31 May 2010

Travelblog: Australia culture photos

Last ones (next stop, New Zealand!)

The aboriginal seasons...

Prescribed zones = some form of reservations

Love this humor...

Monday Funnies

Our soldiers deserve our respect

...and they have mine. Pity about the politicians who order them to risk their lives to accomplish goals that are either stupid (Iraq) or beyond military competence (Afghanistan).

Don't forget that GW Bush started these wars.

Unsustainable hypocrisy

EF sent this article, which points out the battle among greens over the American Power Act (APA). I had these comments:
  1. The APA is full of pork, distortions and subsidies (read more at enviro-econ)
  2. It's also "something," which some people prefer to nothing.
  3. "Greens" fall into several categories. NIMBYs and anti-capitalists are active here. They do not realize their hypocrisy. If everyone was a NIMBY, nothing would happen anywhere. If everyone was anti-capitalist, we'd be poor -- raising cows to make shoes and growing cotton for our shirts.
So really what we are getting is bunch of people complaining that they -- like anti-greens -- want something for nothing (reminds me of the triple bottom line!).

Although some people think that technology and innovation will save us, I do not agree. Because the environment is owned by none (and everyone) and unpriced, it's easy to overexploit it.

We need to cooperate to prevent that, and part of cooperation will require that we, all of us, do with less.

It's not going to be a big bang, but a series of steps, gradual steps, that take us to the goal.

Bottom Line: Better to recognize and work with constraints than ignorantly walk off a cliff.

28 May 2010

Travelblog: Australian urban photos

I've gotta get these posted before I leave the country again!

Loved those water fountains!

...as well as the humor

Frog condos, I guess...

Honest academics

PhD Comics tells it like it is:

What's our water worth?

They may know in Australia, but they do not in Arizona, and that question is coming up more often...

I got this from MD:
We own an acre+ of undeveloped Commercial 2 land in the middle of xxx, Az., upon which exist 2 commercial water wells operated by others.

Our land is for sale, but the water rights have NOT been included.

We have separate parcel #'s which include all water related easements for each of the two wells, this allows us to retain the land/water rights/income even if the other land should sell. (Which actually occurred 5 years ago re: one of the well sites.)

Our water income has been around $8,000-$10,000/year. No great shakes, but not bad for zero effort! (and yes, we realize, now, that we most probably sold the water too cheap!).

We are in a quandary...still...as to the best decision to make re: selling the above.

Will water become so valuable in the future that selling this now would be extremely short sighted OR is it such a small potatoes deal that garnering a good price and moving on makes sense?????

We have steadily refused all comers who have asked to buy the land WITH the water rights...we just don't know enough about it to make an informed decision...so....any thoughts?
To this, I replied:
Well, there are LOTS of water brokers in AZ. :)

Here's my general opinion: Take the $ if you need to pay the bills or don't want to stay tied there.

If you can wait longer, you can probably make more by leasing your water for 3-5 years and then doing it again.* That assumes that:
  1. Laws don't change to reduce prices.
  2. Demand continues to outpace supply
  3. Your neighbors don't deplete "your" water :)
To which MD replied:
To clarify, we are in direct receipt of the profits and have a contract with a water company who in turn sells to the community. *Don't see where leasing benefits us given our set up.**

We can renegotiate our contract or end it, or effect a transfer of the 'new owners to be' into the existing deal. We are interested in PUTTING A PRICE on the value of the rights, et al. and selling the land/rights as a package.

Just completing the construction of our dream house... Consequently we could happily direct deposit the land/water sales into our new 'money pit'...Thankfully this is not a 'have to' just a 'want to' situation!
...and then I said:
**I was referring to the idea that you can renew the lease with the company every one year, or three years, or ten years. More work if it's more frequent, but more likely that you will get "market price."

What is that price? Some % of the price they charge, I guess :)

A broker will know, but you will never REALLY know w/o an auction, and a one buyer auction will not work for you.

I can see the virtue of rolling it into your land sale; you will be giving up some LT profits for ST cash out.

Every buyer wants to pay less; every seller wants to receive more. Arguments up/down are really only about that, not logic or fact :)
What do you guys think they should do?

27 May 2010

Speed Blogging

Hattip to JC

Bleg: The next bumper sticker

Hey folks!

I am thinking of doing another bumper sticker. (The first one is Some water for free, pay for more. These do not generate revenue; I give them away as swag.)

I am thinking of
Nature makes a drought
Man makes a shortage
Got any better wording?

Free Water!

JS and RM both sent me this article, about Modesto Irrigation District's decision to give its irrigators free water. Their intention is that the farmers will over-irrigate and thus recharge the local aquifer.

Given MID's water rights and the desire to store water for later, this makes sense.

But MID is worried that "parched" farmers -- and people who still think there's a drought -- will not be happy with this news.

Mike Wade (California Farm Water Coalition) "said water shortages in other areas should be fixed by increased storage and delta improvements, not by tapping the MID supply."

Wade is wrong.

Shortages result when demand exceeds supply. It would be cheaper to reduce demand (raise prices!) or allow trading of water. MID could make money, and farmers elsewhere could get more water, without having to wait for (expensive, OPM) dams or hope that a judge will allow them to take more water from the Delta.

Science for hire?

I was surprised and impressed to see that a scientist determined that Sacramento's wastewater discharges were "primarily" responsible for environmental problems in the Delta.

Then I saw that the scientist, Patricia Glibert (U MD), was forced to resign from her position on the NAS committee (the one that Resnick told Feinstein to convene) because her paper was too definitive and premature for a committee that had reached no formal conclusion.

Then I saw that Delta exporters paid Glibert to write the report. Whoops.

Taking all this as true, I have the following questions:
  1. What was Glibert thinking? Ecologists do NOT draw firm conclusions (out of a combination of professional caution and respect for the complexity of the subject) without firm pressure.
  2. What were exporters thinking, putting that pressure on? Sounds like the DeMint end-run stupidity.
This looks like a total fuckup to me. Glibert has lost professional prestige (and future consulting), exporters have lost a sympathetic seat on the committee (and look like they are buying opinions), and nothing is resolved.

OTOH, I agree with the Sacramento Bee's editorial board -- Sacramento has to spend the $billion to get their wastewater in compliance. Not just because it would displace blame for the Delta's ill health, but because it's the right thing to do, and probably the legal thing to do.

Does that sound right to you folks?

Bottom Line: Everyone is going to pay if the Delta is going to get fixed. Parties who think they will "win" are deluded.

Hattips to MC and DW

26 May 2010

Peter Pan 360 -- The Review

I saw this show last night.

The special effects -- flying, 360 degree video projection, good props -- were excellent.

The acting was so so. I was especially disappointed in the decision to cast adults as children. It's pretty difficult to watch twenty somethings jumping up and down, calling for MOMMY!

I have no idea why they choose to have puppets for the pet dog and ostrich, but they were an eyesore -- a guy holding a puppet and barking does not add to the plot.

The script should have been shorter than 2 hours. There was some dialogue that was either too hard to hear or too difficult to understand.

The pirates, "underwater" scenes, flying, and even the big message ("I never want to grow up") was done quite well, but it was hard for me to wait for those great moments.

Yes, I suppose I am spoiled by the excellent writing, directing and editing in video and film, but that's competition, right?

Bottom Line: I give this piece THREE stars. Don't go unless the kids drag you.

Oil hits the Gulf Coast

It's interesting timing that I spoke at a conference in memory of the LAST big oil spill, in 1969 in Santa Barbara, only 2 months ago.

Click here  to see more photos.

A few words on the social web

You may have noticed a firestorm of opinion and coverage over privacy at Facebook (FB), a social networking site where people tend to put a lot of private information, with the intention of sharing it with friends in their networks. (Twitter is facing similar questions, but their management is a lot smarter at dealing with it, has lower costs, and is less desperate to monetize its users.)

The firestorm has come from a rapid change in privacy settings, from only a few people to the entire internet. See this post for that change and this one for FB's complicated privacy interface.

Why is it complicated? Because FB wants to sell targeted ads, and advertisers will pay more to reach 24 year old female in 90210 than a generic user, like me.

FB doesn't want to make it easy for you to hide from adverts.*

Google has made billions with targeted ads, and FB execs got the silly idea that they could too. They just missed one major thing -- people are searching for stuff on google.** On FB, they just want to chat with each other.

So FB is stuck, desperately trying to generate money.

I see two futures here:
  1. FB starts to charge a membership fee or goes fremium (allowing you 100 friends and/or wall posts for free but requiring money for more), but you can see how that would impede FB's goal of intergalactic social graphing. FB has grown because it's free. Those network effects mattered, but they were built on a value proposition that was a money loser. Far fewer "members" would pay, let alone invite friends, if it cost $0.02. So FB needs to figure out a way to make subscription revenue and drop the advertising path.

    [I just saw that FB has apologized for their silly behavior while promising to stay free. That's not gonna work,*** so #1 is out...]

  2. FB struggles with free and ads. Maybe it shuts down, but then it goes rogue. All of that data you gave FB when you were 20, inexperienced, foolish and frequently photographed? FB is going to come back, when you are 30 or 40 and ask for a payment, to keep it private. (Right, Carla Bruni?). That's because FB never really deletes your data when you tell them to "cancel your membership."
But let's step back a bit and consider how we got into this situation. What is it with these friends (FB) and followers (twitter) that people are so eager to acquire. How many of your "friends" do you correspond with -- via a wall-to-wall dialogue -- on FB or twitter? Are you talking with or past each other?

Are these people really friends, or some debased social currency that seems valuable from a social perspective that has not changed much since the 19th century?

Here's the way I see it. Our physical evolution is taking the most time, and it's not quite up to speed with the whole farming thing; we suffer from our food choices, and lack of physical activity (at right :)

Our cultural evolution is much faster, but we still have issues (what's up with all these migrants! people who believe in the wrong god, etc.)

Our technology is evolving the fastest, but we are having trouble keeping up. Some people still don't know how to handle cell phone calls (do NOT answer in the toilet!) FB and Twitter let us broadcast ourselves. Self-advertising has a place in our physical (mate with me!) and cultural (let's cooperate!) spaces, but these "zero cost" mechanisms do have costs, in terms of distractions for those who think that 1,000 friends makes them a success and the spew of navel-gazing that those "friends" have to put up with.****

Maybe this is me not "getting it," but I wonder. Do your "friends" buy you drinks? Will they help you with a project? Would you do that for them? Are you really a part of their lives, or are you texting past each other?

Bottom Line: Technology is out there, and it can be useful, but we need to be sensitive to the social, cultural and biological behaviors, norms and constraints that are very important to making our lives and friendships meaningful. Ignore them and you're likely to be unhappy, even with 453 "friends."

* I started a FB group -- Facebook's Fascist Follies -- to highlight these silly games, and I recommend this tool because it helps you see what FB is exposing.
** It's funny, actually, that google's email is free when people -- like me -- would be willing to pay $50/year. Google doesn't charge because it makes more money with ads.
*** One way or another, I agree with these guys, that social networks are going open source and interlinked, the way our emails are -- different providers, but communication via common protocols.
**** "Twoobs are needy female celebrities who take pictures of their boobs and Tweet them to their devoted followers in order to get the extra attention they feel they aren't receiving that particular day."

25 May 2010

Danger! Children* in charge!

(via DW) "Legislators are seeking the public's input in the budgeting process in order to make tough choices on what to fund, what to cut and where to find needed revenues..."

I suggest that we fire all the legislators and make the decisions ourselves. They have clearly failed.

Bottom Line: Incumbents who cannot do their job should be ineligible for re-election.

* Kids would probably do a better job...


Michael at Knowledge Problem quotes:
“If Alexander Graham Bell returned to Earth today, the progress in telecommunications over the last 125 years would be mystifying,” said Robert Catell... “If Thomas Edison came back today, not only would he recognize our electricity system, he could probably fix it” when problems arise.
My comment:
I’m pretty sure the Romans could fix our water systems.
(And I bet they'd recognize our politics -- bread! circuses! -- and subsidies...)

Speed Blogging

  • Golf balls don't fall in the water trap, they ARE the water trap.

  • Economy sucks? Unemployment high? No worries. Sixteen Chicago managers make more money than the Mayor. Managers say they've done a better job with their budget, but monopolists who set prices where they want them would say that, wouldn't they?

  • People in Vancouver "only" use 325 lcd (~85 gcd) -- it's wet there -- but they may be getting closer to water shortages. Shortages? In British Columbia? WTF? Most people do not have meters, for now.

  • "Cotton subsidies have glutted the market by encouraging farmers, many of them in the Mississippi Delta, to grow the crop even when it is unprofitable. That lowers world market prices for everyone, from impoverished farmers in Mali who pick their crops by hand to multimillion-dollar operations in the San Joaquin Valley."
    The government has decided in their wisdom to encourage production of crops the market doesn't want. It must make political sense because it certainly doesn't make economic sense.
    Hear hear!

  • "Design for the First World seeks solutions to the rich world’s most pressing problems from designers and thinkers in the third world. Why? Because First World problems demand simple Third World solutions." You mean things like NOT subsidizing cotton? or water consumption? or sprawl? Damn straight.
Hattips to DL and DR

24 May 2010

My talk to sustainable MBA students

These are the folks who I provoked (into thinking, emotion, approval?) with my comment on triple bottom lines. I also said that green jobs are BS.

Besides those inflammatory remarks, I gave them three big economic truths about water (how we get shortages, the problem of missing costs, and the difference between a slide and shift in demand) and then did Q&A.

Here's the 50 minute MP3 [17MB].

After my talk, I listened to the next presentation -- "what do you want the economy to look like in 2050?"

Besides a lot of impossible stuff ("full employment, end of poverty, etc."), I was interested to see how often people mistook political, cultural and biological goals ("honest politicians, zero-waste society, male-female birth control equality") for economic goals. Don't ask the economy to take care of birth control or corruption!

Bottom Line: It's good to talk to students, if only to give them a few more things to think about.

Monday Funnies

via JWT:

Triple Bottom Lines are bullshit

I gave a talk to sustainable MBA students last week [see this post for more] and said this as a warm-up. They did not agree, and I promised to bring the debate here, for you and for them.

Feel free to give examples, explanations and arguments for and against my position in the comments. Before you do, please read this:

I think that the triple bottom line (people-planet-profit) is BS because it's impossible to pursue three objectives at once (see these prior posts on greenwashing, farming efficiency and coequal goals.)

Try to date three people at once.

Try to deliver speed, quality and price.

Try to be smart, funny and charming.

Try to work, sleep and play.

Yes, I know that people can try to do all these things, but it's much easier to drop one or two of them and be single-minded about the remaining goal.

Want an example? Bill Gates made billions first, by being a ruthless capitalist. Then he decided to become a ruthless philanthropist. He did one thing well, and then went on to the next.

One speaker gave a spurious counter-example. He held up an iPhone, to indicate how technology could make things cheaper, smaller and faster -- compared to phones of 10 years ago. I agreed about that, but the relevant comparison is to phones today. I can get phones that are smaller or cheaper or faster than an iPhone now, but I can't get all three in one device. That's because making things smaller costs more, making things cheaper slows them down and making things faster makes them bigger. If you understand tradeoffs, you get it.

My point is not that we don't want to be nice to people or the planet -- that's why we have social and environmental organizations. My point is that a for-profit organization will not be able to add additional goals and still maintain maximum profits.

Bottom Line: Companies should make money first (by providing value). Distribute the profits and let shareholders make a thousand different decisions of how to spend them.

Addendum: I replied to the first 12 comments. Still no good reason to discard my headline. Some readers highlighted something I forgot, the problem of principal-agent dalliance with shareholder's money, either with BS "greenery" or with manipulation of quarterly results to get bonuses; see prior posts. Josh also provided a simplification: X + Y + Z = 100. If you want more Z, you must have less X or Y.

22 May 2010

Comments and spam

I set comments to "ID required" to block spammers a few months ago.

But a lot of people have recently had trouble logging in to leave comments.

So, now I've left the comments open, so anyone can leave them.

That should make it easier for you, but also easier for spammers.

If spam comes in, I may try capchas, but I hate them.

Let's see how things work for a week.

Happy commenting!

21 May 2010

Whisky and whores*

Sometimes, the stories write themselves:
The [Los Angeles] Department of Water and Power suspended six employees from their normal duties last month... [after a TV station] aired footage which appears to catch the workers buying beer, drinking in a park, drinking while driving and entering a strip club -- all while on the job.
Go read the comments to the article, to get some additional "color" on LADWP employee conduct.

This is an excellent example of how asymmetric information affects principal-agent relations. In non-economic jargon, I am saying that DWP customers (principals) need to trust that DWP workers (their agents) are working to earn their salaries. Since they cannot see everything (asymmetric information), they need to trust the workers to "do the right thing."

Sometimes that trust is misplaced. I predict a few firings and return to business as usual.

Bottom Line: Employees at companies that face competition will get fired if they do not work hard, or lose their jobs if the business fails, so they work harder. LADWP employees don't face such incentives.**

* Not to say that strippers are whores or that those workers were drinking whisky! At least the strippers were being paid to do the work they were SUPPOSED to do :)
** I wonder if Maude Barlow and Food and Water Watch are filing this under "problems with public water suppliers"?

Speed Blogging

  • The water sector is hiring! Lots of talk and a few resources.

  • What makes a good teacher? "dynamic lecturer, personable, clear communicator, gets to know students and cares that students learn." What's not so important? "challenging, hands out grades often, knowledgeable, organized, respectful, and real-world experience." I feel pretty good about my match on this stuff, but sometimes I am not clear and sometimes I have a hard time getting to know students (one solution is the "get to know a classmate" game; I'm gonna do that).

  • "Between 1957 and 1999, taming Mexico’s malaria required 70,000 tons of DDT," but the bugs develop immunity. Eliminating mosquito habitat is cheaper and more effective in the long run control of mosquitoes and malaria, but it requires solutions that fit LOCAL conditions and insect vectors.

  • Love this! "Nature Conservancy has just protected one of the most pristine alpine lakes west of the Rockies." Sometimes money is the easiest way to save the environment.

  • This paper [pdf] looks at non-price methods of reducing water consumption. Heavy users reduce by most when they are compared to their neighbors, but that effect deteriorates over time. (Price incentives can reduce this decay...)
Hattip to DM and JWT

How the rich get by

Caught in the Act!
In the middle of the worst drought in Trinidad and Tobago since 1987, a truck belonging to the Water and Sewerage Authority (WASA) has been discovered pumping drinking water into a swimming pool in a private residence undergoing renovation in the upscale neighbourhood of Westmoorings.

WASA in a statement last night said the water was requested for “construction purposes,” for a house it is leasing for its foreign CEO.


Faced with the drought and rapidly-declining water levels in the nation’s resevoirs, WASA has repeatedly appealed to the public to use less water in the last two months. The authority has also criminalised the use of hoses to wash cars and water lawns and has reduced the regularity of supply to households across the nation.
..."households without pools" is what they meant to say, of course.

Bottom Line: The rich pay bribes so they can ignore rules.

20 May 2010

Speed Blogging

  • People stuck in Lodi are moving towards managing their groundwater (fees! monitoring!). Good.

  • "Climatedeal.org is an open (and free) platform for the exchange of information on climate change related issues. It provides a forum for anyone interested and knowledgeable or currently working on the topic to ask and answer questions about climate change. Climate Deal has also launched its new Climate Library, which is open and free to anyone to access and post climate related documents."

  • This article discusses the possibility of "fixing" the climate through indirect, but effective approaches. Better than head-on approaches that don't go anywhere.

  • 76 economics bloggers (including me!) give their opinions [pdf] of what's next in the economy. Two interesting results: the economy is worse than the numbers indicate and the government is too involved.

    Speaking of government:

  • USACE's one-size-fits-all mentality requires that we cut down trees but does nothing to strengthen levees. Yes, Sir!

Got water problems? Call a lawyer!

There's a conference on California Water Law happening today and tomorrow in San Francisco.

What's funny sad to me is that:
  1. A lot of water problems can be blamed on lawyers. (Just read that the Colorado River is the "most litigated" in the world.)
  2. These folks are not hearing from very many non-lawyers. I am obviously thinking of myself, but -- seriously -- can't they get some other views in the room?
Overall, this seems to be about credit hours, cocktail hours and billable hours, not resolving our conflicts.

Bottom Line: It will take a lot of different views to come up with a solution to California's water problems, but law views are more likely to hinder than help.

Water use, by county and sector

In this post, I highlighted the USGS report on water use in the US but complained that the data was not broken into sectors (irrigation, public water, etc.)

I was wrong to complain.*

Shahram emailed USGS and got this reply:
Public supply deliveries for Domestic use are in column V, with the tag DO-PSDel (DOmestic, PublicSupplyDeliveries). You can calculate the percentage of domestic use for public supply by dividing column V by column Q, PS-Wtotl (Public Supply total withdrawals).
Go here to get state-by-state spreadsheets with county-level data.

Also read his previous guest post, where he discusses per capita use.

Bottom Line: Data is useless without knowing how to use it :)
* Now I am going to complain about these abbreviations: "DO-PSDel"? WTF?

Collapse -- The Review

The problem with reading a 500+ pp book is that you have to write a review that "gets it all in."

But here we go.

Jared Diamond's Collapse (2005) is an excellent book and worth reading. That's particularly true because of the subtitle: "How societies choose to fail or survive."

Every day on this blog, I talk about economics and politics. I talk about things that we are choosing to do, not the things that Nature does to us, but what we do once Nature has moved. That makes this book particularly relevant.

Right, so we get: Wait, I see that the wikipedia article summarizes the book. Great. Go see that for thesis and structure.

The main point is that humans -- in terms of population -- have often overwhelmed their environment, until an end of abundance (get it?) leads to collapse. Well, he doesn't say "end of abundance" (in those words), but that's the jist.

Diamond makes the point that this need not happen. We can change our habits to head off the collapse. My favorite example of voluntary destruction took place in Greenland, where the Norse settlers (vikings!) kept to their sheep and cows, ignoring the fish and seals that were nearby. They starved (turning to cannibalism in the end) while the Inuit nearby just cruised along. Strange that they preferred to die like Norsemen than live, but that's what some people do, when they stick to old habits, like...
  • Driving cars everywhere
  • Water lawns in the desert
  • Eating meat
  • Overfishing
  • Diverting streams
You see the point, or was I too subtle?

Here's another obvious one. The inhabitants in Chaco Canyon (present day New Mexico) left because of a drought, but they were vulnerable because they pushed the water resources to the limit, to the point where there was no safety margin left. Sound familiar?

Some people killed in the Rwandan genocide were killed for land (Hutu-Hutu killings), and that was because the land resources were too meager for the population.

Australians over-exploited their land because they paid prices that were proportionate to land of a similar productivity in England. The trouble was that their new land was NOT that productive. Given their purchase prices, they had to work the land hard (high sheep density, etc.), which led to it deteriorating rapidly. They should have paid less -- in proportion to real and sustainable productivity -- and they wouldn't have depleted it.

Today, "80 percent of Australian agricultural profits come from 0.8% of Australia's land" (p 413). That number is astonishing. If true (James? James! Tell us!), it implies that 99 percent of Aussie agriculture is losing money. I reckon that if half of that shut down, the other half might make a profit...

"Of the 80 claims of `for every tree felled, two are planted' [by wood companies] 77 were unsubstantiated, 3 could be partially substantiated, and nearly all were withdrawn when challenged" (pp 472-3). That was for wood being marketed in the US. China, Burma, Indonesia, Malaysia? Fuggetaboutit!

Australia (in the chapter is called "mining Australia") has a deforestation problem, but they cut trees, grind them into chips and export those to Japan, which has PLENTY of forests. The Japanaese process Aussie chips into paper that they sell back to Australia at a 2500% markup. I'd call that neo-colonialism, but I'd be wrong. It's Aussie government policy that allows plantation farming. Like this place I saw in western Victoria:

The best way to get change is to hit the company in their PR. Want to end "Blood diamonds"? Boycott DeBeers, not Sierra Leone. Want to stop deforestation? Boycott Ikea, not Indonesia. DeBeers and Ikea have done a LOT more to protect market share than these corrupt governments (of corrupt people) will ever do. Thank god for market power!

We, 7 billion humans, are NOT going to achieve First World living standards. There will NOT be a SUV in every driveway, a flat screen on every-wall and a porterhouse steak on every barbie. The earth's resources (and environment!) are not sufficient. Things will cost more (resources) or run out (environment) before we get to that standard. Time to go for smaller is better in developed countries and population control in developing countries.

Bottom Line: I give this book FIVE STARS. I recommend that anyone interested in sustainability, environment, resources, food, and/or public policy read it. Everyone else should as well. We need to understand patterns of failure and prevent them from happening to us. We're already in the middle of many failures, but it's never too late to stop failing.

19 May 2010

Travelblog: Australian resource photos

Everyone knows how much water is left...

...even when there is none at all.

And here's my least-favorite image:

But "bulk molasses"? I can get behind that!

Poll Results -- What's it worth?

Hey! There's a new poll (traveling man!*) to the right --->
This blog provides ___ value to me (as a reader) per year
None 16%10
Less than $5 8%5
$5 -- $10 11%7
$10 -- $20 8%5
$20 -- $50 13%8
$50 -- $100 13%8
$100 - 250 8%5
The Moon! 25%16
64 votes total

These results are encouraging.** If I take the midpoint values of the votes (giving a value of $300 to "the moon"), then the average value is about $100 per voter per year. If I extrapolate $100 times the thousand subscribers here (the number of subscribers is down to 400 or so due to a periodic error at Feedburner), then the blog has a value of about $100,000! (Even at half that number, I'm doing ok.)


Of course, people are unlikely to pay their value (consumer surplus!), but it's good to put a number on this, if I ever have to go for a job review :)

As most of you know, I do this because I enjoy it, but it's great to know that it's useful/valuable to you :)

Bottom Line: You're "productive" if you add more value than you consume. I'm working on it!

* I was planning to go to Montana in 2 wks. Silly migration rules mean that Anne (NL) and I are going to Central America first. Guess we will have to stimulate a different economy...

** What's up with the $0 people? Why are they reading this blog at all? Nothing better to do? Nothing worth $0.01 more?

Community groundwater management

Read this post at waterwired on how some folks in Utah are shooting for sustainable.

The growth zombie is back

Wow -- Vegas developers are all excited about... new development.

They claim that people want new new homes, not new old homes, and they are breaking ground as fast as possible.

This is happening for three reasons:
  1. They make money off new houses (duh!), but so do politicians (campaign contributions) and water managers (hook up fees). Vegas hookup fees dropped from $180 million in 2006 to $27 million in 2009. That's gotta hurt Mulroy's expense account.

  2. Old new (foreclosed) houses can't sell while banks are dicking around with paperwork and arguments with bureaucrats over who's going to eat the losses. This sad state of affairs is the result of government attempts to "help." Better to have a lot of bankruptcies, clean titles and a functioning market.

  3. People would rather get new than old at the same price. The drop in land values and construction labor/materials costs means that new houses are a lot cheaper to bring onto market than they were 3 years ago. They are cheaper than "old" houses because people are still attached to "paper" values. (Oh, and the FHA, Fannie Mae and Freddie Mac are continuing to subsidize buyers, spending our money like drunken sailors. Fannie/Freddie just lost another $19 billion.)
Meanwhile, a development from a completely opposite direction promises to bring some sense in to urban areas. The EPA is prioritizing infrastructure funding to existing areas over new areas. That will slow sprawl by raising the cost -- instead of subsidizing -- new developments.

Bottom Line: Vegas continues to define unsustainable while some government bureaucrats are getting incentives right.

Hattips to EF and DL

18 May 2010

Tell the Feds what to do

...and maybe they will listen?

"Federal officials want public input on a proposal to revise policies for managing urban water shortages in the Central Valley." Three meetings in Sacramento, starting May 26th.

Trans Atlantic Pipeline

Abstract of this paper:
This paper offers a technical and geopolitical reappraisal of a macroengineering proposal to plumb Earth’s freshwater, siphoning some of it from a region of surplus (Amazon River Basin) to a region of shortage (arid northern Africa) via ...(a) Transatlantic Freshwater Aqueduct. Two different routes for the pipeline, of length 4,317 and 3,745 km, respectively, have been considered. Pipe diameters larger than 60 m are necessary for “reasonable” low pumping power (i.e., less than 20 GW). ... To keep the number of pumping stations reasonably small (i.e. fewer than 20) a single pipe of diameter higher than 30 m (or bundles of smaller diameter pipes) is required. The Atlantic Ocean currents may be used to provide the necessary power for pumps. ... A rough cost estimate of the project is about 20,600 GUSD and 18,400 GUSD, respectively, for two pipeline routes.
Their cost estimates are based on the now-defunct Alaska-California proposal. I do not know what a GUSD is but I suspect it's a lot of money.

Bottom Line: Build it soon while it's still cheap.

Lies, damned lies and politicians

Governor Schwarzenegger refuses to declare the end of the drought, in defiance of science. That's because he wants voters to "feel the pain" of water rationing, so they vote for the useless waste of money, the $11 billion bondage package that will tie us in debt, just to help his special interest friends.

It's Chinatown all over again.

Meanwhile, DWR says that it will impose water restrictions. DWR has been lobbying for the bill, which will give it more money to waste and more water to mismanage.

Bottom Line: Nature creates droughts, but people create shortages. The drought is over, but the shortage is not. You know who to blame.

Speaking of consumptive use

Read this great post by Chris Corbin

...and then read this one on marketing water.

What's your evapotranspiration?

JH asks:
Shouldn't sustainable water management include charging the water users for exactly the water they consume, i.e., evapotranspirate?

We can find this with remote sensing/satellite imagery now.

It is impossible to know exactely what every user extracts from aquifers, it is also impossible to know well how much water the irrigator really uses as with the older techniques a lot of water comes available for downstream users and is not lost...

So maybe we should charge users only for what they consume (evapotranspirate)?
I replied with
That's what they do now [in some places], charge for "consumptive use" -- net water loss.

OTOH, EV water is less than that, since some "consumption" goes to g/w (the environment, other users)...

Although it may make sense to charge for EV only (measurement issues aside), it may encourage people to use wasteful irrigation methods, methods that may NOT allow non-EV "waste" to be used elsewhere...
To which JH replied:
They use some average relation EV / returnflow but of course this depends on soil moisture, season, crop, etc., so actually (remotely) measuring it would be better I think.*

Percolation to g/w could be pumped up by water users downstream which would be charged as well exactely for their consumption = EV. Natural areas (environment) could also consume from this aquifer, depending on catchment characteristics. Question of good water accounting, isn't it?

Anyway, maybe we'll better continue disccusing in the comment section of the post on this issue?
Indeed. So what do you guys think?

Should irrigators be charged for ET, as the BEST method? Please tell us the costs and benefits.

* JH continues: As far as I know, the only place where these things are pilotted so far is in the Hai Basin in China [pdf]. Evapotranspiration quotas, monitored by remote sensing. That's an interesting future. Of course you can think on pricing and trading schemes behind this, but the main problem in agricultural water management is right now that no proper monitoring of water consumption can be done by administration or private owner, it's too easy to cover up groundwater abstractions, no way to control that. If monitoring is ok, quotas can be traded without any problem and a healthy 'water economy' might be viable.

Rights vs Contracts

via JF, we hear that
Westlands' General Manager/General Counsel Tom Birmingham himself was there to explain why, technically, Westlands doesn't actually have junior water rights...

According to Birmingham, Westlands doesn't have junior water rights because they're just CVP contractors, and the Bureau of Reclamation is governed by different rules.
Ok, I'll bite. Westlands has junior water contracts. I know, Tom told me himself.

Why are these different, in function, from junior rights?

If there's less water, junior rights holders get cut.

If there's less water, do senior rights holders get cut? No, junior holders get cut.

Tomay-toe, toma-toe, you still get cut.

Or, am I missing something here?

17 May 2010

I'm NOT on California's Water Commission

But nine other people are. The Governor announced their names on Friday afternoon. (That's when you announce important news that you want people to read, right?)

I don't know why these people were chosen. What's interesting to me is that there did not appear to be any open call for applicants. I applied the week before, but perhaps that was too late -- or I was too... you know.

Anyway, these folks -- if confirmed -- will be in charge of $3.5 billion. That's $400 million each. I bet they'll be getting a lot of invitations for nice cozy dinners with engineering firms...

In related news, the anti-bond folks now have a website. The battle of engineers, bureaucrats and farmers for pork, waste and non-solutions against citizens (including me) will be energetic.

I wonder where politicians -- our "representatives" -- will stand?

Hattips to JC and DW

Privacy? What privacy?

Photocopiers have hard drives that store document images. When they get sold, the buyers can get access to tens of thousands of sensitive (health, criminal, financial, etc.) documents. Although I am sure that businesses sell sensitive information, the government -- home of the bureaucratic paper trail -- is a heavy distributor of your information, and they have little reason to keep your information when it costs money to encrypt or delete the data...

Watch this and weep...

Monday Funnies

Turning water into gold

DJ tells me about an interesting development of water rights.

Dianne Feinstein has proposed (in S 1759) that water's "reliability" (a bureaucratic definition for priority and probability of delivery) change when its use changes, i.e., when water leaves an agricultural area with "lower reliability" and goes to an urban area, its reliability is increased. This is because urban deliveries have priority. This press release [pdf] opposes the legislation.

That creates an important arbitrage opportunity. Not only are the "water rights"* more valuable because urbans are willing to pay more; it becomes more valuable because there will be MORE OF IT.

Note that this applies to some water -- CVP water -- but not other water -- SWP water -- solely based on definitions within the delivery rights or contracts for that water. The fine print, the part that politicians and bureaucrats can change, is where the action is...

Thus, we can see how Westlands can sell its water rights* (with low reliability) to cities, to make much more money.

I'll note that rights sold in the Australian market do NOT get their reliability upgraded.

Bottom Line: "Regulatory arbitrage" can instantly change the value of water, by changing the definition of who can use it and for what. This development may allow Westlands to make a lot of money. I wonder if Feinstein knows that? \sarc.

* Westlands and other CVP contractors do not have rights; they have contracts. No difference, in my mind, if you can still sell them :)

Addendum: Valley enviros have written a comment letter [pdf]; I'll put a brief summary under the fold:

14 May 2010

Travelblog: Australia nature photos

So, we have the wet season (in Queensland)....

Which means that the water rises above the walkways...

And pushes cars off the roads

Development and Institutions

In yesterday's post -- We're Not #1 -- many commentators appeared to dispute the importance of statistics that do not put America in first place.

I say this because of the nit-picking aspect of the comments. I should have put up something that said we ARE #1 to see if those same comments were made.

Anyway, I want to address these comments in a new post, because I think that some people miss the point of the measures (life expectancy, healthcare, education, etc.)

First, income -- or gdp per capita -- is not on that list. Even if it was, the US would hold 9/12/10th place (three sets of 2009 data). Using the more appropriate PPP measure (adjusting for the cost of living), the US is in 4/6/8th place. Even so, money certainly isn't everything, and it's definitely NOT what we want. We want what money can BUY (goodies, health, happiness), not little piles of paper. Unfortunately, GDP per capita fails to consider the distribution of wealth. If the rich get richer and the poor get poorer, then it sucks to be poor -- like most of us who do not work on Wall Street. Income inequality -- measured by the Gini coefficient -- indicates that the US is about as unequal as China, where the rise of the super-rich and urban elites have left most of the poor folk behind to fend for themselves. This matters, because inequality affects social cohesion and a society that is not cooperative is one that gets into lots of disputes (Washington DC, tea party, Two Americas, blue and red, and so on...) To see the relation between GDP/capita and Gini over time, click here.

Second, institutions. One comment was "Iceland is near the top in lots of categories, has a very small GDP, a tiny homogeneous population, very little industry, and is almost bankrupt" -- so what's that mean? Does Iceland have an "unfair advantage" What about Maldives and Belize? They have the same population, but not nearly Iceland's success. Iceland has done a good job at delivering human development (education, health, happiness) and they should be lauded for it. Their bankruptcy, btw, was the result of over-powerful banks. We can identify with that, but I'd prefer to identify with good schools and long lives. Iceland's banks will be gone, but its educated people will still be there, living a good life.

Third, another commentator pointed out that potable water is an excellent indicator of doing well. I agree. We have got a lot of good water (with the exception of Boston's schools, apparently), and other places have done a bad job. You will be interested to know that I drank out of Iceland's rivers. A rare pleasure for an American.

Fourth, these rankings -- statistical quibbles aside -- give us something to strive towards. Why wouldn't we want to learn from others, to see if we can get more freedom of the press, longer life expectancy, and so on?

Bottom Line: It's not "my country, right or wrong," it's "what can I do for my country?"

Speed Blogging

13 May 2010

We're not number one!

I'm a patriot, but we need to work harder on some things.

Eez not my fault

After reading this article on the coal mining disaster, EF wrote this:
The intriguing part of this article are the implicit assumptions.
  • Companies are bad
  • Government must protect workers
  • Government though hated for incompetence is the answer to disasters
  • Government must get bigger
  • Government (executive, legislative) is not to blame for any disasters
  • Penalizing oil companies has no effect on consumers or on the amount of oil imported
  • There is always an appropriate scape goat for a disaster.
  • The scape goat is not the government
  • The scape goat is a company, preferably a foreign company
  • Bad legislation is not the culprit even if the company followed the legislation and the legislation was not sufficient
  • The answer to all disasters is more government funding and employees
  • Increased oversight costs in the government has no effect on the health of the economy or on America's world wide competitiveness.
An economist who could speak the truth effectively might be a big plus.
Here's my [DZ's] small truth: Regulators and politicians have one answer for success "give us more money") and one answer for failure ("give us more money").

I have one answer for them: Do your job first. If you don't, we take your money.

Bottom Line: There needs to be penalty for a failure of businesses AND government. (Remember who really has market power here. It's not the company, it's the government with a monopoly on the use of force.)

Change and adoption takes time

...and sometimes that's too long:
Idaho went from 180,000 cows in 1990 to 530,000 in 2009 to become the third-biggest milk producer after California and Wisconsin, but the arrival of mega-dairies caught regulators flat-footed and prompted environmentalists to call foul.


...regulators struggled to keep pace when big dairies began targeting cheap Idaho land to build 5,000-cow dairies two decades ago. Air and water pollution concerns emerged, as did a backlash over smells.
Bottom Line: It's important to pay attention when activity moves from the baseline. If you don't, you may end up somewhere, surprised and unhappy.

12 May 2010

Speed Blogging

  • Groundwater tapping out in North China says the communist party paper. I guess that's a good reason for the Party to build the south-north canal. What happened to restrictions on groundwater extraction and higher prices?!? Oh yeah, sustainability isn't so exciting...

  • "TaKaDu can take sparse and spiky data from existing sensors and fold that in with weather data, acoustic data, and GIS data to enable the smart water grid... TaKaDu's water network management can prevent, weeks or months ahead of time, significant events in real-world networks by alerting utilities to the small changes that precede bursts and other anomalies."

  • Berkeley people are throwing away too little garbage and too much recycling, so the City is thinking of raising the price for recycling above zero, which will create accounting headaches. Better to lay off workers. (In the future, the price may have to rise; keep it below 50% of the normal garbage price...)

  • Water trading is worth $2.5 billion in Australia. Interested?
Hattips to AA, JC, DL, SJ, AZ

Speaking of corruption

Katherine Hart, who regulated the industry her husband lobbied, was fined $600 for her conflict of interest. Even worse, she still has her job.

That's totally ridiculous. I suggested a much harsher penalty (as well as firing her).

$600 is merely the cost of doing business. (I bet her husband deducts it from his taxes...)

Bottom Line: We are giving a green light to corruption.

Taugher on Westlands and Corruption

Corruption, n. When someone uses political office for private gain.

Taugher says:
A former Bush administration official [Manson] whose tenure was marked by systematic attempts to weaken endangered species protections has gone to work for a powerful California farm district [Westlands] that has the same aim in the Delta.
I'll put it this way: Show me that this is NOT corrupt.

Human rights FAIL

I sent my human rights paper to UN's High Commissioner for Human Rights and got this reply from the Special Procedures Branch (Water and Sanitation):*
General Comment No. 15 [pdf] is the authoritative interpretation of what the human right to water is under the International Covenant on Economic, Social and Cultural Rights.
So what does GC15 (2003) say?
Water is a limited natural resource and a public good fundamental for life and health. The human right to water is indispensable for leading a life in human dignity. It is a prerequisite for the realization of other human rights. The Committee has been confronted continually with the widespread denial of the right to water in developing as well as developed countries. Over one billion persons lack access to a basic water supply, while several billion do not have access to adequate sanitation, which is the primary cause of water contamination and diseases linked to water. The continuing contamination, depletion and unequal distribution of water is exacerbating existing poverty. States parties have to adopt effective measures to realize, without discrimination, the right to water, as set out in this general comment.
Fine words, but how do you get it implemented? How do you get "States parties" to listen?

Well, first you sing Kumbaya:
Water should be treated as a social and cultural good, and not primarily as an economic good. The manner of the realization of the right to water must also be sustainable, ensuring that the right can be realized for present and future generations
Uh, ok, "make it cultural" -- but make sure that your culture is a sustainable one. You know, the ones that take care of the helpless, like...
States parties should give special attention to those individuals and groups who have traditionally faced difficulties in exercising this right, including women, children, minority groups, indigenous peoples, refugees, asylum seekers, internally displaced persons, migrant workers, prisoners and detainees
Ok, so we have to make sure that prisoners and refugees get water. Uh, fine. And how do we do that? By giving people water or...
The obligation to respect requires that States parties refrain from interfering directly or indirectly with the enjoyment of the right to water. The obligation includes, inter alia, refraining from engaging in any practice or activity that denies or limits equal access to adequate water; arbitrarily interfering with customary or traditional arrangements for water allocation; unlawfully diminishing or polluting water, for example through waste from State-owned facilities or through use and testing of weapons
Wait a sec? We can't ruin water with weapons testing? Whose laundry list is this?

Ok, so let's get serious. How do we implement this? What's the plan of action?
The strategy and plan of action should be devised, and periodically reviewed, on the basis of a participatory and transparent process; it should include methods, such as right to water indicators and benchmarks, by which progress can be closely monitored; the process by which the strategy and plan of action are devised, as well as their content, shall give particular attention to all disadvantaged or marginalized groups;
I get it. Hire bureaucrats. Like the ones who wrote this 18 page, 8,000 word manifesto.

But what if we don't? Are there any consequences for failure to comply with this?
To demonstrate compliance with their general and specific obligations, States parties must establish that they have taken the necessary and feasible steps towards the realization of the right to water. In accordance with international law, a failure to act in good faith to take such steps amounts to a violation of the right.
And then what? The Swiss army invades? Seriously. That's where it stops. They never get to "...and then what?"

Bottom Line: I have never read such a load of shit (and I've read a LOT of shit!) This top-down, "if wishes were horses," sanctimonious, unrealistic, self-serving crap not only wastes time, but it distracts us from getting the job done. I don't know who paid for this meaningless drivel, but I sure hope that they got champagne and hookers on the side, cause it's a black-hole of nonsense. Can we PLEASE get a realistic plan, a plan that consists of more than 8,000 words -- 60 clauses! -- of "do what we tell you"! Damn.

* 007 must stop by every so often...

Bleg: Increasing block rates

I'm blanking here...

Does anyone have an example of increasing block rates being used outside of regulated (water, gas, electric) utilities?

It seems that IBRs do not exist in any markets. Curious Important!

11 May 2010

Watershed management

Read this speech [PDF] by Mehan (ex-EPA). It's deep and thorough:
For too long water quality management has been characterized by compartmentalization and the creation of artificial boundaries among and between various aspects of what should be a unified approach to water quality in terms of the chemical, physical and biological integrity of the nation’s waters. It has tolerated, even encouraged a bifurcated approach, allowing unnecessary polarities to dominate policy and practice: water quality versus quantity; land versus water; surface water versus groundwater; point versus nonpoint sources; energy versus water; and supply-side versus demand-side management.
I particularly liked his reference for Chicago being the biggest polluter on the Mississippi:
Footnote 35: I have made this assertion in the presence of officials with the Chicago Water Reclamation District several times, without eliciting any protests, just smiles.
Now, if you want to know how to model and manage a watershed, then you will want to get some good, multi-disciplinary advice, and that's why you should read this paper [pdf], which will help you...
...gain an understanding of how various human activities affect watershed processes, and in turn how the variable nature of the hydrologic cycle affects humans’ well-being, is essential for policy makers and watershed managers.
Next problem, please?
Addendum: Aquadoc also comments.

Speed Blogging

Hattips to RM and JWT

Some straight talk on human rights and water

Ching Leong has got some good stuff to say. In this piece [pdf], she tells the tale of two cities:
In Singapore, water is priced from the first drop. There is no free water.

In Mexico City, the people have no idea how much water costs. There are few meters in the city – most pay a flat rate, if they pay at all. Only about one-fifth of the residents in Mexico City actually pay their bills.

Singapore loses only about 4 per cent of its water supply – one of the lowest volume of unaccounted for water in the world. Mexico loses about 30 per cent, and some cities in the developed world lose as much as 15 per cent.
In this one [pdf], she gets at the "red herring" of human rights:
In Singapore, water is not declared as human right. Everyone who uses water is charged from the first drop. While the water is not free, the Government has targeted subsidies under a scheme called RUAS (Rent and Utilities Assistance Scheme) where the poor receive subsidies for their utilities. Even for the very poor, the water connection is 24/7, and at the service level the same as that experienced by all other Singaporeans.

In other words, despite the lack of the declaration in Singapore that water is a human right, there is universal access to water in Singapore. So we see such a declaration is not a necessary condition for universal access. But another way to view the question is - is the declaration of water as a human right a sufficient condition for universal access? Let us now consider South Africa...


On the demand side, designating “water as a human right” creates a sense of entitlement. When they are told they have a right to something, people will not want to pay for it. On the supply side, designating “water as a human right” does nothing. It is not sufficient to ensure its place in policy-making. It does not ensure universal access, and offers little advice to policy makers who are simultaneously battling other equally urgent problems.

Bottom Line: You can have a free water supply or a sustainable water supply, but not both.

Down Under WTF?

(via TS) Australia's new water minister says:
What we want... more than anything else, we want people to use water but we want people to save water, we want people to use it wisely.
He appears to be asking people to use more because of the need to make use of additional supply from the new desal plant, but use less because it's not good to waste it.

I hear that people who live on the bottom half of the world say weird things sometimes. Is that because people who are hanging upside down have too much blood in their heads?

10 May 2010

What were they thinking?

DW asks:
Why did many Westland farmers, knowing that water shortages were on the horizon, tear our their seasonal crops and replace them with almond orchards that need water year round?

What were they thinking?
I have no idea, really.

What do you guys think?

Monday Funnies

The scary world outside the ivory tower...

Who wins business plan competitions?

According to my friend and colleague Jens, it's not just the winning entry; it's also the company that sponsors the competition. Why? Because they get inside information on the losers. Watch the video, which goes to English after the Dutch introduction.

Bottom Line: It's always useful to look beyond the obvious winners and "losers."

7 May 2010

Bureaucratic or effective?

The secretary of Interpol talks [pdf] about terrorism and security:
What frustrates me, as secretary general and this is relevant in light of what happened in Dubai in the case of the individuals accused of having assassinated a Hamas leader—is that in 2009 there were over 500 million international air arrivals where passports were not checked against Interpol’s database, which contains records on over 11 million stolen passports and 9 million other identity documents.

At the same time, if you or I are traveling internationally via the United States or Europe, we are required to take off our shoes and belts, give up our bags and our computers, and sacrifice whatever liquids we might not have consumed before passing through security. We do that for everyone.

But each year, there are 500 million international air arrivals whose passports aren’t screened against Interpol’s database. And we have the technology to identify false passports being used by war criminals, terrorists, assassins, drug traffickers, and fraudsters. That’s what is most shocking and frustrating to me.

Paddle to the Sea

The Tuolumne River Trust's epic journey from the Sierra Nevada to San Francisco launches today:
This is a great way to learn more about the "wild and scenic" Tuolumne River that originates in Yosemite National Park and provides water for 2.5 million Bay Area residents. 60% of the River is diverted for human uses (mostly for agriculture), and as a result, the salmon population has crashed from historic highs of 100,000 fish to just 280 last year.

Climate change is real

But you already know that. If you want to beat up deniers, then send them this [pdf], via Emily Green.

My talk at HP...

...was titled: "Monopoly, corruption and misinformation: The three problems with water managers," but I spent a lot of time on the "Engineers vs. Economists" question, i.e., how do you design a system when people break rules, lie, do unexpected things, etc.

We also got into the basics -- why water shortages are man-made, how to set prices ahead of supply cuts, etc.

Here are my slides [pdf] and the one hour four minute audio [22MB mp3]

Bottom Line: Talk to people from other disciplines, then you work with reality!

I've applied for California's Water Commission!

Apparently, even comedians can work on water issues (via JWT), and I decided that I am funny enough to get this job. I even included a nice joke on my signing statement:

I also know what I am talking about, so that is a bonus, right?

The CWC will control disbursement of $3 billion to be spent on water projects, should the water bond pass. (Although I oppose the bond, this is a hedge :)

I just submitted my application, in which I said this:
37. Please explain why you wish to serve in the Schwarzenegger Administration.

The State's water should be allocated to highest and best use, for the benefit of all Californians. I have a long and public record of writing and speaking on this question, and I feel that I can be a useful member of the State's Water Commission.

You can read my blog, academic papers, and PhD dissertation for more on my views.
Let's see what happens next! (Takes a deeeep breath.....)

Bottom Line: Nothing gets done until you get started.

6 May 2010

Bleg: free water in S Africa?

I recall reading that South African poor people were given free water while rich people were metered. The argument was that the poor could not pay and the rich could, and that the poor only "needed" a bit, but the rich had lawns, yards, etc.

The result was that the poor used A LOT of water -- running on their tin roofs -- to cool their houses. The rich used less because they had to pay for it.

But I can't find a reference to this story. It makes sense ("for example...") but I read it as fact somewhere.

Any help?

Feinstein's Jeckyll and Hyde

A California Farm Bureau article:
Meeting with a group of about 150 farmers in Fresno last week, Sen. Dianne Feinstein ... noted 40 percent unemployment in the Westside city of Mendota and concluded that the situation was "unsustainable" and that "something had to be done."


Feinstein took the opportunity to provide an update on immigration policy, stating that she considered it clear that American, domestic workers can't or won't take jobs in agriculture. She added that farmers need a legalized work force through a guestworker program.
So we don't have enough jobs for our workers AND we don't have enough workers for our jobs?

Help me out here.

National Geographic on water

Read it.

They also did a special issue in 1993 -- after the LAST big drought. I'm wondering if these are going to be more frequent. After all, nobody ever says that the Sahara is in drought.

Here's the money quotation:
If you think about how we settled the West, it was all limitless, limitless resources. But now we are running up against limits, and people don't want to think about that.
We do here, and that's why my book is called The End of Abundance.

Now, back to writing it :)

Subsidized or not?

Westlands Water District (WWD) is famous as a large irrigation district that uses a lot of water to grow a lot of crops. Some claim that this water is subsidized; others worry that WWD receives subsidies for growing crops.

According to this letter from environmental groups [pdf], the all-in cost (operations, capital, energy) of delivered water to WWD is $150/acre-foot. What's interesting is that we don't know what WWD pays the Bureau of Reclamation for its water. (I'm guessing it's free, since WWD has contracts.)

According to this PPIC piece [pdf], subsidies are misunderstood [these are my summaries of their points]:
  1. The value of subsidies is capitalized into land prices. That was a windfall for farmers at the beginning of subsidies, but not farmers that bought land later; they paid more, since they counted on subsidies continuing.
  2. "Eliminating water subsidies is not the only way to encourage farmers to conserve water." Farmers will be more efficient if they can sell conserved water in markets.
While I agree that both of these statements are true, I do not agree that they justify the continuation of subsidies, both explicit (prices lower than cost) and implicit (price lower than what others would pay, which implies an "opportunity cost" from potential misallocation). Further:
  1. This excuse can be offered anywhere, at anytime, but two wrongs (we gave you a subsidy, so we have to keep giving you a subsidy) don't make a right. The same logic implies that we should never stop a bad program. Yes, we should -- as soon as we see that it's not working.
  2. If farmers had to buy their water on markets, then it would still go to highest and best use, but the money from that value would go to taxpayers, not farmers. Further, farmers who are given water think "how do I use my allocation?" Farmers facing a market price for water think "how much do I need?" That's a totally different idea. It's easier to use less when you have to buy it, instead of cutting back/selling what you have.
Bottom Line: Subsidies lead you to do things that you wouldn't otherwise do. Those distortions in behavior may be good (free vaccines) but they are often bad (cheap corn for feedlots and HFCS). Use them rarely and carefully!

Hattips to JM and RM

5 May 2010

The economics of things we love

TTTE says it:
Economics is the study of resource allocation. It informs decision-making by comparing different options by a common denominator (money).

At this point the haters say “you can’t put a dollar value on everything!”. This may be true, but merely attempting to put a financial value on non-financial objects is part of the beauty of using economics in policy-making. It forces us to reconsider how we value things. This is important because we are rarely asked to justify our intuitive decision-making cognitive processes and the result is we are often wrong.
Read more.