30 Sep 2009

Poll Results -- Pass-a-Porta

Hey! There's a NEW POLL (Vegas baby!) to the right! ---->
Do you have a passport?
Yes, and I use it! 80%52
Yes, but it's not been used 9%6
No, but I want one! 8%5
No, why leave my country? 3%2
65 votes total
Given that only 20-30 percent of Americans even have passports, these results indicate that readers of this blog are way more cosmopolitan than average. Good -- I have two :)

Bottom Line: You cannot know your own country (right or wrong) until you have visited another.

Stalin's Reincarnation

[Buddhists believe that ordinary people are reincarnated until they reach enlightenment; that means that someone evil will come back until they renounce their evil...]

Joseph Stalin is famous not just for killing most of his foes (Assassinating Trotsky; show trials) and the starvation of 20-30 million "kulaks," but also for the Katyn massacre of about 22,000 Polish officers.

What's interesting about those 22,000 vs. the 20,000,000 that died in other ways? Stalin blamed the massacre on the Nazis rather than take the blame himself.*

...and that's what justifies the title to this post: Vladimir Putin (ex-President, current Prime Minister, and President-elect-in-waiting) is not just an admirer of Stalin -- he's also someone who I think is capable of using Stalin's methods: killing to advance his own cause while blaming others for those deaths.

Which deaths? The people who died in their beds when "Chechen terrorists" blew up four apartment buildings.

These attacks occurred in 1999, and they were directly relevant to the second Russian invasion of Chechnya and the subsequent rise of Mr Putin from nowhere to control over a state whose oil and gas wealth is exceeded only by its corruption and concentration of power in the hands of its politicians.

To make a long story short, Putin -- head of the KGB before he became president -- had the resources, incentives and temperament** to coordinate the attacks that would give him the keys to the kingdom. And anyone who has watched Russia since that surreal day when Yeltsin "revealed" Putin as the next president will see that Putin has wasted no time gathering power unto himself.

But wait -- even more interesting than all this backstory is the way that the "Putin blew them up" story has been treated in the media. I read the story in a US-edition of GQ. When I went to GQ's site to find a link to that article to post here, I found links to hot babes, casual ties, and sports analysis, but no link to the story.

What happened? Conde-Nast has suppressed the story on the internet and all its international editions, with some intention of "protecting" Russia and Putin from the nasty possibility that some people may question their legitimacy and morals.

This move was pretty stupid, since it called more attention to the story. Gawker published a WTF post, and others (here and here) have reposted the article in full.

Bottom Line: It's my belief that politics and economics are fused in the USSR Russia, and those in charge (Putin and the real oligarchs) will use whatever power they can to maintain control over that country's economic assets (oil and gas) and the "citizens" whom they serve enslave.
* Some (ex-Soviet) Russians still fail to acknowledge responsibility for this massacre.

** Unlike George Bush (who thought he saw Putin's soul in his eyes), I see real-politic in Putin's eyes.

29 Sep 2009

Carbonated Water

I newsletter that I receive (via TS) gave some useful context to the impact of carbon prices on water prices:
Based on analysis of national greenhouse gas production and the provisions of the bill contemplated by the Senate, the price of emitting one ton of CO2-equivalent gas is projected to be $15 in 2011 and rise to $26 by 2019.

To provide some perspective on this price, approximately 80% of the power used to move water through [Arizona's] CAP system comes from Navajo Generating Station (NGS). NGS emits about 1 ton of CO2 for every megawatt-hour (MWh) of energy it produces, and CAP consumes an average of 1.76 MWh for every acrefoot (AF) of water it brings into the three-county service area. If our calculations are correct, a CO2 allowance price of $15 per ton would increase CAP energy cost by approximately 50%; at $26 per ton, energy cost would nearly double.
With a carbon price of $20/ton CO2e, the cost of water would jump by $35/af. That's real money when the price of water to farmers is $45 [or $110/af pdf]

Bottom Line: As energy prices increase, so will water prices. Some prices will be high enough to make farming "uneconomic." Yes, that means that the price of food will rise.

Good Subsidies?

(via JWT), Japanese rice farmers are strongly protected against competition from other, "unsuitable" farmers (more here). What do they do with prices that are about 6x world prices?

They do this (with rice paddies):

While very pretty, I am not sure that such art (the result of planting different colors of rice next to each other) is the best way to grow food or art.

Bottom Line: If you want to help farmers, pay them cash. If you want to help artists, pay them cash. Trade barriers cost more and deliver less money to the farmers. Of course, politicians are not going to end these inefficient programs because they are harder for citizens to understand and oppose. (Same for US programs on ethanol, sugar, steel, etc.)

28 Sep 2009

Speed Blogging

  • Here's an update on DXV desalination technologies (see this water chat), with nice pictures. DXV has a small demo in place, and they are closer to funding a pilot "within a year."

  • Charles Kolstad says [pdf] "cap and trade is not a tax," and he points out that a carbon tax needn't be a tax, either. I agree with tax and rebate.

  • From The Economist: "Poor countries’ economic development will contribute to climate change. But they are already its greatest victims"

  • The Economist also discusses macro measurements that improve on the GDP fetish -- read this post.

  • "This study analyzes the role that local media played in covering and communicating important issues related to local water rights policies in Colorado... and finds that the principles associated with democratic ideals of a watchful press were not apparent... experts were the most influential actors in initiating and advocating for these policy decisions... These two factors interact to diminish democratic governance within these communities, which means that citizens do not have the information or influence that is desirable in democratic policymaking. "

  • This paper examines the impact of incentives on bureaucratic performance. "First, some bureaucratic factors, and especially meritocratic recruitment, reduce corruption... Second, the analysis shows that other allegedly relevant features in the bureaucratic institutionalist literature, such as public employees’ competitive salaries, career stability or internal promotion, do not have a significant impact."
hattip to DW

Monday Morning Smile

"Political Science, so Let's Drop the Big One" by Randy Newman:

And here's more:

Some rules for modern living.
  1. If at first you don't succeed, destroy all evidence that you tried.
  2. Experience is something you don't get until just after you need it.
  3. For every action, there is an equal and opposite criticism.
  4. He who hesitates is probably right.
  5. Never do card tricks for the group you play poker with.
  6. No one is listening until you make a mistake.
  7. Success always occurs in private, and failure in full view.
  8. The hardness of the butter is proportional to the softness of the bread.
  9. To steal ideas from one person is plagiarism; to steal from many is research.
  10. Two wrongs are only the beginning.
  11. Work is only accomplished by those employees who are still striving to reach their level of incompetence.
  12. You never really learn to swear until you learn to drive.(The corollary is: you never learn to pray until your kids learn to drive.)
  13. The sooner you fall behind, the more time you'll have to catch up.
hattips to KH and JWT.

18 Months of Aguanomics

Time flies when you're having fun...

...and so do the words. After about 18 months (six month update; one year update), Aguanomics has:
  • About 2,000 posts: 35 by guests; 16 by Damian and about 1,950 by me.
  • Attracted about 900 subscribers (most on RSS; about 140 on email)
  • About 250-300 unique visitors/day; they spend about 1:40 to look at about 1.6 pages/visit.
  • About 31,000 unique visitors making about 52,000 visits in the past six months; both numbers are up over seventy percent from the same period one year ago. That's interesting because it seems that there are a few dedicated readers (revisiting the site often) and many casual readers. Hopefully, the "casuals" are learning something!
  • Nearly made me into a touch typist. :)
As you can tell from the photo above, I have a big mouth, and I've enjoyed opening it and sending "aguanomic" ideas out to you folks. What have "we" accomplished?
  • In concrete terms (actual implementation of all-in-auctions or real conservation pricing), not very much, but there does seem to be an improvement in the scope and depth of the discussions on water policy in the news and legislatures. I'm happy to take some credit, as one of many advocating more economics in the "new reality" of scarce water.
  • A refinement of ideas and dialogue. Thanks to emails, conversations and comments with you, I have refined simple ideas into robust ideas ("some for free, pay for more," business metering, all-in-auctions, using insurance to measure monopolistic efficiency, etc.)
  • A growing community of people who know what they are talking about. I have learned from "water chats" with many people involved in the water business; I have given many talks to diverse audiences, spreading ideas that are simple, effective -- and usually unknown.
...and here are a few hints on what lies ahead:
  • I will finish teaching Environmental Economics and Policy 100 at UC Berkeley by December. Here's a page with audio (mp3) and video (youtube) links to my first 7-8 lectures. My students will also be contributing about 80-90 guest posts -- starting on October 2 -- to this blog. It will be interesting to get some new perspectives!
  • I will write the first draft of my book (The End of Abundance: A Primer on Water Economics) and get your comments and critiques.
  • I will be visiting Indonesia, Australia and New Zealand for about three months (Dec 20 to end-March) to learn more about their water situation. (If you want to meet me, schedule a talk, introduce me to someone, etc., then email me.)
  • I am planning to come back to Berkeley to finish out my postdoc, but I am not sure what I will do after that. Perhaps I will continue to travel and learn more about/work on water problems throughout the world; perhaps I will get a job that allows me to continue blogging; perhaps I will work as a consultant, implementing these ideas. Probably a combination of all three.
  • I am "taking some time off" from an academic career, mostly because the entire "publish or perish" regime is so discouraging. Why should our best minds spend so much time arguing with each other on issues that rarely apply to reality, in journals that so few read, over a period of time that's glacial? Although I love to teach, it seems I will have to teach outside of academia.
Bottom Line: I've enjoyed blogging, and I hope that you have enjoyed this blog. I look forward to our future adventures!

Weekend Discussion: Political Influence

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!) the last week's discussion on a new constitution for California. After that, please give us your thoughts on...

Political influence/constituent services. Have you ever contacted your representative? Have they responded? Have they addressed your concern? Tell us about success and failure.

27 Sep 2009

Not the Same Going Down as Up

Vernon Smith recommended this 1992 article [PDF] to me:
This analysis indicates that reference price formation does have significant effects on consumer behavior. Furthermore, these effects are asymmetric with consumers two and a half times more responsive to egg price increases that are in excess of the reference price than they are to comparable egg price decreases.
If you do not think that the response to egg price increases is important (demand falls more quickly when prices rise than it rises when prices fall), then you may want to apply this result to other market goods (share prices, houses, etc.) in your thinking of how we are going to respond to a change in current economic conditions -- especially if (5%+) inflation returns to the US.

In relation to water prices, this result gives us reason to suspect that higher prices will lead to strong contractions in demand (not quite as strong as 2.5 times, since there are fewer substitutes for water than for eggs...)

Bottom Line: We respond more strongly to (real/nominal) price increases than decreases. Plan accordingly.

25 Sep 2009

Chino Auctions Water for Real Money

CS, JR and TS all asked my opinion on this report that the Chino Basin Watermaster is planning to auction 36,000 af of water. (The water is just an allotment, not an annual right; see the auction website.)

Given projected prices of $800-1,000/af, the auction will raise about $30 million. I am fully in favor of this development:
  1. It's for water in an adjudicated groundwater basin -- meaning little chance that the water will come from unsustainable overdrafting. Something I worry about with the $77 million sale.
  2. The sale is open to "local water agencies, Southland developers who under state law have to demonstrate there is enough water to supply new projects, and private investment groups that deal in natural resources." A big pool of competing developers means more competition and higher prices -- something that DWR failed to encourage with its beauty-contest guidelines for the Drought Water Bank.
  3. The water is coming from east of LA -- an area of heavy demand and (relatively) easy delivery infrastructure -- which means that bids are likely to be numerous and prices competitive.
  4. Best of all, the auction will help people understand the value of water. At $800/af, IID just let $144 million of water float away...
Bottom Line: The best way to ration scarce water is with prices and markets, and auctions are the best way to discover the price (value) of something that's hitherto been so abundant that we valued it at zero.

Pyrrhic Victory in McCloud?

Food and Water Watch joined local activists in celebrating Nestle's decision to build a bottled water plant near Sacramento instead of in McCloud, CA.

I am not a fan of FWW's hysterical anti-capitalist rhetoric (see this and this), and I am also familiar with the situation in McCloud, a small community with little to offer besides splendid nature and lovely water.

So, I am sad to see this "triumphalism" on Nestle's withdrawal. Although I criticized the terms that Nestle offered the people of McCloud (about five to ten percent of the price they should have offered), I think that they could have made a deal. Instead, Nestle's ham-handed "negotiating" created an alliance between those who dislike capitalists and those who dislike being ripped off. Bad news for Nestle but worse news for McCloud.*

So what's McCloud going to do with its fantastic water? How are the citizens going to use their asset to improve their lives? Although they can surely enjoy the cleanest, freshest showers around, they are going to have a hard time getting more money for their water then Nestle was capable of paying.

My bet is still on "McCloud" branded bottled water, but I'll wait to see what they do.

Bottom Line: It's one thing to negotiate for your interests, it's entirely another to throw your interests (and those of your neighbors!) out the window in the name of ideological purity.
* I submitted a consulting proposal on how McCloud could use its water for economic development, but we were unable to work together because of their categorical rejection of any option that included Nestle. I was unwilling to take that option off the table -- how can the community choose without knowing all the options -- so I declined further negotiation. (Note that the people who rejected Nestle were not representative of the community but of a local environmental group.)

24 Sep 2009

Speed Blogging

  • This story gives an update on the Bay Area's carbon tax (prior post). First, it's working logistically. Second, it's probably going to be adopted Statewide. Third, it's probably going to rise from $0.045/ton CO2e to a real price...

  • Robert Glennon continues to say that water shortages will end when water prices rise. He's right.

  • "It's not surprising to find pathogens in municipal waters, said Pace. But the CU-Boulder researchers found that some M. avium and related pathogens were clumped together in slimy "biofilms" that clung to the inside of showerheads at more than 100 times the "background" levels of municipal water. "If you are getting a face full of water when you first turn your shower on, that means you are probably getting a particularly high load of Mycobacterium avium, which may not be too healthy," he said."

  • T-Mobile started charging customers to receive paper statements (instead of giving them praise). Enrollment in the program jumped from 1,000 people/day to 33,000 people/day. That's called a "price response." (They ended the fee after losing a "you changed the contract!" lawsuit. Gaia continues to weep.)

  • "We employ a field experiment that examines the manner in which police officers in a major Latin American city respond to socioeconomic distinctions when requiring a bribe. In this experiment, four automobile drivers commit identical traffic violations across a randomized sequence of crossroads, which are monitored by transit police... Our core finding is that officers are more likely to target lower class individuals and let more affluent drivers off with warnings. The qualitative results suggest that officers associate wealth with the capacity to exact retribution and therefore are more likely to demand bribes from poorer individuals"

  • Why are LA's water mains bursting? "But some experts said a prime suspect should be the city's recent decision to allow sprinklers to run only on Mondays and Thursdays. They say that if more water flows through the system on those two days when people water their lawns and then pressure suddenly changes on other days, it could put added stress on already aging pipes." The Law of Unintended Consequences strokes again. Just raise prices!
hattip to JWT

Resnick's Machinations

Mike Taugher continues to pursue the political-economic connections between Kern farmers businessmen and Senator Dianne Feinstein.

[Be sure to read Emily's take on this situation too.]

In this story, he highlights an attempt by Stewart Resnick (investor in Fiji Water, Paramount Farms, Kern Co Water Bank, and so on...) to throw a procedural wrench into the science surrounding the biological opinions/restrictions on Delta Exports. DiFi "merely" requested another scientific review, by another panel of experts. Resnick would benefit if -- as planned -- this request delays/casts doubt on prior opinions, allowing his companies to continue business as usual.

This kind of BS is on-par with the "endless appeals" problems that clog our court systems. As one law professor said: "If every decision made under the Endangered Species Act had to withstand that rigorous level of review, there would be no decisions under the Endangered Species Act."

Right, so let the decision stand, take your losses, and get back to bribery business.

Bottom Line: It's one thing to fight for your rights under an existing set of rules; it's quite another to try to change the rules to declare yourself the victor (right Pat?).

23 Sep 2009

Good Water Blogs

I read a lot of stuff, filtering it down to find the right content for this blog, and I thought it would be nice to share some good blogs with you. (I'd also love to hear about good blogs that I've missed, especially if they cover water issues in the Western US.)
  • Aquafornia gives a thorough feed on water events in California
  • In Chance of Rain, Emily Green brings a keen eye to water in Southern California and Nevada.
  • jfleck offers good commentary on Southwestern water issues, with an emphasis on New Mexico.
  • Knowledge Problem is all about energy markets; look here to see the "future" (potential?) of water markets.
  • At WaterWired, "Aquadoc" covers national and international water issues, with an emphasis on groundwater hydrology.
Some good, non-water blogs are:I am omitting Alternet, Blue Marble (Mother Jones), Environmental Capital (WSJ), Green.view (Economist), Thirsty in Suburbia, Sustainablog, Water Numbers (Peter Gleick) and Yale Environment 360 because their coverage is too sporadic and/or weak on economics to recommend.

Markets or Regulations?

Brian Holtz sent me this question:
Hi, I'm wondering what you think of AB 1881 (requiring California towns to adopt a water conservation ordinance by Jan 1 2010), and what you think is the best market-oriented response to it.

The default ordinance imposes elaborate irrigation guidelines and landscape planning requirements on any development significant enough to require a permit.

In my town I'm proposing an alternative of self-water-budgeting plus fees for higher-than-average use and penalties for exceeding your own water budget:

33 pages of irrigation rules would become just this:
  1. Project applicant estimates how much water s/he will purchase in the first 12 months.
  2. If Estimate > average usage in our town (500 units), applicant pays $3 for every unit above that average.
  3. After the 12 months, homeowner documents how many units s/he actually purchased.
  4. If Actual > Estimate, homeowner pays $6 for every unit above Estimate.
  5. If Actual < Estimate, homeowner is refunded $1 for every unit below Estimate.
Feedback and better ideas are welcome. Advocates of market-based water policy in California should cooperate in developing a best-practices response to AB 1881's onerous regulatory requirements.
I have a few reactions:
  • On point (2), users should pay for going above the actual average usage in the next year. "Average" should also be defined per capita. A formula with per capita & per acre (like IRWD's water budgets) would be more acceptable for big landowners, but also give "equal" rights to water for landscaping. I am not a fan of that.
  • Wait. When does the homeowner pay the $3/unit extra in (2)? As a deposit against future use? If so, the "average" would be for past use.
  • There's no need for number (3), since the water utility can do that accounting.
  • If you want to REALLY turn down the screws, publish everyone's budget vs. actual. Shame can be a great motivator.
Bottom Line: General principles are more flexible (read: more efficient and more "human") than specific regulations. Since we are concerned about overall water use (not HOW that water is used), it makes more sense to use general rather than specific guidelines.

Poll Results -- Peeing in the Shower

Hey! There's a new poll (get outa town!) on the right --->
Do you pee in the shower?
Yes 73%
No 27%
83 votes total

Looks like a fair majority feels comfortable with letting some pee mix with their soapy water.

I wonder why the "no" voters do NOT pee? Is it hygiene? stage fright? greywater? standing up? gender? Please elaborate...

Bottom Line: If the water is already swirling around, then why not add a little pee?

Addendum: Thirsty has more on this (pee outside!)

22 Sep 2009

Speed Blogging

  • Lake Mead is half full, Lake Powell is half full. Why not slow evaporation by putting all the water in one of them?

  • Multinationals are planning for water shortages that may expose them to serious risk, but their efforts are sometimes dismissed as greenwashing. IBM, meanwhile, is bringing IT to water, hoping to make money from an increasing need for good water management.

  • Saunas and steam rooms are good for you if they make you feel good (and you aren't at risk...)

  • A lie or an ad? "Economists at Dartmouth College has discovered that ski areas report 23 percent more new snow on weekends, but, unsurprisingly, "there is no such weekend effect in government precipitation data."

  • "Corporate America has begun to grapple with a challenging question: How do you quantify the risks associated with climate change?.. .95 percent of [Levi-Strauss's] offerings are made from cotton. Climate-related water shortages threaten cotton supplies, to say nothing of the tornadoes and floods that could threaten the company's cut-and-sew operations in Bangladesh, Cambodia, Vietnam and other countries."

  • "This study investigates the impact of corruption on public and private investment in African countries as a way of exploring one channel through which corruption undermines growth. The empirical results indicate that corruption affects economic growth directly and through its impact on investment. We find that corruption has a negative and significant effect on domestic investment and that corruption affects public and private investment differently. The results indicate that corruption has a positive effect on public investment while it has a negative effect on private investment. The positive association between public investment and corruption supports the view that corrupt bureaucrats seek to increase capital expenditure (over maintenance expenditures) to maximize private gains (rent-seeking). In contrast, the results confirm that corruption discourages private investment, suggesting that corruption increases the costs of doing business while raising uncertainty over expected returns to capital. The results support the view that corruption hampers growth and call for institutional reforms to improve the quality of governance as a prerequisite for achieving investment-led growth. "
hattips to JWT and DW

IID's $35 Million "Mistake"

In February this year, I visited Imperial Valley and the Imperial Irrigation District (IID) to learn more about a place that uses about 3 million acre feet (maf) of the State's 40 maf water supply.

During my water chat with Joe Tagg (a farmer), I was intrigued to hear his prediction of how IID's heavy-handed attempts to reduce water use (in an effort to meet contractual obligations) would affect overall use:*
Note: I forgot to highlight Joe Tagg's contention that IID's "mismanagement" of water is actually a ploy to "create" excesses that can be sent downstream to a junior water rights holder (The Metropolitan Water District of SoCal). How does this idea work? Since farmers MUST use less than 5.25 af/acre, they will be conservative in choosing what crops to grow. Given that they undershoot 5.25 af/ac on average, there will be "surplus" water. What's his evidence? Someone at IID told him they were counting on 200 thousand acre feet (taf) of surplus.**
This story basically confirms that prediction. Guess how much "excess" water IID is sending to MWD (free of charge)? 180 taf.

What's IID's explanation for the overage?
IID spokesman Kevin Kelley said it's a result of the depressed farming economy, particularly for forage crops such as alfalfa that is fed to cattle.

“It's a function of natural market forces,” he said. “If farm commodity prices were high, those fields would be planted and water would be ordered for them.”
That explanation is pretty empty when you know that IID had planned for a 200 taf surplus.

I have lots of questions about the connection between IID's regulations and the benefit to MWD, and I'd love to have a complete record of correspondence between these two agencies. Given that MWD values "extra" water at $195/af, this 180,000 af "whoops" is worth about $35 million -- hardly chump change.

Of course, IID would not have "lost" that 180 taf if it allocated its water with markets and prices instead of blunt and inaccurate regulation. Markets would have allowed IID to use every drop -- or sell the excess to MWD for $35 million more than the $zero it got.

Bottom Line: IID's mismanagement of water serves neither its citizens, nor its farmers, nor the citizens of Southern California.*** IID needs to use transparent price and market mechanisms to allocate its water. Anything less is somewhere between inept and criminal.
* IID manages the water for its farmers, who are fighting IID on multiple levels. Read this and this.
** One acre foot (326,000 gallons) is enough water for 4-10 people (depending on consumption) for a year. Thus 200 taf would supply 800,000 to 2 million Californians for a year.
*** The more time IID spends fighting its farmers, the less time it spends figuring out how to allocate its water efficiently. Citizens would be served if water went to highest and best use (and the money for it went to those who owned the rights to the water).

21 Sep 2009

Monday Morning Smile

From the often brilliant XKCD:

Delta Options: No People or No Fish

LP asks:
Do you answer questions from lay persons regarding the causes of water shortage in the Delta and the economics involved? I am interested in a simple language and time-frame or point explanation regarding the controversy over the EPA of the Delta Smeldt and farmers in the area, who say, "Just turn the water on." I have read several arguments but none seem very clear. Again, as a lay person, who is right and who is at fault here?
Hard to say who is at fault. Seems that several parties are at fault -- the farmers who take water and discharge runoff; the indigenous species; the communities that have taken over wetlands and discharge their sewage into the Delta.

So it's everyone's fault.

I think its more of an ecological (beyond sustainability) than economic (supply and demand) problem -- mostly because there were few prices and no markets involved.

Can economics be used to "fix" the delta? Probably not, except perhaps as a way of moving from here to there, e.g., by assigning property rights to someone (anyone!) and then letting others bid to buy/transfer/destroy those rights. [Read more on my "solution" here.]

But then you have to ask: what about the fish? Who represents them? And I am not sure. I am sure that the groups claiming to represent the fish are going to be imperfect (and perhaps conflicted) representatives.

Bottom Line: The Delta is "broken." There are two ways to fix it: End all human involvement or forget nature. (In other words, the misleading political fiction of "co-equal" goals -- simultaneously protecting environmental and human activities -- is impossible to achieve.)

Weekend Discussion -- A New Constitution

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!) the last week's discussion on shoes. After that, please give us your thoughts on...

A new constitution for California. Will that fix things, or will we just end up with a different flavor of broken?

20 Sep 2009

Water Flowing Underground

In response to EBMUD's plan to store water in San Joaquin country (see page 3-26 in this report [pdf]), KE says:
Here in rural Amador County, people went crazy a few years ago when they heard the county might pass an ordinance to measure groundwater use and prevent its offsite transfer.

I suggested to our county supervisors that as part of developing a new general plan, they study the fractured-rock aquifers on which so many rural residents depend. Good to know where the water is and how old (and whether it's being replenished) as you figure out land use densities, right? But oh no -- groundwater use is a sacred property right.

EBMUD wants to stick water in the aquifer in San Joaquin County and just hope it might be there in a dry year. SJ has no gw monitoring or pumping limits and is in chronic annual overdraft. To pull out a metaphor from Dr. John Suen, of Fresno State (fractured rock aquifer study guy), EBMUD's plan is like putting your money into a bank account while a number of people write unlimited checks on it.
KE has a good point: It's all good to store water underground, but you've got to know the structure of the basin that will do the storing (assuming you want it back).

Bottom Line: A paper thin plan may not be worth much. It takes time to turn a good idea ("store water underground!") into a working one ("get it back!"

19 Sep 2009

Senatorial Stumbles

(via JF) US Senators are calling for more price supports to help "struggling" dairy farmers.

That's because dairy prices have dropped by more than input prices, and their profit margins are being squeezed.

This is a stupid idea -- mostly because the current system of regulations and price supports is meant to prevent just such an occurrence. The reason that dairy farmers are in trouble is because of government policy, not for lack of such policy. (Oh, and those policies are also responsible for the groundwater pollution that HUGE dairies produce...)

Their current attempts to help are shallow offers to add more complexity to the Rube Goldberg dairy program that the USDA currently manages for the benefit of farmers bureaucrats.

Bottom Line: The best way to help dairy farmers is by getting the government out of the dairy business. Those who can, will prosper; those who cannot will get off the teat and go into another business (of bribing senators, no doubt).

18 Sep 2009

Fear and Water Managers

In response to this post, Terry Spragg sent a comment worthy of a post of its own:
Regarding your “Nothing to Fear but…” blog comments, why do you think so many water authorities seem to “Fear” the new, but simple to test ideas that we have been proposing to use waterbags linked in trains to form a fabric pipeline through the ocean to transport water throughout the State, and to move water through the Delta during an emergency using a fabric pipeline?

Ray Seed thinks creating a fabric pipeline through the Delta during an emergency is an interesting idea. He thinks it should be investigated. But Ray’s opinion doesn’t seem to influence the authorities who fund these ideas. Ray has told me that the collapse of the Delta levees as a result of a natural disaster is the one thing that keeps him awake at night. And it is an accepted fact that a major earthquake along the Hayward Fault, which may trigger this catastrophic levee collapse, is overdue.

I have some ideas as to how “Fear” relates to implementing new ideas but I wonder what you and perhaps your readers “think?” As I have been saying for years, these ideas are easy to “think” about. They are not rocket science.

West Basin MWD and the Water Replenishment District of Southern California have both passed Resolutions in favor of testing waterbag technology, and sent them on the DWR. Neither of these agencies have received a written response from DWR to these Resolutions, and their... letters requesting DWR’s public support for an investigation of waterbag technology and our emergency applications in the Delta.

Jeff Kightlinger has been kind enough to write me a letter in support of demonstrating our ideas. Jeff recently told me that he thinks waterbag technology will work. But in spite of this support it is MET’s position that they don’t have the time and the budget to study these ideas.

MET staff has never produced a report on waterbag transport technology, or on our idea for creating an emergency fabric pipeline through the Delta. The only letter MET has written to me related to any of these proposals was on an idea to float waterbags through the Delta, which MET staff and I both agreed needed more work.

A motion to have MET staff study our waterbag transport technology and our emergency proposals was introduced to the appropriate MET committee but it was rejected for lack of a second. MET’s opinion is that waterbag technology can not supply enough water to their system in order for MET to spend the time and money to investigate these ideas.

Naturally, I disagree.

I have told Jeff that all we need to do is to start with two waterbags linked together and move them from a selected point A to a selected point B through the ocean. Assuming that this delivery is successful it will then be a simple matter of adding more waterbags to the train, and more trains to the system, in order that over time we will find the limits of developing a simple modular fabric pipeline through the ocean. The economics will be easy to calculate. The environmental effects will be easy to demonstrate. I have told Jeff that this method could prove that waterbag technology could potentially move 100,000’s of acre feet into the Delta and/or down to Southern California.

Jeff did not refute my argument, except by making the comment that,

“It has never been done before.”

I could not refute Jeff’s argument.

But to me, that is a logic based on “Fear.” A “Fear” of failure. Yet history has proven that without failure it is difficult to achieve great success.

If something has never been done before, is that an acceptable reason for rejection, or is it a reaction based on “Fear?”

Maybe the answer is, as you and Peter Gleick have pointed out, decisions for solving California’s water problems are still based on overcoming “Fear.”

I know that Jeff is a man of courage.

I have even used “Fear” in my arguments to try to gain support for a demonstration of our waterbag technology.

What seems so incongruous to me is that almost all the men and women I have met over the past 21 years of pursuing our water transport goals are some of the most courageous individuals I have ever known. They exhibit courage as individuals in the face of the unknown, such as the unknown length and effect of the current California drought.

For years our team has offered an inexpensive way to demonstrate our technology in California, at little or ZERO FINANCIAL RISK to California taxpayers. But we have yet to see our friends in the water industry step forward to overcome the “Fear” of the unknown in order to give waterbag technology a seat at the table with desalination and other multi-billion dollar alternatives that are currently being discussed.

Perhaps you can share my comments with your readers and ask them this simple question,

To this, I replied with:
Innovation is hard because water managers get blame for failure but no praise for success. Since they operate in a monopolistic environment (with appropriate job security and a lack of benchmarking against "peers"), it's much easier to say no, do the same old thing ("Nobody ever got fired for buying IBM"), and then pass the costs of inaction onto their "customers."

As you may recall from the days before email and FedEx, the USPS gave terrible service (even today, they sometimes do, but we can avoid it...). There was no need for customer service or quality or efficiency, since they had a monopoly.

With water, the monopoly is stronger and the risk of disregard for the interests of customers that much greater. Although I know that many in the water business do *try* hard, I also know that they are not forced to. In that instance, there is no penalty for going home at 4:45 (I've been in a few offices by now) or even declaring a shortage.

As I've said before, managers who declare shortage should be fired on the spot for incompetence, but they are not. So where's the penalty for failure?

I, like you, wish that there was more desire for improvement and innovation, but they are not called water buffaloes for nothing!

(My all-in-auctions would fix Met's "dilemma" on reallocation among member agencies -- ending lawsuits -- but Met does not have a single FTE to devote to a pilot study. Why? It seems that failure-as-usual is more comfortable than trying something new. Recall that most water agencies are using the same tools in this drought that they did in 1977 and 1991. Plus ca change.)
Bottom Line: It's hard to innovate when the person in charge of innovation is not the person who will benefit from innovation.

17 Sep 2009

Lessons Not Learned

This story (via DW and TS) recounts a familiar problem:
  1. Water agencies ask customers to use x% less water, often increasing restrictions on water use.
  2. Customers cut use by 2x%, reducing agency sales below projections based on x% reductions.
  3. To cover the gap between revenue and expenses, agencies raise prices, reduce services and/or tap reserve funds -- upsetting customers who feel they are being penalized for cutting back.
  4. Some agencies cut back on conservation programs, hoping that customers will use more water (!) and thus provide revenue...
This cycle of fail (ever hear of this problem at gas stations? restaurants?) is driven by agencies' need to break-even on water sales and inaccuracy in making demand projections.

The solution to this problem is to raise prices (and revenue projections) far above the level required to break even and rebate excess revenue (per capita) to customers. Higher prices (especially for wasteful use) will increase conservation; rebates will please water misers; revenue in excess of costs will please accountants. (Here's my detailed description of how to match variable/fixed revenues and costs.)

Bottom Line: Higher prices (and advertising) will promote conservation, but we have to make sure that those prices are sustainable, i.e, that they encourage conservation while ensuring long-term financial viability to the water agency.

16 Sep 2009

A Break with the Past

On the Record (via BT) notes how views are changing:
This is the turning point I’ve been waiting for. With water costs this high, she’d rather be in a city apartment. I’ve been wondering for years what would herd people in from the exurbs. It struck me as a race between costs of water and costs of firefighting. For a while, the cost of gas and the commute was coming on strong, but that horse fizzled. Now we need people to know this before they lock themselves into houses. Ms. Sanchez, don’t become a water district activist! Spend your energy telling your friends not to do what you did! Tell them the house and lawn isn’t worth it.
As water bills rise to reflect the true cost of scarcity, some people area are realizing that their perception and reality no longer overlap. The reality is that it's delusional to expect that your "desert lawn" is going to be cheap.

Bottom Line: Lawns are not a human right. Lawns should be just as scarce as water, and nobody will understand how scarce water is until the price rises to reflect scarcity!

Poll Results -- Weather Living

Hey! There's a new poll (pee in the shower?) to the right ---->

Weather (heat, snow) determines where I live...
Always 23%7
Often (>50 percent) 33%10
Sometimes (<50> 17%5
Never 27%8
30 votes total

I wanted to ask this question to get an idea of how people will be affected by climate change. 27% say they wouldn't move, but 73% will be affected. That's a lot of "refugees."

Bottom Line: We try to live a comfortable life. Discomfort makes us work harder. Always more work! :)

15 Sep 2009

What Happens in Vegas...

...will be reported on this blog. I am going there to give a talk at the AWWA-CA-NV conference on October 7 (8:15 am). My topic is "The Political Economy of Water Rates."

I tried to set up a water chat with Pat Mulroy, but she's "busy."

(I may be able to talk to someone else at SNWA and perhaps talk to Pat at a later date. Still negotiating that.)

If you are interested in meeting with me to talk water or, better yet, having me talk to your group (is there a "Las Vegas water action coalition"?), then email me. I plan to arrive the evening of the 6th and leave the afternoon of the 7th.

Data! Data!

Professor Joseph Dellapenna kindly sent this table [pdf] summarizing the different property rights regimes -- Appropriative, Dual (appropriative & riparian), Regulated Riparianism, and Riparian -- for each of the 50 states. Although I know that rights correspond to water scarcity (riparian is more common in wet places; appropriative in dry), I'd be interested to know if the regimes match some measure of water efficiency and if regimes have changed to improve things.

This website (and this one!) provides data on per capita water consumption (perhaps indoor only?), a concept that is very important and often unmeasured. I'd LOVE to see an open access listing of per capita consumption for US cities. Anyone?

Top consumption award (as reported) goes to UAE, at 500 liters/capita/day. Canada comes in at 326 lcd, then the US at 295 lcd. According to the other site, the US leads at 575 lcd, so that's probably indoor and outdoor.

Bottom Line: Property rights can drive water use, and measurement of water use is critical to understanding how well water is managed. No rights, no management; no measurement, no management.

14 Sep 2009

Speed Blogging

  • The human toll from the Vegas meltdown. It is worse than elsewhere because Vegas grew so fast, so unsustainably. Thank Pat Mulroy.

  • "The lack of clean water is one of Egypt's most urgent problems... Corruption, pollution and wastage are to blame... because water tariffs are too low. UN-appointed expert Catarina de Albuquerque reported [doc] that the "tariff for drinking water in Egypt is considered one of the lowest tariffs in the world, with over 92 percent of households spending less than 1 percent of their household budget on water and sanitation"... Many farmers to use untreated wastewater to grow their crops. In the beginning of August 2009, the minister of Agriculture announced that all fruit and vegetables irrigated with sewage have to be destroyed." Read more

  • Illinois is west of the Mississippi.

  • "To deliver public infrastructure services to citizens or taxpayers, there are a series of decisions that governments have to make... Theory suggests that in general it would be a good option to contract out infrastructure to the private sector under high-powered incentive mechanisms, such as fixed-price contracts... Theory also shows that ownership should be aligned with the ultimate responsibility for or objective of infrastructure provision. Public and private ownership have different advantages and can deal with different problems."

  • "Does dowsing for water really work?" No.

  • "Do we have to make trade-offs between biodiversity and ecosystem services?" Yes.

  • India gets half its rain in 15 days, and the monsoon has failed this year. That problem is made worse by the government's poor policies and incentives.

  • Other San Diego politicians fill the policy gap left by their mayor -- by proposing higher prices: "If a commodity costs nothing, that becomes the value of it," Frye said. "And people are not going to conserve what has little or no value to them." Hear hear!

Monday Morning Smile

ps: watch this video (the boat stimulus?), via Thirsty Gayle.

Fewer People and Less Stuff

EF sent me this story:
People want to save the planet but are unwilling to make radical lifestyle changes like giving up air travel or red meat to reduce the effects of climate change...
It's been obvious to me that two main adjustments are necessary to get climate change:
  1. We need to reduce the population consuming resources [on the extensive margin]
  2. We need to reduce resource consumption within the existing population [on the intensive margin]
As the poll points out, people are not interested in doing the "right thing." If they will not do it voluntarily, then the only alternative is to (involuntarily) induce them to do it. Besides radical interventions,* the alternative is higher prices on "bad" things, i.e., kids and consumption. Ironically, France is tacking the latter (through a carbon tax) while encouraging the former (through kid subsidies). Well, I guess we've learned not to expect consistency from politicians :)

Bottom Line: Most people do not care about doing the right thing when it conflicts with their other desires. They (the so-called "80 percent") need to face prices that help them make that "right" decision.
* I wrote this in April 2007:
Bangladesh's 145m people live on a delta twice the size of Ireland, 40% of which is flooded for three months of each year. By 2050, its population is projected to reach 250m. -- Economist Feb 8, 2007
There are many ways to (intentionally) slow population expansion, ranging from the draconian (forced adult sterilization, abortion, etc.) to the evolutionary (the demographic shift).

IMO, the most effective way is to sterilize one-half of all newborns, leaving half the people fertile ("Breeders") and the other half sterile ("Players"?).

The key element in this idea is expectations, i.e., the idea that Players would grow up knowing they were not going to have kids. That makes it easier to plan a life around other activities. Although Breeders might face some additional pressure to have more, they would not have many more, especially if they bear the full costs of raising the kids. (Although I'd maintain some subsidies for education, I'd end other subsidies/tax breaks/etc.)

Net result -- cut average births per woman by up to 50 percent.

There is the potential of one-nation expanding at the cost to another nation, but this only matters of nations invade each other and/or quality of life in the decreasing population country falls. The former is more likely, but not assured

Weekend Discussion -- Worn Out Shoes

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!) the discussion on habits from two weeks ago. After that, please give us your thoughts on...

Shoes. Have you ever worn out a pair? Is it strange that we rarely do, or is it normal? How do you feel when you buy new shoes? Throw them away? Throw away "worn" shoes?

13 Sep 2009

Krugman on Economics

Several people have asked what I think of Krugman's piece (How Did Economists Get It So Wrong?) in the NY Times. In it, he says:
As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn’t sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets, this time gussied up with fancy equations. The renewed romance with the idealized market was, to be sure, partly a response to shifting political winds, partly a response to financial incentives. But while sabbaticals at the Hoover Institution and job opportunities on Wall Street are nothing to sneeze at, the central cause of the profession’s failure was the desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess.

Unfortunately, this romanticized and sanitized vision of the economy led most economists to ignore all the things that can go wrong. They turned a blind eye to the limitations of human rationality that often lead to bubbles and busts; to the problems of institutions that run amok; to the imperfections of markets — especially financial markets — that can cause the economy’s operating system to undergo sudden, unpredictable crashes; and to the dangers created when regulators don’t believe in regulation.
I have two comments:
  1. There were plenty of economists (the so-called "heterodox") who did NOT believe in this mathematical fantasy. I am one of them [read this, this and this], but others often identify themselves as Austrians (as in Ludwig von Mises), experimentalists, etc. Krugman is overstating the "autism" of the profession.
  2. Many economists work at universities, under an incentive system that rewards mathematical elegance over realism. My favorite example of how this doesn't matter in reality come from an interview with Nassim Taleb. He was asked if he was bothered that money managers (and economists) rejected his warnings of risk in the markets. "No, I just bet against them..." and made a killing, I'm sure!
If you agree that the profession has strayed too far from reality, please sign Geoff Hodgson's petition in support of Krugman's call for a re-appraisal.

Bottom Line: Math is fun, but it's not very good at describing how people behave. Real mathematicians economists strive for accuracy over elegance.

12 Sep 2009

Useless Discussions?

I am wondering if the "weekend discussions" are of any use or am I just picking boring topics.

Please tell me your thoughts and/or good topics...

Better PhDs

It's widely-acknowledged that many research professors bring a weak grasp of reality to their subject. This so-called "ivory tower" problem usually means that their research is irrelevant to the outside world, but sometimes that research is dangerous -- as we have found with financial theory recently.

One way to reduce this problem is by requiring some work experience in the outside world. Such a minimum, say 4 years, would not fix all problems, but it would change the way that most PhDs see the world. I suggest that this gap be maintained at the leading edge, i.e., 4 years after a bachelors or masters degree before a student would be allowed to matriculate to a PhD program. Besides the obvious -- it's easier to monitor the leading edge than the trailing edge -- this requirement is also useful as a means of bringing more real-world experience into the classroom. Students with experience would be able to challenge teaching that was poorly-framed wrt the outside world.

Bottom Line: The academe is useful (even necessary), and its use depends on its contribution to the outside. Increase the intensity of academe-lay interaction and make both better off.

11 Sep 2009

Banksy on Sustainability

Intrinsic Motivation

I recently posted Jorge Cham's lesson on the difference between intrinsic and extrinsic motivation, but here's another example:

I was at Burning Man, a place with a "gift" economy. That means that people don't exchange things (either through barter of goods or money for goods); rather, they give things with no expectation of reciprocation. It turns out that people are quite creative with gifts -- everything from pancakes to moonshine to stickers...

Of course, someone had to put an end to all this "free love," and thus we have begun to see the rise of regulations and bureaucracy around gifts. In particular, food "givers" were required to get permits before they could hand out cookies, lemonade, etc.

Another regulation stipulates that this girl is "dressed appropriately" for distributing ice. Seriously!

Now I think that someone has lost the plot. Food safety regulations are founded on the idea that customers are not exactly sure of what they are getting, since food is an experience good. Thus regulations are designed to protect consumers from paying good money for bad food.

But what if the food is free? Is it worth it to hand out contaminated food if all you get in return is a smile and a hug? For the vast majority of people (the sane), it is not. Why bother to bake cookies that people are not going to enjoy?

In fact, most people enjoy giving -- they derive intrinsic pleasure from making others happy -- and the lack of monetary compensation (explicit motivation) ensures that only those who really care are going to put in the (costly) effort to make and distribute those goods.

Taking this point as accurate, you have to ask yourself why there's any need to regulate food at Burning Man. If anything, the regulators care a lot less than the producers and consumers about the quality of the food. Since they care less and are imperfect observers, it's likely that their monitoring will be characterized by some mix of lazy, haphazard and over-zealous. Better to leave the "monitoring" to those who care about quality (the givers) and spend the day at the pool (inside joke).

Bottom Line: Some systems do not translate well from one environment to another. Beware of imposing them, cookie-cutter, and causing more harm than good.

10 Sep 2009

Speed Blogging

  • Peter Gleick takes apart the Bureau of Reclamation's cost-benefit report for a new dam: "The entire report would benefit from a smart independent economist reviewing all the assumptions and redoing all the benefit/cost assessment with more realistic numbers." Well, I am busy, but I bet there are plenty of economists available. Will BurRec hire them, though?

  • Speaking of cost-benefit, Cash for Clunkers appears to have a cost that's 10x the benefits, even if this analysis is slightly sloppy. (Read my comment on that post.)

  • Leave them alone, and damaged ecosystems will bounce back fast

  • Can biochar (charcoal) save us from the twin threats of carbon in the air and depleted soils? Maybe.

  • JWT asks, after reading about no carbon man, "what do you do on a 9th Floor walk up in New York without lights?" My answer: Make babies. If so, that's bad news, since babies have the biggest environmental footprint.

  • An author of a book on the politics of climate change was asked "Do we also need to re-think climate economics?" He said "What we have learnt is that politicians tend to choose the most expensive options first. Faced with climate change, what's our solution? In Europe, it's to devote most of our energies to a rapid build-out of wind power. This is the sort of thing that makes nuclear power look cheap."

  • From a UK report on geoengineering: "some geoengineering techniques could have serious unintended and detrimental effects on many people and ecosystems - yet we are still failing to take the only action that will prevent us from having to rely on them..."

Nothing to Fear but...

While I was away, I reflected on the people and society we (Americans) live in. In particular, I thought of the debates over health care, state budgets, the housing market and (even!) water policies. What do all these things have in common? Rancorous, emotional, biased and intractable debates...

I've known for many years that people prefer not to change,* but the conservatism that we are seeing now is greater than I've ever experienced. Although this conservatism seems a mirror image of the radicalism that we saw under George Bush (starting two wars, massive spending, radical tax cuts, etc.), it is driven by the same emotion that many felt then: fear.

It seems to me that people are afraid now, and they were afraid after 9/11. In fact, it seems that they have been afraid for many years.**

In fact, I think that fear is the dominating emotion for most people, and for men in particular.***

So what's the upshot of fearful men? Control. A fearful man will compromise, back-down, take orders, etc. A fearless man will question authority, fight, and/or walk away.

Now step back and ask yourself how politicians (leaders) will respond to fear. Some may try to reduce it, but others will try to use it to further their own power and demagoguery. We know how Hitler and Stalin used fear. We see today how American politicians use it. Is there any difference? Yes, but only in magnitude. We are not exactly prepared to kill the Jews or Kulaks, but we are being told that "others" are trying to invade our country, poison our food, take away our houses, etc.

Note that power can be defined as control over others. A leader without followers is (relatively) powerless. A good leaders will have followers because s/he takes care of them; a bad leader will have followers because s/he makes them too fearful to take care of themselves.

I wonder -- seriously -- where this is all going. Will we (the People) be able to counter this fear? Will some leaders swim against the tide? Will we realize that some people are trying to use our fear against us, to control us?

Bottom Line: Freemen control their lives; slaves do not. If you are not in control of your life, consider how to regain it -- if you want to.

* My personal website (kysq.org) is named after "Kill Your Status Quo." I personally do not feel much fear. I've scavenged for my food; seen people die; lost my mother; and made my peace with what I see as the futility of life-after-death. Since I have nothing to lose (or do not fear losing what I have), I am willing to take care risks.

** I thought that Michael Moore's Bowling for Columbine was brilliant in its treatment of fear in this country. Now that I think about it, Moore has made a career in highlighting the fears that we have: Fear of job loss in Roger and Me; fear of illness in Sicko, etc. Nevertheless, I don't think he's a fear-monger as much as a progressive who wants to reduce our fears...

*** Women can fall back on a simpler recipe for success (children), and they can also seek shelter with men. I don't say this as a chauvinist as much as a believer in the importance of evolutionary biology and psychology.

Addendum: I thought of this post before I read Peter Gleick's post on fear; we're talking about similar things.

9 Sep 2009

California's Water Politics

Politicians are arguing over how to "fix" California's water situation. I am ignoring most of that debate, since it's more about one group stealing from another than actual solutions. ($12 billion in water funding is a LOT of funding. Too bad California's water problems are more about incentives than a lack of money...)

If you want a good wrap-up on the laws under consideration, read this post by Emily Green.

If you want to know how each law may "fix" the Sac-SJ Delta, check out the Delta Vision Foundation's analysis of each law.

Addendum: Schwarzenegger is threatening to veto all the laws since they do not have dams in them. Totally pathetic pandering to a narrow constituency (republican farmers in the Valley) and a disservice to the other 37.75 million citizens in this state. Even if he gets a dam named after him, his Judgment Day will be harsh.

Bottom Line: "Never let a good crisis go to waste" should be rewritten as "Never forget that you can rob a lot of people in the middle of a crisis." We're going to spend a LOT of money for a LITTLE solution -- if we get any solution at all...

9.9.09 Logistics*

For those who are interested, here is the YouTube video** of my first lecture for my Environmental Economics and Policy class at UC Berkeley.

Audio (MP3) and video recordings of that lecture (and others to come) are posted on this page, which also appears under "sticky posts" on the right sidebar.

I've also posted a direct link to my dissertation (Conflict and Cooperation within an Organization: A Case Study of the Metropolitan Water District of Southern California) under sticky posts. The download is free (as in beer), but the reading (176pp) is not (time=money)
* Guess when this post was published!

** Since my FLIP video camera has poor audio pickup, you need to turn up the volume.

Poll Results -- Water Consumption

Hey! There's a new poll ("weather-driven living") on the right! --->
Our household water consumption is...
<30> 23%11
30 - 50 gcd 26%12
50 - 100 gcd 26%12
100 - 200 gcd 15%7
200+ gcd 11%5

First, I am sad to say that I do not know my h/h consumption (my roommate handles the bill). Although that may mean I use more water (no price signal), I know (theory!) that the bill is so cheap that there's no point in my worrying about how much I use.

Second, these results indicate that 26% of respondents would subsidize the other 74% under my "some water for free [cheap, really], pay for more" pricing policy (assuming 75gcd is "some").

Of course, people in that 26% would use less if such a scheme was enacted, which would require that "some" be even smaller (50gcd?). That change in use would demonstrate how prices can drive conservation and end "shortage."

Bottom Line: The more obvious the link between the price of water and the amount we use, the stronger will be the impact of price changes on water use.

8 Sep 2009

Sustainable SoCal

This is how to do it:
The Inland Empire Utilities Agency... is at the forefront of the emerging local-is-good movement. About 70% of the agency's water comes from its own backyard: a patchwork of dairies, industrial parks and planned communities overlying the big Chino Groundwater Basin.
Bravo! IEUA may not have big pumps and pipes, but they have water.

Bottom Line: Water is no longer so abundant that it can be shipped here and there. We have to use what we've got right under our noses...

Tuesday Morning Smile

From the New Yorker:

Speaking of truth... 6 Bullshit Facts About Psychology That Everyone Believes is both true and funny.

I'm Baaack!

I had a lovely break from the internet.

While I was gone, I wondered why there are no sweet noodle dishes.* We have sweet rice, sweet potatoes, and sweet breads, but why not noodles?

(I am thinking noodles with sweet cream sauce and fruit chunks.)

Anyone? Ideas? Recipes?

* I have no googled this idea; if you want to play the game, you can't either. Just tell me your ideas...

Glennon Speaks Truth!

via DW, we get this useful idea from Robert Glennon:
Last summer, as the price of gas inched up over $4 a gallon, Toyota dealers couldn't keep fuel-efficient Priuses in stock. We should apply that pricing lesson if we want to conserve water, using increasing block rates to discourage profligate water use. Tucson does that and adds a surcharge for excessive use in the summer, when water mostly goes to fill swimming pools and irrigate landscaping.

The idea of charging for water offends many people who think that would be like charging for air. Is it immoral to extract fees for an essential resource? Precisely because water is a public -- and exhaustible -- resource, the government has an obligation to manage it wisely.

Think of our water supply as a giant milkshake, and think of each demand for water as a straw in the glass. Most states permit a limitless number of straws -- and that has to change.
Bottom Line: Higher prices for water that we get from the tap, restrictions on the water we take from the ground, trade among those who have rights -- that's how we should manage water if we want reliable (sustainable) supplies.

7 Sep 2009

Speed Blogging

Surreal Sachs

I've had a good time lambasting Jeff Sachs's continued faith in big government, top-down "solutions," but now (via NMC) he seems a caricature of himself. While discussing a program to aid small farmers in Africa, he says that the money should be given to the World Bank and the International Fund for Agricultural Development. Then:
Governments in hunger-stricken regions, especially Africa, would then submit national action plans that would provide details on how they would use the donor funds to get high-yield seeds, fertilizer, irrigation, farm tools, storage silos, and local advice to impoverished farmers. An independent expert panel would review the national plans to verify their scientific and managerial coherence. Assuming that a plan passes muster, the money to support it would quickly be disbursed. Afterward, each national program would be monitored, audited, and evaluated.

[I did NOT take anything out here. He REALLY does continue to say...]

This approach is straightforward, efficient, accountable, and scientifically sound.
Poor Hayek must be rolling in his grave. Sachs's "straightforward" prescription is full of information and incentive holes big enough to drive a truck through.

Bottom Line: The best way to help farmers in developing countries (and the people they feed) is to protect property rights, improve markets and free trade. Yes, less government, more entrepreneurs!

6 Sep 2009

Dilbert Teaches Empirical Skepticism

This strip is not about the danger of math in theory as much as the danger of exact numbers in simulations, something I've noted before, with more words :)