31 August 2008

FloodSim UK

If you've ever wanted to make important decisions, affecting millions of people, this is your chance!

FloodSim puts you in control of all flood policy decisions and spending in the UK for 3 years. Whether its deciding how much money to allocate to flood defences, deciding where to build houses, or how best to inform people about the risk of flooding, you are in control.
I wonder if the city leaders of Sacramento (and Natomas) have been playing this game? If not, they should -- and they should NOT be using other people's money.

Bottom Line: With tradeoffs and uncertainty, what do you do? What do you do when losers complain and winners party?

hattip to JM

Innovators

Here's one email I got:
Did you know that just a 1% change in soil organic matter across just one-quarter of the World’s land area could sequester 300 billion tonnes of physical CO2?

Recent Australian studies have shown that a 1% change can occur within a few years – and in fact up to 4% changes were measured in some areas. The management changes required to achieve these increases are very readily implemented. I hope you find the attached presentation of interest. There are Spanish, Mexican, Italian, English, Portuguese, Japanese and German versions on our website.

Boosting soil organic matter levels is one of the only real ways to deal with the existing excess legacy load of carbon dioxide currently in the atmosphere.
Also see this article (via MR) on soil and carbon.

And here's another (from Gerhard Laschober of Austria)
The “Balloon shuttle” is filled with free hot utility waste gases ... which enable a fast rise of the balloon, from the place of filling to the place of cool air offtake (3000 - 4000 meters above sea level).

Fixed cables will prevent further rise of the balloon by opening an escape opening in the balloon to let the warm gases out. Due to now missing buoyancy power of the warm gases and countermovement of the cables being reeled in, in addition to the mass of the balloon, the warm-air balloon will now go down... where the chilled air is emptied into the condensation equipment to cool off the condensation surfaces. The cycle repeats.

The results of my experiments and calculations are showing that to cool of the condensation surfaces on the water condensation equipment, there will be about 24 million cubic meters of cold atmospheric air from +3ºC to 5ºC at disposal and that will fully satisfy the needs to produce a volume of several hundreds thousand liters of drinking water (always in relation to the air temperature and humidity).
Bottom Line: Don't look at me!

30 August 2008

Neoclassical Deathwatch

In past posts, I have pointed out the important difference between risk and uncertainty. (Risk is something that you can quantify in terms of probabilities, while uncertainty is something that you cannot.)

For those of a statistical inclination (i.e., neoclassical economists using expected utility), risk is the way to go and uncertainty is ignored. That's a fine idea in the casino but a miserable one when you are dealing with a mad dog.

Climate change is one such dog, and this essay [PDF] takes apart the conventional wisdom of using risk and cost-benefit analysis (CBA) to examine climate change (as the Stern Review did):*
It is now acknowledged that the economics of climate change is now more appropriately concerned with uncertainty rather than return, a feature of the problem that has been evident from the early 1990s, when the scientific assessments began in earnest. It can also reasonably be argued that CBA is useless for the climate problem because of the uncertainty and risks of catastrophe. The discounting of costs and benefits in which risks are converted into certainty equivalents and discounted at market rates has been shown to be misleading and biased. This in turn implies that the economic problem is one of achieving political targets, based on scientific evidence, at lowest costs compatible with equity and effectiveness, rather than with the economics of choosing the targets themselves.
Bottom Line: Economic analysis must use methods appropriate to the problem, and climate change requires that we consider uncertainty. Tough.

hattip to DS

* and this paper [pdf] critiques Stern as too neoclassical.

Legalizing Graywater

California Senate Bill 1258 [PDF] is now law:
This bill would require the department [Department of Housing and Community Development], at the next triennial building standards rulemaking cycle that commences on or after January 1, 2009, to adopt and submit to the commission for approval building standards for the construction, installation, and alteration of graywater, as defined, systems for indoor and outdoor uses. The bill would terminate the authority of the Department of Water Resources to adopt graywater standards for residential buildings upon the approval by the commission of the standards submitted under the bill.
I spoke to a general contractor the other day. Potential customers are constantly calling him, trying to get graywater systems [prior post]. Trouble is that they are illegal ("It's not in the code"), and so he can't install them. (He's experimenting with some black-market fixtures in his house to learn how they work.)

Note this interesting definition:
For the purposes of this section, “graywater” means untreated wastewater that has not been contaminated by any toilet discharge, has not been affected by infectious, contaminated, or unhealthy bodily wastes, and does not present a threat from contamination by unhealthful processing, manufacturing, or operating wastes. “Graywater” includes wastewater from bathtubs, showers, bathroom washbasins, clothes washing machines, and laundry tubs, but does not include wastewater from kitchen sinks or dishwashers.
So shower water is ok but not sink water? Great. I see lawbreaking ahead.

Bottom Line: Nothing happens until the bureaucrats say so,* and this law at least pushes the bureaucrats in the right direction. The regulatory "solution" will probably take months (or years) and be too expensive, but it's better than the current criminalization of graywater systems.

hattip to DW

* "Put the government in charge of the Sahara, and I guarantee that there would be a shortage of sand within three years." -- Milton Friedman

29 August 2008

Dunce CAP

I'm not a fan of big water projects -- especially subsidized Federal projects. So, it's no surprise that I would not like the CAP.

But, as we all know, instincts are useless in a fight with numbers,* so it helps to have some, and "Cadillac Desert Revisited" [PDF] delivers:
To alleviate Arizona’s dependence on groundwater, the federal government subsidized construction of the Central Arizona Project (CAP) to import water from the Colorado River. In exchange for the subsidy, Arizona reformed its groundwater law to eliminate common-property pumping and to ban groundwater mining after the year 2025. We build a model of water resource development in which imported water is a capacity constrained backstop. The model is applied to quantify the welfare effects of alternative CAP construction dates and Arizona groundwater laws. We reach two general conclusions. First, CAP was completed 86 years too early, in 1987, at a deadweight loss of $2.612 billion. Ironically, construction in 1987 yielded lower surplus than never constructing CAP. Second, the political exchange of reform for subsidy introduced a greater loss ($2.612 billion) than it corrected ($0.810 billion). The exchange was worse than doing nothing at all.
Bottom Line: 87 years early and $1.8 billion in the hole. Howdya like dem apples?

* Don't bring a knife to a gunfight.

Make Money FAST!

Headlines ("Water Shortages! Water Wars!") are attracting a lot of attention from the "investment" community. This site is all hype and no style -- as you'd expect from a MAKE MONEY FAST* operation:
What we have seen is water consumption per capita is skyrocketing...and there's a long way to go for developing countries. The US, for example, uses 158 gallons per person per day. Most developing countries use only around 13. So what we have is a massive population that is suddenly becoming dramatic users of water in unprecedented days. By the way, if I take a look at the united states, us water demand has moved per person 6 folds in the last 50 years. So our population grows, our water consumption moves up even more steeply. [SIC!]
Bottom Line: When the hype gets to retail investors, it's time to sell.

* Weren't these guys selling REITs euros gold oil a little while ago?

Free Water Means No Water

In this post we hear about
a gathering of international thinkers, artists, and activists is inspiring a new revolution in the right to water and what belongs to the commons... Put simply, the water commons means that water is no one's property; it rightfully belongs to all of humanity and to the earth itself. It is our duty to protect the quality and availability of water for everyone around the planet. This ethic should be the foundation of all decisions made about use of this life-giving resource. Water is not a commodity to be sold or squandered or hoarded.
So, I said this:

"While I agree with the general notion that water is precious, etc., I'd like to point out that "common tragedies" often result when property rights are weak.

Water can be managed in a sustainable and equitable way at the community level, but rights must be secured. These are tricky for water, since it tends to be used more than once as it flows from clouds to ocean.

Markets and prices, btw, do have a useful role to play when water is being used as a commodity, e.g., as an agricultural input. When water is not priced (as is the case in India where farmers get free electricity for pumping), ground water is over exploited. I could give many other examples.

Bottom Line: Some water is a human right -- the rest belongs in a market, where its owners are paid by buyers who want to use the water."

28 August 2008

Neoclassical Failure

Read this interesting overview of the gap between mainstream economics (neoclassical, theoretical, mathematical) and reality.

The article begins with an interview with Bill Rees, who invented the concept of "ecological footprint" to gain some traction with "real economists" who claim that there are no limits to growth. (I have said elsewhere that there are no limits to resources -- just higher prices -- but there are limits to the environment, which does limit growth.)
The news these days is full of stories that show how the global economy is becoming more vulnerable to environmental change caused by humans. The fear of climate change has led to subsidies for biofuels, which has resulted in grain shortages, soaring prices, hunger and riots. The price of gas suggests peak oil is upon us, promising many years of difficult and expensive transition for our gluttonous and polluting economies. And although people like Rees have invented new tools for understanding what happens when the economy presses against ecological limits, it seems that on university campuses only the mainstream, limits-denying school of economic thought has the official stamp of approval. The big issues of our era – and the theories that might help explain them – are not being discussed in economics lectures.
The main point is that a large share of economic teaching and research at top schools has little to do with the real world.* Because of this, many students do not bother to study economics; those that do persist tend to emerge with an "autistic" sense of reality that is either useless or harmful.** That doesn't mean they are not successful (since they get published in journals edited by other autistic economists and thereby get tenure) -- it just means that their time and abilities are wasted in a world that needs more, not less, applied economics.

[Env-Econ disagrees, saying that "ecological economics" is NOT real economics.]

I contemplate these questions daily as I "commute" between the blogging/policy world and the academic world. My postdoc at Berkeley is one of the best positions I could ever hope for, but it will end in 1-2 years. Will I continue in the academic world or not? The most important factor in my decision will be my perception of impact, i.e., will I be able to do more as an academic or less? Every time I get a rejection letter written by someone who took neither time nor care to read my paper, I move away from the academic world. Every time I have a real conversation about real issues with someone, I move towards the "real" world. Sure, academic life is cushy, but I am not interested in comfort -- I am interested in teaching and impact. We'll see.

Bottom Line: Economics MUST be useful to people if it is going to survive, let alone thrive. Otherwise it will go bankrupt in the market of ideas and only survive on subsidies, beneath our contempt.

* This post is partially dedicated to my former classmates who are today retaking the "microeconomic theory" exam at UC Davis. The exam is widely regarded as an exercise in mathurbation that reflects economic theory of 15 years ago. Very little of that test would make sense to any normal person; very few economists reflecting on real-world problems would consider those ideas as solutions. The trouble is that everyone has to pass such an exam to get a PhD, and our pool of candidates shrinks to those who with adequate skills in mathematics -- and perhaps not much else.

** I use autistic intentionally -- not to slight autistics, but in honor of the movement for a post-autistic economics.

hattip to Marginal Revolution

No Free Lunch

The WSJ green blog reports that Californians do not like "green" ideas as much when they are reminded that ideas cost money, i.e.,
  • “Requiring energy companies to produce more of their electricity from renewable sources like wind and solar” gets 72% support.
  • “Requiring energy companies to produce more of their electricity from renewable sources like wind and solar, increasing energy costs for California families and businesses” gets 50% support.
I suggested an alternative version: "Do you favor all-electric cars IF they are going to cost you more BUT you will not die in a global-warming induced tsunami?"

Bottom Line: People who want benefits without paying the costs are out to lunch. Let's be honest about them and THEN make decisions.

Mapping and Monitoring

This NYT article gives an update on groundwater and bottling plants in Vermont. (A recent law puts restrictions on groundwater withdrawals. Under old laws, bottling companies might have exported without limit, which would upset the neighbors.)

Nearly everyone is happy with the new law because it advocates measuring and monitoring the aquifer rather than prohibiting certain uses (in the dark).

Aquadoc also comments.

Bottom Line: Urban, agricultural and industrial users of water can cooperate, but they need to know what they are cooperating about. Measure and adjudicate groundwater before nobody has any.

hattip to RF

27 August 2008

Conserve but How?

Tim Brick, Chairman of the Board of the MWD -- the organization that imports 80% of SoCal's urban water -- wrote an editorial calling for conservation, i.e.,
The Legislature is debating a bill that would aim to reduce the per capita use of water by 20 percent by the year 2020. It is an ambitious goal. But it is only the start. The governor's delta task force is recommending a 40 percent reduction in per-capita water use by 2050, and more after that. Conservation is no longer just a civic virtue. It is fast emerging as a statewide necessity. There is no longer the assurance that a healthy snowpack in March means a healthy water supply come May.
The funny thing is that he says NOTHING on how to get conservation.

OTOH, MWD has nearly completed a $1.2 billion pipeline to import more water to its reservoir at Diamond Valley,* so you can see the divide between Brick's mouth and his money. I can see why they are calling for conservation, but I cannot see any REAL action in that direction (i.e., higher prices). Instead, MWD is spending another $billion or so to increase supplies. Guess what's going to happen? Demand will continue to grow until it exceeds the additional supply,** and SoCal will have a shortage -- again.

Bottom Line: The best way to get conservation is to raise prices. Don't tell people to exchange their virtue for necessity.

* Better branding than "Domenigoni Valley," no?

** The pipe allows MWD (in theory) to capture more runoff. Global warming is causing faster snow melt, so runoff periods are shorter and more intense.

Water in Oz

via h-net water comes news of "Troubled Waters: Confronting the Water Crisis in Australia's Cities," a book written by a group of distinguished academics (law, environment, economics, and policy).

Better still, you can read it free online!

Here's the blurb:
Australian cities have traditionally relied for their water on a ‘predict-and-provide’ philosophy that gives primacy to big engineering solutions. In more recent years privatised water authorities, seeking to maximise consumption and profits, have reinforced the emphasis on increasing supply. Now the cities must cope with the stresses these policies have imposed on the eco-systems from which they harvest water, into which they discharge wastes, and on which they are located. Residents are having to pay more for their water, while the cities themselves are becoming less sustainable.

Must we build more dams and desalination plants, or should we be managing the demand for urban water more prudently? This book explores the demand for urban water and how it has changed in response to shifting social mores over the past century. It explains how demand for centralised provision of water might be reshaped to enable the cities to better cope with expected changes in supply as our climate changes. And it discusses the implications of property rights in water for proposals to privatise water services.
Bottom Line: As Australia goes, so do we. Abundance is over, and scarcity is here -- raise prices :)

Working Water Markets

via Yubanet, Nick Wilcox wonders if the Nevada Irrigation District is missing an opportunity:
NID's neighbors to the north (Yuba County Water Agency) and to the south (Placer County Water Agency) have been participating in the Water Market for years, earning extra income to benefit their citizens by selling surplus water. YCWA, for example, have used $10 million of the proceeds from their transfers to fund needed levee improvements in recent years.

So far, NID has not taken advantage of this opportunity. In an average year, NID has available about 39,000 af of surplus water. If the district were to sell half of this at $125 per acre foot, $2.4 million in new revenue could be generated. This money could be used to help stabilize rates and to build new infrastructure. In addition, the environment would be enhanced if the water were conveyed in natural stream channels.
Bottom Line: At least some people see the potential to use some water for cash and the rest for irrigation and drinking. I hope that other districts notice, envy and copy their wise actions.

26 August 2008

Meters -- Not Guns

An EDF analyst asks "what would Adam Smith do" to save water? Although he gives the right answer (raise prices), his notion of how to do so is misguided. I left this comment:
Although I agree with you in principle, the example you give ("doubling fines for wasters") is just about the worst way to reduce water use -- too many cops and not enough savings.

Take an example from driving -- cops can give speeding tickets to make people slow down and save gas OR the price of gas can be higher all the time. Fuel use under the latter scenario (as we know from recent events) will fall MUCH FASTER than under the former scenario -- which we have had for years, after all.
Bottom Line: Raise prices at the pump meter.

Delta Deja Vu

This article appeared in the SJ Mercury News (Why the long excerpt? See below):
For decades, one of Northern California's most enduring stereotypes has been the thirsty Los Angeleno, guzzling most of the state's water in a selfish crusade to keep his lawn green and swimming pool brimming.

The trouble is, it isn't true. Cows and crops consume the majority of California's water, not budding ''Melrose Place'' actors. The real water rivalry is not north-south, but east-west.

This spring, that fact is being highlighted with increasing frequency as state leaders struggle to repair the battered ecosystem of San Francisco Bay and its delta. At stake is the source of drinking water for two-thirds of Californians and irrigation for much of the state's $24 billion farm economy.

Restoring the delta's fish and wildlife while guaranteeing a more reliable water supply to California's growing population could cost taxpayers $10 billion or more. That total, say state officials who hold a public hearing on the issue tonight in San Jose, includes money for environmental restoration work and new dams and reservoirs. That figure is 50 times greater than the bill for repairing Yosemite National Park after last year's floods.

Those estimates are giving rise to a politically touchy question not seen since the depths of the state's last drought in 1991: Wouldn't it be cheaper to shift some water from farms to cities instead of making taxpayers spend those billions on dams and reservoirs?

Consider:
  • Operating under a system of water rights and subsidies that began 100 years ago to encourage settlement of the arid West, farmers now consume 79 percent of California's water, according to the state Department of Water Resources. At the same time, farmers generate less than 10 percent of the state's $995 billion economy.
  • Roughly 46 percent of agricultural water goes for four crops: rice, cotton, hay and alfalfa to feed cattle. Combined, those crops contribute $3 billion annually to the state's economy, or as much as Hewlett-Packard Co. makes every 26 days.
  • Alfalfa alone uses almost nine times as much water as the city of Los Angeles each year.
  • If the state's cotton growers cut water use by 10 percent, that would double the amount of water available for every person, business and farm in Santa Clara County, without building a single new water project.
  • Farmers in the arid plains between Sacramento and Redding who grow rice, a crop normally found in monsoon climates, use more than twice the water of the entire Bay Area.
''There'd be no reason to build enormously expensive storage projects if you could go out and buy water on the open market,'' said Tom Graff, a former Harvard law professor and now senior attorney with the Environmental Defense Fund in Oakland. ''We have a profligate use of water in a desert environment. Water transfers allow farmers to make economic choices to conserve water or to fallow land.''

Although the issue is viewed as dull and complicated by many people -- and easy to ignore in rainy years like this one -- water transfers are one of key topics that will help shape 21st century California.

Billions of dollars are at stake, not just for farmers in Fresno, but for high-tech companies in Santa Clara and high-rise hotel owners in Los Angeles.

[snip]

The idea behind transfers is simple: Encourage farmers to voluntarily sell water to cities, moving it through the state's sprawling series of canals, dams and pumps.

Water marketing

In some cases, farmers in places like Imperial, Fresno or Merced counties could earn more money by selling water than they could from growing crops.

In theory, that would offer farmers a market incentive to conserve, reducing the demand to pump from the delta and the need for expensive storage projects.

[snip]

The chief fear of many rural leaders is that a few farmers would get rich while towns from Calexico to Colusa would dry up and blow away.

''Water is what makes agriculture, and agriculture is the backbone of our rural communities,'' said Jason Peltier, manager of the Central Valley Project Water Association, a Sacramento organization that represents 80 water agencies, many of them rural.

''Without ag, there's no rural economy. People will fight to protect their way of life,'' he said.

[snip]

Environmentalists, however, are battling any plans that would build new reservoirs without including transfers.

''There are some crops that are just going to have to reduce production,'' said Jackie McCort of the Sierra Club in San Francisco. ''If we remove those subsidies and look at the environmental harm we've done to build dams to get water to these crops, it's benefiting a very few people at the expense of the environment and the taxpayer.''
When did this article appear? May 18, 1998.

Bottom Line: We haven't gotten very far in terms of reforms and solutions, and the problems we face today are even worse than 10 years ago. I wonder where we will be in 2018?

hattip to JWT

800 Pound Gorilla 2

In yesterday's post, JWT argues that higher prices on agricultural water would end the water shortage. (I agree, but we offer different suggestions.) Today, JWT broadens the view to include the collateral damage of current water use patterns in California (and other places that practice subsidized, irrigated agriculture):

"There are four more very, very serious problems that flow directly from California’s huge agribusinesses wasteful use of water:
  1. There are estimates that fully 20% of all the electricity used in California is used to move water from where it is to where it is currently wanted. A significant amount of this electricity is produced by highly subsidized (that means our tax money) hydro-electric power producing dams. Think Hoover Dam for instance, but there are hundreds more. As more and more water is diverted from dammed up rivers, less and less electricity is generated.

    [snip]

    The California Aqueduct, which you have seen if you have ever driven from Los Angeles to Sacramento, begins at the Oroville Dam. It then runs 444 miles to the South, and up hill all the way since the Southern end of the San Joaquin Valley is higher than the North end. Then it arrives at the Tehachapi Mountains and it has to be lifted 3,400 feet straight up to get over the mountains. This happens in five stages. The fifth stage lifts all that water higher than the Empire State Building on top of the Eiffel Tower. Some of this energy is recovered on the downhill side, but not much.

  2. When fields are watered by flooding and by rolling sprinklers, the overwhelming majority of the water evaporates into the sky. But the water that is left behind contains lots of minerals, and particularly damaging is salt. When the irrigation water is recycled, the salts continue to build up as the “unsalted water” goes into the sky. Eventually, the salts in the soil build up to the point where the land is useless for growing anything and will remain that way forever. As you drive through the San Joaquin Valley even now you can see places where the land looks as if it were covered with white snow. Sorry, that is salt and that land is out of production forever. Continued wasteful irrigation simply speeds up this process.

  3. Because huge agri-business can use heavily subsidized water to grow cotton in a desert, and because the same huge agri-businesses receive huge subsidies directly from the U.S. Congress, they can set the world price for cotton so low that small farmers in Africa, who have successfully grown cotton for generations, can no longer compete and have given up growing cotton. However, without cotton, those African small farmers might starve to death and we cannot let people starve to death so we send the unemployed African cotton farmers direct relief payments. In November, 2005, the U.S. government issued this press release; “The Millennium Challenge Corporation offers the most significant opportunity for many key countries to address long-term development obstacles in cotton. It will result in hundreds of millions of dollars flowing into the region in grant form in a way set by recipient countries.” And the grants for the first three countries total $737 million.

    And when we are talking about U. S. farm subsidy payments, we are not talking about lunch money!! Data from 2005 is the latest available and it shows that California cotton farms received $649,415,000. Arguably the state’s biggest cotton farmer, headquartered in Corcoran, California, received payments of $4,503,023 from 2003-2005. In addition, nine individuals associated with that business received an additional $4,286,864 during the same period. One California cotton farmer received $8,789,887 in payments from the U. S. government all the while using cheap water to grow the cotton. And that is just one example. And always remember that these are YOUR tax dollars we are talking about here.

  4. The California salmon industry has collapsed because so many rivers have been dammed that many salmon cannot reach their spawning grounds. Add to that, the fact much smaller amounts of water are being released in the few remaining rivers. Here is just one example; in 2007 only 90,000 adult salmon returned to the Central Valley to spawn. In 2002, just five years ago, the number was 804,000."
Did you notice the irony of $737 million in aid to African cotton farmers harmed by our $649 million in subsidies to California cotton farmers. We are paying people to dig holes and then paying other people to fill them in!

Bottom Line: As we have seen with the ethanol debacle, bad policies can lead to tragic consequences in many places, domestic and foreign. Time to replace bad policies with sustainable ones, and ending water agricultural subsidies is one of those “no regrets” actions we can take here and now.

25 August 2008

Dam Prices

Last week, the Modesto Bee argued that California needs more dams. JC cc'd me in his response:
The Bee's 200 word limit makes it impossible to adequately respond to the August 21 editorial, “Feinstein on right track: We need more dams”. But here's a beginning. The Bee says that no one argues that we now have enough water, “at least not the way it is distributed and used.” The Bee should have added, “and the way it is priced.” Pricing is the first answer to dealing with water issues. Efficient use is next, and that doesn't just mean efficient drip systems; it means being efficient in not growing low value, water intensive crops like cotton with subsidized water.

The Bee argues for building new dams now (undoubtedly having Sites and Temperance Flat in mind), but fails to mention that the pending studies on the costs, yields and environmental effects of those dams are not complete. That is like having expensive surgery before the Doc has looked at the X-rays.

The Bee and Senator Feinstein want to solve a problem of my generation's making by saddling my children and grandchildren with $9.3 billion (plus interest) of debt to be paid in the future. Let those who say they really need more water pay the full cost.
Bottom Line: JC may not be the Savior, but he speaks truth!

800 Pound Gorilla

JWT sent me an editorial published in a local paper in January. Here's a nice excerpt:
The 800 lb. gorilla is the absolute fact that there is NO WATER SHORTAGE IN CALIFORNIA!! I can hear you saying that must be wrong because we constantly hear about the need to take three minute showers with friends to save water. While three minute showers may be wonderful, as well as maybe a yard full of cactus, all of that change in behavior will not affect the water situation in California in any significant way.

The actual fact is that there is an abundant supply of water in California, but that water is being incredibly badly used. The reason for this extraordinary miss-use of water in California is that water is priced very badly. The reasons for this inappropriate pricing go back a century, or more. While that pricing was right for its time, it is flat wrong now 100+ years later and is the primary cause of California’s “Water Problem”. Appropriate pricing is the complete and total solution to California’s “Water Problem”.
He goes on to offer seven "facts" that everyone should know about water use in California (paraphrased):
  1. Ag uses 80 percent of water.
  2. Farmers grow low-value crops with it. (Alfalfa uses 20 15 percent of ag water. The alfalfa goes to cows, true, but cow shit pollutes groundwater.)
  3. Farmers pay very little for water ($17/AF in Imperial Valley) while urbanites pay $1,200/AF.
  4. Farmers will adjust to expensive water by using less -- just as they adjusted to expensive corn by growing more.
  5. If the price of ag water rose, farmers' costs would rise, but they could be compensated with grants or loans to improve irrigation efficiencies.
  6. This point is worth quoting in full:
    This proposal will be greeted with cries of outrage that we are forcing the little guy off the farm. And that is, of course, utter and absolute nonsense. The overwhelming majority of agriculture in California is produced by a handful of gigantic agricultural corporations. In fact, the 2002 Census of Agriculture shows that about 6% of all California farms produced 78% of the total value of California agriculture. And all of those farms were $1,000,000 businesses, or larger.

    The cries of outrage won’t come from farmers; they will come from corporate lawyers and lobbyists! Ignore them.
  7. Long-term contracts can be bought out. (They will have to be bought out eventually anyway.)
Bottom Line: These recommendations are reasonable to me (raise prices!). Although I prefer that farmers market their water (My all-in auction allows them to buy water from themselves; market forces -- and sales revenue -- will lead to fast improvements in efficiency and productivity), almost anything is preferable to the current system of too cheap water.

Recycling Propaganda

GW Resources wants you to "do it for the children," and its overly-long and maudlin promo-video (3 minutes!) has kids asking "what are you doing about our water?" (The best is the girl who says "Like, 95 percent of our body is water.")



Bottom Line: Love your kids? Raise prices! :)

ps/For pro-infrastructure propaganda, watch the video here. Although it's posted at Penn State and funded by a charity, it's co-funded and supported by a bazillion engineering firms. (I dunno -- maybe that's just their way of expressing approval of a good idea? Like Bechtel funding of PPIC's pro-Peripheral Canal report expressed approval?)

Hattip to DW

24 August 2008

Water Fascism or Follies?

LA residents will be DOUBLE fined for violating watering restrictions, SD residents are encouraged to turn in their "waster" neighbors.

The pressure to conserve is leading to some surreal scenes:
The anti-drought initiative has coincided with efforts by Villaraigosa to keep his top appointee at the DWP, Commission President Nick Patsaouras, from quitting his post. Perhaps the utility's most aggressive watchdog on spending issues, Patsaouras sent a resignation e-mail Monday, but the mayor refused to accept it.

[snip]

Villaraigosa discussed his appointee as he stood near two of the city's 16 "drought busters," inspectors who will issue fines to those caught violating the new rules two or more times. The team will look for various violations, such as washing cars with a hose that lacks a shut-off device.

One resident questioned whether the city was being fastidious about its own water usage. West Los Angeles resident Eric Shabsis said he had seen sprinklers running during the day outside the Cheviot Hills Recreation Center and a city facility in Palms.
"Refuse to accept resignation"? "Drought Busters"? "Daytime sprinkler violations"?

While I appreciate the "need" for action in SoCal, these measures are probably the least effective way to get people to use less water.

This article says why:
Mayor Jerry Sanders began pushing residents earlier this year to save water. He acknowledged last week, though, that the effort had failed and said the city may in fact use more water this year than it has previously.

[snip]

Shames dubbed the authority's 20-Gallon Challenge, which has urged residents to save 20 gallons each day, "woefully inadequate."

"I violently disagree with this almost pathological preoccupation with education," Shames said. "Education is like an excuse for yet another pamphlet."

[snip]

The UCAN report says officials from cities and water districts throughout the region must increase -- not decrease -- their conservation efforts. One of the most important steps, Shames said, is to establish tiered water rates that penalize the heaviest users. While many districts charge more as a customer consumes more water, the price hike isn't significant enough, he said.

"The customer who conserves isn't being given the proper message that you're doing a good job," Shames said. "Because it doesn't have much of an impact on what they're charged. The signals are so horribly upside down in the way we charge for water in this county."
The UCAN report [PDF] gives many tips on how to conserve water, but people need a reason to conserve. I'll let you guess....

Bottom Line: Raise prices.

hattips to DW

Competition (Oh Good!)

Antelope Valley's experiencing upheaval as citizens debate their future water policies. This article [read it fast, AV Press doesn't archive] gives the details on election challenges that incumbent directors of the water district face.

Although the US Congress is famous for its 90 percent-plus reelection rate (figure), water directors have even higher success rates -- because they rarely face opposition.

So how does a new director replace an old director? The old directors choose the new director, who steps in when the incumbent resigns. That new director then runs as an "incumbent" in the next election -- and rarely faces opposition.

Did you notice what a sweetheart deal that is? Yep -- Board members appoint their replacements. That's the way things work in Russia -- not in a democracy.

How are the AV directors reacting to the challenge? They are not happy:
Water agency board members in 1997 appointed Weisenberger to fill the vacated seat of Duard Jackson, a retired California State University, Los Angeles professor who moved out of the area. Since being appointed to the board, Weisenberger, a 52-year-old Antelope Valley College agriculture and landscape professor from Lancaster, has run unopposed.

In fact, director Dave Rizzo, also up for re-election, considered Weisenberger to be lucky in the 1998, 2000 and 2004 elections for not having to campaign.

"Now he has to earn his position like everyone else," Rizzo said with a smile, adding that he was kidding.

But neither Rizzo nor Weisenberger is laughing too hard. They believe a politically motivated strategy is behind an effort to unseat them and longtime board member George Lane, who has served as a board director since 1977.
I don't know about you, but I thought that elections are SUPPOSED to be political. Too bad these guys are going to face a POLITICAL challenge. After all, it may interfere with business as usual. /sarcasm

Bottom Line: Competition is good. (And no, I don't care if the challengers want to skewer and roast Bambi alive -- all politicians should earn their seats.)

23 August 2008

Westlands Getting Nukes?

Another story from the Department of WTF:
Fresno Nuclear Energy Group LLC on Tuesday signed a letter of intent with the Westlands Water District to discuss the possibility of building two 1,600-megawatt nuclear power plants on 500 acres in the district.
What are they going to do with the nukes? Desalinate water for irrigation.

I had to check to see if it was April Fools. Given that it isn't, Westlands has either decided to go into the fool business itself (the plants will require water for cooling!), or they are making a WMD threat to go nuclear unless the government gives them more water.

Unfortunately, Westlands' management style reminds me of North Korea (hysterical screaming and ignorance of common sense leading to "gifts" to make them shut up), so I see this announcement as a cynical ploy to take water from more-deserving places and give it to the second least-productive district in the State.*

Bottom Line: Although I am not taking Shock and Awe off the table, I think we can ignore Westlands' ploy for now.

* Productive, as in value versus cost (in misallocation of water AND cash costs) of crops. Imperial ID is obviously the worst.

Water Alternatives

That's the name of a new, online and free journal dedicated to a broad discussion of water issues. Although I have not got 'round to reading all the articles I printed out, this introductory essay [PDF] shows that WA has some promise:
The idea that water problems are not due to water scarcity but, rather, to poor management or poor governance has become popular (World Water Assessment Programme, 2006). Although this implicit recognition of politics has somehow been diluted by managerial and social engineering approaches that tend to perpetuate the dominance of the state and water experts, it has also prompted an emphasis on the institutional, as opposed to climatic or technical, dimensions of water management. The space for explicit discussion on 'the political' in water resources management mainstream debates and circles has arguably increased and different constituencies have learned how to mobilize IWRM [Integrated Water Resources Management] and other mainstream concepts to promote their agendas and contest the status quo.

[snip]

Addressing the institutional, social and political dimensions of the water‐society nexus, Water Alternatives will explore issues as varied as the history, the management and the governance of WSS and irrigation schemes (communal and public), aquifers, fisheries, watersheds, national and transnational river basins; flood control, hydropower and water conservation. Policy issues include the relationships between water use, environmental health and food production, and between water, growth and poverty; the competition between economic sectors, the processes of policy reform, planning and the decision‐making process for public infrastructure, the evolution of irrigated agriculture, privatization and decentralization, transnational and global water regimes, science/policy‐making relationships, the social construction of water knowledges and of the main water narratives.
Although this essay is dropping a few too many radical deconstructivist words for my taste ("unpacking", "winners and losers"), more dialogue is, indeed, better.

Bottom Line: Check out this journal. Better yet, send them articles and make WA a place for truly diversified perspectives.

Drought Grants

California's Department of Water Resources is giving $17 million in grants under its Urban Drought Assistance Grant Program. DWR received requests for $74 million.

Besides the obvious attraction of "free money",* the volume of requests reflects the dire circumstances that many communities find themselves in as demand continues to outpace supply.

Bottom Line: Of course, DWR could keep its money and fix the "supply-demand imbalance" another way. Send a one page memo to all supplicants that says "raise prices."

* It makes no sense to me why tax revenue should be returned to SOME communities for conservation measures when water management problems are local. Use the $17 million on a state-wide program.

22 August 2008

Economics of Water

Despite its weird title ("A Scoping-Level Analysis"), this overview report [PDF] discusses the efficient allocation of water in California (and elsewhere, I am sure). It covers a LOT of ground with bullet-point notes, but I found two interesting areas.

Tiered Water Rates:
Volumetric pricing is the minimum standard for urban water users. In 2006, 195 urban water agencies reported that 80 percent of their revenue was derived from volumetric charges (CUWCC, 2006). Black and Veatch (2006) report that volumetric pricing was used by 90.5 and 95.6 percent of respondents in 2001 and 2006, respectively.

Tiered water pricing is increasing, but was still not used by most respondents. From 2001 to 2006, use of tiered rates increased from 38.4 to 43.3 percent of respondents. Tiered rates were used by most respondents in most Central Coast and most Bay Area counties, but uniform rates were still most common in most central valley, southern inland and in some south coast (Los Angeles) counties. In other south coast counties (Orange and San Diego), non-tier rates were still used by about half of respondents. In April 2008 Assembly Bill 2882, designed to encourage public agencies to adopt conservation rate structures, passed by a large margin (Woodland Daily Democrat 2008).
Did you get that? 95 percent of water districts charge you more if you use more, but only 43 percent charge you more per unit, the more units you use. (None that I know of use the conservation pricing that I advocate -- probably because they cannot figure out how to rebate revenue in excess of costs. Wait, that's not too hard to figure out. Ahh, lazy? political opposition?)

Did you also notice that the places that face water shortages (OC is recycling sewage; SD is building a desal plant) are the ones that do NOT use tiered pricing? Do I need to draw you a picture?

Water Transfers:
For pre-1914 appropriative rights, water transfers are subject only to a finding of no injury to other legal water users, and the injured person must bring court action to halt the transfer. For post-1914 rights, water transfers require an application to the SWRCB and the application can be protested by an injured water user. Any transfer of post-1914 rights also cannot have an unreasonable effect on fish and wildlife, and two laws that consider economic impacts may apply.

Water Code section 382 provides authority for transfers of surplus water by local or regional agencies. If an agency utilizes this code section then the SWRCB may approve the transfer if it does not “unreasonably affect the overall economy of the area from which the water is being transferred.” Water Code section 1810 permits any public agency that owns a water conveyance facility to utilize unused conveyance capacity for transfers provided the use of the conveyance facility does not injure any legal user of water, unreasonably affect fish, wildlife or other instream beneficial uses and does not unreasonably affect the overall economy or the environment of the county from which the water is being transferred.
So, despite what our lawyer friends tell us about how water markets "exist", they do not function because it's a pain to get approval from the multiple agencies that can veto a decision (tragedy of the anti-commons) -- even without considering how many people can oppose a transfer on somewhat nebulous grounds.

A market cannot function if transactions costs eat up the gains from trade. That's why markets for water in CA (and elsewhere) are stillborn. The process needs to be streamlined (without disenfranchising too many people, of course).

Bottom Line: We have a long way to go before we achieve efficiency in water allocation like we have in the allocation of houses, gold, oil, etc. This analysis provides a useful checklist of issues to tackle.

Feedback Loops

Treehugger has the scoop on a girl who won $10,000 for designing a device that tells people how fast they are using water (it beeps every gallon). That's the kind of feedback that people need. Next thing to add is the PRICE of that water :)

Ag to Urban

This paper [PDF] uses a simulation to calculate the value of "perfect" water markets in SoCal. Value is expressed as the increase in welfare that results from a decrease in scarcity costs.*

The authors conclude that:
Several promising long-term and short-term water transfer opportunities exist within southern California. The most promising southern California transfers remain from agricultural regions on the Colorado River to urban regions nearer the coast.

Small reallocations of water, represented as market outcomes in this paper, can substantially reduce regional shortage costs. An ideal southern California water market decreases average agricultural deliveries by 460 taf/year (a 13% reduction), but decreases regionwide average annual scarcity costs by 81%. These are upper-bound estimates for the value of an ideal market.
As you might expect, IID is the source of most of this water. What's interesting is that IID is "only" selling 300TAFY, which is about 10 percent of its water allocation.

Another interesting point is that the biggest reductions in scarcity costs are in Castaic and Antelope Valley. When the paper was written (about 2000), these areas were growing rapidly but facing water constraints. Although growth has probably slowed, current wrangling over water in Antelope probably reflects continuing problems with water scarcity.

So what's the price of water in these "perfect" markets? It's hard to say from the paper (darn!), but the simulation indicates that an additional AF of water is worth $1,338 to MWD in extreme drought years and an average of $643 across all years. (These "scarcity" values do NOT include MWD's delivery or treatment costs, which are about $800/AF today...)

Bottom Line: The transfer of a small share of agricultural water can alleviate almost all urban water scarcity.** With fully developed water markets, farmers will stay in business and urbanites can take longer showers.

* When water is sold, payment from one party to another does not affect total welfare -- like moving money from one pocket to another. What matters is the value of water in use, i.e., welfare increases if water moves from a lower-value use to a higher-value use.

** Given that farmers control 80 percent of California's developed water, a 25% reduction in their water supply (via market sales) would DOUBLE urban water supplies.

21 August 2008

Dam Small Enough?

Some see small dams as a middle ground between big dams and no dams at all, but that compromise is not working in Brazil:
Because of their presumed limited ecological impact, environmental permits for small hydroelectric dams are granted by state, not federal, agencies. And the state bodies are more vulnerable to local economic pressures, says Valle.

[snip]

The dams reduce the quantity of fish in the rivers because they alter currents and nutrition, in addition to eliminating migratory species. Attempts to reestablish reproduction have not been successful, according to Juarez Pezzuti, a biologist who conducted a study of the effects of Paranatinga II, a small hydroelectric dam operating on the Culuene.

[snip]

The dams are to be built using the latest European technologies, channeling only a portion of the river flow through tunnels, without affecting the landscape or river rafting, which is what feeds local tourism, says engineer Helio Machado, head of the project. The people opposed to the endeavour are talking about ridiculous threats like flooding or the drying up of the Cubatão River, because they don't know the details, Machado says.
So we have too many dams being built ("economic pressure" = bribes), but knee-jerk activists are overreacting ("ridiculous threats").

Seems that the only way out of this one is to award "flow rights" to those who depend on the rivers for their livelihood and/or Nature (e.g., too few fish - shut down dam) and then allow rights holders to negotiate with dam beneficiaries (power companies and customers).

Bottom Line: The political approval of dams is not so useful because politicians/bureaucrats can take bribes (benefit) without bearing the cost of "too many" dams.

Toilet Veggies

The Economist blogs on an IWMI report on the use of wastewater for irrigation in developing countries. Although the idea sounds yucky, it does have benefits: Veggies grown close to cities, employment for women, reduced demand for potable water, etc. Then this caught my eye:
Spreading wastewater over fields, and allowing it to leach back through the soil into local waterways, turns out to be a reasonable way to purify it. The process filters out all the organic contaminants, and much of the nitrogen and phosphates that would otherwise contribute to algal blooms and dead zones further downstream. It is certainly preferable to dumping wastewater straight into the nearest big river or lake.
Dead zones and algae blooms have been in the news recently (and here in February!), and they are growing because of high nutrient concentrations in runoff. In developed countries, the nutrient comes from fertilizer (farmers want to maximize yield); in developing countries, it comes from untreated sewage (farmers are poorer and governments spend little on water treatment).

The story also gets at the "keeping it local" theme that's more popular. As fuel costs rise, "viable" markets are shrinking. Today, we shop closer to home, buy local food and vacation nearer. Tomorrow, we'll be living closer to work -- and recycling our sewage.

Swiss Family Robinson, here we come!

Bottom Line: As costs rise (for clean water, for fuel), people find alternative substitutes and change their habits. Homo economicus is very clever at adjusting to changing relative prices and living the good life.

Crazy World

From the Department of WTF, we learn how Hindus are poisoning their water by putting statues of gods -- upto 160,000 at a time -- in their rivers:
Environmentalists say the idols are often made from non-biodegradable materials such as plastic, cement and plaster of Paris and painted with toxic dyes.

After the statues are immersed, the toxins then contaminate food crops when villagers use the polluted water for irrigation

[snip]

Traditionally, idols were made from mud and clay and vegetable-based dyes were used to paint them.

But commercialization of festivals such as Ganesh Chaturthi and Durga Puja has meant people want bigger and brighter idols and are no longer happy with the eco-friendly statues.
This story is bizarre, but it reminds us of how a habit can be benign one day and destructive the next. For example, Indians have drunk tea at train stations -- and thrown the cup away -- for over 100 years. Now cups are made of plastic instead of clay, and they pile up. Over here, we have a similar transition: Drinks that used to be in glass and aluminum are now in plastic, and we're surrounded by plastic bottles.

Bottom Line: Our habits should change with technology.

20 August 2008

How Good IS Your Tap Water?

Many people who drink bottled water are worried about the quality of their tap water.

Many people blast them for being naive -- saying that tap water is much safer because it's subject to more regulations on quality than bottled water. They even point out the ironic cases where bottled water from municipal sources was more dangerous than the original sources (e.g., Dasani in the UK).

But "I knew a guy" arguments do not cut the mustard for people worried about what they are drinking -- and does not address the main problem -- we don't really know what's in the water we get out of the tap OR the bottle.

Does anyone see the profitable idea here? Home water testing kits that look for 20-100 "yucky" things in a water sample. The key feature is that consumers can test THEIR water in THEIR house (or their bottled water from Costco).

If the test says the water's good, no need to buy filters, bottled water, etc.

If the test says it's bad, time to complain to the water supplier. (The supplier MAY try to push the incident back to "house plumbing," but additional tests would make it easy to lay responsibility.)

I bet that any company could sell about five million test kits that cost under $20 and took less than an hour to give results.

Can anyone recommend water testing kits (or testing programs run by local water suppliers)?

Bottom Line: It's better to argue with facts at hand, not opinions from thin air.

Addendum: Only 90 percent of tap water exceeds standards and all kinds of info on tap water. (Posts from left and right, nice.)

Water Marketing

Jonathan H. Adler, a law professor, writes of "Water Marketing as an Adaptive Response to the Threat of Climate Change," and this excerpt captures his argument:
The United Nations Intergovernmental Panel On Climate Change has noted that there are numerous policy options that “would generate net social benefits regardless of whether there was a climate change.” Examples of such “no regrets” policies would include the elimination of irrigation and development subsidies that artificially increase water demand, as well as the incorporation of environmental values into existing water institutions.

This article suggests that the gradual implementation of water markets is also such a “no regrets” policy. Many aspects of water markets, including their flexibility, decentralized nature, and ability to create and harness economic incentives, make them particularly well suited to address the uncertain water forecast. A gradual shift toward water marketing and market pricing will improve the management of water supplies, ensure more efficient allocation of available water supplies and encourage cost effective conservation measures.
Bottom Line: Read this paper.

Poll Results -- Water Use

HEY!................There's a new poll on the right bar!

Favorite Use of Water

Selection
Votes
Shower or Bath 39%20
Swimming 12%6
Mixed with Whisky 16%8
Skiing 6%3
Rain 27%14
51 votes total
Bottom Line: Seems that people like to see water flowing more than they want to flow over it. (Whisky is apparently a compromise choice.)

19 August 2008

Death of a Community

This article tells of the Delta communities that oppose the Peripheral Canal:
"This is a living, vibrant community, another voice that needs to be heard in this process," said Larry Emery, pastor of the Walnut Grove Community Presbyterian Church. "Sometimes, the Delta has not always been well-represented."

In Manteca, longtime water watchdog Alex Hildebrand complained that a team of researchers from the Public Policy Institute of California refused to consider his advice when crafting their own report, which recommended a canal.

"The production of food is not considered to be of social importance" in their analysis, Hildebrand said.

[snip]

Delta landowner Dino Cortopassi this month bought full-page ads in two newspapers, as well as radio and television spots blasting the canal. He started working on the Delta when he was 10 years old, and remembers looking across the morning mist at Mt. Diablo rising up in the west.

"I love the Delta. There is no question," he said.

Others share the same love - and concern. New Delta advocacy groups are forming. The Clarksburg Community Church recently held a 12-hour prayer vigil to "seek God and his guidance and help" in the future of the little town and the Delta.
Instead of prayer, these communities will have to offer money -- money to maintain the levees that are currently subsidized by the State. In addition, they will have to purify water that's increasingly saline.

Where will they get the money? Their land is falling in value as the probability of permanent immersion rises, and their crops will not fetch any more on the market. (Contrary to Mr. Hildebrand's intuition, food can be grown in other places besides the Delta.)

Bottom Line: Delta communities have been living in drained wetlands for years, sustained by subsidies from the State. Although they think the PC will destroy their communities, Mother Nature is actually taking back what was once hers. Stop praying and start packing.

When a Well is Not a Well

Most place let people pump groundwater from below their land. That idea gets tricky when you live next to a river, the river's overallocated in the middle of a terrible drought, and "well" water is really river water.

Time to change the rules:
The U.S. Bureau of Reclamation, which oversees the river in Arizona, Nevada and California, has proposed new rules that target the well owners, who drain as much as 5 billion gallons of water a year from the Colorado.

Most of the well owners are private citizens who have drilled their wells too close to the river. Instead of pumping groundwater, to which landowners have a right, they are drawing water from the river's subsurface flow. Well owners must get approval to siphon water from the river's surface or subsurface.

To comply with the new procedures, well owners can seek an individual water right, join an existing water district or become a customer of a city or other provider with rights to Colorado River water. They could continue to pump water from the well but only within the limits of the water right or provider.
Consider this "change" relative to the current law:
Under Arizona law, a domestic-well owner must obtain a permit but does not have to report how much water is pumped as long as it is less than 35 gallons per minute, or about 50,000 gallons a day.
50,000 gallons/day is about 56 acre-feet/year. That's a lot of water!

Bottom Line: Groundwater rights need to be integrated into the existing system of surface water rights. Otherwise, we are taking Peter's river water and putting it in Paul's well.

ps: Read more about this story at WaterWired.

hattip to DW

Rationing in Paradise

For some reason,* Imperial Irrigation District, destination for 70% of California's allotment of water from the Colorado River, is using even more that that:
The 3.1 million acre-feet of water allotted to the IID from the Colorado River every year is just not enough. Although only a projection, the district is estimated to overrun its share by 112,000 acre-feet in 2008, up an additional 12,000 from the 100,000 acre-feet overrun projected last month.

IID spokesman Kevin Kelley said the district has a 65 percent chance of exceeding its allotment this year. This overrun will likely cause the district to declare a supply-demand imbalance.

If declared, a supply-demand imbalance will be cause to implement a water-rationing system within the Imperial Valley. The rationing system, or equitable distribution, would take effect Jan. 1, and the loss, if there is any, would have to be made up to the Colorado River by 2010.

Because a rationing system has never been implemented in the district, Kelley said it would be a “learning experience.”

Equitable distribution would primarily affect agricultural interests within the Imperial Valley, as the municipal and industrial sectors only use 3 percent to 4 percent of the district’s water.

Equitable distribution would allot the same amount of water to each entity and, according to the plan, unused water would be reapportioned to those farmers who need it most.
I quoted this article so extensively so you, the reader, can see how economics does NOT work:
  • A "supply-demand imbalance" means (here) that price is too low.
  • Rationing is the worst way to allocate anything that can be bought and sold. It would be better to allocate water by willingness to pay (and auction), especially since IID farmers understand the value of water as an input.
  • "Paying the river back by 2010"? That's pretty lame. When's the last time the Congress cut spending -- to pay money back? IID already has WAAAYYYY too much water (that they've wasted) and now they want more?
  • Learning experience is right. The Soviets tried to plan and ration for 75 years. Despite being able to put a man into orbit, invade countries, etc., they could never figure out how to ration. Good luck IID!
  • Notice that 96 percent of the water goes to farmers; they only have themselves to blame, which perhaps explains why IID has so many internal disputes.
  • How would you find out which farmers "need it most"? Are you going to ask them? Deliver water to those who wasted more than others? Had back luck? How do you reconcile these aims?
Bottom Line: IID continues to behave as if it's in an alternative universe. Too bad it isn't.

* That's my sarcasm talking. The reason is that IID sells water for $17/AF to its customers. That's pretty cheap.

18 August 2008

Bottled Water's Better Than Soda

JWT offers a different view on bottled water:

"I am aware that:
  • shipping costs from places like France, Fiji, New Zealand, etc. are significant.
  • plastic bottles use a lot petroleum to make,
  • plastic bottles go directly into landfill and break down very slowly.
In spite of those facts, I think that the consumption of bottled water needs to be viewed in terms of long term dietary trends in the U. S.

Since roughly the 1930's... there has been a long term decline in per capita alcohol consumption. Hard liquor consumption just fell off the table and beer is in slow decline. Wine consumption in flat at best. There are just some really significant changes going on and they are really long term trends.

What did grow during that time period was consumption of soft drinks. All during the 1990's, per capita consumption grew around 3% a year. In the 2000's, they have been declining about 3% annually. The figures are still astounding. Here is the per capita consumption of 12 oz cans:

789 in 2007
814 in 2006
828 in 2005
849 in 2000

Since I don't drink any, I wonder who is drinking my 789 cans of pop each year.

As soft drink consumption has declined in this decade, the consumption of bottled water has been growing at roughly 9% annually.

Now lets put this in perspective. In 2007, the dollar value of soft drinks consumed in the U.S. was just over $70 billion. The same number for bottled water is $12 billion.

From this view, consumption of bottled water is a good thing. It is beyond question that we have a very serious obesity problem in the U.S., and we have accompanying health problems. I would love to see every one of those 12 oz soft drinks replaced by bottled water. And remember that many of those soft drinks are also packaged in plastic bottles.

My take is that every can of pop replaced by a bottle of water is a very, very good thing. You can't get fat drinking water and you can't get diabetes from drinking water, so we won't have to pay for the health care costs from those problems. When those very real benefits are weighed against the costs listed at the beginning of this rant, I think bottle water wins by a wide margin.

What is really encouraging is that on my last gig at the University California Irvine everyone seemed to be carrying a bottle of water, and it seemed like there was a bottle on most desks in the class room. Fifty years ago, anyone seen carrying a bottle of water around the University of Minnesota campus would have been laughed out of town. So changing social values are on the side of bottled water."

Bottom Line: Always remember what goes into opportunity costs. If people drink bottled water instead of soda, we can be grateful. If they are replacing tap water, we can be sad. [I see a poll topic here...]

How Many People per AF?

One of the most widely used measures of water is the acre-foot (AF), i.e., enough water to cover one acre (0.4ha) on foot (30cm) deep. An acre-foot contains 325,851 gallons (1,234 m^3) of water.

That's a lot of water.

So much, in fact, that water managers, reporters, et al. try to translate the figure into something easier to grasp. Equivalents in bathtubs, swimming pools, etc., are vague measures that mean different things to different people ("my pool is bigger than your pool"), but the worst equivalent is "the amount of water the average family uses in a year."

Why? Because use varies all over the place (does the family have a yard? live in Arizona? etc.) and various groups like to inflate/deflate the "number of families served" according to their agenda.

A water manager seeking funding for a new project has an easier time if he says the project will serve "5,000 families" instead of "4,000 families" even though the project produces the same number of AF. Someone who opposes the project can say (with a straight face) that the same project will only produce enough water for 3,000 families, etc.

So how many people can use an acre-foot of water?

326,000 gallons works out to about 900 gallons/day. In my forbes piece, I cited average use of 350 gallons/day for an LA family of three (117 gal/each), and proposed that the first 75 gallons/person be free. In this post, a researcher claims a "personal-use minimum" of 85 liters (22 gallons) per person per day. Many commentators on this blog have remarked that they use far less than the LA average but more than 22 gallons.

So, at "LA rates" of consumption, an AF is enough to support about 8 people; at "minimum" consumption, an AF can support about 40 people. That's a pretty big range.

Lloyd Carter adds his two bits:
Metropolitan Water District says 2 families of five, or 10 people, use an acre-foot a year, for domestic purposes. Apartment dwellers obviously use less (for landscaping) than do homeowners with large lot. A 10-member Hmong family living in a two-bedroom apartment would use less than 10 yuppies all living individually in beachfront condos. In Fresno... one family of five uses an acre-foot of water a year. Depends what you include in domestic use, amount of landscaping, etc.
Bottom Line: When you're talking water policy and water projects, just use acre-feet (or cubic meters) -- don't bother with "number of families per year," since that number means different things to different people and can be manipulated to serve particular interests.

Water Rates

In response to this post, Christopher Woodcock of Woodcock & Associates sent a helpful email with links to national water and sewage charges:

This report [PDF] concentrates on Boston but has comparison charges with 25 US cities.

This survey provides data from 400 utilities and can be purchased.

Bottom Line: I don't endorse either, but I think the former may be worth the price!

Lobbying Plus

So what do you do if you want to sell something to a customer who already has a lower-cost supplier? Lower your price? Can't do that and still make money. Knee-cap the competition? Oh yes, that's better.

Read this blog post on how Poseidon Corporation maneuvered and lobbied to get its desal plant (cost of about $800/AF WITH subsidies) approved by trying to block water reclamation (toilet to tap) projects. T2T is cheaper to run for roughly the same capital expense.

I've supported the Poseidon project because I think it's a useful test case (regardless of cost-benefit), but I've also supported water reclamation, since it's cheaper. If Poseidon was unleveling the playing field, I think I'd be a little pissed off.*

Bottom Line: There are many ways to augment the water supply. Torpedoing the competition to get preferential treatment is not one of those ways.

*SD Mayor Sanders is already a little too aggressive in his opposition to reclamation; the blog implies he was compensated for it.

hattip to DW

17 August 2008

World Tank

A tank is slow to turn, has huge impacts on what it hits, but can do great damage if it misses the target. Yubanet reports on the World Bank's dysfunctional means of monitoring and implementing projects:
While the international community welcomes World Bank's new focus on climate change, the IEG evaluation makes clear that while the institution has been talking about environmental sustainability, it has paid insufficient attention to the broader environmental effects of its own activities. Disturbingly, the IEG review points to the risk that the Bank's private and public sector financing branches may often work at cross-purposes, stating that the problem is especially relevant in climate-sensitive sectors such as energy, transport and agribusiness investments in tropical forest regions. For example, the International Finance Corporation, the World Bank's private sector arm, may promote the expansion of industrial livestock, soy bean and palm oil plantations, all of which are drivers of tropical deforestation, while the public sector arm of the Bank simultaneously warns about the problems of forest loss and has created a fund to support avoided deforestation.
Bottom Line: The World Bank often requires that countries take its advice if they are going to take Bank money. As many of you will understand, such a threat bribe implies that Bank advice is not only useless, but harmful. I suggest that the Bank work on selling its advice. If it's valuable, countries will pay for it.

Would Farmers Do Better?

In this post, undergroundman asks:
If water began to be reasonably priced in Cali, would that destroy the value of Cali farms? Would you be in favor of compensating the farmers?
Generally speaking, no. But the "fairness" of this answer depends on how higher prices arrive:

If they arrive via bureaucratic (or political) action, the "value" of farms would change overnight. Many farms are valuable in direct proportion to their water supply, and many farms were bought at prices that reflect that water supply. In these cases, a change in water rights (in quantity or cost of access) will have an effect on the value of the farms. Can farm owners be compensated for that change in values? Should they be compensated? Is bureaucratic action, in effect, a taking? How are we to evaluate the impact of "shortage" cutbacks in deliveries below promised amounts to farms that have State Water Project contracts? What would happen to values if bureaucrats declared that Delta farms would not rescued if a levee failed?

A change in value attributable to market forces is a different matter. Should I be compensated if the credit crunch means that my house is worth less? Obviously not. Should a farmer be compensated if climate change (or market dynamics) makes his land less valuable? Put differently, should a farmer pay the State if his water rights are suddenly worth more? What if he's trying to sell water rights?*

Bottom Line: Bureaucrats can make land worthless or valuable overnight. This power should be used with discretion, but discretion is rare. Even worse, farmers are often compensated for bureaucratic damages but not bureaucratic blessings. I'm sure that readers familiar with the history of water projects will have tales to tell on that latter point.

* I am not happy that farmers receiving subsidized water are required to repay past subsidies if they resell that water. It's not that the idea of repayment is unfair (it is) but that repayment requirements often make the water too expensive to trade. So it isn't.

The Costs of Change

Yubanet reports on CC:
While some of the benefits from climate change may accrue to individual farms or businesses, the cost of dealing with adverse climate impacts are typically borne by society as a whole. These costs to society will not be uniformly distributed but felt most among small businesses and farms, the elderly and socially marginalized groups.

[snip]

"If there's a single bottom line in all of this research, it's that delaying action on climate change carries a significant cost," says Ruth. "State, local and national leaders will save money in the long-run by adopting a proactive approach."
Bottom Line: I should hope that these ideas are obvious. If they are not, read the article.

16 August 2008

Bureaucratically-Induced Poverty

Read this piece on the colonia's struggle to get water and power.
Texas has proved fertile ground for colonias because of its historically lax regulations on development, a scarcity of affordable housing, and appalling poverty. In pursuit of a fast dollar, developers built without regard to industry norms. Legislative fixes to stem colonia development have paradoxically made the situation worse by making it impossible for substandard communities to join the power grid before other improvements are put in place. The rules have forced residents and those who want to aid them to be creative about providing pressing needs.
The more I hear about Texas, the more I see it as half-developed and half-dysfunctional.

Bottom Line: Bureaucrats can mess things up, coming and going.

Sinners and Saints

The saints of Utah are denouncing the plans of Las Vegas (Sin City) to export water from the Snake Valley (which lies in both Nevada and Utah) to southern Nevada. As they recall the [real] horrors visited upon Owens Valley and the Aral Sea, I wonder how this is all going to end. Will there be years of court battles? A dusty desert in the Snake Valley?

As I recall, the Southern Nevada Water Authority bought land in the Valley (fair and square) and plans to export water underlying the land. These exports will far exceed current withdrawals as well as leaving the basin, so there's a legitimate reason to fear that the area will experience some environmental damage.*

My question is this -- are the good people of Utah willing to pay the bad people of Las Vegas to NOT take that water? They are worried about adverse health consequences and ecological damage, sure, but are they only willing to forestall it in the courts?

Bottom Line: Groundwater laws certainly need to be reformed, but---until they are---they are laws. If the people of Utah (and other places) want that water to stay where it is, they need to pay Vegas to leave it there. I don't see that happening, so I do see those exports happening. A pity.

* I've opposed it in these posts. This article details the "battle of the models," as both sides attempt to show their future vision by manipulating parameters, etc. At least some groundwater hydrologists are getting more work!

Leasing but not to Fish

Read this research paper [PDF] to learn about farmers attitudes towards leasing or selling water -- and for what use.

Bottom Line: Farmers are willing to lease, not for long term, and NOT for environmental uses. Got that?

15 August 2008

Guest Blogging 5

Today at Env-Econ, Rich and Clean and Water in Iraq.

Lame Responses

I recently blogged in support of the Peripheral Canal. I did this after reading the PPIC report on how to "fix" the Delta and participating on a panel of "experts" (I wasn't one) who prepared the report.

I've taken a quick look at the "solutions" of the Environmental Defense Fund and the Natural Resources Defense Council. They are lame because they merely advocate reduced exports from the Delta as a way of "saving it."

I am not sure that they read the science sections of the PPIC report. If they did, they would know that the collapse of Business as Usual is not far in the future. The combination of higher sea levels (global warming), earthquake risk and dodgy levees (really dikes) means that the Delta ecology is going saline and farming will end.

Combine this "soon to be fact" with the political necessity of continued water exports (otherwise agriculture in the south Valley will end as water is diverted to cities), and we arrive at the "Peripheral Canal Solution".*

As far as I can tell, EDF and NRDC are off in la-la land. They need to get behind the "solution" that will serve the fish (the PC will restore natural saline flows and harm invasive species) while maintaining the status quo of water exports from the Delta.**

Bottom Line: Too much ideology and not enough reality from these enviro groups.

* And, no, I do not buy the "Bechtel corruption" notion that funding from a member of the Bechtel family (a big engineering firm in SF) motivated these results. The report authors are academics -- and way too proud of their work to get bought off by Bechtel. Still, it would be good if Bechtel is NOT involved in PC construction.

** No, I don't think the PC will be used to send EVEN MORE water (on average -- seasonal flows will vary) to SoCal. (It would be easy to control those flows, assuming competence from bureaucrats.)

Build Underwater Fast!

This op/ed highlights how local politicians care little about safety -- and a lot about new real estate developments:
Effective on Dec. 8, the federal government will place the Natomas basin in a new flood hazard zone. Any development permitted after that date will have to be elevated three feet or more. The designation will effectively restrict new construction in Natomas until its levees are upgraded in roughly two years.

[snip]

But just to make sure developers know about the deadline, the city and county of Sacramento have issued a press release. Yes, a press release! The notice urges builders "to plan ahead as they look to build in the Natomas floodplain" and get their permit applications submitted well before the Dec. 8 deadline.

[snip]

This is a fine kettle of fish. The federal government, which is trying to protect taxpayers who subsidize flood insurance in Natomas and other flood basins, has called for a "timeout" on new development....

Yet the city and county, supposedly partners with the state and federal governments in upgrading Natomas, are now encouraging developers to hurry up and build in a new flood hazard zone.
Luckily, the real estate slump will probably restrict those applications, but I'd love to see the disclosures that housebuyers will have to sign off...

"I realize that the house I am buying is built in an area that's probably going to be underwater soon. I have a boat ready and can swim at least 200 yards with a Starbucks Frappucino in one hand."

Bottom Line: Blame subsidies. If Natomas and Sacramento had to pay 100% of the costs of flood insurance and levee improvements, we wouldn't see this garbage.

Water Markets Fail(?)

Private markets, that is. Professor Fisher of MIT thinks so, i.e.,
The notion that the free markets will allow a sharing out of water in an efficient way, a basic operation in microeconomics, is not valid in the case of water. For this to happen, the markets need to be competitive, with many small buyers and as many small sellers. And, secondly, all the social benefits in the costs related to water should be reflected in the price – and this has to happen; but this not the case with water, where everybody knows that its use has important environmental consequences and it is something that can not be left to the private markets. It does not matter how competitive they are, there should always be a certain governmental control. For example, the majority of governments agree that it is not a good idea to let their citizens die of thirst, or to be less dramatic, that everyone has the right to a minimum quantity of water. However, it is not obvious that the free, private and competitive markets are going to take care of this, particularly in times of drought. This is the scenario for which the private water markets are not ready.
Whew! I thought my ideas were off, but I advocate environmental set-asides, minimum allocations to humans, and competitive auctions.

I guess I still have a chance with MIT :)

Fisher goes on to say that "water wars" will never happen (and have not happened) because water is not valuable enough to justify the cost of fighting. That's true for countries but not for tribes. I am also not so optimistic about [cost/benefit] rationality wrt wars -- governments have often started wars for irrational reasons.

Bottom Line: Reallocation of water needs to take public and private interests into consideration, but there are ways to use market forces (willingness to pay) to do so.

Flow, the Movie

I've blogged on this film before ("propaganda"), and now we have a trailer:



and some PR:
Interviews with scientists and activists [Peter Gleick!] intelligently reveal the rapidly building crisis, at both the global and human scale, and the film introduces many of the governmental and corporate culprits behind the water grab, while begging the question "CAN ANYONE REALLY OWN WATER?"
Although I agree that bottled water is a scam, and privatization has gone wrong some places,* I am also sure that there's a little too much anti-market hysteria in this film.

YES, PEOPLE CAN OWN WATER!

Here's the best quote from the trailer:
People say that water is a lot like air. You shouldn't charge for water. Well, ok. Watch what happens.
...you run out of water!

Bottom Line: Enjoy the film but don't lose your head! Neither public nor private provision of water is better -- monopoly is the problem. Water MUST have a price (on the margin, at least) if we are not going to run out of it.

* I met an insider to the water privatization in Buenos Aires and learned that service had improved dramatically (child mortality down**) even while the company used "creative discretion" to maximize profits (bad!). The trouble was that the peso devaluation lead to a freezing of tariffs (and drop in revenue). The company left the country, and the anti-privitization people claimed that the experiment was a failure. They were wrong.

** Galiani, S.; Gertler, P. & Schargrodsky, E. "Water for Life: The Impact of the Privatization of Water Services on Child Mortality" Journal of Political Economy, 2005, 113, 83-120. Abstract: In the 1990s Argentina embarked on one of the largest privatization campaigns in the world, including the privatization of local water companies covering approximately 30 percent of the country's municipalities. Using the variation in ownership of water provision across time and space generated by the privatization process, we find that child mortality fell 8 percent in the areas that privatized their water services and that the effect was largest (26 percent) in the poorest areas. We check the robustness of these estimates using cause-specific mortality. While privatization is associated with significant reductions in deaths from infectious and parasitic diseases, it is uncorrelated with deaths from causes unrelated to water conditions.