27 September 2007

Weather-driven policy

It's sunny outside, but I am leaving for rain Brussels tomorrow. When I do, I am sure to change my opinion about water supply and water policy. Humans have a simple psychological bias: We pay attention to the weather at hand -- not the weather on average. This bias leads to policies that, literally, ebb and flow with the seasons and trends. When Katrina hit New Orleans, California politicians woke up to the parallel levee weaknesses in the Sacramento Delta. They rushed through laws, bills and bonds to pay for repairs, upgrades and changes. Now that Katrina has receded in our memory, the drought and endangered fishes are driving water policy in California.

This type of policy-making is just as short sighted as the policies made after 9/11 (USA Patriot Act), the Enron debacle (Sarbanes Oxley), or the recent cut in the short-term federal-funds rate to "save" the US economy. When people are in a hurry to make a decision and "get things done", those who stand to benefit the most drive their hard bargains and get "deals of a lifetime" slipped into sloppy, rushed legislation (cf. public choice theory). Look for the same with respect to water policy as the imbalance between supply and demand worsens in California, the Western US and the rest of the world.

Bottom Line: Water policy, like all policy, should be made for the long-term to address long-term problems. Policy should ignore short-term fluctuations to allow people to muddle through in sensible ways.

BTW, Keynes complaint that "in the long-run, we are all dead" does not refute this analysis or recommendation. Keynes was right that psychology matters, but he was wrong to assume it could be manipulated by Brilliants such as he.

26 September 2007

Water water nowhere...

California's water supply is getting tight. The Colorado River is still in drought, precipitation was very low last year (and doesn't look good this year) and redistribution of water from the North to the South is threatened by court rulings that such exports threaten endangered species.

Gov Terminator has proposed spending oodles of $$ on dams and a (don't say it!) Peripheral canal to deal with, respectively, storage and distribution issues. These ideas are not very good, or at least not the first place to make change:

Water needs Tradible Rights! Water needs a Price!

It's amazing to me that politicians and bureaucrats think that the only solution is to "increase" supply facilities. (Note that these facilities will not necessarily increase supply.)

They are ignoring two other "sources" of water, redistribution from higher to lower-value uses (via markets) and changes in demand (via prices).
Why spend $8 billion over 5 years when markets can be created through permission and recognition of rights in less than a year?

Follow the money? Ok, maybe the expensive solution is popular with contractors and engineers (make jobs!) and unpopular with folks who will lose water if they have to pay the full price (farmers). Yeah, that's about right.

Bottom Line: California is still stuck in the dark ages of water management. Drastic conditions call for drastic action, but markets are even easier than that!

17 September 2007

Treating Water Like It's Worth Something

California is in a drought. If the rain is below average this year, the shit's gonna hit the fan. Farmers -- who use 80 percent of the water in CA -- are worried their water will be cut, and they are dragging out patriotism:

"Farmers across the state know this will be very tough and not pleasant," says Dave Kranz, spokesman for the California Farm Bureau Federation. "To the extent that you take farmland out of production for whatever reason, it increases another problem, which is providing enough American-grown food to serve the US population as well as demand from other countries." -- from an article that also has some useful perspectives.

American-grown food? What are these guys on? What about American-made TVs, SUVs or videos on MTV? America trades with other countries because it makes us better-off.

Farmers are not happy about that -- they would rather have a captive pool of consumers to overcharge. Those who worry about dangerous "foreign food" (e.g., China), should remember the recent contamination of Salinas Valley (CA!) spinach with e-coli. Phyto-sanitary standards for food can be maintained while we import food (rather, water) from countries that have it.

Bottom Line: Farmers evoke national security when they really mean income security.

13 September 2007

Do rich people deserve cheap water?

In a recent article, Fresno County officials say they are not going to give a loan to a golf-club community that has run out of funds for its water supply. (Residents are already using "four times as much water as they're allotted") The officials say that people in $1million homes can find the money themselves: "They've been leading a luxurious life way too long, and it's coming to an end."

Bravo for these folks in Fresno! Water is a human right in small quantities but not where golf courses are concerned. The ethos of "have as much as you like -- for free" has got to change if California is going to continue to prosper.

Cheap and free water has encouraged waste (You never see people pouring gasoline on the sidewalk, do you?), and people will manage their water wisely if they have to pay a steep price for waste. ("Water education" is a poor substitute for prices; you don't see "gasoline education", do you?)

Bottom Line: Water is a commodity and should be treated as such. When people pay for it, they will "waste" less.

04 September 2007

Water at Burning Man

I just got back from Burning Man, a one-week desert festival of arts and music (and sex and drugs). In the beginning, Burning Man was about blowing things up. As the police do not take kindly to that behavior, BM moved into the desert -- the Black Rock Desert, which is about 100 miles north of Reno, NV. In the desert, blowing things up is easy, but living is hard. Without food, water or shelter, everyone had to be "radically self-reliant", i.e., bring those items.

Since this beginning (early 1990s), a few things have changed: many more people are there (48,000 this year); cleaning up the mess has become more important ("respect the Playa"); and surviving has gotten easier (in two ways: some people have more money, so can bring larger vehicles that others can use, and BM sells ice on the Playa.)

The use and disposal of water at BM is interesting -- first because everyone brings many bottles of it and second because they are supposed to evaporate or carry out the gray water from showers, etc -- not drop it on the Playa, which is an evaporated lake but apparently "vulnerable" to water (or perhaps dirty water).

The irony is that shlepping in water and taking out all those containers are not exactly ecological activities. (The theme this year was "Green Man", so this is relevant.) Further, gray water handling is terrible (evaporation doesn't work very well), inconvenient and makes people guilty when they fail to "do the right thing".

This topic hits right on the ecological/sustainable element of BM. Although people are supposed to be sustainable and zero-emission on the Playa, the considerable energy they put into preparation, supplies, etc. far outweighs the energy they use on the playa. If BM were analyzed on an annual (not one-week) basis, it's ecological footprint would be huge. (One of the bigger exhibits (the Oil Derrick) used 20,000 gallons of gas, for example)

Bottom Line: A city of nearly 50,000 people in the desert is not the best place to look for sustainability. Burners know that and don't care: they want to party. The real sustainable action would be to shut BM down and plant trees, but that sustainable life is hardly worth living, is it?