P3s to Combat Climate Change

Bilzin Sumberg
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Bilzin Sumberg

We recently wrote an op-ed about the role that P3s can play in mitigating the effects of climate change.  In that piece, we explained that an availability-risk model could be used to offload many of the risks associated with the uncertainty in climate-change projections (e.g., how high will the sea-level rise in 20 years? 50 years?) to the private sector. We also referenced the PennDOT Rapid Bridge Replacement Project as a template for how the smaller infrastructure projects required to mitigate against the effects of climate change can be bundled into a single P3 project large enough to attract the large infrastructure investors.

Although the example we used in the op-ed (and a follow-up piece in American City and County) relates to transportation infrastructure (rebuilding roads and bridges to accommodate future sea-level rise), water and sewer infrastructure is perhaps in even more urgent need of investment to address both capacity challenges and the effects of climate change.  In South Florida, for example, sea-level rise is expected to ultimately contaminate the freshwater aquifer with salt water, necessitating the need for desalination plants to supply drinking water. Sea-level rise has already contributed to the premature decay of the City of Ft. Lauderdale’s sewer system—pipes that were never designed to withstand the corrosive effects of the seawater in which they sit are failing rapidly.

P3s can be used to solve these climate-related infrastructure challenges, too.  The EPA’s Water Infrastructure and Resiliency Finance Center promotes the use of the P3 model to address water-related infrastructure challenges, and the University of North Carolina’s Environmental Finance Center, in collaboration with the EPA, published a report in 2017 on nine case studies, including the use of the P3 model to deliver a desalination plant in Tampa. Currently, there are a number of water and wastewater infrastructure projects in the P3 pipeline, including new biosolids facilities in both Miami-Dade County, Florida, and Charlotte, North Carolina. As the need for resilient public infrastructure continues to grow, so will opportunities for public/private partnerships.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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