CHICAGO — If crisis begets opportunity, the people of the Great Lakes ride in the catbird seat. As global demand for clean water steadily escalates, the Midwest is attracting entrepreneurs who would gladly quench humanity’s thirst by selling tanker ships full of Lake Superior and truckloads of handy plastic bottles filled from natural springs. But the region also could become a worldwide center for genuine industrial innovation and new policies meant to conserve and enhance increasingly precious freshwater resources.

And so begins an epic tug-of-war over who gets to ride: The business-as-usual water wholesalers, or the true innovators who offer much more original ideas, such as selling better toilets, instead of lots of water, to all of those thirsty hordes.

Last week Great Lakes leaders introduced a pioneering plan whose fate could decide which way things will go. The proposal, broadly referred to as the Great Lakes Water Management Initiative, attempts to advance more efficient water use in a region that some say is the last place on Earth that needs such a thing. Indeed, most state and provincial governments in the Great Lakes Basin do not actively promote water conservation or regulate large water takings. But the proposed agreement — also known as the Great Lakes Charter Annex — lays down basic principles that governments would use to evaluate water withdrawal proposals and douse the harmful ones.

It could be the most important public policy initiative to protect the Great Lakes since the 1972 Clean Water Act extinguished the pollution-fueled fires on Ohio’s Cuyahoga River.

“At no time at no place in the world have we had an undertaking of this magnitude in terms of water management,” said Sam Speck, director of the Ohio Department of Natural Resources, in a speech here at the annual meeting of the International Association of Great Lakes Mayors and St. Lawrence Mayors’ Conference. “It’s something that goes beyond past undertakings in terms of the complexity of bringing all the players together and in terms of the scale of the effort. It not only promises, if we carry through, remarkably enlightened stewardship. Maybe we’ll provide a model in a world of growing water scarcity that others might learn from and follow.” 

Making Things Better
Perhaps the most important feature of the proposal is the so-called “improvement standard,” which would guide certain water use decisions toward enhancement, not depletion, of the Great Lakes ecosystem. Coupling water project proposals to local improvement measures could lead to removing obsolete dams, restoring natural habitats, or repairing leaky sewer pipes.

“The governors and premieres were very clear that the focus should not be on economic protectionism but on the protection of the resource,” Mr. Speck said. “If we take care of the water, and ensure that our use is sustainable, then we can have more development and more improvement of the economy.”

Clean, fresh water provides the Great Lakes Basin with a unique, competitive edge in the 21^st century because the resource is increasingly rare around the nation and globe. The region can harness its unfathomable amounts of water to retain and grow existing industries, lure corporate leaders and the talented workers they covet, and create new economic opportunities. Yet even the vast Great Lakes ecosystem has proven vulnerable to depletion and degradation. That is why a bipartisan coalition of federal lawmakers recently proposed a multi-billion dollar program to begin repairing some of the damage the Great Lakes already endure.

Civic leaders in the basin, through policy proposals such as the Great Lakes Charter Annex, now are deciding how best to build an economy that simultaneously capitalizes on and celebrates such a bountiful water supply. The challenge is to find a formula for economic activity that maintains and, ideally, enhances the lakes, rivers, wetlands, and aquifers.

Meeting or Ignoring the Challenge
Innovators appear ready to meet the challenge. In 2003, for example, Falcon WaterFree Technologies located the U.S. hub of its international operation in Grand Rapids. Falcon is in the business of water conservation. The company manufactures and sells men’s room urinals that require no flushing, save some 40,000 gallons of water per year, are more hygienic than the typical porcelain potty, and are cheaper to install, operate, and maintain. 

But other ventures are pulling in the opposite, more traditional direction — resource extraction. For instance, Nestle Waters North America in 2001 built a water-bottling plant in Mecosta County, Mich. The company annually pumps, bottles, and sells millions of gallons of spring water from an aquifer that otherwise would replenish the Muskegon River, which feeds Lake Michigan.

Both Falcon and Nestle forecast a rapidly expanding market for their respective exports. Falcon’s growing client list includes thirsty western cities like Beverly Hills, cost-conscious companies such as Daimler Chrysler, and even Nestle. Nestle Waters distributes its Michigan-produced Ice Mountain brand bottled water throughout the Midwest. Nestle hopes to expand its extractions from the Great Lakes oasis, so it is busily searching for other sources around the state even as citizens wage a highly effective lawsuit against its Mecosta County operation.

Enter the Great Lakes Charter Annex. The proposed agreement attempts to better define the laws about how water is used to boost economic development. It is driven by the common belief that numerous external threats — climate change, soaring populations in the U.S. Southwest, schemes for bulk water export — threaten the integrity of the basin’s economy, environment, and culture.

The proposed agreement would amend the 1985 Great Lakes Charter, a non-binding accord that encourages collaboration among the region’s state and provinces. Primarily, it would establish an official interstate compact among the eight U.S. states — Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio, Pennsylvania, and New York. The compact outlines common water management and conservation standards that each state would enact into local law and use to regulate new and increased water withdrawals for businesses, farms, municipalities, and other users.   

More Efficiency, Less Extraction
The proposal, more than three years in the making, would make the diversion of large amounts of Great Lakes water to places beyond the basin nearly impossible. Effective immediately under the agreement, any proposed water withdrawal averaging one million gallons per day over any 120-day period would require unanimous agreement from the Great Lakes governors if it leaves the basin. New or increased withdrawals that stay in the basin but average a loss of five million gallons per day over 120 days would require approval of a super-majority of the governors.

Whether the proposal does more to help conservers like Falcon or extractors like Nestle remains in question. As proposed, terms in the agreement such as conservation “plans” and “measures” lack definition. And new rules to manage in-basin water projects using less than five million gallons per day averaged over a 120-day period — ventures such as Nestle’s Ice Mountain plant — could take as many as 10 years to go into effect.

“The governors and premiers continue our work to achieve our first priority — the sustainable use of water resources,” said Wisconsin Governor Jim Doyle, a Democrat who co-chairs the Council of Great Lakes Governors with Ohio Governor Bob Taft, a Republican. “Once implemented, these agreements will ensure that when other regions look toward the Great Lakes to solve their problems, we will have the legal authority to protect ourselves. In part, this means that we must take it on ourselves to improve our own stewardship over the use of Great Lakes water.”

The proposed water use agreement comes as economists predict that environmental quality will play an increasingly crucial role in the Great Lakes community as it competes in the global marketplace. The region’s past economic history is one of extraction, export, and exploitation of natural resources — from fur to timber to oil and gas. But the modern economy uses information — not natural resources — as its chief raw material. And it measures competitive advantage by an area’s ability to attract talented workers, generate innovative ideas, and turn them into goods or services.

“Jobs are not so much tied to ports and minerals and transportation systems, but rather intellectual work that can take place anywhere,” said Bill Testa, vice president of the Federal Reserve Bank of Chicago. “More than ever, people want to live and work near the water. Work location has increasingly become more footloose and fancy-free. Jobs follow people. And people go where life is good.”

Selling Quality
The proposed agreement ultimately aims to make life better around the Great Lakes . The current regulatory system meant to protect that ecosystem is a patchwork of hundreds of public programs and regulations designed merely to slow economic activities that, by their nature, degrade the environment and poison the people who depend on it. In contrast, the agreement employs a unique improvement standard to actually enhance freshwater resources.

As drafted, the agreement would encourage resource managers and large water users to ensure that their projects actually add value to the economy, environment, and society. For local leaders attending the Mayors Conference, many of whom are busy upgrading sewer infrastructure and transforming industrialized shorelines into parks to lure people and business, such a standard could create a new mechanism to fund local restorations.

“Critics have said this [Agreement] has the possibility of commodifying water,” said Henry Henderson, a partner at Policy Solutions Limited, a Chicago-based consulting firm. “What has begun here is a way to commodify ecological services and ecological benefits as the basis for creating a natural marketplace that starts to energize private investments in ecological improvements in local communities.”

The public review period for the proposed water management agreement runs through October 18, 2004. The Council of Great Lakes Governors will sponsor two meetings, one on September 8, 2004 in Chicago and another on September 20, 2004 in Toronto. A complete schedule of meetings and hearings in all eight basin states regarding Annex 2004 is available on the organization’s Web site, www.cglg.org.  

Andy Guy, a journalist, directs the Great Lakes Water Project and manages the Michigan Land Use Institute’s regional office in Grand Rapids. Reach him at aguy@mlui.org