31 December 2008

Poll Results -- NOT YET!

Still one week to vote (the poll on the right sidebar) where you think I should go on the first Water Chat tour!

The Natural Process

[A post that's perhaps appropriate at the end of the human year...]

We took a few trips to the California coast recently. This estuary [click on photo to see full size] is in Point Reyes National Seashore. I really love the way that the water has formed channels and patterns in the mud. The area is also biologically significant -- the brackish mix of fresh and salt water supported an ecosystem that attracted many birds.

This shot is at Natural Bridges State Beach in Santa Cruz. I love how it captures the absolutely massive scale of Nature. (There's a person standing on the beach, near the middle.) We stood there and watched clouds blow by, dropping rain and obscuring a sun shining from SO far away.

If there's a time to understand the magic of evolution (or power of God), it must be when we are surrounded by water and wind and storms. Beside being terribly impressed to live in the middle of such a magical, miracle machine that runs on its own accord (tides, waves, rain, animals, etc.), I am terribly depressed that our species has gone from inconsequential (only 100,000 years ago) to very dangerous in the past 200 years.

Why? Mining Nature. Mining oil, water, fish, etc. so that we can live a lifestyle that's unsustainable.

I realize that we are great innovators and excellent adapters, but Nature doesn't work at our speed, and Nature is suffering. (Of course, Nature doesn't need us, and Nature moves last, so I am not worried that we will get off without an "appropriate" retribution.)

Bottom Line: Have a little respect for Nature -- without it, life would be nasty, brutish, short AND ugly.

Random Addendum: XKCD on sea "size" :)

A Real Czar Speaks

Grist has a good piece on Bill Ruckelshaus, the man who founded the EPA. Here's the money quotation:
Instead of a cap-and-trade plan, Ruckelshaus favors a tax on carbon emissions. Such a move would still let the market decide where reductions should happen, but it would be much simpler for the government to administer, he said.

"It has the desired effect," he said. "It moves consumption toward less carbon-intensive activities. It does everything a cap-and-trade system does, but it's about ten times simpler. And about one-tenth as popular, which is why we don't have it."

"Presidential candidates, and others, have to promise they won't raise taxes," he said. "Cap-and-trade is a form of tax, but it's not as overtly a tax as a straight tax on carbon."

Ruckelshaus said a cap-and-trade program would carry too many "unintended consequences." Those are inevitable in any large government program, he said, though he believes climate change compels the U.S. government to play a leading role.
The good news? Ruckelshaus is advising Team Obama.

The bad news? Climate change may be happening must faster than we thought (7m rise in sea level?!)

Bottom Line: Slowly the ship turns: Down with Cap and Trade, up with Carbon Tax! (and take swimming lessons!)

What's Benthological?

The North American Benthological Society (mission: "promote better understanding of the biotic communities of lake and stream bottoms and their role in aquatic ecosystems") is meeting in May in Grand Rapids, Michigan.

The meeting (agenda [PDF]) is full of scientists talking about water, climate change, sustainability, rivers, agriculture, etc. (Sexier than I expected!)

The lead keynote is Paul Ehrlich (yes, the Simon-Ehrlich guy), so you would be right to think that this is an ecology funfest. That doesn't mean that economists are not welcomed (or needed!). For example:
Population and economic growth versus biodiversity conservation

Organizers: Bob Hughes (hughes.bob@epa.gov) Jerry Mead (jvmead@gmail.com)

Aquatic ecologists are increasingly relating the condition of aquatic ecosystems to land use and landscape-scale stressors, but ecological economists and global ecologists view economic and population growth as the root causes of ecosystem impairment. At the same time, local planning agencies are trying to stimulate economic and population growth via increased urban development and employment opportunities. At state and national scales, governments view economic and population growth as desirable if not essential.

An initial set of speakers in this session will document linkages between economic/population growth and the impairment of aquatic ecosystems. Other speakers will offer alternatives to economic and population growth, discuss the limits of technological improvements and research, and suggest optional indices for monitoring quality of life. A brief panel discussion will follow the formal presentations.
Although I lean away from growth and towards ecology [prior post], I also know that scientists don't always get the social side of the social sciences.

So anyone who's free should consider contacting these organizers (or sending an abstract) by Jan 21 -- just to provide the (bio)diversity of opinion that will create a robust (ideological) ecosystem.

Bottom Line: Scientists and economists need to talk (a lot) about everything if we are to survive and restore balance to our world.

hattip to PW

30 December 2008

While Rome Burns

I recommend WashingtonWatch to those of you interested in the sausage-making that goes on in Washington DC. In a recent email, WaWa says:
Just before the beginning of the 2009 fiscal year in October, Congress passed a temporary spending measure to fund the operations of the government until March.


The stopgap bill passed in September set full year FY 2009 funding levels for Defense, Homeland Security, and Military Veterans. It spent about $8,000 per U.S. family.


The operations that expire in March include Agriculture, Commerce/Justice/Science, Energy & Water, Financial Services, Interior, Labor/HHS/Education, Legislative Branch, State/Foreign Operations, and Transportation/HUD.


They total just over $10,000 in spending per U.S. family.
Every citizen should be forced to read the budget (and appropriations bills) because it's clear by the structure and language of the bills that the Congress Government does not want to be clear about why or how it decided to spend $18,000/family.

I often wake up with the fantasy that I am laying out the budget, cutting spending and bureaucracy as I send responsibilities (and funding) back to states (education! welfare!) and end stupidnesses (agriculture! war!).

Sometimes, I have to end my fantasies and just consider the serious legislation that our leaders consider worthy of their time (and our money). For example:
H.R. 693 is entitled the “Restroom Gender Parity in Federal Buildings Act of 2007.” Shockingly, Congress let this essential legislation languish since its introduction back in January 2007.

In newly acquired or renovated federal buildings, the bill would require the Administrator of General Services to make sure that toilets in women’s restrooms exceed the number of toilets in men’s restrooms (including urinals) by a ratio of 2 to 1.
What kinda of equity is that? Time in line? Is the Congress going to mandate federal timers to measure "effectiveness" in surge conditions?

Bottom Line: Sometimes I gotta wonder WTF is going on in that swamp.

Untouchable Water

The Dec 2008 National Geographic has an article on village health workers in India, and it gives an excellent example of breaking path dependency:
Discrimination against Untouchables underlies much malnutrition, neglect, and disease, but Jamkhed fights back—often mischievously. During the famine of the 1970s, Jamkhed got money to dig wells. The Untouchables, who had to live on the outskirts of their villages, begged Arole to put in two wells for each village: One for the higher caste women, and one in their neighborhood, so Untouchables could use the pump.

Arole said no. He didn't want to foster caste discrimination. He called in an American geologist with a reputation as a diviner to choose the best spot to drill. "Your job," Arole told him, "is to go around the village looking for water—but to find it only where the Untouchables live."

Soon the Untouchables had water at their doorsteps. The higher caste women, who would not normally have gone to those areas, had to break with tradition—water was more important than caste. "When 50 villages were done, people began to wonder why we were only finding water in Untouchable areas," said Arole. "But by then it was too late."
Bottom Line: Stupid beliefs last until they are too expensive to ignore (global warming, anyone?) Forget global warming -- start with higher prices and water markets!

Klamath Follies

Another NG article reviews the situation in the Klamath Basin [prior posts], making it all too clear that homesteading policies put into place 100-plus years ago led to settlement by farmers and dams on the river, both of which have disrupted the ecology and endangered the salmon.

While I am glad to see that the dams are likely to come down, I think that the Feds will have to buy out the farmers and flood their fields. Sure, they have a "community" there, but it's a community that should never have existed there.

It will take money, effort and pain to get off the current path, but that path has taken us upto (and perhaps beyond) the point of folly. It's time for the land and water engineers to turn Herculean feats of dominance into sustainable feets of coexistence.

Bottom Line: As times change, good ideas can turn into bad ideas; pay attention to that switch.

29 December 2008

The Search for Leaders

Does anyone else think this is important the way I do?
The Otay Water District serves a population of more than 191,000... More than 65,000 notices were sent to property owners and residents notifying them of the rate hearing [for the 12.1 percent increase].

Three people wrote letters opposing the rate increase, and two people showed up at a Dec. 15 hearing to protest.

Jeannie Akers of Chula Vista said she has had to cut back on watering the landscaping around her house.

“We're doing everything we can to limit our consumption of water,” Akers said.

The board approved the rate increase 4-1. Board member Mark Robak voted against the measure, saying he believed Otay could phase in the increase more gradually.

The rate increase, effective Jan. 1, means a typical customer's bill will rise from $47.51 to $52.42 a month, Otay officials said.
First of all, look at the protester:customer ratio: 3:65,000 is too small to even calculate a per cent figure.

Second, look at the suffering imposed: "cutting back on landscaping watering" (oh no!)

Third, look at the political vote: 4 to 1, i.e., one person (20% of votes) says that the $5/month increase is too dramatic. Are you freaking kidding me?

So, what can we conclude?

Bottom Line: Few people will protest a rate increase in a drought because the "pain" of cutting back is trivial -- and way too much attention is being given to protesters by politicians. I saw Mongol last night; I hope that water managers go see it to get some notion of what leadership means: Raise Prices!

hattip to DW

Let's Get OUR Share!

Instead of doing the right thing (raising prices and self-funding projects), we see a rush to the "federal subsidy trough"...

Brown and Caldwell’s Water News [30,000 readers!] of December 19 encouraged readers to get a piece of that finger-likkin "economic" stimulus package:

Opportunity is knocking. As we speak, congressional leaders are working overtime to put together an economic stimulus package that could include at least $20 billion for water, wastewater and stormwater infrastructure projects. These “ready to go” projects would not only improve our water quality and environment, but could generate nearly 700,000 domestic jobs in construction, manufacturing and engineering.

How you can help: Let’s join the 52 construction, engineering, conservation, labor, municipal and manufacturing organizations that comprise the Water Infrastructure Network in support of this timely investment.

Note that someone has bad math skills, i.e., $20 billion / 700,000 = $28k/job with ZERO for capital costs, overhead, etc. Not bloody likely!

Bottom Line: Ugly ugly ugly greed, distortions and wasteful lobbying; I'm surprised they didn't say "for the children!" Can you imagine what the construction firms are sending around?

hattip to a loyal forwarder

Free Lunch Is Served!

What should happen instead, as California's budget crisis puts projects on hold all over the state (a list that will grow longer as tax receipts drop during the downturn) is simple and doesn't require green jobs or stimulus payments.

Raise the price of water to reduce demand to levels equal to the ever-dwindling supply. The extra revenue can be used to fund system upgrades, keep charges for water misers low, etc.

Thomas Friedman says much the same thing about gas/carbon taxes. Hear hear!

Bottom Line: Raise prices to stretch our water supply -- and use the extra revenue for (public-benefit) goodies!

hattip to JWT

28 December 2008

Weekend Discussion: Moving Water

NOTE: This post will stay here until Sunday night. Posts for Saturday and Sunday morning go below this post.

Dear Aguanauts,

Discussion posts allow you to discuss your beliefs on a topic -- to share your understanding, experience and opinions -- without worrying about what's right or what others think. (Check out last week's discussion on commodity water.) Most important, the discussion allows us to learn from each other. So...

Tell us your thoughts on water transfers within and across watersheds and political boundaries.

International Year of Sanitation

That's 2008 folks! Just a few more days left to celebrate.

Sanitation (as the flip side to water supply) is an important but often ignored topic. This book review gives a decent overview of "the business" as well as pointing out areas needing elaboration.

Bottom Line: As the importance of understanding the total lifecycle of water increases, we will be seeing more on this shitty topic :)

Water for Geeks

The Jan 2008 Wired has several interesting articles:

The King of Bionic Ag is an Iowa corn farmer obsessed by the quest for the highest yields of corn and soybeans. He loves pesticides and fertilizers (and he's sponsored by Pioneer seed), but he also gives his crops TLC.

The Dutch masters of flood control are planning to spend $150 billion over 100 years to upgrade protection systems to deal with 1m+ increases in sea-level. Interesting tidbit: The Dutch were early adopters of cost-benefit, i.e., risk = probability of flood x damage from flood. The bad news? While they prepare for 1 in 10,000 year flood risk, we (e.g., New Orleans and Sacramento) struggle to prepare for 1 in 100 year risks!

Meet the guy at the bleeding melting edge of the ice sculpture business. See the ice Elvis!

Bottom Line: This geeky stuff is cool but don't forget the low-tech stuff -- like sustainable ag, living at higher elevations and admiring the sculptures that Nature has put all around us.

Path Dependency

JD writes in with this:

"Here's an observation on human behavior for you. We take our kids sledding to a local hill. After large snowfalls here in Detroit, the small hill gets pretty crowded with kids and parents. I was struck by the fact that when the hill gets really crowded the chances of someone walking up the hill getting struck by another sledder increases dramatically. (Makes sense, right?)

In any event, the profound part is that most people (90-95%) sled down the hill and then walk straight back up the middle, thereby impeding traffic for other sledders coming down. When very crowded (making space scarce), when one looks up from the bottom, one sees that the vast majority of people are on the top of the hill simply waiting for a clear path to come down. Conversely, a large minority are actually sledding down (much less than the hill could sustain).

Frustrated at this situation (because of her understandable reluctance to send our kids barreling down with increased chance for collision) my wife commented that if the people who came down simply walked over a short distance to the side of the hill to come back up, there would be much less danger of collisions. Also, more people could fit on the hill and actually sled down if, when they reached the bottom, sledders would move off to the side to come back up.

But unable, or unwilling to grasp the notion that there would be more collective fun (benefit) and alot less risk for everyone if people conducted themselves with some sense of order (by walking up the side instead of the middle) the mass simply carries on in the fashion described above causing a lot of waiting, more danger, and essentially a lot less fun than possible."

"Path dependency" is the simple idea that people will walk on a path that has been made, rather than "break trail" somewhere superior, which is costly. Since any path breaker will absorb most of the costs but a small fraction of the benefits (everyone can walk the new path), he does not act. With nobody acting, everyone stays in their "sub-optimal" space.

The most common example of path dependency is the QWERTY keyboard, which is supposedly inferior to the DVORAK keyboard, but people continue to use the QWERTY keyboard because switching from one to the other is too costly (e.g., if I learn to use DVORAK, I have to take my keyboard with me). Although that example is not accurate [debated], this example demonstrates the cost of switching from an inferior standard.

(My favorite path dependency example is the continued use of the avoirdupois system of weights and measures in the US, which is FAR inferior to the metric system. I am willing to dump acre-feet -- even if it takes me 10 minutes to figure out gigaliters -- but I can't talk to other US water people in gigaliters.)

My advice to JD: Stand at the bottom of the hill and tell people to move left and right (to the edges). After awhile, traffic flow will change, and everyone will be happier...

I do this sometimes in grocery stores where there are two lines next to each other. Just stop at the front and tell people behind you that you are waiting for the first available spot. That way, nobody feels anxiety when choosing a line, since they will get to the cashier after the person who came earlier and before the person who came later. (That's why I like bank lines more than supermarket lines.)

Bottom Line: Changing from a sub-optimal equilibrium takes time and effort, but a little effort now will be repaid by a lot of happiness later. Do it for the team (that's how we evolved!)

27 December 2008

Weather Update

Ok -- it's time to get back to business...

So -- those of you living in California will have noticed that it rained a lot recently. Has it rained "enough"? No.

This story reports on how ski resorts in the Sierra Nevada Seca are opening late in the season. Resorts are adjusting to new norms by advertising themselves as places for outdoor fun 9 months of the year instead of winter wonderlands 4.5 three months of the year. It ends with the tragicomic tale of snow-makers who saw a night's work melt and flow away.

DWR's Weather and Climate newsletter [PDF] goes from good news to bad news:
There were 21 days in November that California set new temperature records! Almost all of them were high records (153 new high maximums, 40 new high minimums, with 196 total new records; 3 were new lows).


Several storms have hit California since mid-December, providing a boost to Sierra snow, if not making a major impact to current reservoir storage. At least one big weather maker will slide through between now and New Year's. There's good news and bad news with this present situation.

Good news is, anything will help from a drought standpoint. A 75% of average runoff year would keep things just as poor, reservoir-wise. So we really need to see something more substantial than that. Last water year (hydrological water year ending September 30, 2008) ended with 57% of average runoff; the year prior, 53%. Hence this is the start of what could be a 3rd dry year. If we did end with close to average runoff (95-100%), the upstate reservoirs could spring back up to normal. Areas south of the Delta will have supply issues even if we had a great snowpack, but that's not my department, as they say. Other positive factors are that the systems have so far been fairly cool (snow levels low to moderate). That provides snowpack, while keeping down the risk of flood in burn areas.

Bad news factors: The season started okay, took a hiatus most of November, and now we're looking at a drying trend after Christmas. Yes, a couple systems come by, but they may be fast. Quicker storms, less resulting precip. Also the precipitation that has occurred has not brought significant runoff into the reservoirs. Shasta stands at 46% of average for this time of year, Oroville at 44% of average, and Folsom (Have you SEEN it lately?!?) at 44% of average; 21% of capacity.
PG&E is "adopting" to climate change by seeding the clouds, i.e., "enhancing" snowfall. Why is a power company doing that? Because more snow means more water to power PG&E's hydro-plants (and hydro can be sold at premium, green power prices...)

I've never liked cloud seeding (and other types of geoengineering), but PG&E claims that it doesn't have adverse impacts. Predictable response, but true?

That's the situation from California, but what of the rest of the world? In the recent issue of Nature's Climate Change, the news is not good:
2008 went down as the coolest year of the current decade, if still the tenth warmest since instrumental measurements began in 1850. But the past 12 months have done little to cool concerns over the forecast for climate change. If anything, the science that has emerged this year paints a far bleaker picture than the landmark reports released in 2007 from the Intergovernmental Panel on Climate Change.

The latest in a slew of convictions against greenhouse gas emissions, this year scientists for the first time attributed the major changes occurring in physical and biological systems throughout the globe — from early onset of spring to trends in ice melting — to human-caused climate change.
Oh, and we should now start to worry about methane as a potent greenhouse gas that's going to be far more common as cow offgassing (farts) are supplemented by melting permafrost in Siberia and the Arctic circle.

Rapid methane release is one of the four main causes of "abrupt climate change". To learn about the others (rapid glacial melting, changes in the hydrological cycle and ocean currents), read this recent USGS report.

Bottom Line: This winter is not going to fix our water shortage problem, and the effects of climate change are going to make everything worse -- leading to abrupt disruptions in our lifestyle.

Green Subsidies for Desal?

San Diego county water managers have asked for $175 million of federal funds for Poseidon's desalination plant (actually for the pipes to deliver the desalinated water to customers).

On the one hand, I know that it's a mistake to subsidize a local project that has zero "federalism" involved and will make it cheaper for people to live somewhere without water.

On the other hand, it seems appropriate for the Feds to subsidize a project that has "demonstration" value for future projects.

Of course, the Feds need not spend any money. They could just put all federal water (CVP, IID, CVID, PVID) up for sale (and reallocation) via all-in auctions.

But I guess it's easier to spend money on high-technology "solutions" than force people to change their habits...

Bottom Line: It's time to reevaluate our water rights. The Feds should implement markets.

hattip to DW

26 December 2008

Eating Out on Christmas

We went out to dinner last night in Santa Cruz. Luckily, one restaurant was open, and we sat down in anticipation of a lovely Italian dinner -- fresh bread and olive oil, nice wine, pizza and perhaps a little tiramisu.

Our first disappointment was quick to arrive: There was no pizza; they ran out of dough. (Luckily, we weren't in the mood for pesto, since they were also out of that.)

Oh well. So we ordered pasta and a salad, and "no, don't bother to charge us $2 to split the order, we can switch plates."

Our next disappointment was that there was no bread -- we were given stale focaccia instead.

When the wine came, the pour seemed to be less-than-generous minimal, i.e., less than 0.1875 liters (or 1/4 of a bottle) that is the norm.

Things were not looking good.

We ate the meal, and I asked the waiter "what do we do when your service is good, but the restaurant is below par? We don't want to give you a smaller tip."

"Nothing," he says. "Sorry that we ran out of bread."

So we paid (12% tip) and left -- asking the bartender on the way out: "How many glasses do you pour from a bottle of wine." "I don't know," she said. "Four, maybe?"

I don't know about you, but a restaurant that runs our of pizza, pesto and bread and has a bartender who doesn't know -- or doesn't say -- the most-basic pour measure (four glasses is normal; five glasses is a rip-off) is a restaurant that is mismanaged. (Reminds me of the time I went to the airport during the holiday, and the TSA [Transients Standing Around] was overwhelmed by the crowds. What were they thinking? that people would take the holiday off to NOT travel?)

So why was a mismanaged restaurant open (and doing good business) on Christmas? Perhaps because the extra business was worth the cost (paying double wages to workers), or perhaps because they are not able to get customers on a normal business day. For one thing, it wasn't through the charity of their hearts.

Do you have any interesting restaurant stories?

Bottom Line: It's hard to run a restaurant, but I am glad that the government doesn't run them. [non-sequitur warning!] Too bad the government seems to think it can run schools and other things that can be provided by the private sector.

25 December 2008

Miracles of 2009

I'm tired of this Nostradamus dude; he's old and dead. It's time for a new prophet, and who else would be better than a random water blogger and his readers?

In honor of Sant' Obama, I (we) make the following predictions for 2009:
  1. Sant' Obama will walk on water -- of the Reflecting Pool -- as he proceeds to his inaugural. He will then take the oath of office on the Constitution -- a document that means more to America than competing man-made texts.
  2. All the stories written in this July 9, 2009 New York Times turn out to be true.
  3. At the December 2009 meeting on climate change, Sant' Obama performs an exorcism -- removing the corporate tumors from the spleens of delegates -- and everyone agrees that climate action should be based on per capita rights to emissions.
  4. Sant' Obama brings down showers of loaves and fishes -- singlehandedly compensating for the environmental and ecological disasters of ethanol and overfishing. People eating good and abundant food dance in the streets. Mother Nature converts from Paganism to Obamaism.
  5. Sant' Obama throws the moneychangers lobbyists out of the Temple Congress. A new ethos permeates legislation: Laws apply to all people, not just special interests.
  6. Sant' Obama brings sight to the blind -- revealing the demand curve to water managers who have only known the supply curve during their sojourn in this earthly paradise.
  7. What's your seventh miracle? (Seven was good enough for Sinbad and Herodotus)
Bottom Line: You can never expect too much when the recent past has been too miserable for hope. Of course, those expectations may be disappointed, but we're only human, right? Light a candle.

24 December 2008

Poll Results -- Drought Response

Hey! There's a NEW POLL to the right ----->
When a Drought is Announced, Do You
Use MUCH LESS water 15%6
Use LESS water 46%19
Use THE SAME water 24%10
Use MORE water 2%1
Use MUCH MORE water 12%5
41 votes total
So it seems that most people (61%) use less water -- regardless of price. An irascible 12 percent use much more water (or say that they would)

Bottom Line: Many people readers are willing to "do their part" in a drought, but how much is that? Higher prices would help them (and the rest) understand how much is appropriate.

Water Chats Are Coming to You!

I will be taking to the road in 2009 to teach and learn about water.

I will start in California (vote where I go at the weekly poll, which will run for two weeks), going north, central or south, after January 10, 2009.

My first goal will be to learn, i.e., I will meet with "water people" to hear what they have to say about the management of water in their job/region.

My second goal will be to teach, i.e., I will be available to give talks about aguanomics -- the economics of water -- here and there.

My third goal will be to meet you, the readers, to find out how I can improve this blog and answer questions that are too complicated to transmit in text.

After the poll tells me where to go, I will post a wiki with dates and places and let you all weigh in on my itinerary.

After heading one direction, I will head another direction in February (and so on), until this process seems to make no sense, or I die of old age :)

Bottom Line: Aguanomics is about bringing economics to the people -- and here I come!

Environmental Prop/Agit

All sides of the environmental/carbon debate are spending big $$ to present their POV.

There are the pro clean-coal and anti clean-coal ads.

There are ads from oil companies and car companies and spoofs on those ads (to the right - click to enlarge).

And don't forget that classic -- Chevron's hope that you can do less so they can make more.

Bottom Line: There's a lot of money on the line with climate change and government policy (this is all about political economy, i.e., the exchange of money for favorable legislation). Perhaps all these ads are being made by people working "green jobs" who will "stimulate" us back to prosperity -- and a healthy Earth.

23 December 2008


PB sent me this prayer on water:
We thank you, Almighty God, for the gift of water. Over it the Holy Spirit moved in the beginning of creation. Through it you led the children of Israel out of their bondage in Egypt into the land of promise. In it your Son Jesus received the baptism of John and was anointed by the Holy Spirit as the Messiah, the Christ, to lead us, through his death and resurrection, from the bondage of sin into everlasting life.
Although I am agnostic, I am happy to acknowledge the value of religion and spirituality as a means of understanding who we are and what we should strive for.

Please post your favorite water prayers, poems, etc. in the comments...

Bottom Line: We have a deep connection with water, and we should respect that connection by managing it wisely.

Dear Sant' Obama

While you are doing last minute shopping, can you get these presents for me?
  • Legalize drugs -- please end the chaos and waste from this failed Prohibition.
  • Redirect the US Military to defense and stop supporting illiberal dictators.
  • Trade with everyone (Cuba, Iran, et al.), freely. Yes, unilateral trade liberalization.
  • Protect people (not jobs or industries) via portable health care, pensions and unemployment support.
  • Get religion out of government (abortion, prayer, etc.) -- those are private matters!
  • Kill the farm bill. If we are going to bribe farm states, just send them money.
  • Implement a carbon tax, unilaterally.
  • Decentralize MANY government functions to states (support the 10th Amendment!), i.e., education, welfare, infrastructure, etc.
  • End corporate taxes and move regulation to agencies that are harder to bribe.
  • Reform income taxes (flat, with an exemption) and payroll taxes (switch social security from pay as you go)
  • Close Guanto and end shameful practices that are ruining (have ruined?) our reputation as a "shining city on the hill"
  • Promote 100% government transparency -- retroactively!
  • ... and a puppy (just kidding on that one!)
Bottom Line: We can't shoot too high when we are asking, but we can shoot too high in what we are expecting.

From the Mouths of Babes

...comes truth (via ES):

December 22, 2008

Dear Editor,

We have been polluting our world too much. Naturally, we have tried to do something about it. What we use to create energy is the big problem, so people have tried to come up with a new, renewable energy source that is easily obtained. We have already figured out several non-polluting techniques: wind, water and solar power. But another attempt is not working out so well: ethanol. The problems start at the very beginning.

Most ethanol is made from corn. However, that corn must be supplied in enormous quantities, and corn is used in much food for humans and animals. If we use corn for fuel, more will need to be grown, on huge farms receiving government subsidies. We are paying extra so that our food can be used for fuel.

The corn is grown using chemical fertilizer, which is awful for the environment. Most pesticides are made from petroleum, exactly what ethanol is supposed to be preventing the use of. Also, the machinery on big farms needs massive quantities of gas.

The next step is even worse. The corn, grown with petrochemicals, must be distilled in factories to become ethanol. These factories need to get their energy from somewhere, and that somewhere is fossil fuels. It takes about nine-tenths of a gallon of fossil fuel to make a gallon of ethanol. Ethanol pollutes the environment about the same amount as if we just used fossil fuel.

To add insult to injury, ethanol is not as efficient as fossil fuel. In short, ethanol is stupid. It just doesn't do what it's supposed to do - namely, reduce our carbon footprint. Our government needs to start focusing its attention elsewhere. Wind, water and solar energy could use some boosting.


Bottom Line: Give that girl a PhD.

22 December 2008

Bureaucratic "Achievement"

via KP, we can see, country-by-country, the share of the population with "sustainable access to an improved water source" or "sustainable access to improved sanitation".

Long-time readers will recall my Freakonomics post on how these statistics are more about bureaucrats wanting to measure something ("access") than delivering something substantial, i.e., quality.

I am guessing that everyone will forget this important difference -- until victory is declared, and a reporter discovers that these "100% attainment" countries are still full of people getting sick from bad water. (The bureaucrats and politicians will not care, and the people have little "voice".)

A pity, since there will be no money left once the problem is "solved".

The proper way to measure sustainable access to quality water is to track statistics on waterborne diseases/mortality and test water quality. (Sorry if that's harder/costly, but that's the right way to go.)

Bottom Line: What gets measured gets managed. Can we measure the right thing now?

Journalistic Failure

A few weeks ago, I attended the anti-greenwashing summit in San Francisco, but I did not attend the corporate water footprinting summit that the former was protesting.

Thus, I was interested to read the San Francisco Bay Guardian's story on the two events. Although it's sad that the article is biased against the corporations (I am willing to accept partisan opinion in the Age of Faux), I think it unforgivable that the reporter has such a terrible grasp of economics.

For example:
  • She thinks that a law requiring public reporting of bottled water withdrawals is important. (It's not.)
  • She quotes Maude Barlow on economics, e.g., "[water] demand is never affected by inflation, recession, rates or changing tastes." That's SO WRONG.
  • Her survey of 35 people (!) "reveals" that 31 think water is a human right. She (and many others) fails to distinguish between water for drinking and water for lawns, fields, etc. (Forget the 35 people -- I wonder how the question was posed!)
  • This is the worst paragraph:
    The problem has its roots in the inherent conflict between conservation and profit. Saving water is relatively cheap, but there's no money to be made by eliminating waste. Developing expensive new water sources, though, is a potential private gold mine.
    There are two mistakes. First, the best conservationist is a monopolist. (Monopoly profits result when quantity is withheld from the market and prices rise, e.g., OPEC.) Second, the connection between conservation and new water is obvious -- if new water costs a lot (e.g., desalination), then it PAYS to conserve -- or use less.
  • Later on, someone from Food and Water Watch (Barlow's cheerleader organization) says [in reference to Poseidon Corp's Carlsbad Desal plant] that "There's a lack of regulation with a private company controlling the water." That's LOL funny! First, private water companies in California have their prices controlled by the CPUC. Second, Poseidon has a contract with its customers, and contracts cannot be arbitrarily changed. Third, Poseidon has no power. If it REALLY turned off the taps, the local government could seize the facility.
  • The author has issues with history. She says "historic water rights... have been granted to a small lobby of powerful growers who sell their surplus rights for profit" when she should have said "historic water rights were granted to growers who now make big profits from selling their surplus rights."
I could say more about her misleading characterization of economists ("That even among a small cast of purported experts there's little consensus on several fundamental issues" -- except that there was one issue -- the price of desal -- and these experts are real, not purported); poor characterization of Bechtel ("It wouldn't be the first time Bechtel bailed on an international water contract" -- except when Bechtel is forced out of it); or her inability to see failure in public water administration ("though decent water service in Cochabamba is still elusive, the water war has become the poster child for successful grassroots activism" -- but not results).

I'll leave you with this gem:
"There are [bottled water] companies I call water hunters," explained Maude Barlow. "They destroy water to make their products and profit. Unfortunately, some of the companies that are leading this conference are bottled water companies. I don't know how you can become 'water neutral' if your life's work is draining aquifers."
Seriously, I hope that they put this article in the textbooks -- so students can learn how bad hack journalism can get.

[Is "hack" too harsh? Maybe "bad" or "naive" or "lazy"? For one thing, don't cite blogs (cite original sources; I need articles to cite!). Second, stop quoting Barlow on economics -- about which she knows nothing.]

Wait -- there is ONE good point in the article: Citizen oversight of the water supplier (SFPUC) can result in good outcomes for citizens. Good point.

Bottom Line: This article will either preach to the choir, mislead the uninformed or anger those who know something. It's a waste of space that does not make the SFBG look good.

Growing Alfalfa in the Desert

JWT sent me this trip update 2 weeks ago:

For a long time, I have wanted to drive AROUND the Salton Sea, e.g., the east side of the Sea. Yesterday, we decided it was a good time to do that. When we got to the South end of the Sea, what we saw astonished me!

In an absolute DESERT, we are growing alfalfa. The fields go to the horizon, and there are hundreds and hundreds of stacks of alfalfa. This is in a place where the summer temperature reaches 120-125 degrees! And they are growing it by flooding fields. And without water, the land is absolutely barren. This is where 20% of all California's water is used.

I know that the Imperial Irrigation District is one of our favorites so you should enjoy this insanity.

Not only this outrage, but most of their customers are the dairy farmers hundreds and hundreds of miles away.

Until yesterday, my opposition to alfalfa has been intellectual and mathematical. Now it is visceral!

Was he sure that he saw IID land? Yes -- he says that "the photographs were taken on 111 between Calipatria and Niland, which as nearly as I can tell from the IID Annual Report is dead centered in the IID."

Note that only 15% of California's water is used to grow alfalfa, but 23% is used for irrigated pasture, hay and alfalfa. IID uses about 3MAF on many crops, but IID uses about 7.5% ALL water in California, and 75% of the water California gets from the Colorado River.

So why do farmers grow alfalfa in IID? Because they only pay $17/AF of water (recall that urban consumers pay over $1,000/AF for water).

I used to think that $17 was cheap, until I read this* (via JC):
The Turlock Irrigation District's irrigation increase includes raising the basic charge, now $20 per acre, to $23 in 2009 and $26 in 2010. This charge will cover the basic allotment of water, which is higher in wet years than in dry years. Water exceeding this allotment will cost $15 for the first acre-foot and $20 per acre-foot thereafter....

The Modesto Irrigation District's farmers pay $23.50 per acre for the basic allotment of water, then $11.75 per acre-foot.
Didja see that! If you use enough water, you get more at half price! Those rates are not just crazy low,** but the decreasing block rate structure makes them uneconomical (and perhaps criminal, given the current drought). I used to think that IID was the Champion of Mismanaged Water,*** but I am amazed to find that TID/MID are vying to be even more foolish. Egads!

Bottom Line: Farmers "waste" water because it's too cheap to conserve. IID and others need to raise prices/allow markets to reallocate their water supply before their water is seized due to chronic mismanagement.
* The link isn't to the same story that JC emailed to me -- because I couldn't find it online. Worst website of the month: The Modesto Bee.

** Yes, I know that prices reflect the cost of delivery. What they SHOULD reflect is the value of water, but that will not happen until water rights are more widely traded and/or water prices reflect scarcity.

*** IID, which already has problems with demand exceeding supply (duh! I wonder why) is imposing rationing in a typically backwards way (across the board).

21 December 2008

Weekend Discussion: Green Jobs

NOTE: This post will stay here until Sunday night. Posts for Saturday and Sunday morning go below this post.

Dear Aguanauts,

Discussion posts allow you to discuss your beliefs on a topic -- to share your understanding, experience and opinions -- without worrying about what's right or what others think. (Check out last week's discussion on commodity water.) Most important, the discussion allows us to learn from each other. So...

Tell us your thoughts on government programs to create green jobs.

The Economics of Shopping Bags

In this shopping season, it seems a good time to discuss the little-understood, but commonly-questioned, economics of shopping bags.

In particular, why is it that some places give you bags for free, others charge you for them, and still others give you a money credit when you bring your own?

Let's consider each of these in turn before adding a little more at the end (festive writing style today)...

Free Bags: Why would a merchant give you a bag? Because the merchant wants to sell you stuff that goes in the bags! Why is that rational? Because you will buy MORE when you have free bags to carry stuff in! You must agree that you are likely to buy less when you have to carry stuff on a bike or in hand, or when you go shopping frequently.

Now these last two observations lead us down an interesting path. What if you live far from the store and only shop occasionally? Well, it makes sense to buy a LOT at once to take to your distant home. What's good for that? A car -- and a big one please!

Can you see how free bags may be a leading symbol of our sprawling bedroom "communities" and the big cars we use to travel from them? Yes? Well that means you will also understand the pros and cons of...

Bags You Pay For: Back in the day, everyone brought their own bags shopping, but the convenience and consumption movement put paid to that with free bags. These days, bags have prices to discourage people from using more of them -- either because bags end up as litter or consumption is frowned upon.

Bag Credits: Now let's take the paid-bag perspective to heart and assume that there's public pressure to raise the price of bags. Contrast that with merchants' desire to sell more, and we end up with the "bag credit" compromise, i.e., a way of allowing the greenies to feel good about themselves (for just $0.05/bag!) while leaving "uninhibited shoppers" to continue without bother or interruption... to generate revenue for merchants!.

Now we can understand why stores (even "green" ones like my co-op) hesitate to invoke bag charges. They don't want to reduce sales or drive customers to the competition.

That's why city-wide bag bans are so useful -- they require that all merchants coordinate their activity (normally a violation of anti-trust laws) to charge for bags. LA announced such a ban this summer, but we won't know how it works (or if its implemented) until 2010.

Bottom Line: Economics is all around you! in the bag! <--- new hit song!

The Carbon Footprint of Food

Here's some miscellaneous food stuff (via FCRN) to go in your bags!

Local food doesn't matter: "Total GHG emissions are 8.1 t CO2e/household-yr, meaning delivery accounts for only 4% of total GHG emissions [within] transportation as a whole, which accounts for 11%. Wholesaling and retailing of food account for another 5%, with production of food accounting for the vast majority (83%) of total emissions.

Within food production, which totaled 6.8 t CO2e/household-yr, 3.0 t CO2e(44%) were due to CO2 emissions, with 1.6 t (23%) due to methane, 2.1 t (32%) due to nitrous oxide, and 0.1 t (1%) due to HFCs and other industrial gases. Thus, a majority of food’s climate impact is due to non-CO2 greenhouse gases."

This paper is really interesting -- read it if you are into carbon footprints, local/organic/vegetarian food, etc.

Meanwhile, the UK's Secretary for the Environment talks about food security and production, saying "If we want to encourage more agricultural production, it would help a lot if we stopped getting in the way. Escalating tariffs must be removed across the board in developed and developing countries. And a deal in the Doha negotiations would be the best way of showing that we are serious. Fourth, we cannot simply focus on yields. We need to balance the amount we produce against long-term sustainability of production. So we need to change the way we produce our food."

In "Vulnerability of exporting nations to the development of a carbon label in the United Kingdom" [pdf], the authors worry that labeling will have adverse impacts on poor exporting nations. On the same topic, comes a more-predictable perspective from a Dutch food processing association. Their new report [pdf], "Carbon labelling of food: (how) can the consumer consider climate impact in their food purchases?", will confuse consumers.

Bottom Line: Perhaps you should just ignore all this complicated debate and go buy some stuff... in free bags!

20 December 2008

PE of Carbon Permits

"Political-economic" is the study of how politics and economics interact, i.e., how money (economics) influences power (politics) and vice versa. Put differently, PE is about lobbying and corruption.

[One of the best papers [PDF] ever written on the topic points out that developing countries are often in the "natural state" where politics and economics affect and interfere with each other. Developed countries, in contrast, are "open access orders" where politics may redistribute the wealth, but the market is unimpeded by political interference. There are, of course, many "natural state" moments in developed countries.]

So this post provides a good example of PE in Europe, i.e., the recent "compromise" arranged by French President Sarkozy over EU emissions permits:
The compromise overturns contentious plans to force the power sector to buy all of its emissions permits in the EU's mandatory emissions-trading system from 2013. Instead, power plants and other emissions-intensive industries will only need to buy up to 30% of their allowances from 2013; currently they get all of them for free.


By 2020, the power sector will need to pay for all of its allowances. But sectors that can prove they are facing serious competitive disadvantages — as is claimed by the steel, cement and aluminium industries — can apply for exemptions to grant them up to 100% free emission permits, even after 2020.
So industries not only avoid buying 100% of their permits, but they may able to get ALL permits for free if they can show a "competitive" disadvantage.

One easy way to do this would be to set up an affiliate in a non-regulated country and then export back to the mother country at an "aggressive" price that would require that the State intervene to protect the now "vulnerable" domestic parent company. Pretty nice way to "help" oneself, eh?

Bottom Line: Politicians are very fast to "help" those who can help them ($). Unfortunately, those same politicians are screwing their citizens.

Midnight Regulations

The Bush Administration (like many before it) is issuing a number of "midnight regulations" in its last days of power, e.g.,
The regulations eliminate a requirement that federal agencies seek review by government scientists before approving logging, mining and construction projects to make sure the activities don't endanger rare animals and plants.
Although I am no fan of MORE red tape, I think that this [de]regulation is a mistake, since some federal agencies (BLM, USACE) are more interested in cutting trees or building dams than in the adverse effects from those actions.

While others may also have the knowledge, those government scientists may be the only ones with the power to hold up regs that can cause great harm.

In another case, Bushies claimed they only needed four days to review (and set aside) 200,000 comments opposing their plan to "gut" the Endangered Species Act. That's about 7/minute/staffer!

Rolling Stone also reports on "Bush's FU to America."

Bottom Line: The sad thing is that there are numerous midnight regs on the way -- and many will remain in force. That's good for the lobbyists but bad for us.

Dirty Water

Speaking of lobbyists, all three branches of government are fighting over the interpretation and enforcement of water quality laws:
The results of a Congressional investigation released today detail the collapse of the Clean Water Act enforcement program in the wake of a Supreme Court decision that clouded the question of whether rivers, streams and wetlands remain protected from pollution and development.


The investigation shows that dozens of existing enforcement cases have become informal responses, have had civil penalties reduced, and have experienced delays.


the committees’ investigation revealed that the Assistant Secretary for the Army for Civil Works placed the interests of corporate lobbyists over the scientific determinations of career officials in making Clean Water Act decisions
Bottom Line: Above all else, regulations need consistent interpretation and enforcement. Anything less leads to merciless lobbying, corruption and harm.

19 December 2008

Dam Bleg

Cameron Speir (National Marine Fisheries Service) says: "Some colleagues and I are organizing a special session at the North American Association of Fisheries Economists meeting in Rhode Island this May. The session would focus on economic and policy issues surrounding dam removal. I'm primarily interested in work by economists but would love to hear from other social scientists as well. If you are working (or have worked in the recent past) in this area and would be willing to discuss your work with me, please contact me [at (831) 420-3910 or cameron.speir AT noaa.gov]"

Bailout Banditos

Kevin Drum asks "what harm does it do to try" to stimulate our way out of the economic doldrums? I reply that every idiot with a lobbyist will claim that they need to be stimulated [sic] with OUR money.

In an normal world of competent government, idiots would go the way of the dodo, but a BIG FAT $5 trillion teat has a way of keeping stupid ideas alive long after their natural lifespan.

For example, the Renewable Fuels We Should All Drink Ethanol! Association (WSADEA rhymes with "cool aide") is asking* for MORE government support, i.e.,
The association told the transition team that it wants — among other things — an immediate $1 billion to finance current operations and avoid layoffs and a $50 billion federal loan guarantee program to build new conversion facilities and pipelines.

But Craig Cox, the Midwest vice president of the Environmental Working Group, said, “It’s utterly irresponsible to continue to expand this conventional biofuels industry,” when ethanol may well increase greenhouse gas emissions through greater land use and nitrogen and phosphorous pollution.


In response, the ethanol association released a statement that said, “Some have misconstrued” the industry’s ideas for a stimulus “as a request for federal assistance or a bailout. To the contrary, the RFA recognizes that by stimulating increased production, innovation, and investment in new technologies and cellulosic feedstocks, a revitalized renewable fuels industry can help bail out the flagging U.S. economy and lessen America’s dependence on foreign oil.”
I don't know about you, but loan guarantees and "stabilization funds" (to help with losses resulting form speculating that corn futures would rise in price) sure look like subsidies to me. (But wait! green jobs, investment, innovation! -- oh STFU already...)

Next week, I'll give a longer update on that man-made disaster, the worst (?) agricultural program ever, that weapon of mass-destruction, the ethanol program.

Bottom Line: I hate to blog on stupid, harmful, dangerous, destructive ideas, but "how to make a better chocolate chip cookie" hardly inspires me the same way that political corruption, bad science and hackneyed economics does. (Something to be thankful for -- in a perverse way.)

hattip to JWT and the anti-ethanol lobby

* Excerpt from the Congressional Quarterly, which does not understand how to post on the InterTubes.

ps: The Bailout Explained

Young Chuck in Montana bought a horse from a farmer for $100.

The farmer agreed to deliver the horse the next day.

The next day he drove up and said, "Sorry son, but I have some bad news, the horse died."

Chuck replied, "Well, then just give me my money back."

The farmer said, "Can't do that. I went and spent it already"

Chuck said, "Ok, then, just bring me the dead horse."

The farmer asked, "What ya gonna do with him?

Chuck said, "I'm going to raffle him off."

The farmer said, "You can't raffle off a dead horse!"

Chuck said, "Sure I can, Watch me. I just won't tell any body he's dead."

A month later, the farmer met up with Chuck and asked, "What happened with that dead horse?"

Chuck said, "I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $998 $898."

The farmer said, "Didn't anyone complain?"

Chuck said, "Just the guy who won. So I gave him his two dollars back."

Chuck grew up and works now for the government. He was the one who figured out how to "bail us out".

Price Fluctuations...

Jarad says:

I was wondering if you could post a blog about consumer perception of quickly and drastically fluctuating prices. It is my hypothesis that humans, as a species, prefer predictability over unpredictability. Aside from the problem of putting a price on the most essential ingredient in human life, I believe this is your major obstacle in public perception of market-based water prices. As two examples of where we run into quickly and drastically fluctuating prices, we have gasoline and the stock market. I believe that consumer reaction will be more akin to the gasoline market than it will to the stock market, but perhaps with even more public outrage.

I started thinking about this question as gas hit $4 and as it has declined, possibly even to under $1. When we skyrocketed up to $4, people were in a frenzy, selling gas-guzzlers, buying fuel efficient vehicles, driving differently to increase mpg, taking public transportation, complaining to their legislators, etc. As people reacted to this new price, there was no indication that they thought the price was elastic and that it would return back to `normal.' To their credit, it seemed as if $4/gal or higher was the new reality and they reacted accordingly. Of course, it turned out that the price did come back down and some of the actions people took seem in retrospect a bit rash. I'm sure people have already adjusted to the new reality of our current gas prices, but this adjustment is not news-worthy. My point is that people acted as if today's price was the price forever without understanding that there would be fluctuations and acting accordingly.

In an opposite vein, people who have stock, mutual funds, or even index funds deal with constant volatility in the market. The prevailing wisdom for investing in the market is to buy and hold which essentially eliminates all the fluctuations in favor of the long term trend. Although many people check their investments daily, they don't tend to act on that knowledge on a daily basis. So somehow we are insensitive to the quickly and drastically fluctuating prices in the market. Perhaps even to our detriment. I'm curious how many people move their investments from the market into guaranteed return accounts as they get closer to retirement age.

I tried to imagine what would happen if the water coming out of our faucets quadruple in price. (I understand that you propose a small quantity of free water, but I think the perception would still be that the price was quadrupling.) I doubt we would be insensitive to the price like we are in the market. More likely it would be like gas and everybody would be extremely conscious of the water they were using, i.e. taking shorter showers, running dishwashers only when they were full, not leaving the tap running as you brush your teeth, etc. But my guess is that there would be even more public outrage about these price fluctuations [1] including perhaps attacks against the water utility or breaking into water pipelines to steal water.

My question is really this: Is it in human nature to want predictability or is it just the society we are accustomed to? [2] Would we be able to deal responsibly with quickly and drastically fluctuating water prices? [3] Somebody must have done research on this and perhaps you already have the answer.

So, I basically agree with Jarad's description of how gas and stock prices move and are perceived -- including the very interesting discussion of expectations. (I discussed fluctuations of water prices -- and how to minimize them -- in section 7.2.1 of my dissertation.)

The good news is that prices need not fluctuate as Jarad assumes (see [1]) -- for a few reasons:
  1. Water prices are regulated (gasoline and stock prices are not).
  2. Water markets are local, so supply and demand are more likely to be balanced and less-likely to be manipulated by speculation.
  3. Water supplies can be known and priced over the medium term, i.e., I suggest that urban prices be set every quarter. Wholesale all-in-auctions can set new prices daily (as I suggest that MWDSC do with its member agencies) or seasonally (as I suggest happen with agricultural auctions).
To answer Jarad's other questions, I'll say that [2] it is human nature to prefer stability -- especially with something that we "cannot live without" and [3] we can smooth prices even further by sending water users a monthly bill that averages prices across the prior three months.

As for prior research, all I can say is that economists have assumed for years (based perhaps in intuition or on psychological research) that people prefer -- holding mean constant -- to have a lower variation in outcomes, i.e., to have smaller fluctuations around a given average value.

Bottom Line: Water prices should be higher, and they should move up and down (slowly) as sustainable supplies fluctuate down and up.

What's the EPA Doing?

Environmental Leadership Programs: Toward an Empirical Assessment of Their Performance
Abstract: Over the past decade, the U.S. Environmental Protection Agency (EPA) and states have developed environmental leadership programs (ELPs), a type of voluntary environmental program designed to recognize facilities with strong environmental performance records and encourage facilities to perform better. Proponents argue that ELPs overcome some of the limitations of traditional environmental regulation by encouraging managers to address the full gambit of environmental problems posed by their facilities, reducing the costs of environmental regulation, easing adversarialism, and fostering positive culture change. Although ELPs have been in place for at least five years at the federal level and in seventeen states, these programs have been subject to little empirical evaluation. In this paper, we chart a course for assessing whether ELPs achieve their goals. Drawing on archival research and interviews with government officials who manage these programs, we provide the first comprehensive analysis of the characteristics of these programs, describing program goals, activities, communication strategies, and data collection practices. We find that EPA and many states have established ELPs to improve the environment and to achieve various social goals such as improving relationships between business and government. When it comes to collecting data that could be used to assess these programs' successes, however, government efforts fall short. Even when agencies collect reliable data, these data usually cannot be aggregated sensibly and are insufficient to draw inferences about the true impact of these programs. They also cannot help answer the question of whether ELPs are actually prompting pollution reductions or improving regulatory relationships. These general data weaknesses are significant, even surprising, given the aspirations for ELPs to facilitate policy learning and advocates' claims that these programs are delivering important environmental benefits.
Government Clubs: Theory and Evidence from Voluntary Environmental Programs
Abstract: The U.S. Environmental Protection Agency (EPA) has established numerous voluntary environmental programs over the last fifteen years, seeking to encourage businesses to make environmental progress beyond what current law requires them to achieve. EPA aims to induce beyond-compliance behavior by offering various forms of recognition and rewards, including relief from otherwise applicable environmental regulations. Despite EPA's emphasis on voluntary programs, relatively few businesses have availed themselves of these programs -- and paradoxically, the programs that offer the most significant regulatory benefits tend to have the fewest members. We explain this paradox by focusing on (a) how programs' membership screening corresponds with membership rewards, and (b) how membership levels correspond, in turn, with membership screening. Our analysis of three major case studies, as well as of data we collected on all of EPA's "green clubs," shows that EPA combines greater rewards with more demanding membership screening, which in turn corresponds with lower participation. EPA's behavior can be understood as a response to the political risks the agency faces when it recognizes and rewards businesses it otherwise is charged with regulating. Given the political constraints on EPA's ability to offer significant inducements to business, we predict participation in all but the most inconsequential voluntary environmental programs will remain quite low, thereby inherently limiting the ultimate value of voluntary programs as a strategy for advancing environmental protection.

18 December 2008


MyFarm started in San Francisco in 2008 [link dead as of Dec 2009. Oh well...].
MyFarm is a decentralized urban farm. We grow vegetables in backyard gardens throughout the city. By increasing local food production we are creating a secure and sustainable food system. Using organic practices we strive to grow the best tasting most nutritious vegetables. We ask what vegetables you like and grow them just for you.
I love their business model: homeowners pay to get a garden put in their backyards. Gardens are maintained by myfarmsf staff, and produce is sold to neighbors (homeowners can get a discount).

According to Trevor, MyFarm's founder, the company has been in the black from the beginning -- the ultimate form of sustainability! They already have 60 backyard gardens and are thinking of how to franchise the idea to other places.

Bottom Line: Check these guys out -- total win-win!

Cow Taxes

The New York Times greenblog says:
The comment period for the Environmental Protection Agency’s exploration of greenhouse gas regulation ended last Friday, with farmers lobbying furiously against the notion of a “cow tax” on methane, a potent greenhouse gas emitted by livestock. The New York Farm Bureau issued a statement last week saying it feared that a tax could reach $175 per cow, $87.50 per head of beef cattle and upward of $20 for each hog.


The hysteria may be premature, however. The E.P.A. indeed issued an “advanced notice of proposed rulemaking” this summer that called for public comments on the idea of regulating greenhouse gas emissions from cars, as well as “stationary sources” — which, yes, would include cows and other livestock.
Meanwhile, California's plan to cut emissions advances with the following steps to cut greenhouse gases to 1990 levels by 2020 (a 30 percent reduction from today's levels):
  • Put 85 percent of greenhouse gas-emitting industries into a cap-and-trade program.
  • Require utilities to produce 33 percent of their energy from renewable sources.
  • Increase efficiency standards for new and existing buildings.
  • Discourage urban sprawl by building housing near transit hubs.
  • Lower methane levels in landfills and encourage high levels of recycling and zero trash in landfills.
Wait -- they left off the cows!

Bottom Line: A reduction in carbon emissions will be painful in the short run (next 20-30 years) but potentially beneficial in the long run (30+ years) if reductions avoid "bads" that would happen without them. (Kind of annoying, not knowing how things are going to work out, eh?)

A Different Liquidity Crunch

I wanted to make this simple idea into an bigger op/ed, but let's start here... :)

So, the credit crunch has resulted in a loss of faith among borrowers and lenders. Lenders only have so much money to ration among borrowers, but they can no longer decide who is a good risk and who is a bad risk. Good borrowers are suffering from the "credit drought" because they cannot separate themselves from the bad borrowers who are more likely to go bankrupt than repay their loans.

The situation with water in California is similar. There is "not enough" water for everyone, so the Bank (i.e., the Drought Water Bank that DWR has set up) is trying to ration its water among many "borrowers" -- all who claim to deserve the water.

In theory, the Water Bank should work like water does, i.e., it should be:
  • Transparent
  • Cool (logical)
  • Easy flowing
But, instead it is opaque (buyers and sellers must qualify via DWR's beauty contest), hot (political negotiations) and dammed (bureaucratic allocation, price, etc.)

As a result, water (like credit) is not flowing to those who value it most, but to those who have the best political connections, bureaucratic friends, and/or ability to manipulate the "allocation formulae" in their favor.

Those who merely have a strong desire to buy or sell are left to pursue more expensive options.

[The parallel between credit and water is not total. The credit market froze because "bad borrowers" issued too many opaque bonds with long maturities. Since water is not the same -- buyers are paying spot cash for short term flows -- the failure of the Water Bank is less-forgivable.]

Bottom Line: The damage from misallocation of water is just as important as the damage from misallocation of credit. The pity is that DWR appears to be intentionally mangling the process of reallocating California's water.

17 December 2008

Poll Results -- Favorite Movie

HEY! There's a new poll to the right ----->
What's Your Favorite Water Movie?
Jaws 42%22
Singing in the Rain 17%9
Waterworld 8%4
Titanic 23%12
The Ten Commandments 10%5
52 votes total
Although I left off Chinatown by accident, I think that it would probably have won, so this is a good way to find out how the next best water films rank with you readers.

btw, I can't resist quoting Chinatown's evil old Noah Cross [John Houston] :
Either you bring the water to L.A. or you bring L.A. to the water.

'Course I'm respectable. I'm old. Politicians, ugly buildings, and whores all get respectable if they last long enough.
Bottom Line: Hmmm... Jaws and Titanic. You guys have some fear of water?

Gaming the System

A key component of the cap and trade "solution" to carbon emissions is the notion of "certified" output, i.e., the idea that a building can be certified for low carbon emissions.

Such a system -- the Leadership in Energy and Environmental Design (LEED) Green Building Rating System -- already exists, and those who want LEED certification pay to get it.

The trouble is that LEED certification is voluntary, which means that the only people to get it do so as a means of advertising their "green cred." Now what happens if LEED certification is worth money, i.e., if a LEED gold certification will allow its owner to have or sell carbon credits? Well, I would suggest that a monetized LEED will lead (pun!) to greater corruption and/or sloppier certification standards. There are over 60,000 LEED Accredited Professionals, and it only takes a few "bad apples" giving out incorrect certifications for dodgy clients before the whole system is devalued. (The same way that the credit rating agencies are now devalued.)

Bottom Line: The guardians of LEED certification need to be careful about how their system is used. When incentives go from "low-power" (voluntary) to high-power (mandatory/valuable), it's more likely that the system will be mistreated.

The End of Delta Exports

US Fish & Wildlife's new report calls for reduced water exports from the Sacramento-San Joaquin Delta:
In a typical year, the smelt protections will slash California State Water Project deliveries 20% to 30% -- essentially maintaining the level of cuts ordered this year by a federal judge. Under the worst conditions, that figure could climb to 50%.
These reductions would match the current "temporary" reductions imposed by Judge Wanger, but the report implies that they would be permanent.

Seems like SoCal will have to get used to having less water (as I suggested in my recent post against the peripheral canal). Two ways to minimize the harm from lower water supplies are to allow (perhaps force, via all-in-auctions) trade among water owners and users at the wholesale level and to raise retail, urban prices high enough to curb demand (conservation pricing). It's likely that IID/PVID/CVID water will also be reallocated through eminent domain.

Water managers who do less (e.g., calling for conservation, rationing water, asking for more dams, and wringing their hands) should be fired for timid incompetence.

Whoops -- the governor should also be fired -- he's calling for the PC and more dams (as he has been for the past year).

Bottom Line: Times have changed. It's time to shake up the water status quo in California.

hattip to DW

Clearing the Backlog

  • California regulators adopt standards to reduce GHG emissions to 1990 levels (15% below current levels) by 2020. Cap and trade should cover industries responsible for 85% of emissions -- and permits will be auctioned.

  • Good article on wave power

  • Farm workers suffer from lower Delta water exports. These visible victims obscure the invisible winners (the environment).

  • A big story on life in the Delta, how it was and how it's changing.

  • The $300 million, 56TAFY Carlsbad desalination plant moves ahead and should be operational by end-2011.

  • A "Perfect Drought" (simultaneous drought in SoCal and the Sacramento and Colorado Rivers) is happening now. It's happened before -- and lasted 30-60 years.

  • Privatizing the Salton Sea Sewer, i.e., pay $ for a toxic waste dump? Great idea!

  • The ongoing struggle to begin to measure groundwater activity in NorCal.

  • Photos [pdf] of raging fires and sinking reservoirs in California. No mention of using higher prices (on water, on buildings in fire areas) to reduce both problems :(

  • How trees replace grasses and deplete groundwater [pdf]

  • Water managers forcing customers to ration (instead of raising prices)

  • Book review: Mismanaging water in the eastern US (e.g., Florida).
hattips to PB, JS-C, and DW

16 December 2008

Me and My Opinion

This video was shot for YouthNoise (an activist group) when I was attending the anti-Corporate water footprinting meeting:

Besides one problem (widehead!), this video is mostly accurate. I think I said more about aid for developing countries, but "No" was my answer.

Bottom Line: Neither private nor public water systems are better -- both can have problems.

Addendum: Noah Hall sent me this video debunking the "evil Nestle" case described in the movie FLOW, which I disliked. (In the clip above, I say that Nestle Waters NA made a big mistake in McCloud -- that was because they paid too little, not because they were taking too much.) I asked Noah if Nestle paid for it. He says "Yep. Nestle paid for it, but I didn't take (or was offered) a penny. I did it for free the same way I currently represent the Sierra Club fighting coal plants, and for the same reason, namely good policy."

Building-Integrated Sustainable Agriculture

This past weekend, I attended and spoke [pdf] at the first Building-Integrated Sustainable Agriculture (B-ISA) summit, hosted by Sky Vegetables. There was an impressive group of experts [pdf] speaking on greenhouses, urban agriculture, aquaponics, hydroponics, composting, etc. As the only (?) economist, I was able to offer an alternative vision of how markets, externalities, regulations and political economy might matter [NYT blog on the summit].

Full Disclosure: I am an unpaid adviser to the company, which was not true when I blogged in favor of the idea three months ago.

The B-ISA summit had several goals that I could see:
  1. Get support (financial, technical and social) for Sky Vegetables.
  2. Try to establish a "B-ISA" standard for sustainable ag that can be bolted onto the LEED certification.
  3. Networking among interested people.
It seems that the summit did many of those things, but the second goal troubled me. Many people appeared to want B-ISA standards based on prescriptive criteria (e.g., filter technology) when outcome criteria (e.g., waste water quality) seemed more appropriate.

Bottom Line: It takes time to build a business organically, but that's better than a business that relies on some regulatory or bureaucratic standard.

Hanemann on Risk and Uncertainty

A month ago, I mentioned that my adviser, Michael Hanemann, would be talking to California policy makers about risk, uncertainty and climate change.

For those of you who are curious, here are his slides [pdf]. Here's my favorite bit:
Water is seriously underpriced in most cases in California. We now have backward-looking pricing (pricing keyed to the historical cost of acquiring past supplies). We need to switch to forward-looking pricing that anticipates what future supply –- and future reliability -– will cost.
The slides give a comprehensive overview of the issues that mostly agrees with my own.

Although these slides apply to California and the developed world, the advice probably applies elsewhere. This post discusses adaption to climate change in developing countries.

Bottom Line: First understand the scope of the problem, then implement policies to address it.

15 December 2008

Loving Themselves

United Nations General Assembly President Miguel d'Escoto Brockmann calls for a "Right to Water," and Maude Barlow (newly appointed Senior Advisor on Water Issues to President d'Escoto Brockmann) agrees with his opinion of her platform. [I denounced it three months ago.]:
This is a wonderful opportunity to advance a more democratic and transparent method of policy making around water at the global level than now exists. Without water there is no life, water is a public good, and a human right.
I'm sorry, but this propaganda makes me sick. Barlow has NO clue about water economics, and now she's pushing for massive interventions by bureaucrats
Within a year of ratification, states would be expected to put in place a plan of action, with targets, policies, indicators, and timeframes to achieve the realization of this right. As well, states would have to amend domestic law to comply with the new rights. In many cases, this will include constitutional amendments. Some form of monitoring of the new rights would also be established and the needs of marginalized groups, such as women and indigenous peoples, would need to be addressed.
The Right to Water is so politically correct and so likely to lead to disaster and failure that my head spins.

Will Barlow apologize when MORE children die as a result of such silly policies?

Or will she call for more intervention?

If you've learned anything from international aid failure, you will know that it wil be the latter: "MORE kids are dying -- give us more money to help them..."


Bottom Line: The solution to this "parched posted child" of an issue is NOT a new human right, bureaucracy or slogan. It's the same thing that works everywhere: Better government and more freedom for local people to solve their own problems -- without troublesome interference by overweening bureaucrats [making $100k+ tax free!] who have NO CLUE about local reality and suffer NO DEATH when "nice nice" policies go nowhere.

Addendum: Aquadoc skewers Barlow for arguing with misinformation.