Sustainability: A high stakes game

There is risk involved in any new development, but it’s a matter of how much risk we are prepared to take.

Pracsys has done a lot of financial analysis to determine whether various sustainable technologies, such as recycled water, are viable compared with current methods, such as traditional scheme water, in the developments of the future.

There is no doubt we need to embrace alternative technology; the problem is the capital costs associated with these technologies are often very high.  Add the fact that current technology is so heavily subsidised and the comparative cost really starts to add up – and the stakes get higher.

In making an investment decision does the developer risk short and medium returns in the knowledge that cashflows will be positive in the future? Alternatively do we sit on our hands, watch and wait and hope that such technologies become relatively more affordable once others pave the way and economies of scale are achieved?

No-one wants to be the first to jump, the one to pay a premium for taking that leap of faith. Particularly given that we’re talking about the basics that everyone should have access to – water, power, transport. If the end user doesnt percieve the full value of these technologies then the developer will need to subsidise the price to make it attractive to market.

If Government, for example, were to embrace sustainable alternatives, who would pay for it? Would it put the basics beyond the reach of lower income residents?

There are some advantages in being the first to take the leap, to set benchmarks for others to follow. Water is a scare resource in Perth; it’s a fact that we need a more sustainable method of water supply.

recycled water

The trick is to strike the right balance between the  risk and the benefits, both economic and environmental, of such action. And this means Governments making some hard decisions, working to sway public opinion on issues such as recycled water, and ultimately being convinced that they should take a chance, even if the figures don’t stack up in the here and now.

2 Comments

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