Federal Policies to Advance Decentralized and
Integrated Water Resource Infrastructure

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The federal government plays a significant role in perpetuating the hard-path approach. Regulatory structures were devised which assumed that modern sanitation and safe drinking water could only be provided through centralized distribution or collection and treatment. Progress in small towns was achieved, for example, when public water lines were extended to all homes, or when failing private septic systems were replaced by public sewers and point-source treatment plants. Federal subsidies to local projects from a host of federal agencies were built around those assumptions as well. What this means is that local water protection advocates typically have to ask their communities to buck federal and state regulators, as well as give up federal subsidies, if they are to advance a soft path solution.

Multiple federal agencies have also gotten involved in a piecemeal fashion in one or another aspect of water infrastructure - through water supply or water quality concerns, flood control, housing, rural development, etc. But rarely is a serious integrated water perspective taken at any level. This "siloing" of mission and the lack of coordination among agencies have led to federally-mandated and federally-funded projects that have collectively overstressed the environment and wasted resources.

This report is about what the federal government could do to advance a soft path water paradigm across the U.S., difficult as that may be. Clearly, the most significant federal actions would be to remove the strong bias in federal funding and regulations favoring hard path solutions, to integrate and coordinate the missions of federal agencies involved with water supply and quality, and to ramp up and revitalize basic research and demonstration programs. Pilot projects would cover the costs and risks of early innovations and would develop and try out the new institutional structures needed for soft path system management.

In the process, the government would also be signaling the private and non-profit sectors that large new markets should be opening over time for new decentralized technologies, and the talents and resources of venture capitalists, major technology corporations with substantial research budgets, real estate developers committed to more sustainable development, and new non-profit research foundations could be harnessed as well. Because small-scale treatment units are generally on private property, the private sector can play a more substantial role than it can with large, centralized systems on public property. These new private markets need to be encouraged as engines of reform and innovation, and state and local regulators should carefully expand the suite of new technologies that can be used. Federal tax incentives would stimulate market expansion. As the markets develop, however, public oversight will be needed to assure both high-quality service for all income levels and consistency with broader water resource and community plans.

These critical changes in federal policy will be difficult to accomplish in an era when the federal government shies away from imposing new mandates on state or local governments and is facing major federal budget deficits. However, there are modest, short-term opportunities for federal help to soft path water "change agents" at the local level. Both federal agencies and Congressional committees still support the concept of grants for innovative environmental projects, studies, and conferences, and for the piloting of new technologies at federal facilities. Advocacy at the national level could potentially divert more of these funds to the soft path water field, and through demonstrated success of soft path approaches, slowly build the case for more substantial reform of federal policies over time.