Point of View

NC should invest in water, the new oil

October 17, 2013 

Hall-of-Fame announcer Jack Brickhouse once pointed out, “Any team can have a bad century,” with reference to his beloved Chicago Cubs. Unlike the performance of that hapless team, North Carolina’s economy, on balance, has done reasonably well since the Cubs last won the World Series in 1908. North Carolina was one of the poorest and most backward parts of the South at that time, but over the course of the next hundred years the state dramatically improved its economic position both in absolute and relative terms.

Opinions differ over the reasons for the improving fortunes of the state, but no serious commentator would deny that the state’s long-term commitment to infrastructural improvements played an important role. This commitment began early in the last century, and by the 1930s the results on the state were readily apparent, transforming the image of North Carolina from the “Rip Van Winkle State” – its nickname in the early nineteenth century—to the “Good Roads State.”

For much of the 20th century North Carolinians on both sides of the political aisle and at all levels of government shared a belief in the importance of strategic investment in infrastructure – roads, bridges, rail facilities, airports and water-management projects of various kinds – in supporting and promoting the state’s economic development. Policy initiatives reflective of this belief enabled the state to create a modern, efficient infrastructural “portfolio” that in combination with industrialization, investments in education and other forms of human capital and prudent macroeconomic policies go a long way in explaining North Carolina’s 20th-century rise.

Even today, after a period of relative inattention, North Carolina often grades out better than many other among states in terms of infrastructure. For example, in the 2013 edition of its “Infrastructure Report Card,” the American Society of Civil Engineers, a highly-respected professional organization, gave North Carolina a grade of C, whereas its grade was D+ for the U.S. as a whole.

One of the areas in which North Carolina’s infrastructure was deemed deficient on the report card pertained to water-management facilities. Water management is a broad portmanteau category that includes infrastructure ranging from bridges and dams to storm-water/waste-water facilities and from coastal beach protection to drinking water provision. North Carolina’s needs are large in each of these areas.

According to the report the state is home to 2,192 structurally deficient bridges (12.1 percent of the total in N.C.) and 1,255 “high-hazard” dams. Moreover, in order to bring its drinking-water infrastructure up to scratch it is estimated that North Carolina would have to invest $10 billion over the next 20 years and another $6.6 billion over the same period to do the same for its waste-water facilities.

The sums of money bandied about in the 2013 Report Card are considerable and the opportunity costs of public (and/or private) investment in water infrastructure must always be borne in mind. That said, water is often considered the “oil” of the 21st century, and other states and countries are aggressively pursuing water-management initiatives of one sort or another because of both the need for modern, efficient hydro-infrastructure and an appreciation of the profound role that water plays in the broader economy, whether in agriculture, manufacturing, tourism and recreation or power generation. Michigan’s “Green Jobs for Blue Waters” initiative and Canada’s “Blue Economy Initiative” come immediately to mind in this regard.

North Carolina’s unemployment rate, measured narrowly, is currently 8.7 percent, placing us 44th in the country by that metric. Prudent, cost-effective investment in water infrastructure and water management would not only enhance our long-term economic competitiveness, but – in a win/win scenario – also help to create a range of much-needed jobs with various levels of skill requirements all over the state. The Global Research Institute at the University of North Carolina-Chapel Hill is currently studying the relationship between investment in water infrastructure and job creation in North Carolina as part of the University’s pan-university “Water in Our World” research theme. Research undertaken thus far suggests that opportunities for the creation of useful, productivity-enhancing jobs in the water infrastructure domain are legion.

Many of these jobs obviously will emanate from the public sector, but opportunities abound in the private sector as well, and there are possibilities for public-private “mixed” investment in water infrastructure projects – an investment strategy that was quite common in the U.S. in the first half of the 19th century, helping to usher in our so-called “transportation revolution.”

Wherever such jobs originate, it is likely that they will play an important role in righting our listing economic ship. Who knows? In time, North Carolina might even become known as the “Waterborne State.”

Peter A. Coclanis is Albert R. Newsome Distinguished Professor of History and Director of the Global Research Institute at UNC-Chapel Hill.

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