On UC Berkeley's campus Tuesday, Juliet Christian-Smith from the Pacific Institute will be speaking along with David Zoldoske from Fresno. There is no abstract yet, but hopefully it will be be informative. If you have questions, put them in the comments and I will try to ask one or two and write up the details tomorrow...
08 February 2010
Profit seeking
Jack Ceadel over at Global Water Intelligence wonders what is going on:
Mostly we talk about market consolidation, but over the past decade, the reverse has been happening in the desalination industry. Growth has sucked more and more players into the industry, to the extent that the market leaders have actually been losing market share. It is such an unusual phenomenon that I am not sure there is a word for it. I call it market proliferation.No Jack, it's called profit seeking, as in... businesses with extraordinary profits attract entrants, and these entrants drive down profits for incumbents.
Read Schumpter :)
Bottom Line: Easy money attracts attention, and the fear-driven rise in demand for desal has got a lot of corporate attention.
Wasting our most precious resource?
"California's Central Valley will be the Appalachia of the West" says the Economist. It won't be if California's scarce water is traded at market prices, instead of allocated to historic users. That's the fastest way to maximize the value of our scarce asset. No change will merely enrich a few while producing crops (and goods and services) is lesser value.
Speaking of precious resources, this conservative pundit says that "economic growth depends strongly on an expanding population." He goes on to equate more babies with more prosperity. I've got four objections to his line:
- He's got it backwards: More prosperity leads to more babies, and even that trend has its limits.*
- "Growth is good" depends on your acceptance of GDP as a measure of happiness, which it isn't. (It measures trade in the cash economy.)
- He's missing the (negative) environmental impact of more people.
- Many economic "problems" with smaller populations result from Ponzi scheme policies that require the young to pay for the old (as with social security). Those polices can be reformed, defusing "demographic timebombs."
* Unless ignorance reigns:
07 February 2010
Flashback: Jan 31 -- Feb 6 2009
These posts are still relevant, so please comment!
The Cost of Rationing is less reliability.
BEST: Cochabamba Update -- Bechtel was kicked out, but the re-affirmed public service provider provided little service to the public.
Water Rights are necessary for water markets.
BEST: Speaking of Australia -- water markets Down Under. Now I am here, and I'm planning to meet with Mike Young (and others) to learn more about water. Speaking of Down Under, here's more evidence of global warming:
BEST: Quiz: Midwestern Eutrophication -- can you have farms AND rivers? The Trouble with Trees and carbon offsets? Here's my plan for Fixing the Food System by ending (not raising!) subsidies.
05 February 2010
Speed blogging
- Emily Green tells how Pat Mulroy's obsession for imported water and growth got too sloppy and hit the wall (a recent court ruling that may undo 20 years of Mulroy's maneuvers.)
- Aquadoc lambasts water cliches. I'll drink to that!
- Scientists create a test to identify contaminated water CHEAPLY [in Spanish]
- Dams affect rainfall. Lessons for climate change?
- Stanford gets into the water research business (groundwater and re-use). I'd bet my lunch that they just got a grant funded; let's see if they have IMPACT :)
- Russ Roberts talks about many economic questions with Mike Munger. Their first topic (6 min) is water sanitation -- Mike is horrified that toilet use potable water -- but the other topics are also interesting. This talk with Mike Spence on development is EXCELLENT.
- Speaking of toilets, here's how the toilet on the 110th floor works.
- In this interview, Mike Young talks good sense about water in Australia and elsewhere. Listen to him! He also says that reclaimed water is better than desal.
Avatar and King Leopold's Ghost -- The Reviews
Coincidental juxtapositions can be interesting.
Today I finished King Leopold's Ghost, a book about the Belgian king's ruthless exploitation of the people living in Congo (then Zaire, now Democratic Republic of Congo). The story is one of a colonial owner using force and cruelty to extract wealth (ivory, slaves, rubber) from vulnerable land and people. Rape and pillage was the norm, and the white colonials who raped, maimed and pillaged justified their acts by claiming that the natives were not human and the land was without owners. 10 million people died during Leopold's regime of terror (about 1880 to 1910). Unfortunately, that pattern was repeated in many colonies -- in the same period and even in recent years.
James Cameron's Avatar is a movie worth watching for its fabulous visual effects (and even the love story), but the plot echoes the colonial story: Earthlings invade another planet to get a valuable mineral ("unobtanium" is its cartoon name). Along the way, the natives are seen as beasts and Nature raped.
Of course, this is Hollywood and it includes a love story and happy ending. Formerly colonized people on this planet did not get the Holly-Happy ending. The Belgians established a pattern of corruption and lawlessness and a system for concentrating and abusing power that local "leaders" have adopted, with poor results for their "free" brothers and sisters.
Addendum: Here's a "Pandora" view on dams and rivers.
Bottom Line: People are much quicker to destroy what's not theirs and abuse people who are powerless. Stronger property rights and human rights are the key to the sustainable use of resources and progress in human development. I give the book and movie FIVE stars each.
04 February 2010
Need I say more?
JF send this:
Restore the Delta revealed this week that Phil Isenberg, chairman of the Delta Vision group - the supposedly objective group that recommended the Peripheral Canal - lobbies for a Southern California water district. In other words, the man tasked with finding a solution to the destruction of the Delta works for an agency that benefits from the destruction of the Delta.Bottom Line: It's hard to remain objective (or be perceived as objective) when you are getting paid by one side of a dispute that you are mediating.
More policies for People, not special interests
...and here are five more ideas for solving collective action problems (see yesterday's post) that caught my eye.
Anna O. suggested that carbon taxes be introduced, and that revenue used to offset a end to/reduction in income taxes for people making less than $22,500/up to $77,500, respectively. I liked this idea because the majority (of voters) would probably understand their net benefit and vote for it, in the face of lobbying by the minority -- high carbon consumers. The tax is fiscally neutral but environmentally helpful.
Candace A. introduces a different nuance to carbon taxes, suggesting that above-median polluting firms pay a tax and below-median firms receive a rebate. Instead of creating a united opposition to taxes on all carbon, this idea would split the opposition, since low-carbon firms would lobby for it, in opposition to their heavy-pollution cousins.
Julia A. suggests broadening the pool of those eligible to work on renewable energy (wind farming, for example) to include scientists, non-profits, schools and communities. Since they are currently excluded from power generation (my impression is that it's "managed" by utilities and bureaucracies), this additional involvement would increase innovation and public support for these programs.
Ryan L. goes straight for propaganda, suggesting that environmental programs (carbon taxes, wind farms, etc.) be branded, so that people can have stronger positive feelings towards "save the kids" programs. In Brazil, for example, the "bolsa familia" (family grant) is part of its Zero Fome (zero hunger) campaign. It seems that rebranding "taxes" would also be useful.
Stephanie L. promotes environmental justice by "empowering" poor people likely to suffer from local pollution. She suggests that local community organizations be mobilized to educate locals on issues, increasing feedback to bureaucrats and votes to politicians who will be forced to respond to this democratic noise.
Bottom Line: New ideas require new perspectives. What have you learned from "amateurs" lately?
03 February 2010
Electric pipes for water
"Steve Shoap has invented a rapidly deployable system to move large quantities of water over long distances. The invention can rapidly bring water, electric power, and communications to areas that have lost them. Haiti shows how an earthquake can destroy the water supply to a large population. If you know anyone at FEMA or Homeland Security, please forward this post to them. The invention can also be used to fight wildfires.
He has also invented a new type of irrigation system. The idea is to embed the wire pair from a two-wire irrigation system into PVC pipe .When the pipe is installed, the control system is installed with it. No additional wires need to be trenched. The wires pair also supplies power to the valves by trickle charging rechargeable batteries at the valves. His proposed system has the potential to reduce the material, installation, and maintenance costs of advanced irrigation systems.
Steve believes that changing rainfall patterns and will force more farmers to use irrigation. Many regions are suffering droughts and then occasional deluges. Hopefully, the water from deluges can be stored and then later used for irrigating crops."
You thoughts? Comments?
Policies for People, not special interests
During my class at Berkeley, I gave my students "the hardest assignment in the world," i.e.,
Please explain how a leader can promote an environmental program that will benefit the average citizen --- but not special interest groups --- and still get re-elected.Although I provided numerous clarifications to my students, this assignment is pretty straightforward: solve a collective action problem.
Collective action problems are rife in the water sector, and -- you will see -- many other areas of social and political action. They arise from two factors. First, there is the misalignment of costs and benefits. A collective good gives benefits to everyone (as a "public good" like a radio station or "common pool good" like a community reservoir), and it's hard to exclude those people from enjoying it. Because of this non-exclusionary characteristic, it's hard to force those who benefit from the good to pay for its provision. Thus, we may see (and do see) that people "free ride," enjoying the benefits but avoiding the costs. Because of this free riding, the good may not be provided at all, creating our collective action problem.
While people commonly assume that collective goods will only be provided when the government taxes everyone and uses those funds to create them, there are numerous examples of social and private provision of these goods. (Religion often plays a part in motivating people.)
Right. So that's the context for the assignment I gave my students. Although many of them thought it unfair that I ask them to give a solution to a collective action problem (in one page, no less!), several of them gave interesting suggestions. These are what I wanted when I gave the assignment: some new thoughts from people didn't know how hard their assignment was supposed to be!
Before I get to those, note this further wrinkle: Their brief was directed at a politician who was going to face re-election, and -- it is assumed -- an opponent who would be able to draw support from whatever special interests were free-riding on the currently provided collective good or would suffer if that good (e.g., a clean environment) were to be provided.
And here are the first two ideas:
Andrew C. introduces an interesting idea to promote open spaces. Developers want to build houses, but home-owners (and enviros) want open space next to their properties. Politicians are caught between the two, but they often bow to developer interests. Andrew suggests that residential properties pay a higher tax, that this tax be used to retire undeveloped land, and that developers have the option of selling their parcels for open space -- or developing them -- via a tradable development permit that builds in the open space. This scheme works by linking present and future values, allowing future homeowners to pay off present developers.
Daniela C. has an easy answer to the problem of water that's too cheap -- let rate payers decide what the prices will be. Given that the current system tends to favor a minority -- water hogs -- at a cost (in terms of reduced reliability) to the majority, this makes a lot of sense. Of course, there's the problem of "let's charge nothing!" but that's easily overcome by presenting voters with a series of "break even" price decisions. I like it!
Check in tomorrow for five ideas to address climate and environmental issues..
02 February 2010
Water is Boring
JG sent this column by Ben Baeder. It's funny -- and pointed. You can write your own bottom line...
Is it just me, or have we been in a water crisis my entire life? No joke, some of my earliest memories are sitting with my dad watching super-spooky "WATER CRISIS!" stories on the local news.
People in California's water business are constantly screaming that the sky is falling - or that water or snow are not falling from it fast enough.
"Wolf! Wolf!," they scream.
But every time I turn on the faucet, water comes out.
It's cheap. It's sort of clean. And it seems like there's plenty of it.
I'm tired of hearing about water. It's so boring.
[snip]
If water agencies are so hard-up, they should stop giving their workers big pay raises.
And if they are still broke, they should raise rates.
Otherwise, I don't care anymore.
Seriously, Azusa Light and Water employees just got a one-time payment of 3.75 percent of their pay from the city. LA's utility workers recently got a similar deal.
Maybe they were due for a raise, but they got it when everyone else in the private sector is getting hammered.
And, before its board buckled under political pressure, the Metropolitan Water District in October was on the verge of giving employees a 23-percent raise over the next five years.
So, do water companies have ample water and lots of money, or don't they? I can't tell.
If water is so scarce, why is the Inland Empire full of homes and mega malls?
Why are Southern California lawns lush and green?
Why, when my kids get bored, do I make their plastic slide a little more interesting by running the hose at the top?
All the while, farms in the Central Valley are going fallow and pumps in the Sacramento River Delta - at least until last year - were grinding up fish that are the bedrock of the area's ecosystem.
Logic and economics aren't applied to water issues. And I think I know why.
Quick, name the directors of your water district.
See. You don't know. In the desk that is the human mind, water districts are just clutter that gets tossed away.
It's so boring that our elected water board officials flit away public money on booze and conferences, and we don't even pay attention.
Someone needs to do away with the whole system.
I wish I could say right now the best way to fix everything. My first instinct is: keep water rates low for businesses, farms and most residential customers, then jack the rates up super high for big consumers.
Hit extravagant people in the pocketbook.
If you want a Ferrari of a front lawn, you're going to have to pay for it.
Maybe the wasters can pay for all the new water infrastructure we supposedly need.
Secondly, we need to get rid of water districts. Nobody watches them, and they're inefficient.
I would offer more solutions, but my mind got too bored.
It's on to something more exciting: prime numbers! Three, five, seven, 11, 13, 17, 19, 23. . .
Travelblog: Incentives on islands
We are were on another island. Gili Trawangan -- like Nusa Lembongan -- has problems with fresh water shortages. As before, there is a fixed supply that is exceeded by demand. This demand -- given no constraints on new developments, visitor numbers or use by visitors -- is only likely to increase. (There are no signs in rooms saying "please use less water" and there are certainly no meters on rooms, to charge guests for the water they use.)
Hotels and guesthouses have responded to shortages in three ways:
- The expensive and big places have desalination units (cost about $25,000 for the machine and one-half their monthly electric bill). All their guests have "fresh" water at the tap.
- Luxury bungalows (we paid $40/night) have fresh water from 5 gallon jugs ($3 each) or big tanks that are shipped from shore; see photos. Again, fresh water from the tap.
- The other places (and local people, in their homes) have brackish water from their wells. We are now in one of those, and the salinity varies from noticeable to "way too much."
This island is interesting for two other features: One rare feature is that they are trying to "regrow" their reef by sinking cages offshore and then connecting electrical cables to them. A small current encourages corals and other beasties to perch on the cages and grow at a much faster rate than normal. This effort is supported by the local dive industry (big money) as a means of recovering from a past of sloppy anchoring and dynamite fishing. Fish here are VERY expensive: lobster cost about $60/kg; prawns slightly less.
One common feature is rubbish -- everywhere. I picked up plastic bags and other stuff while snorkeling. There are plastic bottles everywhere and a surprising number of flip-flops and other shoe pieces. One thing that you do NOT see is empty beer bottles -- that's because they have a $0.20 deposit.
The reason that there's so much trash around is that locals are not used to dealing with plastics. In the past, they would use bamboo or leaves and then toss the old stuff on the ground to wash away or get eaten. Now that stuff doesn't "disappear" and the shoreline and reef is clogged with it.
Given the importance of tourism on this island (90+ percent of the economy), it seems like they should tackle trash, but they are probably not due to a tragedy of the commons: If one hotel cleans up its beach, then the trash of others just washes (or is dumped) there. So why clean?
It would be easy to fix this problem with a visitor trash tax that paid for trash to be hauled back to the mainland. Even better, locals could hold "trash olympics" with bounties and rewards for the largest volume of shoes, plastic bottles, etc. that were retrieved from the environment. I'd guess that a bounty of $0.01 per plastic bottle would result in HUGE piles of empty bottles -- those that are currently scattered throughout the island. (Miscellaneous plastic would have to be rewarded by weight, of course.)
Bottom Line: Incentive matter. This island has water "shortages" because tourists do not pay for fresh water consumption; it has garbage everywhere because there is no reward for collecting it. Locals understand why beer bottles are worth returning and reefs worth rebuilding; they can apply the same knowledge to reduce the stress from over-drafting fresh water and dumping garbage.
01 February 2010
Sustainability and equity
TS sent this paper [pdf], which describes "The sustainable residential water use [sic]: Sustainability, efficiency and social equity. The European experience," but you probably will want to skip the obtuse discussion of sustainability. The author wades through three pages of confusion before settling on (paraphrasing) "sustainable water use means that you use as much water (or less) than you receive." No duh.
There's a mildly interesting description of retail water pricing mechanisms (not prices) in Athens, Amsterdam, London, Seville and Tel Aviv. The author also points out that increasing block rates are not "fair" if they do not take the number of household members into account. No duh. Again.
Water managers can't make a shake
David Foster sent this guest post, and he wants to know if the Lassi Shop (see below) should be (can be?) turned into a skit to teach people about water provision.
Just a few days ago, I watched Christiana Amanpour interviewing Robert F. Kennedy Junior, founder of the Water Keeper Alliance and all around friend of the poor and the environment. Kennedy began by quoting a clever observation by Mark Twain that: “Whiskey’s for drinking and Water’s for fighting”. Unfortunately, he left out another Mark Twain quote that I believe is just as applicable: “It ain’t what we don’t know that gets us in trouble. It’s what we know that ain’t necessarily so!”
Kennedy then began speaking on the many ills that confront the water sector and right at the very top was the Evil Threat of PRIVATIZATION. Now in my opinion Kennedy was absolutely right that sometimes private companies have done terrible things to the environment. Where I would fault him (and Amanpour) is in leaving the impression that private water systems have done more harm than public ones or that the poor and the environment would be just fine, if only we could keep the private sector out.
Now I know that I can’t get Kennedy or Amanpour to really visit the thousands of publicly run water systems throughout the developing world but I have this pipedream of having them come meet me at a “Lassi Shop” that is run on the same basic principles as a public water supply system in India.
There follows a brief description of the policies followed by the Lassi Shop -- all of them close replicas of their respective counterparts in the typical municipal water system over here:
Meet Me At The Lassi Shop*
Imagine, if you will, a lassi shop that was run on the same basic principles as most Indian water supply systems...
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