for economy. They say that regulations lead to higher prices and lower profits, and they cause businesses to eliminate jobs and reduce pay.

But now other companies are speaking out, dividing the business world. Strong water protections create opportunities in some industries even as they create challenges for others.

Regulations disrupt markets. But many other forces disrupt markets as well, and we generally welcome them. Breakthrough products (like the Apple Watch) disrupt markets. So do new platforms (like Uber) and innovative business processes. Regulation leads to change. In every change, some companies win and some companies lose. Some companies shed workers and other companies add them. Why should we fight or fear regulation that disrupts market any more than we fight or fear technological change that disrupts markets?

The market structures that tolerate pollution need to be disrupted. They are not economically efficient for the economy. Large scale water pollution is enormously costly. The Deepwater Horizon explosion and spill in the Gulf of Mexico led to a $20 billion fund to settle damage claims. The cost to fishing in Louisiana was pegged at $2.5 billion and the cost to tourism in Florida at $3 billion. The much smaller chemical spill at Elk River in West Virginia cost the local economy $19 million per day, roughly 24 percent of the economic output of the region.

In Ohio last year, blooms of toxic algae caused mostly by farm runoff hurt the tourist economy on Lake Erie's south shore. Tourism there brings in $1.8 billion per year. In Toledo, Ohio, alone, in just one weekend, $3-$4 million was lost when restaurants and other businesses had to close due to lack of clean water.

Looking across these incidents and many more, there's no doubt that clean water rules help some businesses while forcing others to spend money to improve their operations. Clean water rules directly help restaurants and bars, tourism services, recreation and fitness, and food and beverage producers. Clean water rules indirectly aid most other businesses whose consumers and employees count on clean water to live. That's why large majorities of small business owners support clean water protections.

Meanwhile, lax pollution rules provide a substantial economic benefit to a few industries: chemical production, pipelines and certain factory agricultural operations. But even as profits may fall in these industries due to compliance costs, other opportunities are created as rivers and streams are cleaned up. And many companies find their profits are protected as large scale water quality disasters like the Elk River spill are prevented.

The challenge, politically, is that the few companies that are hurt in the near term by pollution rules are quite vocal and organized, while the many companies that benefit from the rules have been quiet. But that is changing. The beer industry has been particularly outspoken in its support for clean water. Andrew Lemley, an executive at New Belgium Brewing, supported the new clean water rules in recent testimony to Congress. New Belgium is joined by roughly 45 other brewers in calling for stronger clean water protections.

Elsewhere, Marne Hayes, director of Business for Montana's Outdoors,   penned an op-ed calling for clean water rules to protect $3.6 billion in tourism spending that comes to the state each year. Jim Epstein, a Virginia food entrepreneur, argues that the Clean Water Act has added nearly $16 billion in economic value to Virginia's economy.

Now, when you hear regulation being called a "job killer," think twice. A regulation may kill some jobs, somewhere, but it leads to the creation of other jobs elsewhere. That's how it works with creative destruction. And now, more business owners are saying so out loud.

David Brodwin is a co-founder and board member of American Sustainable Business Council. This article appeared in U.S. News & World Report June 8, 2015.

The Climate-Friendly Diet

Every five years, the U.S. Department of Agriculture and the Department of Health and Human Services reconsider what Americans should eat. Their Dietary Guidelines Advisory Committee makes recommendations, but the process of approving these inevitably gets politicized: The USDA defends large, politically connected agricultural corporations whereas HHS seeks to combat diabetes and other diet-related illnesses. As with everything political, money is involved: USDA considers the profits of agribusiness; HHS considers how diet-related illness drives up America's health care costs.

Meanwhile, Americans just get fatter. Two-thirds of U.S. adults are now overweight or obese. So, not surprisingly, the proposed guidelines for 2015 reiterated the call to eat less sugar, saturated fat, salt and fewer calories overall; and to eat more fruit, vegetables and whole grains, as well as to drink more plain water.

But this year's proposal goes further: No longer are the recommendations based solely on how diet affects individual health and well-being. For the first time, the proposed guidelines consider the sustainability and safety of our food system as a whole.

It turns out the unhealthy diet that most Americans eat is hard on the planet as well as hard on our health. Because our diet overemphasizes meat and underemphasizes plants, it leads to "increased greenhouse gas emissions, land use, water use, and energy use."

Last week a group of 700 doctors, public health professionals and other medical experts sent a letter to the heads of USDA and HHS, urging them to adopt the latest diet guidelines. The petitioners include leading researchers at Harvard's School of Public Health and Yale's Prevention Research Center. Joining the call, among many others, is Dean Ornish, famous for his work on low-fat vegetarian diets, and how these diets can reverse heart disease.

One of the most important sustainability challenges with our diet involves the huge amount of water that is needed to produce our food. Agricultural production worldwide accounts for 92 percent of the water used by humanity, according to the Water Footprint Network, which promotes smart water use. With California and other parts of the West locked in a record drought, this matters a lot. California produces more than 12 percent of the U.S. food supply. Or to put it another way, roughly one dinner in eight is grown entirely in California.

The water used for agriculture is a far bigger challenge than the water used by people taking long showers or washing their cars. Meat is the biggest challenge: It takes nearly 1,850 gallons of water to produce a pound of steak, but it only takes about 300 gallons of water to produce a pound of tofu. These figures for beef take into consideration not just the water that the cattle drink, but the water needed to grow the plants that the cattle eat.

If the Western drought continues it will force a realignment of California's agricultural sector and a shift towards healthier food in American diets. California will export less beef and pork (and less nuts, too), and it will export more fruits and vegetables. This will affect price and availability nationwide. It will make people healthier (if not happier).

But water isn't the only sustainability challenge associated with what we eat. A meat-heavy diet adds to climate change too. Raising livestock for food produces one-fifth of the total greenhouse gas emissions released each year. Beef is significantly worse for the climate than pork, poultry or egg production.

Hopefully these new guidelines will be adopted. If so, U.S. policy will finally align with what food experts have been saying for several years now: Steak is not just bad for your heart; it's bad for the planet.

David Brodwin is a co-founder and board member of American Sustainable Business Council. This article appeared in U.S. News & World Report June 2, 2015.

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