water issue(s)

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How on Earth do water systems want for investment in an economy that somehow pours trillions of dollars into cryptocurrencies?

The Water-Dogecoin Paradox In an economy awash in capital, why does water want for investment? Cryptocurrencies turn code into gold, but water is the ultimate liquid asset. America's water and sewer utilities need trillions of dollars of investment—a state of affairs now thoroughly documented and loudly lamented.* Water/sewer systems provide the most basic of basic services; they're tangible, provide real value, and sustain the entire economy. The water sector's investment troubles aren't due to a financial crisis or lack of liquidity in the broader economy. In fact, the economy is absolutely awash in capital. So why does the water sector struggle to secure financing for the nation's most critical infrastructure? Capital aplenty A key to the astonishing success of capitalist economies is the way that complex equity and securities markets transform financial capital into productive capital, turning dollars and cents into foundries and factories. Current economic indicators point to abundant financial capital available for investment. Corporations are holding record cash reserves and posting strong earnings, while equity and credit markets remain robust, despite geopolitical and tariff uncertainty. Liquidity remains strong. The AI sector has attracted massive capital flows, demonstrating investor willingness to finance long-term infrastructure. Record high gold prices indicate liquidity surpassing pre-COVID conditions, in part due to investor worries about an AI bubble. There's so much capital sloshing around financial markets that investors drove $600 billion growth in the cryptocurrency market in 2025. That's more than twelve times the value invested in water/sewer bonds last year. As I write this, the cryptocurrency Dogecoin—which was supposed to be a joke—has a market value of $23 billion. Water infrastructure literally sustains life.** Cryptocurrency literally is nothing. How on Earth do water systems want for investment in an economy that somehow pours trillions of dollars into cryptocurrencies? If Dogecoin can raise billions on a meme, what does it say about us when clean water can't?   Use value, exchange value, and ironic underinvestment In The Wealth of Nations, Adam Smith famously observed: Smith's great insight was the distinction between use value and exchange value, and his water-diamond paradox reflects the dilemma facing America's water and sewer utilities. Water systems have immense use value—they are essential for life, health, and economic activity. Yet to access financial capital, utilities must convert that use value into exchange value, typically through the bond market. Historically, utilities have been investor favorites: they're tangible, reliable, and backed by a service that no one can live without. If water systems struggle to attract financing, it is not because capital is scarce. Investors are pouring trillions into cryptocurrency, which has no use value at all, but apparently immense exchange value. The dearth of capital for pipes and plants and reservoirs lies in perception: utilities are seen as poor investments. Why? Too often utilities look like deadbeats—charging low rates, keeping shoddy records, carrying shaky balance sheets, or serving shrinking customer bases tied to single industries. Others have governance boards unwilling to invest in their own systems, even when sustainability demands it (we launched Waterworks Excellence in part to help leaders clarify priorities). And looming in the background is the specter of bailouts: why sacrifice for success if failure brings free money from state or federal programs? Capital markets reward confidence and penalize risk. Investors chase assets that promise stability, growth, liquidity, and returns. Utilities that can't demonstrate sound management, financial resilience, and a willingness to price services sustainably will remain trapped in Smith's paradox: indispensable in use, undervalued in exchange. Credit Counseling Large municipal water and sewer utilities generally enjoy strong credit ratings and easy access to capital markets. As long as their leaders are willing to invest, large utilities' diversified customer bases and professional management make them attractive to financiers. But for smaller and economically distressed utilities, converting use value into exchange value requires demonstrating financial sustainability. That means cleaning up the books, implementing rates that generate sufficient revenue, and ensuring accurate metering and reliable billing. It means responsible oversight and qualified management. For long-term sustainability, it also means consolidating small systems to diversify revenue streams, spread expenses, improve management, and strengthen governance. Technical assistance (TA) can foster that kind of sustainability, but only if it goes beyond untangling red tape and filling out applications. Weak TA merely connects struggling communities to a dwindling, politically precarious pool of government money, while doing little to make their utilities self-reliant. Strong TA helps utilities become truly credit-worthy—competitors in the capital market instead of charity cases. Water Finance Exchange is showing the way with comprehensive, hands-on TA aimed at building financially sustainable utilities.† When working with a struggling community, WFX is like a skilled mechanic rebuilding an engine—not a gas station attendant pumping petrol into a creaking, sputtering jalopy. For the safe, reliable, and resilient infrastructure Americans need, we must make water systems the kinds of investments that capital markets can't ignore. Water will always have the greatest use value. Let's make it shine like a diamond.     *See this study, this study, and most recently, this study. **Water infrastructure also literally sustains cryptocurrency. †I was proud to join WFX's Board of Directors earlier this year.   Original diamonds (filter applied)  photo credit: Photo by Sabrianna on Unsplash Original river photo credit (filter applied): Photo by Mark McGregor on Unsplash We are gearing up to work with our first cohort of water utilities as part of a national Waterworks Excellence effort. Space is limited, so register soon if you want to learn more. Visit my website for an archive of previous posts and links to my academic research.  Citations are the lifeblood of my profession. Please use my work - and reference it when you do. If you received this email as a forward from a colleague, please consider signing up for my newsletter. Nothing too frequent or formal. I'll just send links to my publications related to water policy, finance & management. Sign up here If you have any questions, comments, or just want to chat about what you see here, please email me here. - Manny Twitter Copyright © 2025 Manuel P. Teodoro, All rights reserved. You are receiving this email because you opted in via our website. Our mailing address is: EJ Metrics 5309 Jonquil Ct. Middleton, Wisconsin 53562 Add us to your address book Want to change how you receive these emails? You can update your preferences or unsubscribe from this list.

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https://www.foodandwaterwatch.org/wp-content/uploads/2025/12/National-Data-Center-Moratorium.pdf 

 NGO sign-ons to letter to Congress asking for data center moratorium.

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Supersized data centers are coming. See how they will transform America.

“This coal plant in central Pennsylvania, once the largest in the state, was shuttered in 2023 after powering the region for over 50 years.Earlier this year, wrecking crews blasted the plant’s cooling towers and soaring chimneys.  Rising from the dust in Homer City will be a colossal artificial intelligence data center campus that will include seven 30-acre gas generating stations on-site, fueled by Pennsylvania’s natural gas boom.  Shawn Steffee of the International Brotherhood of Boilermakers is hopeful.  “The closing of the coal plant had been really brutal,” he said. “But this project just took the entire chess board and flipped it.”  The Homer City facility will generate and consume as much power as all the homes in the Philadelphia urban area. It is among a generation of new supersized data centers sprouting across the country, the footprints of which are measured in miles, not feet. … ” Continue reading from the Washington Post.

emphasis added

may not be paywalled

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Excerpts from an article in the Financial Times of Dec. 24, 2025 by Ian Harnett ("co-founder and chief investment strategist at Absolute Strategy Research") titled "America is betting the farm on hydrocarbon-fueled AI - and perhaps gambling with food security too."

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>"My firm's analysis suggests that AI has already raised US labour productivity by 0.25-0.3 percentage points and might eventually raise global productivity growth by a half-point annually over the next decade.  However, the key limit to the US leading the AI arms race is less technological and more the physical demand AI places on energy supply."

>The IEA [International Energy Agency] says more than half the electricity powering US data centres is still likely to come from fossil fuels, notably natural gas, until after 2030.  But even by 2035 the IEA forecasts over 40 percent of US AI energy being hydrocarbon-based, owing, in part, to the Trump administration's cancellations of support for renewable energy initiatives."

>"One strategic risk from this US AI reliance on hydrocarbons is relative costs.  US average electricity prices have already risen 38 per cent since 2020, with these cost increases often linked to rising AI data-centre demand.  In contrast, the cost curves for renewables continue to come down faster than for fossil fuels, potentially disadvantaging US AI vs. Chinese AI in the longer run."

>"However, the biggest strategic challenge for US hydrocarbon-powered AI may not only be price, but also its physical impact on the economy.  Energy, water and food production are intimately linked.  The increased US energy demand for AI, when powered by hydrocarbons, will lead to more US water demand and water stress than if AI growth was powered by renewables."

>"To make matters worse, two-thirds of the new US data centres built, or planned, since 2022 have been located in places of elevated water stress.  As a result, the risks to longer-term US food security from hydrocarbon-powered AI could be a major constraint."

>"In exchange for these increased strategic risks, society will probably demand real, tangible benefits; a modestly faster search-engine will seem a poor trade-off."

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