Tuesday, August 24, 2010

Great Lakes Water Should be Valued, Not Discounted

A central premise of the new Great Lakes Compact is that Great Lakes waters are worth protecting and that a premium be placed on water conservation and efficiency. In short, we need to put our own house in order.

That point is being missed by Milwaukee, however, as that city looks to offer Great Lakes water at a discount to lure high-volume business and industry water users to relocate and expand there.

It’s not that we shouldn’t lure sustainable businesses to invigorate the Great Lakes economy. In fact, quite the opposite.

But it’s time community leaders in Milwaukee and other Great Lakes communities put their money behind the words of the compact -– that the lakes are an asset to be touted and protected, not discounted and squandered. Put another way, if Great Lakes cities don’t recognize the intrinsic value of being situated near the world’s largest concentration of freshwater lakes, how can they convince others of their value?

In comments presented to Wisconsin’s Public Service Commission (PSC) in Milwaukee Wednesday, Alliance Water Conservation Director Ed Glatfelter urged the commission to reject Milwaukee’s bid for a discounted “economic development” water rate, terming it a “a false bargain with cheap water.”

“Great Lakes municipalities with a ready supply of water who want to promote economic development need to promote the reliability and long-term sustainability of their water resource -- genuine qualities that contrast with artificially low prices,” he said.

Indeed, Glatfelter –- with more than 26 years of water supply management experience under his belt -- notes that smart marketing could even help communities pay for water infrastructure if they use full-cost and conservation pricing for water.

There are other reasons to deny Milwaukee’s request. Among them: the city’s water rates are already low. A draft PSC survey of large cities in Wisconsin and throughout the United States determined Milwaukee’s water rates would be the fifth lowest of the 28 cities surveyed even after proposed rate increases on the city’s existing water users are enacted.

Another reason: Fully 68 percent of respondents to a recent survey of corporations considering relocation or expansion say sustainable development is more important now than ever.

Noting growing concerns about the availability of long-term water supplies beyond the Great Lakes Basin, Glatfelter said, “The reliability, long-term sustainability and quality of the Great Lakes Basin’s water resource should be attractive enough -- even at fully valued prices -- to be an effective economic development tool.”

Attractive enough, to be sure, but still taken for granted by many in the region. It was this same complacency that drove adoption of the Great Lakes Compact back in 2008, a policy that largely bans water diversions from the Great Lakes at the same time that it calls for ratcheting up conservation and water efficiency in the region.

The simple thinking was this: the region must demonstrate that it values and protects the waters of the Great Lakes before it can tell others who come calling for water to do the same.

Ultimately, the battle for maintaining the Great Lakes over time won’t be won with a single sweeping piece of legislation, but with many smaller acts that underscore our reverence and commitment to these waters.

The Wisconsin PSC has an opportunity now to send a clear message that Great Lakes water doesn’t belong on the closeout rack.

Alliance For The Great Lakes

Monday, August 9, 2010

Exports in the Great Lakes:

How Great Lakes Metros Can Build on Exports and Boost Competitiveness



Using newly developed information from the Brookings report “Export Nation,” this analysis of export activity in the 21 largest metros of the Great Lakes region for the years 2003 to 2008 reveals that:

■ Exports support 1.95 million jobs in the largest metropolitan areas in the Great Lakes. Even after decades of decline in manufacturing employment, export industries (primarily manufacturing) still employ millions of people in the region, ranging from 398,000 in Chicago, to 240,000 in Detroit, to 20,000 in Des Moines, as of 2008.

■ Great Lakes metros have some of the highest dollar volumes of exports and
the greatest reliance on exports of any of the large metropolitan areas in the nation. Chicago and Detroit rank third and ninth, respectively, in total dollar export volume among top 100 metropolitan areas, and Minneapolis, St. Louis, and Indianapolis all rank in the top 20. Great Lakes metros also tend to export a greater proportion of their economic output than most large metropolitan areas.

■ In general, Great Lakes metros with the highest levels of manufacturing employment are less innovative than their manufacturing oriented or export intensive peers. Nationally, metros that are manufacturing oriented or export intensive (or both) tend to create patents at much higher rates than other metros. But most Great Lakes metros underperform on innovation compared to their national peers, despite high levels of manufacturing employment and generally high export intensity. Only three of the 15 most manufacturing-intensive metros in the region, Detroit, Minneapolis, and Rochester, post above average patenting rates.

■ The region’s metros lag the nation’s other large metros in terms of service exports and service export growth. Only Chicago and Minneapolis export more services as a share of total output than do the nation’s top 100 metros as a whole, and only four Great Lakes metros (Syracuse, Buffalo, Des Moines, and Columbus) outpaced other large metros in the growth of their service exports. Despite this lackluster growth performance relative to other metros, infl ation-adjusted service exports grew faster than output in 20 of the 21 Great Lakes metros from 2003 to 2008 (Pittsburgh was the only exception).

■ Considerable growth in global customers for products and services produced in the Great Lakes metros will come from the large emerging markets of Brazil, India, and China. Most Great Lakes metropolitan areas (12 out of 21) send 8.6 percent or more of their export value to Brazil, India, and China (the BIC countries), meaning that they meet or exceed the average large metro export share going to the BIC nations. Some Great Lakes metros, such as Youngstown, Des Moines, and Columbus, have seen huge jumps in the value of their exports to BIC countries over the last five years.

A legacy of success in exports does not guarantee future dominance, a lesson that Great Lakes metros should have learned through rough experience. But raising exports holds out the promise of creating thousands of new jobs in Great Lakes metros that desperately need them. For that reason, metropolitan leaders and their federal, state, and private sector partners must be aggressive and creative in determining what new or re-imagined goods and services the world demands from them, and equally dedicated to expanding their global reach.