22 November 2010

Free your mind

In the past few weeks I've participated in debates on reforming water policy over at Inkstain and On the Public Record (as I have been doing here for awhile). In most cases, I've been defending the possibility of improving water management by changing institutions to recognize, for example, water scarcity in prices or to reallocate water using auctions. Several people have taken the opposite stance, holding that my ideas are unrealistic in the world of realpolitic, institutional barriers, beneficiaries of the status quo, and -- above all -- political discretion over water policy.

I know about these barriers, of course, because I have been thinking of them for a few years now. In each case, I have been careful to include them when making my analysis and suggestions for change.

So why aren't water manager adopting my brilliant ideas? They, like some of the commentators here and on other blogs, are stuck in a world where they see a spoon that cannot be bent. But they, like Neo in the Matrix, do not realize that there is no spoon. [watch the one minute video]

The barriers to higher prices are people who do not believe that higher prices are possible. The barriers to auctions for water are the people who prefer not to use auctions. Prices could rise tomorrow; auctions could happen tomorrow. In most of the cases where I recommend these changes, there are no physical, engineering or legal barriers to change. There is only people's inability to see that there is no spoon things can happen in a different way.*

We only need to recognize that the water mismanagement we have is the water mismanagement we created. As I have said before "Nature makes a drought, but Man makes a shortage."

In chapter 7 of my PhD dissertation, I outline how the Metropolitan Water District of Southern California could use auctions to allocate its fixed water supplies among its 26 member agencies, while recognizing past contributions to Met's fixed costs, equitable rights, and so on. My adviser (Professor Richard Howitt of UC Davis, who has studied California water issues for over 20 years) said that this idea was "a no brainer" for Met to implement. It would solve several problems at once, the most important being the ongoing conflict over water allocation and pricing among Met's member agencies.

I sent bound copies and endless offers to explain (at no charge) how Met could use auctions, or pilot a project to test them, but Jeff Kightlinger and Brian Thomas (Met's General Manager and CFO, respectively) have responded only with silence. I reckon that they prefer to stay with the spoon, rather than put in the work necessary to test auctions that will help their member agencies. (Reforms that implement fair and transparent water allocations might also reduce their power, relative to the managers of those member agencies.).

And so we are back to politics and ideas that politicians may not like. The difference is that we now know that there is no spoon. And we -- voters, ratepayers, member agencies, businesses and farmers -- can tell managers that they need to look at a real world in which there is no spoon.*

Bottom Line: You can free your mind by understanding the difference between the way we've always done things and the things that we can do.
* There's also the possibility that managers and politicians are incompetent or corrupt (retaining policies that favor a minority), but I hope that a combination of new ideas, their can-do attitudes, and support from the majority that would benefit from good water management can triumph.

10 comments:

  1. Since the markets and auction approaches are likely to be good ideas in theory, the problem now seems to be how to behave so that the people with the power to change things choose to change them and choose to own the new ideas.

    Telling these people that they are idiots is almost never a successful strategy.

    You might want to look at Revkin's column on negotiating and the power of Ted Kheel as a place to start to develop a successful negotiation strategy. Kheel's negotiation approaches were very successful in changing people's behavior.

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  2. DZ: you write there are no legal barriers to change, even on something as simple as changing the method that MWD uses to allocate water among its member agencies.

    Are you sure of your analysis? It certainly appears incorrect to me; it seems to me that MWD's rate structure is actually set by MWD's board in accordance with various constitutional, statutory and administrative codes. Do the votes exist on MWD's Board to change the procedure?

    Have you ever gone to an MWD Board meeting and used the public comment time to brief the Board on your ideas? Sought meetings with individual Board members?

    [yes, David, there are lots of spoons. The Matrix was just a movie. This is the real world.]

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  3. David -

    Thanks for engaging the debate!

    It's not that I think incorporation of markets and price signals in western water management is unrealistic as a matter of general principle. In raising the issue, I'm hoping to make a slightly more nuanced argument - that implementing your ideas, which seem good in principle, requires a recognition of the reality of the existing political and institutional landscape.

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  4. The lesson I've always taken from your work, David, is:

    1. Private supply of water, with a requirement to provide free water for personal use, is the best solution.

    BECAUSE

    2. Government providers of water will almost always underprice water.

    It is interesting that while you provide brilliant documentation of the latter fact, you do not seem to be convinced that the public choice story is real.

    For me, the fact that consumers/voters prefer low water prices, and concentrated interests (industry, agriculture) prefer low water prices, implies that politicians and bureaucrats will almost always prefer low water prices. I don't see any way out of this - except privatization of the water supplies (appropriately done).

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  5. An old friend of mine who doesn't care that much about water but knows politics inside and out said that the state legislature owns all the water in California and can move it around anyway it wants to unless the feds or the voters step in and stop it. The fact that California water history is a convoluted snakepit of special interest actions doesn't faze him one bit. He doesn't give a damn about "water rights". He says that all the real action is in the state legislature and that if you want to help shape the state's water future, focus there.

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  6. @Eric -- I'm not calling people idiots, and it's not my job to negotiate with managers and politicians. The dialogue should be between them and their constituents, the ones who pay the price of mismanagement.

    @Francis -- Yes, I am sure. Yes, I've done that. Yes, they did nothing. Yes, there are spoons but not as many as you think. [And no, you're condescending tone is not helpful.]

    @John -- Yes, I agree on that. So we agree with each other. And we also agree that ideas like AiA can be implemented, with adjustments for institutional quirks.

    @Michael -- I'm totally onside with the PC narrative. The sad thing is that water users who prefer low prices are not told by their leaders (representatives, the folks who solve the collective action problem), that the cost of low prices is a dead environment and/or shortages. This "dynamic PC" scenario hits the wall at some point, but pols are not punished for that. So are we talking about suicidal irrational voters?

    @DW -- Given with Michael just said, I doubt that the Legislature is interested in good ideas, compared to giving water to special interests.

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  7. DZ: as you recognize, voters in So.Cal. do not vote on water issues. So the only way to get your 'brilliant' (I can no longer tell when you're being sarcastic) ideas is to persuade bureaucrats. If Kightlinger isn't returning your calls, maybe you need to work a little harder and start going to Finance Subcommittee hearings and workshops.

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  8. DZ: Eric is right. Water professionals, regardless of their backgrounds, must adopt the *boundary spanning* or *transdisciplinary* approach to their work. Ted Kheel recognized this, moving from one of the most respected mediators and negotiators in labor to climate change. Read a little about him, and visit the Kheel institute at Pace University to learn more about how these skills might help get your important message across to others. Or, better yet, join us this summer for specific training on transforming water conflict where engineers, economists, and eco-freaks sit in the same room:

    http://www.transboundarywaters.orst.edu/training/index.htm

    Shill alert! I am one of the instructors.

    Sorry, but negotiations are part of all of our jobs in the water business now. Thanks for all that you do.

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  9. @Francis -- I don't have any power over Kightlinger, so your proposal to lobby at the $-source is a good one, but see below...

    @RWC -- I agree that lobbying, etc. are necessary. (And it's ironic that you recommend a solution that Francis thought useless when I proposed it.)

    So, who's going to pay my salary? Remember that I do this blogging for free, in my spare time.

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