31 Aug 2009

Speed Blogging

  • Colorado just passed a law [doc] awarding tax credits to those who donate water rights that the Colorado River Conservation Board can use for in-stream flow.

  • Plastics decompose in the ocean -- aka out of the frying pan and...

  • Rob Davis fights for access to public documents (emails) from the City of San Diego. First they refuse, then they hold some back, then they stonewall, then... What are they hiding? [last update] Why the paranoia? I've heard a lot about corruption in SD government, and this situation makes me worry. Davis is still on track for a Pulitzer :)

  • "The Nestlé Prize [500,000 CHF/USD] in Creating Shared Value will be awarded...for developing an outstanding innovation that... has high promise of improving... access to clean water, or having a significant impact on water management." Submit by end-Oct.

  • Op/ed: "Spreading Sewage Sludge on U.S. Fields, Hidden Cause of Food Safety Problems"

  • The Straight Dope answers "Is the arsenic in treated wood dangerous?" [for raised garden beds], "What is sea level?" and [IMPORTANT] "Do bathtubs drain counterclockwise in the Northern Hemisphere?" Yes! but only after waiting 5 hrs :(

  • Drink up! "In South Africa, the total water footprint [for producing SAB/Miller's beer] is equivalent to 155 litres of water for every 1 litre of beer..., with the vast majority of water use (98.3%) associated with crop cultivation, both local and imported... the overall water footprint of Czech beer production is significantly smaller at 45 litres of water to every 1 litre of beer, with the differences due mainly to a greater reliance on irrigation in South Africa and the proportion and origin of imported crops. In comparison with other beverages, beer’s water footprint is relatively small... coffee, wine and apple juice all have water footprints more than three times that of beer."

Monday Morning Smile

End of Ze World! (Is that funny? Well, funny to me...)

hattip to LJ

The $54 Billion Headline

Finally, someone has started to talk FACTS, and I am proud to say that my friend Steve Kasower is the one to do so:
The Delta fix supported by Gov. Arnold Schwarzenegger and many of the state's largest water agencies could carry a staggering price tag of $23 billion to $54 billion, a consulting economist was planning to tell lawmakers Tuesday.

The estimate, provided in a paper by Steven Kasower, appears to be the first time that potential costs of different pieces of the proposed fix — storing and moving water, offsetting environmental damage caused by those projects and restoring habitat — have been compiled in one place.


The figures compiled by Kasower included $4.2 billion to build a new aqueduct around the Delta and $9.8 billion to maintain levees to allow water agencies to continue taking water from the Delta. They also include rough estimates for environmental projects and new dams. The high end, $54 billion, would be reached if the state tunnels under the Delta to move Sacramento River water to the south instead of moving it through a new aqueduct.
If you didn't notice, California can't afford a pot to piss in (how about the Delta? whoops! black humor day...), so $23 billion (bargain!) is still a deal killer. (Remember what happened to "Restore Hetch Hetchy"?)

Here is Steve's draft document [doc]. Please email him with your feedback!

Bottom Line: Everyone wants to "fix" the Delta. Assuming that is possible, someone has to pay for it, and now you know what all the fighting in Sacramento is about.

Weekend Discussion -- Habits

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 a topic among yourselves -- exchanging views, learning and teaching. (I only read the comments.)

If you are interested, take a moment to check out (and add to!) last week's open thread discussion. After that, please give us your thoughts on...

Habits. Do you have them? (Think for a second; they are supposed to be unconscious!) Do you have one that you dislike? Have you changed one (or failed to?)

30 Aug 2009

Incentives Matter

Attempted suicide is was may also be a crime.

Bottom Line: If you're going to die, don't take any chances. It's not just bad if you fail (mission not-accomplished), but you may also end up in jail!

The NYT Follows My Lead

Remember my Monday post on health care (get rid of employer health care)? Well, the NYT -- a newspaper that gets ALL its good ideas from me :) -- says the same thing:
Consumers, instead of being able to choose freely among insurers, are restricted to the plans their employer offers. So insurers are spared the rigors of true competition, and they end up with high costs and spotty service.
Bottom Line: Consumers with choices can do more to improve health care than ANY "master" planner.

29 Aug 2009

Book Reviews of Interest

"What Does It Mean to Be Efficient?" This reviewer says:
Jennifer Karns Alexander has undertaken the ambitious project of trying to demonstrate how the concept of efficiency changed, from being applied only to machines at first to being employed as a means to control human behavior. Although the basic thesis of this book is not new, her way of approaching the topic is quite unique. Instead of writing a theoretical piece or a comprehensive historical account of the evolution of this concept, she attempts to explain the evolution of the concept through six historical cases. Perhaps if she had selected her cases more carefully and justified the reasons for their selection, her work could have made a better contribution. Her reliance on cases that might be extreme and her failure to acknowledge the potential social benefits of some forms of control targeted at improving efficiency undermine the potential benefit of her work.
What about "Politics and Environment in the Silver State [Nevada]?" This review says:
Well-known Nevada historian James Hulse has focused his latest project on that state’s evolving environmental legacy. Hulse describes the history of Nevada’s resource economy, its close relationship to the land-hungry federal government, and its insatiable demands for water. The result is a highly readable, well-illustrated essay that offers state residents and a wider audience of westerners a penetrating look at the Silver State’s complex, highly politicized story of environmental change.

While Hulse notes the perspectives of many other western environmental historians such as Donald Worster, Marc Reisner, and Douglas Strong, this book is not a theory-rich foray into the drivers or the results of environmental change, but rather a more personal and historical essay that reflects the author’s familiarity with the particular people, stories, and political contexts of the Nevada setting. Because Hulse has been a long-time Nevada resident (and a professor of history at the University of Nevada-Reno), he has personally witnessed many of the events narrated in the book and he never hesitates to offer his own thoughtful interpretations about controversial issues and how they have played out within the state. Overall, the author often expresses an informed, if cynical view that private economic interests, a narrow-minded state government, and an uncaring federal bureaucracy have not traditionally placed a high value on the state’s environmental health.

28 Aug 2009

Intrinsic vs. Extrinsic Motivation

It appears that we PhDs get some pretty serious intrinsic compensation:

First Lecture for EEP 100

I am teaching environmental economics and policy 100 (intermediate microeconomics) at UC Berkeley.

Here's the syllabus [PDF].

I gave my first lecture today.

Here's the audio [27MB MP3].

I am working on getting the video posted.

I am NOT going to post more lectures here. I am posting this one because it gives a good overview of my "philosophy" on teaching, environment, resources and political economy.

When I get things organized, I will put a link to a public version of the class resource page for those of you who want to follow along :)

Bottom Line: Teaching is difficult because it requires that you present your messy, complicated, evolved knowledge in an orderly and incremental manner that can be learned.

27 Aug 2009

DWR as a Fail Organization

This presentation [PDF] from California's Department of Water Resources undermines unintentionally their claim to responsibility, competency and/or adequacy.

First is the fact that 81 taf of 612 taf of water transfers passed through the DWR-managed drought water bank. Thirteen percent isn't very good, and here's why they failed (no market solutions). FAIL.

Second is their "plan" for drought in 2010. Besides "pray for rain" (somehow omitted), they are hoping that the 20% by 2020 program and a website are going to promote water conservation (but no price solutions). FAIL.

Third is Lester Snow's support of Schwarzenegger's plan for more dams.* He sounds a lot less like a competent bureaucrat and a lot more like a political lapdog. Hey! The Gov is a lameduck! Can we get some professionalism here!??! FAIL.

Bottom Line: DWR is not managing our water resources. That sucks, since they have a monopoly on our water policy. (I am not even getting into groundwater!)
* It's not in the PDF but why not pile on?

Today I Start Teaching

Let's not have this, shall we?

Complete the analogy:

Robo-student is to robo-citizen as thinking student is to.... __________

If you get the right answer (ask the person in the cubicle next to you to grade your performance), then listen to this mp3. (Permission to bop-around granted!)

26 Aug 2009

The Water Framework Directive

While I was in Europe, I heard a lot of people talking about the Water Framework Directive:
The WFD is the most substantial piece of water legislation ever produced by the European Commission, and will provide the major driver for achieving sustainable management of water in the UK and other EU Member States for many years to come.

It requires that all inland and coastal waters within defined river basin districts must reach at least good status by 2015 and defines how this should be achieved through the establishment of environmental objectives and ecological targets for surface waters.

The result will be a healthy water environment achieved by taking due account of environmental, economic and social considerations.
These regulations are aimed at water quality, a luxury for people worried about quantity, i.e., can we get it at all!

Water problems vary from place to place, but they are all driven by the end of abundance -- a change from the good old days of having plenty of good water.

Bottom Line: First we must have water in quantity; then we -- and Nature -- must be able to use it.

hattip to AB

Poll Results -- Schools Daze

Hey! There's a new poll (water use) to the right ---->

Note on the new poll: If you don't know, look it up (or try... homework!). I want to know how hard it is for you all to figure out those numbers...
Does it matter (happiness, earnings, etc.) where you go to school?

Yes 66%27
No 10%4
Maybe (YMMV) 24%10

I am a supporter of the "no" "yes" vote on this one,* but I am a "self-starter" type. Does school matter for lazy people? Maybe not if they fail out. Are some schools better at "forcing" teaching? Or is this "yes" vote all about who you meet?

Please explain why you voted (or how you would have voted if you did).

Also explain how you "know" your answer if you only went to one school. (Or are we talking K-12 plus higher ed? hmmm...)

Bottom Line: Education matters in your happiness and "contribution" to society. Does it matter where you get it (school, "real world")? I'm not sure, since so many other factors are important.
* I was thinking UCLA vs UC Berkeley, but now I DO think that I am different (better different or just different?) b/c I went to UCLA. My K-6 years in Montessori was VERY important. So yes it is...

Boldly (Wrong) Politicians

People send me some of the water agit/prop from California politicians.

Steve Poizner is running for governor in 2010, and he has a "solution" for our water problems. Here's one bit:
Utilize The Governor’s Executive Power To Get Water To Where It’s Needed. As Governor, Steve Poizner will exercise his full authority under the law to ensure that water gets to drought-stricken parts of our state [1]. Although he recognizes the breadth and significance of the Endangered Species Act, Commissioner Poizner firmly believes that California’s governor should have the right to respond appropriately to emergencies within the state’s borders [2]. He will explore every legal option—and will take California’s case all the way to the United States Supreme Court if necessary—to ensure that Californians who need water have access to it [3].
So let me get this straight:
  1. From where? More important, from who? Is the governor going to take water from the NON-drought-stricken part of the state to the "drought-stricken" part? How's he gonna get it there? Helicopters?
  2. Before you ignore that federal law, can you ignore the drug laws? Please argue for legalization before the Supremes. That would improve things by much more.
  3. Need. I hate that word. Who doesn't need water? How does the "wise" governor intend to arbitrate among claims? Oh yes, I forgot -- whoever gives him the largest bribes campaign contributions.
Enough of this rubbish. What a delusional candidate!

But wait, he's got company!

Steve Dave Cogdill, State Senator from Modesto, introduced a bill for "a safe, clean and reliable water supply" (stuck in committee). His agit/prop for the bill [pdf] is good example of self-quoting, free-lunch politics. Even worse, it's full of misinformation and hyperbole:
  1. "We have a crumbling infrastructure built three decades ago for 18 million people and the state's population is expected to nearly triple that number in the next decade."

    It was built from the 30s to 60s, it works pretty well, and the population is NOT going to 54 million by 2020. He's high by 10 million.

  2. "Court decisions and new regulations have cut Delta water deliveries by 30 percent, imperiling the Valley’s economic engine: agriculture and endangering millions of Californians who rely on the Delta as a source of clean water."

    DWR says [slide 6 of this pdf. Oct 20 addendum: They took it down. Here's my copy, made for just such an occasion :)] that regulatory cutbacks are 10 percent. "Endangering millions"? Are you kidding me? Prima facie dumb.

  3. "Water is literally going down the drain. In 2005, enough water to supply 13 million families for a year went out to sea and was lost because there was nowhere to store it."

    So, reservoirs were full of water. Did we have a drought? No. A shortage? no. Why would we need more dams then? Will more dams now "make" water appear? No. The reservoirs we have are only 66% full [pdf]. Is Cogdill implying that we could have saved enough water from 2005 to make it today? Maybe. Is that a silly idea? Yes, if you understand cost-benefit and realize that 80 percent of the water goes to agriculture (his district). Ahh yes -- the water would NOT go to 13 million families (that's the entire state population @ 3people/family, btw) -- it would go to farmers. And no, that doesn't necessarily help farm workers!

  4. "According to a recent UC Davis report, a continued dry spell could result in a $2.8 billion hit to the state’s economy, with 95,000 jobs lost."

    Well it didn't. Howitt (the source of that report) now estimates $1 billion/35,000 jobs. Jeff Michael argues that job losses have nothing to do with water.
In the water business, we talk about grabbing the "low-hanging fruit" first, but Cogdill is going for the hardest, most expensive fruit (dams, etc.). I wish he'd talk about water conservation/efficiency via higher prices and markets, but he probably isn't because he wants to use Other People's Money to help his constituents.

I am glad that SB 371 is stuck in committee. It deserves to die. And so do all dam proposals.

Hear that Governor?

Bottom Line: Politicians often promise everything to everyone, regardless of reality. These guys have gone overboard. They should be cited for "contempt of logic/respect" for reality/their constituents/the State.

hattips to DL, GP and DW

Economic Laws of Scientific Research

I am reading Terence Kealey's "The Economic Laws of Scientific Research" and finding it to be fairly interesting. He skimps a bit here and there on evidence, but one particular part caught my eye - The traditional economic claim regarding pure science and research is that industry won't invest in science because they cannot reap all the benefits of it. Therefore, government must step in.

However, Kealey claims that although existing science has aspects of a public good, it is expensive to understand and use. Industry finds secondary-mover research (working off of others' research) is much more profitable than first-mover (figuring out stuff on your own), but to access this science and exploit it, companies must hire scientists to digest the information. The best scientists aren't interested in just secondary research, however, and therefore extract a salary to fund their own primary research interests as well as keeping abreast of others' work. The companies must therefore invest heavily in their scientists' first-mover science to retain them as second-mover consultants.

Bottom Line:
It helps to understand the underlying market before pronouncing a market failure.

25 Aug 2009

The Organization of Inquiry -- The Review

I read this 1966 book by Gordon Tullock to address the concerns of the referee's of a paper [PDF] that we were revising for a journal.

Tullock is brilliant, and his discussion of incentives, effort, quality and other important features in the academic ecosystem is not just interesting and diverting -- but full of insights for anyone in the social sciences. (He notes that economics is NOT a natural science but also that sociology is even less rigorous than economics.)

You can read the online version of the book here. Here is a more-critical review [pdf].

Bottom Line: I give this book four stars for its thoughtful and careful analysis of incentives and institutions in academe. (If we consider its publication date, it should get five stars!)

Addendum: Tullock also addresses the mix of "pure" and "applied" science; he finds a similarly blurry line. See Damian's post above.

High Five!

Westlands Owns NASA

Fleck posted this image from NASA, showing the brown spots (fallowed land) in the Central Valley.

I was interested to see that Westlands Water District was outlined in the original. Who asked NASA to outline Westlands?* Seems that politics is interfering with science. [Click here for the original, which zooms to VERY large.]

Oh -- and we can also see how the drought is affecting some places and not others.

Westlands has lots of brown spots because it has poor (junior) water rights. Other areas are better off. Yes, there's a drought, but most of the damage is accruing to those with poor water rights -- as is appropriate. (It's the same difference as that between people who have lost their houses because they took on too much debt and others who still have their because they have "reasonable" debt. It's both fair and predictable -- but perhaps not nice -- that one would lose while the other does not.)

Bottom Line: Westlands has lots of political friends, but we should not let politics interfere with their just desserts deserts.
NASA may have put Westlands in because it's in the news, but I wonder if they are reading the science or politics section?
The Westlands, reports National Public Radio, is the United State’s biggest irrigated region. Water pumped into the region from the Delta via the San Luis Reservoir supports farms where much of the nation’s fruit, nuts, and produce are grown. It was the last water district to join the federal irrigation agreement, and therefore it is the first to face restrictions during water shortages. Meanwhile, the Fresno District, immediately east of Westlands, had far fewer bare or failing fields.

24 Aug 2009

Speed Blogging

  • Russ Roberts chats with Christopher Hitchens about Orewell. Fascinating discussion of a man opposed to imperialism, fascism and communism -- different ways to curtail freedom.

  • The American Coalition for Clean Coal Electricity has engaged (actively or passively) in fraud by sending forged letters protesting climate change legislation. Don't fine them (the customers would pay) -- just put their PR department in jail. Oh, and then tax all fuels in proportion to carbon content.

  • US Army Corps of Engieers supplies water to 10 million people in 115 cities [pdf]. They are outside their mission and unaccountable to their customers. This is crazy mission creep.

  • Speaking of mission creep, USACE and BurRec are being told to consider environmental values when doing cost benefit analyses; formerly, they only paid attention to economic values -- and that got us in trouble.

  • Speaking of bureaucratic failure, this 1971 paper [pdf] details the Bureau of Reclamation's failure to clarify water rights before building Shasta Dam (for the CVP). BurRec got busted by farmers who were paid off with... the Trinity River Project. (BurRec knows how to turn two wrongs dams into a right bribe.)

  • Ranjan and Shogren use math to "show" [pdf] that farmers who are unsure about the future are unlikely to "efficiently" participate in water markets. (Did I miss some deep insight or is this a no duh paper?)
hattips to DB and PB

Monday Morning Smile

If you hated James Blunt's "you're beautiful," then you HAVE to watch this...

WHOOPS! Deleted because of EMI is enforcing copyright has no sense of humor.

Try this! (the destiny of all those clunkers?)

How not to wash your car


Check out the twitter widget (keyword "water") on the right sidebar. People on twitter say some crazy stuff! (Wassergeist is bastardized from Zeitgeist :)

A Few (More) Thoughts on Health Care

I posted on this a few months ago, but some people didn't appear to notice.

(That's why we still have a broken system... :)

During the interim, I:
  • experienced the Dutch healthcare system: Yes, single-payer mandatory universal coverage with competing private health plans works.
  • reflected on our system: We are not just afraid of dying in hospitals, we are afraid of going bankrupt.
  • experienced our system: My insurer put a mediator on the phone to help me get an appointment; this system is BEYOND complex if you need someone to represent you for a doctor's appointment!
  • got good care from the doctors. Unfortunately, the situation with medical records, appointments, payments, etc. is a complete disaster!
  • chatted with a very cute, passionate and ill-informed CALPIRG organizer. (Never knock on a PhD's door and ask them to sign a policy document!) I told her I was unwilling to consider government insurance before we restored decision-making to patients.
Here are my additional thoughts:
  1. If we do not go to single-payer (unlikely), we are going to have competing insurance companies.
  2. Since private companies do not compete that much right now, we need more competition.
  3. People are more afraid of losing their jobs because they may lose coverage.
  4. We can fix both (2) and (3) by separating insurance from work -- your salary goes up, but you have to buy insurance.
So, I've just found more reasons to support my initial idea: get employers OUT of the healthcare loop! (My preference is similar to a Dutch system -- see above -- that works better.) [For more fun, read The Economist's view or watch Barney Frank slapdown an Obama-as-Nazi protester.] Bottom Line: We will not (or cannot) fix our healthcare system without strengthening patient-doctor relationships. Single payer would do that, but it can also work with multiple payers (government or private insurance) and providers, e.g., as car insurance does.

Weekend Discussion -- Open Thread

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 a topic among yourselves -- exchanging views, learning and teaching. (I only read the comments.)

If you are interested, take a moment to check out (and add to!) last week's discussion on online communities. After that, please give us your thoughts on...

Anything you want -- it's an open thread where you direct the conversation...

[I am trying something different here...]

23 Aug 2009

Anarchy! in Amsterdam!

Bill O'Reilly is so stupid blinded by ideology that he lies makes delusional statements about things that anyone can double-check. This bit of Faux News paranoia should help anyone understand that the O'Reilly "factor" (a function that combines the root of -1 and many black holes) almost always cancels out the "reality factor."

Note: O'Reilly "rebuts" this response here. Watch for such classics as (to rebut the statistic that 22% of Dutch have tried cannabis vs. 40% in the US) "They do statistics differently over there, they have fewer people..." [OMG!] and O'Reilly's attempt to convince his co-hosts that pedophiles in Oklahoma learned "their trade" from the Dutch. Amazingly, the co-hosts argue with the King of Non Sequitur.)

Bottom Line: The truth will set you free, but Bill O'Reilly still lives in Abu Gharib.

The Backwardness of the Social Sciences

Another in a series...

That's the title of the chapter of Gordon Tullock's book (The Organization of Inquiry) in which this quotation appears:
A friend of mine in physics once said that he could not understand the social sciences. “You’re always arguing,” he continued. He was, although I do not think he realized it, quite an acute social critic and had neatly placed his hand on one of the major distinctions between the social and natural sciences. The social studies are dominated by arguments, while arguments are much less common in the “exact sciences.” Arguments, sometimes bitter and protracted, do occur in the natural sciences, but they occupy much less of the investigator’s time. Even a casual inspection of a journal in the natural sciences and one in the social sciences will indicate the great difference in the proportion of space devoted to disputation in the two fields. The social scientist must devote much of his time and considerable energy in “convincing” people, while the natural scientist can give much less energy to this matter. Further, arguments in the natural sciences normally are settled by some further advance in knowledge which makes one point of view or the other (sometimes both) obsolete. This is much less common in the social sciences. The fallacious defenses of tariffs which were invented in the fifteenth and sixteenth centuries still appear with monotonous regularity in the literature.

The explanation of this phenomenon is fairly simple. While almost everyone would, in the long run, benefit from the removal of tariffs, and the raising of tariffs is a blow to the welfare of almost everyone, there are, at any given time, minorities which can be hurt by the reduction of specific tariffs and helped by the increase of others. Now the benefits of the repeal of a given tariff are likely to be dispersed over the whole population, while the injury will be concentrated in a small group. Although the benefit will be much greater in total than the injury, it is slight for any individual. The group which suffers concentrated injury, however, is likely to try to convince the majority that really they gain nothing and to hire economists for this purpose. Since there are always some such groups, there will always be economists who have been hired for this purpose.
Tullock wrote this in 1966. The Logic of Collective Action came out in 1965; "rent seeking" -- which this describes -- was coined in 1974.

Bottom Line: Incentives matter.

22 Aug 2009

Graywater Update

The California legislature just made it easier to install graywater systems. That's cool, because the existing standards were so tough that legal systems cost over $2,500.* That's pretty steep compared to the $150 cost of illegal systems.

Can anyone guess how conservation-minded people responded? These do-gooders thought of cost and benefits (yay economics!) and decided to break the law -- at an 8,000 to one rate. Now they needn't fear prison for dumping their sink water in the garden.

Bottom Line: People will break stupid laws. Stupid laws do not only reduce the value of other laws, but they draw legal and enforcement resources away from important laws. (Compare drug laws to laws against violent crime.)

* This article was "community funded" through the spot.us model of bottom-up journalism. Anyone interested in the survival of the fourth estate should check them out (and send a few bucks)

21 Aug 2009

A Model of Crisis

M. Scott Taylor delivered an incisive, thought-provoking and completely useful keynote address on crises and the factors that drive them at the EAERE conference I attended recently in Amsterdam.

What kinds of crises was he trying to describe? Global warming, collapse of an endangered species, economic meltdown, and so on...

You can read his paper on the talk here [PDF], but here are the three factors that determine whether a bump in the road turns into a full-fledged crisis:
  1. Is there a tipping point? That is, some point beyond which decline inevitably leads to fall?
  2. Is governance limited? That is, a central authority that's too weak to coordinate counter-action?
  3. Are there positive feedback effects? That is, is something more likely to happen each time it happens?
The key feature of Taylor's model is that a crisis is unlikely to develop unless all three of these factors are present (in the jargon, they are joint necessary conditions). Take away one (e.g., powerful governance, a lack of tipping point, or lack of feedback) and your "disruption" is unlikely to turn into a crisis.

Bottom Line: Economic theory can provide a useful framework for understanding problems. After the theory, however, you need action to address them.

Another Nail in the Coffin

... of the idea that water conservation technology (e.g., drip irrigation) will reduce overall water use. Read all about it in "Water conservation in irrigation can increase water use" (via RH).

The folks at the Pacific Institute should read this paper. Then they should re-read this post and this post. Then they should sit down and rethink the whole "technology -- regardless of cost or flows -- will fix the water shortages" leitmotif.

Bottom Line: Farmer want to make money. If they save water in one place, they will use it in another -- as long as they still make money. If you want them to use less water make it more expensive (price) or worth more elsewhere (markets). Got that? Thanks.

20 Aug 2009

Water Wars NOT! [2nd edition]

I am not a fan of the "water wars" motif that reporters and NGOs throw around; see this and this post.

Fleck mentioned a new research paper that points out water is more often associated with peace than war, and it got me to thinking...

Why would there be wars over oil or diamonds but not water? Or, are there wars over water for the same reason as there are wars over oil, etc.

No, I don't think that there are wars over water.

Ok, well there may be, but they are not "natural" or common. That's because of the nature of water -- as compared to resources like oil or diamonds.

If we fight a war over oil, and I win, then I get to keep it. You get nothing, and there's nothing you can do to keep me from "enjoying" the wealth from it. If you lose a war over water, you can "destroy" the water (through contamination) and then I can't use it.

The same principle kept us alive during the Cold War. MAD (mutual assured destruction) meant that the "winner" would also lose because the loser would have launched enough ICBMs to destroy the winner. Such an outcome made peace the preferred outcome (there were still proxy wars, but they did not go nuclear.)

So it's the risk of MAD that has instilled a "neutrality" around water in human cultures. The same holds for animals -- in times of drought, watering holes tend to be non-aggression zones among species that would normally kill or hunt each other. This changes if there is so little water in the hole that the animals start to go mad with thirst and fight. [At least that's what I read in Heart of Dryness :)]

Bottom Line: We cooperate in managing water resources because the alternative -- death for all -- is not worth fighting over.

Dilbert Teaches Cost Benefit

Original version

Politics, Community and Climate

In Forget Shorter Showers (via SJ), Derrick Jensen reminds us that personal action cannot solve political problems. He suggests that people -- as citizens (not consumers) -- actively go after those in power, destroying those perpetuating injustice. (I'd do that, but this chair is sooo comfy :)

So how about the people who want to get up, to do something? Well, they need to coordinate their actions. What kind of results might we expect to see? This article [pdf] describes scientists' attempt to simulate the actions of many people -- realistic actions -- using computer models.

A good start, but what about those pesky humans? They are not often as reliable as computer models. This article [pdf] discusses a surprisingly underdeveloped academic niche -- sociologists looking at the human response to climate change. Why is the field underdeveloped? There's the academic reason ("they tend to be more interested in general theories rather than specific topics"). That doesn't mean that nothing useful is emerging. One study looked at how local communities in the US responded to the threat of climate change:
“The most at risk and least responsible were most likely to participate, and the most responsible and least at risk were least likely,” says Zahran. If it suited an area well to emit loads of carbon dioxide and it never suffered the consequences, then the area would be unlikely to participate actively in efforts to reduce emissions."
Why? Free-riding. (Hey! I thought that economists invented that!)

This last paper reminds me of the talk I heard last week at the Brower Center. David Orr (Professor of Environmental Studies and Politics at Oberlin College) discussed climate change (we're screwed) and mountaintop removal (WV rivers and communities are screwed). The connection between the two? It's REALLY hard to coordinate those who will suffer to take action in opposition to those who are benefiting from the status quo. (Students in my class will read Olson's book on collective action to learn about this issue.)

Gee. Sounds familiar.

Orr gave some ugly facts:
  • In one week, more explosives are used for mountaintop removal than are used in one month in Iraq and Afghanistan. Need a villain? Massey Energy.
  • Global temperatures are up by 0.7C, and we are locked into a 1.6C increase.
  • Since climate change is characterized by non-linear, stochastic feedback (things can get bad, unexpectedly, and quickly), we are in trouble if we cross the tipping point
  • The tipping point is at +2C, which will (probably) arrive when atmospheric carbon hits 450ppm. We are now at 387ppm and gaining 2ppm/year. That means we will pass the point of no return around 2040.
  • The projections are for 250 million to one billion climate change refugees by 2050.
Even with all this, he's hopeful (but not optimistic) that we -- as a species -- will survive.

Bottom Line: Somewhere out there is a future that "we" control, and we are going to have to change our ways if we are going to avoid the nasty version of our future -- a planet that looks like the picture above :(

19 Aug 2009

Speed Blogging

  • Mosquitoes LOVE contaminated water (in Atlanta!) -- because they have more buggies to eat. (I'd also guess that there are fewer fish to eat them...)

  • Prices up ($5/m^3), use down (15%) -- and Israelis are just barely safe from saltwater intrusion destroying their aquifer.

  • This blogger been in charge of groundwater for 3 million acres (!) of Kansas farmland for 30 years. You can probably learn a few things from him :)

  • "An Ecologist Doubts the Impact of Exotic Species" Dammit. I want my simple truths!

  • "India's Groundwater Disappearing at Alarming Rate" -- 54 (+/-9km) cubic km per year, up 70% from the 1990s. I blame government subsidies on the electricity used for pumps.

  • Incorporating Moral Rules into a Wise Cost-Benefit Analysis. Good idea. Kinda tricky.

  • "This paper presents and analyzes the results of a recent field experiment in which residential electricity customers in Washington State with price-responsive in-home devices could use those devices to change their electricity consumption autonomously... we focus on the results of the real-time contract, under which homeowners participate in a double auction with a market clearing occurring every five minutes. These customers saved money, and their peak demand (and pressure on infrastructure at peak capacity) fell by 15 percent."

  • "Current climate conditions resemble those that led to peak Atlantic hurricane activity about 1,000 years ago. So if you live anywhere from the Caribbean to the coast of Maine, prepare for the possibility of stronger and more frequent storms."
hattips to EF, LP and TS

WaterSource/WaterBank Comment Policy

Dear Aguanauts,

I have sent Ray (retired water rights analyst, WaterSource/WaterBank) an email asking him to stay on topic -- and stop promoting his "non-tributary" water.

Sorry if his comments bothered you.

More Dams? No. More Politics

GJ says this at his blog:
Regarding... Schwartzenneger’s demand that new reservoirs and dams be included in California water legislation addressing the water crisis...

Are we approaching that point where sheer numbers of a growing population and its increasing demand on natural resources can no longer be sustained (or even that survival itself is at stake) — even if prices were increased to control demand and everybody were to cease excessive consumption of water — unless we build new water storage infrastructure?
I wrote this:
Our water use is WAY about human “needs” — i.e., 200 gal/cap/day in SoCal. Most of that water goes to lawns. We don’t need new dams for urban consumers. Arnie is proposing them for farmers — rather, his Repub. friends in the Valley. Politics, not economics.
Feel free to comment at his blog :)

Poll Results -- Bad Ass Turtles

Hey! There's a new poll (schools) to the right ---->
How many times did you watch the turtle before voting here?
0-5 74%74
5-10 18%18
10+ 5%5
Can't remember 3%3

Bottom Line: Sometimes you gotta watch out for the slow guy.

Swiss Pix

NF sent this pretty pic...

... and this comment: "Here, you can see 3 very well known tops of the Swiss mountains. The one which is in the building's center is the Eiger and then to the right are the Mönch and the Jungfraujoch. The lake is Neuchâtel, the biggest inside Switzerland. (Leman and Constance lakes are bigger -- and also Swiss -- but they share frontiers France and Germany, respectively.)"

18 Aug 2009

Imagine H2O Night

"On Thursday August 20th, Imagine H2O, a San Francisco based not-for-profit organization committed to enabling water entrepreneurship is hosting an evening for identifying water customers’ needs, brainstorming ideas and building teams in anticipation of the upcoming launch of the inaugural Imagine H2O Prize (Info and tickets).

On September 1, Imagine H2O will kick off a competition for ideas that promote water efficiency (reduce the demand or use of water in either agriculture, commercial and industrial, or residential applications).* Winners will receive cash ($50k in total prizes), in-depth business incubation (including introductions to financiers, potential beta customers and go-to-market partners), and reduced-rate or free office space."

* Is "raise prices" worth $50k?

Mulroy, Mulholland and Muddle

For those of you who do not read all the water blogs, there has been a series of posts on Mulroy's grab for rural water to feed Vegas sprawl.

I wrote this.

Aquadoc wrote this.

Emily Green wrote a bunch of stuff.

Fleck wrote this.

Now Aquadoc wrote a great post comparing Mulroy to Robert Moses of NYC. He notes how both -- "mere" bureaucrats -- were able to change the courses of their cities.

Bottom Line: Bureaucrats are around longer than politicians, who move on, up or out. They can wield real power. Check out section 3.2.2 of my dissertation if you want to see how Mulholland (of Owens Valley fame) changed "the facts" to get a Colorado River Aqueduct to Southern California. [I also made the comparison here.]

Academic Economists

Another in a series...

I was talking to my dad, explaining how academic economists are not very good at describing how markets work [seen the news recently?].

For example, many economists talk about "equilibrium," i.e., when supply and demand are balanced. I asked him the last time he noticed the real estate market in equilibrium.*
"You mean where prices are stable? Well, that happens every so often."
"But you only know that prices are stable after they stop being stable, right?"
"Oh yeah, right. We never know where things are going until after we've been there."
Anyway, I told him that economists often assume equilibrium so that their mathematical models will work.
"But how can they do that if the real world is not like that?"
"Oh, because most of them have never been in the real world (they stay at university from their BA to their PhD to their job as professor). Even worse, they "job" is mostly about writing stuff for other academics.** And those writings are all about models that show equilibrium."
"What about teaching?"
"No, there are few rewards for teaching. You get tenure (lifetime job security) and promotions if you publish. Student evaluations don't matter."

"But what about the stuff you do? The blogging?"
"Nobody pays me for that. My postdoc salary is for "research," and I decided that blogging was the best way to use my time and skills. Look at my teaching -- I am doing that for free*** because I think that's important too."
"So will blogging and teaching help in your career?"
"No -- if you want to be a professor, all that matters is publication. That's why I am not going to apply for professor jobs at research universities.****"
Bottom Line: Those in the Ivory Tower will only serve the people if they walk outside every so often.
* My dad's been in the RE business for 30 years. He says it's easy money -- 6 percent! -- and I've spent a lot of time trying to understand why 6 percent commissions persist. It's not the exclusive access to data -- the internet exposes data, but 6 percent persists. I think it's more because people are willing to pay 6 percent on the biggest transaction they will ever make.
** Although I find that few academics bother to read that stuff.
*** UC Berkeley will pay me $9,000 to teach EEP100. Since my postdoc is for "research," my postdoc salary will drop by $9,000.
**** This is a big decision I recently made (more to come...)

17 Aug 2009

Speed Blogging

  • Rich people are now having more children. Seems like the demographic transition is reversible :(

  • "Groundwater Availability in California’s Central Valley" comes from the USGS and provides a thorough and authoritative view of groundwater use and recharge. (The report cost $1 million; the USGS provides value for money!) The important numbers are 1.4 maf of average annual overdraft -- a number that increased to 3-4 mafy in the early 2000s and it probably hitting 8+ mafy in these times of drought.

  • Lloyd Carter does a funny voice over (actually, text-over) on Hannity's interview with the "people vs. fish" crowd from Westlands. Actually, his cutting commentary indicates the lies, innuendo and hyperbole that Fox eats up from their "fair and balanced" fans. [In their honor, I've added a tag for agit/prop to the blog.]

  • "In a dramatic defeat for San Diego, the California Coastal Commission on Thursday denied the city's request to continue operating the region's main sewage treatment facility below the minimum pollution standard. San Diego is expected to appeal to the U.S. Secretary of Commerce for its third waiver from the Clean Water Act. If that fails, it could be on the hook for paying up to $1.5 billion to upgrade its Point Loma Wastewater Treatment Plant." San Diego is the largest US city not complying with clean water regulations.

  • A little analysis of pay scales at the University of California indicates that the number of employees making $200k plus has risen dramatically in the past few years. Those people may be facing 8% pay cuts, but the lower-paid employees are getting "furloughed."
hattip to DW

Monday Morning Smile

(via JWT) "Judy Wallman, a professional genealogy researcher in southern California, was doing some personal work on her own family tree. She discovered that Senator (D-NV) Harry Reid's great-great uncle, Remus Reid, was hanged for horse stealing and train robbery in Montana in 1889. Both Judy and Harry Reid share this common ancestor.

The only known photograph of Remus shows him standing on the gallows in Montana territory.

On the back of the picture Judy obtained during her research is this inscription:
Remus Reid, horse thief, sent to Montana Territorial Prison 1885, escaped 1887, robbed the Montana Flyer six times. Caught by Pinkerton detectives, convicted and hanged in 1889.
So Judy recently e-mailed Senator Harry Reid for information about their mutual great-great uncle.

Believe it or not, Harry Reid's staff sent back the following biographical sketch for her genealogy research:
Remus Reid was a famous cowboy in the Montana Territory. His business empire grew to include acquisition of valuable equestrian assets and intimate dealings with the Montana railroad. Beginning in 1883, he devoted several years of his life to government service, finally taking leave to resume his dealings with the railroad. In 1887, he was a key player in a vital investigation run by the renowned Pinkerton Detective Agency. In 1889, Remus passed away during an important civic function held in his honor when the platform upon which he was standing collapsed.
That's real POLITICAL SPIN!!! That's how it's done folks!"

The Tragedy of the Anti-Commons

Bretson and Hill have just published an important article [PDF] on the tragedy of the anti-commons in water markets. Unlike the tragedy of the commons (where anyone can exploit the resource), the tragedy of the anti-commons arises when everyone has a veto, preventing anyone from exploiting the resource.

And a word to those who look at "exploit" and say "hell yeah, let's stop that"... Exploitation means using water in any way -- for agricultural, environmental or urban purposes.

Here's the abstract:
In much of the American West water shortages are becoming an important concern. With increasing demands for water for municipal, industrial, and environmental uses, transfers of water from the currently predominant agricultural uses to these other uses should produce economic gains. Even though most commodity markets respond rapidly to price differentials and reduce those differentials over time, water transfers out of agriculture into higher value uses are not occurring very rapidly.

The existence of multiple rights of exclusion unbundled from the rights of use under the prior appropriation doctrine in the American West creates an anticommons that has impeded water transactions. This article explains the tragedy of the anticommons, describes the various rights of exclusion that create an anticommons in western water markets, and concludes with case studies that illustrate the difficulty of water transfers.
Anyone interested in water market MUST read this paper to understand many of the reasons that markets are not established or functional.*

Bottom Line: Change is only possible when we have freedom of action (compare US and Iranian elections), and we can't have that when too many people can veto that freedom.
* In an oft-cited 1984 article, Henry Vaux and Richard Howitt calculated that transfers from agricultural users would reach 10 percent of total supplies (about 3 maf). In his 1997 thesis [pdf], Newlin uses CALVIN to estimate potential water transfers in SoCal; trading 13 percent of water would reduce "scarcity costs" by 84 percent. Unfortunately, transfers to date have been much less than these modest estimates (perhaps 3-5 percent of ag water -- less than 500tafy).

Weekend Discussion -- Online Communities

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 a topic among yourselves -- exchanging views, learning and teaching. (I only read the comments.)

If you are interested, take a moment to check out (and add to!) last week's discussion on governance. After that, please give us your thoughts on...

Online communities. Are they communities? Can you trust someone you met online? marry them? be friends with them offline?

16 Aug 2009

My Future Activities

I am teaching a class ("Environmental Economics and Policy" -- or EEP 100) to 90 undergraduates at UC Berkeley during the Fall semester. I'll be posting videos of my lectures on YouTube.

I have a contract to write a book (The End of Abundance) with the University of California Press. Here's my final proposal [doc] and an extended reply [doc] to a referee's concerns about the book. The actual book (which I will begin writing as I teach) will be different as I develop the material. I will be posting draft chapters -- for your comments -- as I write them.

(I will also blog, revise papers, give public talks, run lab experiments, consult and apply for academic jobs...)

Stay tuned -- fun times ahead!

15 Aug 2009

Aquashock -- The Review

[review redacted at the request of the publisher. It will reappear on Oct 14.]

Speed Blogging

  • The Economist says that the US ethanol program drives deforestation in Brazil, and they're right. It's all about pork for corn states, not the environment.

  • Cash for clunkers is a rip off [PDF] -- $365/ton of avoided CO2 -- but now we know why politicians love it. Reminds me of ethanol. When is this going to end?!? (Don't answer that -- I can't get a prescription for anti-depressants)

  • Vitaminwater is basically non-carbonated coke made by... Coca Cola!

  • "In this quaint [Japanese] fishing village, each fall, tens of thousands of migrating dolphins are captured, some of which are sold into captivity (for up to $150,000 a piece), and the rest are taken to a secret cove and slaughtered (to be sold for their meat -- sometimes falsely described as whale meat)." One reason: Nobody owns the dolphins :(

  • The US Navy, OTOH, is trying to get a permit to kill 11 million mammals that are "in the way" at its shooting ranges. No, that's not cool either, since the permit is issued by a government agency that doesn't own them!

  • "It is possible to prevent the collapse of commercial fish stocks" with quotas and appropriate technolgy.

  • Save water, pee in the shower. I do, but my roomies are grossed out. (Nobody said saving the earth was easy!)

14 Aug 2009

The End of Abundance in Idaho

A guest post from Mark Solomon:

Over-appropriation is hitting the fan in south Idaho with IDWR ordering the first curtailment of use order in its history.

So far, the courts are upholding the agency order. The facts are complicated, but basically, junior groundwater pumpers are being curtailed to meet the call of senior surface water users. Simple on its face, but the surface water users are actually supplied by springs from the aquifer where they exit the cliff face of the Snake River canyon at Thousand Springs. Only problem is the spring user rights are hydrologically unsustainable as they were awarded at a time when the aquifer was being artificially recharged by leaky canals and flood irrigation practices and before cheap hydropower spurred development of groundwater pumping. To compound the issue, the spring users apply the water to aquaculture, producing most of the farmed trout in the country, a high return on water investment compared to field crops. It is also a largely non-consumptive use (there were and still are to some extent issues with return water quality, but that is being addressed through CWA enforcement), which is critical for Idaho's ESA balancing act for salmon.

The situation cries for a market response, but the groundwater users know they will come out on the wrong side of the cost/benefit equation so it is being fought as a game of political and legal chicken.

The state convened a stakeholder group to write a Comprehensive Aquifer Management Plan that obliquely looks to markets to replace prior appropriations as the dominant management tool, but the current legal wrangling may cause it to be stillborn.

DZ's Bottom Line: It's hard to move to a new system if some people hold onto the old (broken) one.

It's My Birthday!

Woo hoo! 40 years old and nothing's fallen off!

This photo captures my first entrepreneurial venture -- selling watermelon at the 1977 (or 1978?) Union Street Fair in San Francisco.

I was paying for the teddy bear in the photo. I sold each slice for 25 cents. My mom provided raw materials for free. (I loved fat profit margins, even then...)

I'll swim 4,000 yards today (birthday swim) and have a party (pizza in the wood-fired oven in the backyard) tomorrow. Yay!

Bottom Line: Life can be good or bad -- it depends on your prospective.

13 Aug 2009

Pat Mulroy's WMDs

Both aquadoc and jfleck mentioned that Pat Mulroy has called for an "up or down" vote from her board on approving a $3.5 billion "in state" pipeline that will take water from rural areas in the Snake Valley, which lies in Nevada and Utah.*

Emily Green covers the "human" aspect of the water czarina:
In daring the board to vote against the project that has been the focal point of her career, she told the Review-Journal that uncertainty about the community’s water supply would “spill over into our ability to recover economically. The banks will go crazy.” The R-J story continues: “The worst-case scenario involves a drop in Lake Mead so severe that it cuts the valley off from most of its present water supply.” And Mulroy continues: without some sort of safety net like the in-state pipeline, “you don’t have water in hydrants… You’re going to live Amman, Jordan. You’re going to get water once a week.’
Ok, so Mulroy is daring a bunch of elected officials to deny her plan to keep their constituents from dying of thirst.

(Oh, and I've been to Amman -- it DOES have water in the fire hydrants and 24/7 water pressure, so she's full of sh*t.)

Let's assume that they vote to spend their constitutents' money on a project that will bring glory to her, dewater the basin and not do anything to address Vegas's unsustainable path. Congrats, you just voted to pay the steward for re-arranging the deckchairs on the Titanic!

That point -- as witty as it may be -- is not my main point. My main point is that Mulroy is responsible for the "shortage" in Vegas. That's because she's responsible for cheap water in the area. Since cheap water has spurred demand, it has also drained Lake Mead. So if you want to blame someone for Mead is drying out and a $ multi-billion pipeline, blame Mulroy.

Why didn't she raise prices and balance supply and demand in Vegas? Because she's pro-growth (developers), pro-engineering (the third straw into Lake Mead and pipeline will cost ratepayers a LOT), and pro-power (for herself).

If she raised prices 5 years ago, her job would have been boring. No headlines. Just quiet competence.

In fact, I think she's drying out Lake Mead to get $$ for her pet project (the "Pipe Immortalizing Pat Mulroy"), and the PIMP will be out there -- forever -- to remind us about power-mad water managers. (Apparently, Schwarzenegger is also interested in getting his name on a dam or two -- he's a big guy.)

And the bad news is this -- she will win. Utah has rolled, the Board will forgo fiduciary responsibility to their constituents and the environment (since an unsustainable Vegas will hit the wall anyway -- just farther in the future), and the PIMP will be built.

In 5-10 years, we will look back at her scare tactics and all the damages from the pipeline and we will see how Pat Mulroy is the George Bush of water. She told us "trust me, there are WMDs shortages that will kill us the children!" even though there are none. We trusted him and we suffered. We should not trust her.

Bottom Line: Pat Mulroy is not a water manager, she's a pro-growth, anti-sustainable megalomaniac eager to expoit fear to get what she wants -- not what's best for her customers.
* Utah just rolled over, approving a 36,000 af export of water from the Snake Valley to Vegas.

Addendum: Nobody caught the typo [MWDs > WMDs] in the title. Damn it -- proof my stuff!

Bottled Water Competition

It's not usually tap water. From this story, a nice quote from someone who understands the issue:
People make the assumption bottled water competes with tap,” Lauria said. “It competes with other packaged products, like coffee and soda. … Bottled water is the healthiest packaged beverage.”
Bottom Line: While I don't usually (ever?) buy the stuff, it's a nice option to have.

Poway Water Rates

In Poway, a wealthy inland city near San Diego, some residents are concerned about proposed new water rates. To get an idea of their concern, I looked into the proposed rates:
The first 15 units used by all residential customers during a two-month billing period will cost $2.64 per unit. Units 16 through 40 will cost $2.97 per unit. Units 41 through 80 will cost $3.30. Units 81 through 120 will cost $3.96. Units 121 and above will cost $4.62 each.
121 units per month translates into 1500 gallons per day. To give an idea of comparable usage, in our house here in Berkeley, the 7 of us average 250 gallons per day.

They argue that it may lower property values, but it seems clear that large landscaped lots are relatively endangered in California, and so these expectations ought to be built into the price. Any buyers not taking this into account regardless of what happens currently with the rates is foolish.

Bottom Line: They'll get over it.

Useless Paperwork

I was filling in this form ("privacy practices") at the hospital and noticed the "make 1,000 copies" work order on the lower half. Obviously someone forgot to remove it before making 1,000 copies. What I wonder is if any patient will ever mention the problem -- or if any patient actually cares what's under the work order.

Bottom Line: Too much information is worse that no information at all: They assume we know what's up, we waste our time and don't understand, and problems are not prevented. (Oh, and trees die for no reason.)

Something I wrote elsewhere

I am working on a paper [on academic publication] and just wrote this:
Referees know that editors need to reject many papers, so they look for defects. In the end, the editor is left with a pile of papers that are not bad enough to reject --- and those are published.
Bottom Line: It all depends on how you look at it... (and incentives matter!)

12 Aug 2009

Economics AND Engineering

During my vacation in England -- a very classy place* -- I visited Lynton/Lynmouth, two towns joined by a funicular.

The cool thing is that their funicular ("the cliff railway") is hydro-powered, i.e., water is used to move the cars.
  1. Connect two cars with a rope that goes from top to bottom.
  2. Put the rope through a pulley at the top. Hang one car on either side, one up and one down.
  3. Fill top car's water tank [from river at top of railway] until it gets heavy enough to pull up -- by sliding down the rail and pulling the rope through the pulley -- the car on the bottom.
  4. Drain water at bottom, fill water at top, and repeat.
Each car can holds 700 gallons (2650 l), which means that it can change its weight by 5,600 pounds (2,650kg) -- that's a lot power to lift!

These photos show the entire slope, the down car (see the green tank on the bottom, "in front?"), and the view of the track from Lynmouth.

Bottom Line: It's possible to use water wisely -- this example uses engineering to solve an economic problem (how to lift people) while having no negative environmental impacts (the river diversion is minimal, and the water is dropped back on course). Excellent!
* Their tabloids can teach ours a thing or two about lower standards ...

Cadiz, Money, Politics and Corruption

Emily Green, an experienced investigative journalist, has been looking into Cadiz, Inc. [stock: CDZI], the company that's been trying to turn its property in the Mohave desert into a source/storage site of water to be sold to urban areas -- probably via Met's Colorado River Aqueduct (there's no connecting pipeline yet).

In this post, Emily compares Cadiz's claims to the reality in the area. My favorite? Cadiz claims a recharge (sustainable yield) of 35,000 - 50,000 af; USGS says 2,500. [See posts by aquadoc and jfleck.]

In this post, Emily gets into the money. More importantly, the connection between Cadiz and Schwarzenegger, whose chief of staff was a paid Cadiz consultant only a few years ago. The key question here is how Schwarzenegger's June 4 "endorsement" of Cadiz affected the share price of a company that's 50 percent owned by 10 companies.* Lo and behold -- the announcement sent shares up by 60 percent in one day.

Note that Keith Brackpool, CEO of Cadiz, plead guilty to charges of securities fraud in the UK. Does he know how to do manipulate shares and do insider trading? Yes. Is it possible that he is doing that? Yes.

What intrigues me is that Brackpool took options on 60,000 shares on May 22. They were worth about $400,000 then and about $750,000 2 weeks later. (He only had 90,000 shares before exercising that option. Was it "in the money"? Did he sell those shares? I can't tell. Help, anyone?)

I've spoken to Emily about this situation and these are my own ideas, but the facts may be telling us an interesting story. Anyone got more to tell?

Bottom Line: It's fine to buy and sell water to make a profit. It's NOT fine to use political influence to change the value of your water trading company. I would not be surprised if Cadiz has crossed that line.
* The endorsement was highlighted in a June 5 press release, so it was issued the day before.

Poll Results -- Who's to Blame?

Hey! There's a new poll (Bad Ass turtle!) on the right ---->
Who's to blame for California's budget problems (choose all that apply)
Gov. Schwarzenegger 23 votes
Democratic politicians 31 votes
Republican politicians 30 votes
The Media 6 votes
Unions 21 votes
Citizens 22 votes
Foreigners 5 votes
The Children! 5 votes
The Federal Government 8 votes
LOLCats (http://icanhascheezburger.com/) 5 votes
So the politicians are more to blame than the people. Does that imply that they are acting for themselves and not the citizens who elected them? See story above.

Bottom Line: When people fight over the division of the pie, a lot of pie ends up on the floor.

11 Aug 2009

Keep or Toss?

Does anyone look at WaterSISWEB or "water" on the google newsreader? They are both on the sidebar, down below...

Please tell me if I should keep or dump them (and why :)

Fish or Foreclosure?

Jeff Michael has released an updated study [PDF] arguing that the economic problems in California's Central Valley are general, not caused by cut backs in water deliveries to SOME farmers.* I agree with him. If you don't, then read the report and get back to me :)
construction job losses caused by the foreclosure crisis exceed job losses from Delta water pumping reductions by a ratio of 8 to 1. The foreclosure crisis is by far the main force driving the Valley’s economic crisis. The report conservatively estimates that the construction collapse alone has destroyed 47,000 jobs and $1.8 billion in employee compensation across the San Joaquin Valley, compared to a loss of 6,000 jobs and $170 million in employee compensation from reduced water supplies caused by both drought and environmental needs.
Let's say that these numbers are true. Will that stop the campaign to take water from fish and give it to the few farmers with poor water supplies? No -- that's because such a taking would be decided by politicians, not markets. (Politicians took the water for the fish, of course, when they approved the Endangered Species Act.)

Bottom Line: Everyone wants to shift blame. Farmers that are suffering from water shortages can only blame themselves for overextending their reliance on imported surface water/mined ground water.
* I've corresponded with Richard Howitt (my adviser, whose study predicts 35,000 job losses from water shortages), and he's looking into the multipliers connecting agricultural output to jobs. Stay tuned.

So Long and Thanks....

Red thought you'd like to see this photo he took in Hawaii

Civil War at IID, Part 23

IID is panicked because many members of its advisory board are suing it over water allocations (prior post). They want to remove those members. Reminds me of how Venezuela's putative dictator Chavez deals with media criticism -- by removing the media.

Bottom Line: IID will be dysfunctional for as long as political and economic power are unevenly tied together. Split IID!

10 Aug 2009

Speed Blogging

  • In this 4 minute audio clip from KCBS radio, I discuss the Pacific Institute's report on potential conservation of water by farmers.

  • Condensing water from wind -- using vertical windmills -- in Australia.

  • Lloyd Carter does a good job reporting on the background of the major personalities backing the so-called "Latino Water Coalition," a name that Paul Rodriguez doesn't quite accept:
    “When I say Latino Water Coalition a lot of you automatically say, ‘Why Latino? Doesn't everyone need water, Paul? Why just you Latinos and as a Caucasian person I take offense to that, why does everything have to be segregated?’ I don't know. I don't know but we're using this. We're using this race card in a positive manner, a cloak. You know everybody's welcome to this. The reason why we call it the Latino Water Coalition [is] because it gives them a pause. ‘Better not attack these Latinos, we don't know.’ If we call it the Caucasian Coalition, you bet they would already be attacking us. Because Caucasians, sadly to say, who is defending you? I am. You know, just to put that to rest, there's no division."
  • Conservation-minded water managers are learning about efficient irrigation from golf courses. Why do golf course managers know so much about efficiency? They face high costs from water agencies, and they compete with other courses -- meaning that they have to deliver the best golfing experience for the price of a round. Put differently, it's because they face price and market discipline.

  • "Climate change brews up trouble for coffee growers" also has an interesting discussion of the micro and macro institutions in coffee production.

  • "Phoenix is using less water today than we were a decade ago and less per capita than we were two decades ago" -- interesting piece I found via the excellent GOOD blog (based in Iceland!)

  • In San Diego, "The continuing drought may be accelerating farmers' long-term shift away from tree fruit and toward products with higher values, market niches and opportunity for tourism tie-ins..." That's what happens when supply falls -- you make the most money from whatever water you've got left.

  • El Nino is coming to the Pacific. Will it be strong (lots of rain) or weak (maybe below average rain)?
hattips to CC, JWT