The sorry saga of Wellington’s woeful water infrastructure and the lessons it holds for us about how to manage climate change and its impacts
New Zealand Climate Crisis: Blog 4
[2420 words – a 10 minute read]
Introduction:
In parts of New Zealand, including the much of the wider Wellington metropolitan region, the past management of the essential “3 Waters” [3W] infrastructure (drinking water, wastewater, and stormwater systems) is a sorry story, spanning decades of inadequate investment and action.
There are, however, striking parallels between this area of endeavour and how we manage the future impacts of climate change - if we have the wit to learn.
The provision of an adequate supply of drinking water, the effective removal of stormwater and the removal, treatment and disposal of wastewater are essential features of modern urban communities.
These services (and especially the removal of the growing volumes of stormwater that climate change will deliver in future as a consequence of an increasing frequency of severe weather events) are also a key element of sustainable future communities. How this vital infrastructure is provided in future is not, however, the focus of this article. Rather, the intention is to look at how the mistakes of the past in this area can inform better decision-making in the climate change sphere today.
The 3 Waters infrastructure problem
When Wellington became the capital of New Zealand in 1865 the population was 4,900. Nearly sixty years later, Wellington City’s population has risen to ~215,000. The wider Wellington metropolitan area, including Lower Hutt (~115,000), Porirua (~60,000), and Upper Hutt (~48,000), now has a population of ~ 440,000[1].
Houses were (and are still being) built to accommodate the increasing population and the provision of an increasing amount of 3W infrastructure mirrored this, especially during the post-war 1950’s boom period when government money was readily available for upgrading infrastructure. It is a truism however that nothing (except, possibly, life in some form) lasts forever and this constraint applies to the pipework, pumps and other parts of the 3W infrastructure system.
This limitation was well known to both the engineers who designed and built the Wellington metropolitan 3W system, and to the managers and elected officials who oversaw its operation. Ensuring the 3W system components could be replaced in a timely manner was managed by two things; firstly, an understanding of the lifecycle/lifetime of the various system components and secondly, by utilising this knowledge to put aside money, each year, over this timeframe (depreciation) to ensure that the necessary funds would be available to replace the pipes etc when the time came.
This system worked well until the late 1980’s/early 1990’s when local government - including its structures, functions and finances – was reorganised. These changes had a number of outcomes, including two that were of particular relevance to the on-going funding of 3W.
The first was that nthe level of funding that local authorities received was reduced. The second was that prior to the reorganisation, the mayor and councillors had controlled both the long-term policy and day-to-day operational functions of their local authority. The town clerk and city engineer’s roles were the two most important paid positions in the organisation, responsible for administration and infrastructure. The changes saw a non-elected chief executive officer (not necessarily with the same level of local authority experience or understanding of the importance of maintaining infrastructure funding) became the employer of staff, with elected councillors focusing on policy.
The result was that, while money was collected from ratepayers to cover depreciation of 3W pipework and assets for several decades, some local authorities, including in the Wellington region, have spent a substantial part of these funds on other things that have been perceived as more urgent and/or visible. It has been assumed that, in the absence of major (and very visible) failures, that the necessary replacement of pipes and other actions., can be deferred and deferred again - a process that has, conveniently for ratepayers, enabled rate increases, over many years, to be lower than they would otherwise have needed to be.
The problem is that continuing to defer expenditure on assets with a finite lifetime (much of Wellington’s 3W pipework dates from the 1950’s and was expected to have a 50 – 70 year life) is that at some point the strategy, and the infrastructure, will both fail.
Not addressing this problem is simply not an option in 21st century New Zealand. The Wellington metropolitan area absolutely must have a well-functioning and appropriately sized 3W network. Unfortunately, remedying the chronic underspending of previous years will not be cheap with several billion dollars (possibly more) needing to be spent over the next ten years.
More broadly, the historic under-investment in infrastructure is a national issue, with current estimates for the investment needed before 2050 estimated as costing between $120 billion to $185 billion[2], eye-wateringly huge sums of money that will need to be found over the next twenty-five years.
Nationally, it is now understood and accepted that New Zealand is, very rapidly, approaching a critical point in terms of 3W network funding and that very large sums of money will have to be found in the short-to-medium term to address the issue. Of key relevance to the climate change we now face, the nature and scale of the [3W] problem is now accepted and discussion has now moved to how steep the spending trajectory will be, who pays and what the delivery mechanisms might be to ensure the necessary outcomes.
The lessons from this that are relevant to our management of climate change
Firstly, the lesson to be learnt from the 3W saga can, in my view, be summed up as ‘continuing to defer necessary investment in the provision of something that is essential to the functioning and well-being of a community is foolish, a poor use of ratepayer money and, ultimately, is likely to not deliver the needed outcome/s’.
[Unless some technological breakthrough makes the problem redundant or enables major savings in the cost of the service.]
Secondly, what are the parallels between the history of 3W network development and climate change and its impacts and how might this inform decisions around addressing the latter adequately and in a timely manner? The specific requirements of the latter, as far as they directly impact the former (e.g. the need for increased stormwater capacity) are not considered here.
Both are real-world issues that, if not properly managed, will hugely impact the ability of families, businesses, organisations and communities to function sustainably in future.
Both are ‘slow burn’ processes that play out over decades and longer.
The impacts from failing to address either is minimal in the short-term but the magnitude and frequency of adverse impacts increases hugely over time as the process unfolds.
Both require the investment of very large sums of money to adequately deal with the issue (and in general, the earlier targeted investment is made the cheaper the overall cost will be).
Both are affected by the fact that the human brain tends to discount long-term risks - they are perceived less significant or important than risks that occur in the immediate future (a phenomenon referred to as temporal discounting or hyperbolic discounting). This can lead to choices being made that that prioritize short-term gains over long-term benefits, even if the long-term benefits are significantly greater.
Lastly, for quite some time after the problem was recognised and the solutions were known, neither issue enjoyed/currently enjoys a high profile and consequently public discussion, while not non-existent, was/is relatively muted and there was/is currently no strong public voice pushing for the issue to be effectively addressed.
The above combination of circumstances, in both situations, has meant [3W] and could mean [climate change] that, at least in the short-term, the choice, for ratepayer/taxpayer funders and their elected representatives, to do nothing (or not enough to stave off subsequent system failure) and save money had [3W] and has [climate change] considerable attractions. Such decisions however are “penny wise, pound foolish” – some money is saved immediately but a much larger amount of money is then needed to be spent in the future.
An issue that deserves further exploration in future – space constraints prevent a full exploration here - is, with the benefit of hindsight, the role that successive generations of ratepayers have played in the process that saw the 3W infrastructure inadequately funded over a long period of time. More importantly, how might an understanding of this inform the future management of the climate change problem we now face?
It would be both wrong and unfair to label the historical (in)actions of ratepayers in the 3W area as complicit, as ratepayers could and can reasonably expect to have confidence in both the abilities and the processes followed by local authority and central government staff and their elected officials (at both levels) to provide some level of leadership. This includes informing communities about emerging issues and providing their constituencies with options about how such matters could be addressed – and when.
It is also true however that competent adults routinely make choices about important (and less important) matters that affect their lives and those of their families/businesses/communities. Some of these decisions (e.g. where to live, the purchase of a car, who to vote for, employment related matters) have very significant on-going financial and other impacts.
As adults, we are accountable for the choices we that make in life. In some instances, especially those with significant financial or other consequences we often undertake some level of inspection or due diligence process in order to minimise any risk around the decision we make. Such additional measures are often reserved for decisions with legal or significant financial consequences (such as the purchase of a house or apartment, or signing a rental agreement) as due diligence and other processes take time and may also incur costs.
Given what is now widespread level of knowldege about the 3W issue and the impacts on communities, it it can now be resonably be expected that ratepayers are informed on this issue and are in a position to let their local authorities know about how they think the issue (including the on-going cost) should be managed in future in the light of the options available. The same cannot yet be said about climate change however.
Around two-thirds of New Zealand households own a home and the insurance and banking sectors are taking and active and increasing interest in the area of risk management that includes exposure of properties to climate related hazards (e.g. flooding and slips). It is increasingly untenable therefore for most adults to claim ignorance about climate change and its impacts - at least insofar as these will impact on their home.
What is lacking to date is the widespread provision, and effective distribution, of information about climate change its impacts, how these will affect peoples lives and the options and costs of addressing the issue.
Responsibility for this process is primarily a matter for central government. However, because local governement is the point at which “government” first impacts community members’ lives, and becuase the imapcts of climate change will be substanatil at a community level, local authorites also have an important role to play.
In my view it is important however that local authorities understand the limits of their influence and their ability to drive change in this area. To not do this risks ratepayers and comunities becoming complacent about what is being achieved by their local authority to the detriment of addressing the problem.
With the benefit of hindsight around the 3W infrastructure problems that have emerged and are now being addressed, what do we, and our elected Council representatives, need to do differently when it comes to managing climate change?
From a local government perspective:
Firstly, understand what the critical issues are that are essential to the current and future functioning of the city (e.g. climate change impacts, the provision of 3W services). These are what the community needs Councils to focus on and deliver. Matters that are not critical are wants, but despite this distinction and because the process is political, it is highly likely that a number of sectors of the community will see their special wants as community needs.
Secondly, given the risk treatment resources that able to be brought to bear, be clear about which of the critical issues are within Councils’ ability to meaningfully address. (e.g. climate change, especially in the area of adaptation). This does not mean being solely responsible for solving the issue but does mean accepting that there are things that Councils can do to materially contribute to the process and/or solution - and being abe to quantify the gains (eg emission reductrions) that will be made.
Thirdly, both the Council and the community need to clearly understand what critical issues are beyond the mean of Councils to address (e.g. mitigation of greenhouse gas emissions at a town/city/regional level) with these risks needing to be transferred to other parties (e.g. central government and its agencies, individuals and businesses).
Fourthly (and subject to the above point) accept that deferring action/investment on any critical issue/s for reasons of short-term political expediency is unacceptable, as is passing the problem in its entirety onto subsequent generations to deal with. If financial constraints are impacting the necesary expenditures, then expenditure reductions must be made in the “wants” areas.
From a community member or ratepayer’s perspective:
Firstly, the problem of climate change, the nature of its coming impacts on your life and your family/business/community and the ways in which it can be addressed have been known about for some decades. Understand that, if you are an adult and have access to news and/or social media sites, the excuse of “I don’t know anything about climate change” is no longer valid.
Secondly, understand that it is very much in your interest to become involved at some level, in understanding how climate change will affect you and your family/business/community. If you do not then others will make decisions in this area for you and the results may not be in your best interests.
Thirdly, be prepared to act in some way to ensure that climate change and its impacts is kept ‘front and centre’ of mind for our elected representatives. Many community groups have a focus on climate change or include climate change in what they do. Joining with others - or supporting what they do - is an easy way to help contribute to addressing the impacts of climate change.
“The earth, the air, the land, and the water are not an inheritance from our forefathers but on loan from our children. So, we have to handover to them at least as it was handed over to us.” – Gandhi
Footnotes:
[1] While KCDC (population ~58,000) is part of the Greater Wellington Regional Council, as are three Wairarapa based District Councils, they are not part of the Wellington Water partnership (that has the managed Wellington’s 3W infrastructure over the past ten years) or its predecessor organisations such as the Wellington Regional Council Water Board.
[2] Economic analysis of water service aggregation: final report (Water Industry Commission for Scotland, 2021) Found at: https://wics.scot/system/files/2022-02/Three%20Waters%20reform%20-%20Economic%20analysis%20of%20water%20services%20aggregation.pdf
