29 June 2009

20x2020 in Trouble

On May 29th, I attended the first half of the final public comments session on California's plan to "reduce use by 20 percent by 2020." (They are not, btw, clear on what year to use as a baseline.) The webpage has MANY materials and a video of the session.

First, the elephant in the room: the plan says nothing about water "used" in agriculture. As many of you know, agriculture diverts 80 percent of California's "developed" (controlled) water supply. The rest goes to municipal and industrial use. (Read this post on how much farmers really use.)

So the State wants to reduce overall water use by 20 percent, but it's only dealing with the first 4 percent, i.e., a 20 percent reduction in the sector using 20 percent. I think that this plan will be DOA with the public (they will not care to cooperate) unless the public sees at least a plan for reducing agricultural use. I think such a plan is possible, particularly if farmers are allowed to make better use of markets.

With that said, here are some notes on what I saw:
  • They are making the same mistake that we have seen elsewhere -- requiring cuts against baseline use, which does not recognize earlier conservation successes. The obviously better way to make cuts is to measure aggregate use, reduce that by 20 percent, and then allocate that reduced quantity to cities based on their population. That would mean that cities with low use (e.g., San Francisco) would not have to reduce by as much as cities with high use (e.g., Sacramento). It's both fair and efficient to base targets on PEOPLE, not historic use.

  • The plan is FULL of command and control regulations and BMPs (Best Management Practices). That's sad, since it ties people up with rules. Better to raise prices and let people decide how to conserve water. (OTOH, lots of planners and consultants will get jobs from the current emphasis, and I guess those are "green" -- if wasteful -- jobs.)

  • Watch out for the "public good" charge. This tax comes from a good intention -- water waste is bad for the public, so we should tax it to reduce waste -- but it will attract a firestorm of criticism. The first critique will come from people who claim that water belongs to "the people" already, so you cannot tax them for using it. (That's not true, since some people use more than others.) The second will come from those skeptical of how the State will spend the money. If revenue goes to the General Fund, there will be hell to pay. The third will involve monitoring. The tax will have to be collected on ALL water withdrawals -- surface and ground -- and the biggest current users, farmers, will fight this idea like crazy. If they are not axed, it will be worse; see "elephant," above!

  • 20x2020 only got 57 comment letters. For such an "important" topic, this is appalling.

  • DWR has decided to monitor (and perhaps reduce use) for each of California's ten hydrological regions. That's troublesome for everyone who does not know them and for all the political bodies that do not share their borders. This decision seems to exemplify the importance of bureaucracy over performance.

  • The plan calls for uniform data collection. I hope that they make that data available to the public in XML format so that we can use it for monitoring and decision-making.
I could make many more comments on what's right (30%) and what's wrong (70%) in the 20x2020 plan, but I will wait until someone from the government asked me. If history repeats itself, we will get an plan that's neither effective nor efficient. Then we will get a new plan -- 20x2050, perhaps.

Bottom Line: Bureaucracies are good at setting goals and bad at improving efficiency. People and markets are better at improving efficiency without needing goals. We could have 20x2012, but not if the bureaucrats are in the lead!

4 comments:

  1. It's a bit like discussing carbon standards versus carbon markets. The bottom line is politicians want to be seen to tackle the issue, yes, but in a way that brings no decrease in utility for consumers, and efficiency is a hailed objective. Raise prices, indeed...

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  2. David,I was at that meeting too, and I agree with much of what you say (even though I am one of the "consultants" who may profit from the current plan).

    Agricultural water use MUST be included in any serious effort to solve the water issues in California. I think ending subsidies and pricing water more realistically (including environmental needs) would inspire plenty of voluntary conservation by farmers and urban users alike. Easier said than done under the current regulatory structure though.

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  3. Great article, but there's a bottom line error- keep the eye on the ball rather than on bureaucrats

    With all due respect, I would advise against making assumptions based on a dodge used by politicians to provide shelter for themselves. Bureaucrats make wonderful scapegoats because they are anonymous carry out policy, but keep in mind that bureaucrats exercise only the discretion of second-order decision-making. They operate under the primary decisions of others, who often establish faulty and contradictory policies that are constructed to satisfy the political motives of decision makers.

    Command and control regulations and Best Management Practices may be implemented and carried out by bureaucracies, but policies originate and owe their existence to the primary political decision makers.

    The price of water cannot be increased for the same reason gas taxes cannot be increased even though the highway fund is going broke.

    Image a world run by bureaucrats and then you can imagine highway funding being determined by cost/benefit analysis rather than by a political benefactor’s wish for a “bridge to nowhere.”

    Look instead to individual politicians and trusted advisors by name. Beyond the primary political decision makers, look to the ignorance of voters and the lack of civic responsibility of non-voters. Here is where your blog is making a vital contribution.

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