30 November 2010

Watch me talk water

I discuss water governance, human rights, privatization, and shipments from Alaska to India during this interview that I did in Washington DC. Caption: Yes, I'm talking to you :)

Anything but water

29 November 2010

Quantitative Easing Explained

Excellent! (via CM)


So what qualifies him to run the Fed?
I don't know, other than he has a nice beard.
My plumber also has a nice beard, but I would not trust him to play god with the economy.
No, although when you call a plumber to fix something that is broken, they usually fix it, not break it more.
This is true, the plumber is clearly smarter than the Ben Bernanke.
Well, that is why he became a plumber and not an economist.
Classic!

The Economist calls it quits...

...on mitigating climate change.*

Their leader (How to live with climate change: It won’t be stopped, but its effects can be made less bad) gets at the unpleasant questions of floods, migration and hunger.

In my 20 years of reading the Economist, I've rarely seen such a brutal reality check (usually they offer a comment in a debate). I think they've seen the impending disaster of the Republican-controlled US Congress and decided that it's time to start preparing graves for the bodies that will result from inaction.

* It's stuff like this:

Monday funnies

Tis the season... for underwater riding with sharks!

A few words on footprinting

From today's NYT/IHT:
David Zetland... said footprinting would serve little purpose unless, for a start, water was priced according to its value.

If water were appropriately priced, he said, the price of consumer products would reflect the amount of water used in making them. Since most consumers either would not understand footprinting, or would not care, Mr. Zetland said, they would almost always pay more attention to the price of what they bought than to a certificate on the label.

From the point of view of producing companies, he added, if water supplies were free, or nearly so, water footprinting and investments in water efficiency would remain superfluous. “Water footprinting has no operational, economic or social value to companies if the cost of labor and equipment to reduce water consumption exceeds the cost of the water saved,” Mr. Zetland said.

The basic problem, he said, is that the price of water rarely reflects its value or scarcity. “The price for most products combines value to consumers with the cost of production and delivery,” Mr. Zetland said. “Since the price of water only reflects the cost of delivery — the water itself is free — we don’t pay a price that reflects its value or scarcity.”

Still, not all experts are so dismissive...
hahaha -- love that ending, at which point various people try to justify their work on water footprinting :)

Westlands takes its toys home

Westlands Water District has pulled out of the Bay Delta Conservation Plan (via BB et al.), claiming that it is unwilling to spend time or money on a process that does not guarantee that water deliveries will be equal or higher to their historical level.

Fleck, Aquadoc, Carter and OTPR all have posts on this "development." I think that WWD has made a mistake in not playing ball. It seems that WWD (and SLDMWA, a related organization) think that the new Republican majority will deliver them a gift (more free water) that they cannot currently get in the BDCP negotiation. I'm betting that the Republicans will be too busy fighting in DC to pay attention to farmers who lack the lobbying clout of defense contractors, Wall Street firms, and oil companies.

But I am glad to have WWD away from the table, where they could sabotage negotiations at every turn with new items for the agenda, further studies, and so on. It will be easier to reach an agreement on the Delta without WWD. (It's still not certain!)

Oh, and here's WWD's 5 page 22 Nov resignation letter to the Department of the Interior [PDF]. Read it to learn a little more about WWD's pain and suffering in this unfair world.

Bottom Line: The end of abundant water means that some water users will get less water. That's a fact. The only response to it is to try to find ways of minimizing the cost of allocating whatever water remains. WWD needs to play that game, instead of wishing reality away.

27 November 2010

Flashback: 21 -- 27 Nov

These posts are STILL relevant! Read them and weep, or grok, or chortle...

Smile Bonus: China to US: "Stop fucking with us" (nothing changed there)

BEST: A fish here, a fish there. Who cares? Should we bother to preserve local ecosystems? In Fishermen vs. Fishermen, we look at the fight over scarce fish.

BEST: All about Blowing Bubbles in financial markets.

Policies & Procedures: a good thing or bad? Great guest post with insights on bureaucracy.

BEST: I was basically right that CC-deniers would abuse Climategate but leave the science intact.

Department of I told you so -- heavy water users complain when their bills rise. They expected a discount?

Academic Water Economists -- good news/bad news

26 November 2010

You Don't Have to Wear Hemp Underwear -- The Review

This review is appropriate, perhaps, for Black Friday, America's biggest circus of consumerism.*
Robin Pharo's main idea in this book is that saving the earth doesn't have to be be hard.

I suggest that your first move in saving the earth is to NOT buy this book.

The book starts off as an advertisement for all the consulting Robin has done (and can do for you!)

It goes downhill from there, trying to shoehorn readers into one (or several) of seven "types" of people, as a means of determining what kind of environmentalist you may be (retro biker or deep greenie -- I can't remember the exact types). This structure (with accompanying icons next to the text) gives the book a Dummies appearance, but that's just an aesthetic error.

The real problem is that the artificial categories are too rigid for normal people (I eat organic and shop at Walmart), so that means that the book is useless to people who don't like the boxes they are being stuffed in.

After this problem there is Robin's approach: Don't like fair trade coffee? No problem! Drink from a ceramic mug? Don't like that? Well, then drink from a foam AM/PM cup.

Ok, so where's the environmentalism here? If you don't change anything (because everything's great!), then we're already on the perfect path.

Even worse than the "do nothing" advice is the "this is right" judgment about various activities. Fair trade coffee, for example, is presented as good per se, but that's not true. There are a lot of problems and complications with Fair trade that Robin ignores. I take that as an example that defines the norm in this book: cliche environmentalism.

The only good news for the book is that the title seems catchy: I sold it in about ten minutes in the flea market, for one euro. Recycling is good!

OTOH, I worry that people will like and buy this book because it supports a greenwashing mentality towards the environment that is not supported by facts (consumption and pollution do have adverse impacts; restoration costs money and diverts resources).

Bottom Line: I give this book ONE STAR. Don't waste your time reading this book, because it will just tell you to keep doing what you're doing to save the earth.
* Speaking of consumption... Forget McMansions. Built a tiny organic house for $7,000. Along similar lines, read this bit on why consumerism is killing the planet. (Good thing to think about, but I still love my new old leather jacket.) Want a more balanced view? Read the report on reaching a steady state economy.

25 November 2010

Thanksgivings past

These posts are from previous years:

Thanksgiving and the American Dream

Black Friday, 9/11 and Your Kids

Poll Results -- Thanksgiving is more about family than Xmas

Food Day!

The United States celebrates Thanksgiving today. For most people that means eating. (Some people give thanks for the food that they eat, others just skip to the eating.) So, let's talk food!

Watch the Yeo Valley dairy rap (H/T to JD):



Those of you with a warped sense of humor (like me) may want to know how to make pancakes like a crackhead. Very funny...

24 November 2010

Poll results -- Voting regret

Hey! There's a new poll (Giving thanks?) on the right sidebar -->
I have regretted a vote that I made in the past...
Once 26%26
Sometimes 38%38
Often 6%6
Never 30%30
100 votes total

Most economists (and mathematicians) know that voting "doesn't matter" in the sense that a single vote rarely decides an election, but most of us vote for other reasons: We want to participate in civil society, we want to express our opinions, we need an excuse to know a little more about political and legal issues, and because we want to associate ourselves with the winning side.

It's on this last reason that I make my choice for this poll. I voted for George Bush in 2000 and regret that I did. My vote made no difference in California (where he lost by a wide margin), but it still annoys me that I "did not see it coming" when he went nuts with a lot of bad policies (bad fiscal policies, domestic spying, crony capitalism, etc.) and actions (invading Iraq, torture and suspension of habeas corpus, etc.). I am just annoyed at the thought that I associated myself with his administration. (Ironically, I've "thrown away" my vote on libertarian candidates before, so this was a conscious decision.)

At the time, I was thinking Bush II would be like Bush I, who would not have been so bad as an Al Gore who would -- in my view -- do anything to get or keep power. Gore's flexibility wasn't as appealing to me as Clinton's, taking it for granted that all politicians have some quality of flexibility.

Case-in-point, we have Gore's recent admission [read this and this] that he only supported corn ethanol because he wanted to win votes in Iowa. I wish that Mr. Inconvenient Truth has said something before we got one of the most destructive agricultural programs out there!

Sorry if seems more confessional than analytical, but I want to be clear on how these regrets work, if only with one data point. Do you have a story to share?

Bottom Line: Sometimes we make voting mistakes. Learn from them. (Corollary: Sometimes politicians make policy mistakes. Take away their power :)
Addendum: Read this great piece on the contortions of ethanol lobbyists trying to defend their $6 billion (plus!) boondoggle.

23 November 2010

Speed blogging

  • This 1993 report [pdf] discusses how "price regulation of water utilities has generated several forms of inefficiency. First, poorly designed rates misallocate water among different consumers and may result in insufficient revenues to cover costs. Second, the lack of incentives to minimize water-provision costs creates cost inefficiency. And third, scarce regulatory resources are wasted when the costs of regulation exceed the benefits."

  • Clean water for carbon credits is not a total scam, but it's certainly not the solution to poor water management corruption in developing countries or global warming.

  • "When Research Turns to Sludge: It’s not just corporate funding that creates conflicts of interest. Even government and nonprofit funding can have strings attached." An interesting case study of how corporations try to control research on pollutants and health risks in sewage sludge.

  • More crazy shit from China: "Local officials in China's arid northwest launched a new push for a vast water-diversion project that would pump raw seawater thousands of miles from the coast to the deserts of Xinjiang...to fill Xinjiang's dried-up salt lakes and desert basins in the hope that it will evaporate and encourage rainfall over drought-stricken areas of northern and northwestern China."

  • California is getting ready to monitor groundwater but "there are no penalties for failing to comply with reporting requirements." Useless.
HTs to JB, TM and DR

22 November 2010

Do smaller water footprints lead to bigger profits?

Corporate water footprinting diverts attention from profits and sustainability...

Read and comment on my piece over at the Guardian.

I wrote this piece in preparation for my upcoming talk on footprinting in London. The Dec 8 and 9 conference ("Measure and interpret your water footprint: How to make water reduction pay") costs about $2,000, but you can get a discount with the codeword "David" when you register here. (Love that code :)

Monday funnies

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.

20 November 2010

Flashback: 14 -- 20 Nov

These posts are STILL relevant! Read them and weep, or understand, or chortle...

Poseidon's Carlsbad project cost is $700 million, not the $350 million often reported in the press.

Entrepreneurs, brokers and liars -- an interesting case study of how "big profit opportunities" in the under-developed business of water attracts some irregular types.

BEST: How much do subsidies cost, anyway? A useful discussion of their dimensions (much of which went into my book)

BEST: THIS is how you get people to use less water -- measurement, feedback and competition.

Carbon Offsets = BS -- and they haven't been in the news recently. Is that because carbon and climate change topics are dead in the US?

BEST: Vegas charging more... to poor people -- typical rate structure favors rich people with big lawns. Speaking of Vegas, Kill the growth zombie! has more on the political impulse for sprawl.

19 November 2010

Oh.My.God.

The republicans are taking over committee chairs.

Wow, check out the new chair of the energy and commerce committee (via env-econ):

The Colbert ReportMon - Thurs 11:30pm / 10:30c
Chair Apparent
www.colbertnation.com

Bottom Line: Un-fucking-believable.

A Model Free Trade Law

WHEREAS,
  • X is produced, consumed and exchanged worldwide as a commodity;
  • US citizens are best served by prices that affect and reflect global supply and demand;
  • X from any origin can be certified safe for consumption by a simple test.
NOW LET IT BE KNOWN THAT, the United States declares all prior rules and laws restricting the production, consumption and exchange of X null and void.
As my first X, I suggest sugar.

Bottom Line: Free trade is easy but often thwarted by politicians eager to protect producers in exchange for bribes. Luckily, it's easy to detect its absence: The more words in the "free trade agreement," the less free trade is happening.

18 November 2010

Speed blogging

  • There are many financial, bureaucratic and informational questions casting doubt on the Delta project, now projected to cost $13 billion (for what benefit?)

  • An excellent post at Circle of Blue:
    As watergy flows decline and provision costs rise, utilities could – and in theory should – raise rates to balance out demand and supply. In practice, we voters ensure that they don’t. We only elect officials who keep rates – for residential, commercial, industrial and agricultural use – artificially low. It is hard to call them ‘cowards’ for declining to commit political suicide.
  • On a related note "...water policy in California is contradictory and vexing. Current policies encourage overconsumption and are unlikely to lead to long-term conservation because they fail to address the underlying economics and distorted incentives in the water market." Read this for more (I had a hand in it but forgot to post it when it was originally published).

  • The Economist on smart meters (and other sensors) for water- and other types of infrastructure.

  • Uh oh returns... "IPCC’s broader concern about the rapid loss of Himalayan glacier ice was correct."
H/T to WH

17 November 2010

What you eat affects the planet

Via FCRN:
Read more at the Barilla Foundation (yes, the pasta people). It's no accident that they promote this information, but it's not total agit/prop.

Anything but water

  • In his 1959 paper [pdf], Armen Alchien discards the conventional economic perspective of profit maximization (and utility maximization) in describing how businesses make decisions, succeed and survive, i.e., "The economic counterparts of genetic heredity, mutations and natural selection are imitation, innovation, and positive profits." Useful, deep thoughts from a master.

  • Drop a nuclear bomb anywhere in the world and see the impact. A useful tool for peace -- or sociopaths.

  • My shaving brush gave up (in a way) after almost 20 years. I bought it for $4 in Turkey in 1991. They take shaving seriously there -- almost as seriously as built for work, not show.

  • British humour: Posh Nosh does paella

  • Life hacks -- a number of interesting suggestions.

  • A very cool dad makes his 4 y.o. son into a mini-DeadMau5 (electronic music warning)

16 November 2010

Please keep things in perspective folks

Water and financial risk

A few weeks ago, Ceres released a report calling attention to the risks of water shortages on the financial health of municipal utilities that have issued bonds (NYT piece).

That report, like this recent piece on US cities that face a risk of running dry (nearly 3,000 comments, some of them typical of Yahoo! people) fits the water crisis meme that I've been fighting for years. Why are they wrong? What are they missing?
  • Nature makes a drought, man makes a shortage: These problems can be traced to mismanagement.
  • Politics makes it hard to implement economic solutions -- either because it's too hard to get political approval to do anything or because a change in rules can eliminate shortage (the profit motive).
  • Scarcity pricing in water-short areas (in the US, for sure) can end shortage overnight.
(The water footprinting fad -- like the carbon offset fad -- reflects an attempt to do something while ignoring prices or politics, but I think that footprinting wastes too much energy that could be better spent on root and branch reform, to bring rational economics and conventional resource management to the water sector. That said, this piece on footprinting mentions the value of understanding the "water supply chain" to understand weak points. I like that idea because it quantifies the impact of local mismanagement on any part of the supply chain.)

But the biggest problem with the Ceres report is that there is ZERO financial risk of default on bonds when municipal agencies can just raise prices (or property taxes) to meet their obligations. So I guess that revenue risk is really about political risk -- that populist politicians just decide to default or shift the burden to outsiders (as recently happened when Placerville, CA decided to raise sales taxes to lower water and sewer rates; tourists are now subsidizing lawns).

Bottom Line: The biggest financial risk to water users (and bond holders) comes from failing to price water for scarcity and balance supply and demand for sustainability.

H/Ts to DL and BP

15 November 2010

Opinions and errors

Several people asked what I thought of Tom Birmingham's OpEd in the Sac Bee.

I think it has errors. The game here is to identify them.

Please quote his sentence and where the error(s) lie.
Attack on valley water district misinformed

Farmers and fishermen are both suffering from the effects of California's broken water system. In a recent commentary, "Big Ag cries big tears; salmon run dries up" (Viewpoints, Nov. 7), Larry Collins turned his concerns about declining fisheries into an attack on the Westlands Water District, which was misinformed.

With respect to water subsidies, Westlands pays the costs of water delivery, just like other public water agency served by the Central Valley Project and just like the millions of other water users that have been served by federal reclamation projects throughout the 17 Western states since 1902.

There is nothing "junior" about our water rights; we have the same rights as other CVP contractors south of the Sacramento-San Joaquin Delta. Corporate ownership of Westlands ended a quarter century ago, in accordance with federal law. And far from enjoying a surplus this year, Westlands received only 45 percent of its CVP allocation.

Contrary to Collins' claims, Westlands does not sell water nor do we allow our farmers to transfer water out of the district. To conserve water, we have arranged to store water temporarily in Southern California this year to prevent it from being lost.

This agreement produces double benefits for the general public. Urban areas in Southern California are able to use the water now to help recover from the drought, and agricultural communities in the Central Valley will get the water back next year when it is needed for planting crops.

Westlands works closely with state and federal fish agencies to ensure that the Endangered Species Act is being fully enforced and to make certain we are meeting the most stringent regulations for fishery protection. According to federal scientists, however, the recent decline in salmon abundance that Collins decries is the result of ocean conditions and excessive predation by other, non-native fish.
GO!

Monday funnies

Yes, she's baaaaack!
Canadian crusader Maude Barlow has had to defend the life-or-death truth against corporate interests for years… And even today, it is a war un-won. At stake in her crusade is humanity’s own right to the liquid that sustains all life – balanced against powerful interests that insist water is just another resource to be bought and sold. In some countries where the corporate argument has prevailed, the poor can be barred from collecting rainwater.
Who makes this stuff up, anyway?

Water Disclosure Project

Grinzo notes that the WDP has just released a slew of figures on corporate "dependence" on water resources.

This project is supposed to help investors and governments assess water risk for companies, but it's driven decidedly from the outside and top down, not bottom up (investor demand) or inside (corporations). That may be fine, but is it just another cog in the water footprinting scam (disclose your footprint!)

And if so, what's the WDP doing for businesses and consumers? Seems to be another form of the CSR/greenwashing disclosurama -- akin to stakeholder/gender/MDG reports that NGOs demand of developing countries -- that merely distracts executive attention from running the business.

Bottom Line: If we price water for scarcity/sustainability, then we need only see the profit and loss report.

13 November 2010

Flashback: 7 -- 13 Nov

These posts are STILL relevant! Read them and weep, or understand, or chortle...

The Ostrom method/countering climate change -- read and ponder...

BEST: Property rights, prior appropriation & public trust -- it's not as simple as some (professors) say...

Peak Oil -- learn from my student.

Enriching the poor -- with their own money (the post behind my paper on human rights and property rights for water)

BEST: Silly Regulation -- why baby seats on airplanes kill people.

How to get bureaucracies to conserve water (tl;dr? charge them)

BEST: The efficient way to spend stimulus money... was not used.

12 November 2010

Fixing California's water problems

Now that the elections are over and California has a new (old) Governor, it's time to get back to problems that have been festering for ages. The obvious ones are poor management of groundwater, a lack of water markets, and the low prices that lead to shortages in dry places (because the price of water reflects the cost of delivery, not the scarcity of water).

But these problems can be resolved locally, without significant political action.

The Delta problem involves politics and politicians (mostly because it was caused by them).

I've written on one possible solution [PDF] that uses "put your money where your mouth is markets for stakeholders," but I've also been thinking of another idea for ages...

It's the California Water Conference

Slogan: "Leadership. Solutions. Now."

Time: 2.5 days

Attendance: 100 participants, with a composition of (roughly) 10 academics/consultants, 30 politicians/public managers/bureaucrats, 30 biz/ag people, 30 enviro/activists.

The Trick: Attendees are nominated and/or voted in by other interest groups. This means that Ideologues will be excluded. Is it possible to find a solution if they are excluded? Probably. This is a political problem that only requires a majority.

The other trick:

11 November 2010

A few thoughts on the elections

There's been a lot of interesting analysis, and here are some useful bits:

My first impression is that the tea partiers may improve things if they push for smaller government, decentralization and greater individual responsibility. OTOH, they may turn into beasts with a bottomless appetite for telling us what to do, what to say and who to sleep with, spending our money in the process.

Disclosure: I didn't vote, mostly because the Registrar of Voters was unable to catch up with me.

  • 50 of 51 incumbent California representatives were re-elected (two seats had no incumbents). I cannot wait for apolitical redistricting and real competition in elections (yay Prop 20). How bad is it? One incumbent state senator was re-elected even though she was dead. [see comments] I didn't keep the link, but most directors of water districts are re-elected at similar rates.

  • Elections cost over $4 billion nationwide (ads only?). Big oil outspent clean energy 10:1, with $70 million for their favorites. Grinzo has a good rant on many republicans' opposition to restricting energy use. Not only are they NOT being conservative (with resources), but they only care about corporate profits, not real scientific debate on climate change (good news: climate scientists are fighting back with public rebuttals to climate change deniers). OTOH, Michael G. has an excellent piece decrying subsidies to "clean" energy that may never be economical. As usual, I would prefer a nice clean tax on carbon (and other pollutants) and no subsidies. Let market incentives work. [The Economist has a useful update on geo-engineering, which is still too dangerous for me. REDD first, please.]

  • In a semi-related note, read how government regulators are covering up the adverse impacts of BP's dispersants on marine life. Why? Because their bosses told them to.*

  • How bad are earmarks? Academics calculated that politicians who became chairs of various congressional committees directed a huge amount of money to their home states. Why is that bad? Because private investment fell as it was crowded out by pork-spending. Rand Paul, btw, has already flip-flopped, saying that he supports earmarks "for Kentucky." On a similar note, Gasson denunces water clusters that governments open with fanfare and canapes but rarely get anything useful done. Why? Because governments are TERRIBLE at innovation.

  • Looking for waste in California's government? Take a look at this list of state agencies and pick two or three to shut down. Lost jobs sure, but lower taxes and -- very likely -- less interference from politicians and regulators in the real economy. (I'd start with the California Bureau of Electronic and Appliance Repair, California Bureau of Home Furnishings and Thermal Insulation, and California Bureau of Naturopathic Medicine, but there are MANY OTHERS.) The best place to shrink government is where it is doing something that private industry can do. Schools and hospitals (but not subsidies for education or health), power plants, housing, transport -- none of these activities need the dead hand of government. (The Dutch postal service is privatized. Fewer deliveries and fewer post offices but VERY efficient and no subsidies.)

  • Rachael Maddow has a great segment on the lies and agit/prop at Fox -- just the thing that Jon Stewart denounced at the Rally for Sanity.

  • Good news: economists are smart. Bad news: they cannot teach economics to people who are not smart. Worse news: there are about 1 million 100,000 economists the world, which means that votes are not likely to reflect the knowledge of economics (gains from trade, etc.).
Bottom Line: Special interest money buys propaganda that wins elections that increases government interference in our lives and economies that makes most of us worse off.

* For more on regulators, compare this:

to this (with backstory) .

Recall that I said that the BP spill was regulators' fault.

10 November 2010

Anything but water

The water footprint scam

Scam may be a harsh word, since well-meaning people seem to want to improve water management, but I wonder if they aren't (un)intentionally accommodating greenwashing.

From my perspective, most water footprinting is a waste of time.* Why?
  • Most measurement requires lots of engineering assumptions. Water used in one place has a totally different impact on sustainability than water used elsewhere (for the same production), but prices probably fail to reflect scarcity (sustainability) in both places.
  • Say you measure water content/impact. Then what? Do you now have FOUR bottom lines? How do you reconcile them?
It's much easier to manage to one yard-stick, such as price or profit. Why aren't corporations pushing for better water pricing? Why are they using a "green" metric that's subjective, non-operationable, and impossible to reconcile against other corporate goals (e.g., profits)?

There seems to be an entire industry out there, devoted to talking up footprints and selling services that corporations can present as green, when they seem to be more about greenwashing. Maybe footprinting is cheaper than paying more for water? Maybe corporations can say they are "green" even as they drain aquifers?

That's not good for them or us in the long run, but it may make sense in places where corporations, farmers and utilities are racing for water supplies. It may be easier than pushing fundamental reform on politicians who also prefer status quo mismanagement.

How much does it cost to say you're green?

The Water Footprint Network is offering an international water footprint training course in Amsterdam on 16-18 November 2010. About 19 hours of training costs 2300€ ($3,220) for governments, civil society, international organisations and universities or 3550€ ($4,970) for commercial organisations (business and consultants).**

What do you get? Besides case studies, you also sign this pledge of perpetual royalties to WFN [doc],

The WFN training agreement for commercial organisations says that:
After completion of the Water Footprint Training Course I will receive a certificate.

I declare that I may use my water footprint knowledge for commercial purposes and I agree to the following conditions:
  1. I am committed to participate in refresher courses provided by the Water Footprint Network to keep up to date with the most recent developments.

  2. I always use state-of-the-art water footprint knowledge in my projects.

  3. I agree to share the knowledge and data that my organisation has generated by applying the Water Footprint methodology with the Water Footprint Network and its partners as much and widely as possible as allowed or negotiable under confidentiality agreements that might be in place.

  4. My organisation is allowed to use the Water Footprint Training Certificate and the related “trained by WFN” logo in the communications with (potential) customers to show that I have been properly trained in water footprint assessment.

  5. My organisation gives an annual donation (R&D grant) to the WFN Research & Development Fund equal to 10% of the total value of all contracts that contain Water footprint work and that are signed by my organisation, with a maximum of 1500 Euro per calendar year.
Oh yeah, I forgot about the certificate.

Bottom Line: Water footprinting has no operational, economic or social value to companies if the cost of labor and equipment to reduce water consumption exceeds the cost of the water saved. Instead let's have accurate water prices that reflect scarcity, distribution and treatment. Then let businesses figure out how much water it takes to maximize profits. That's a footprint we all understand.
* Veolia is trying to improve the water foot printing metric [pdf]. They claim their "New Tool will... ensure sustainability," but I disagree. "Ensure" implies 100% reliable, but politics can derail reliable in two seconds.

** WFN has a free WF e-learning course [pdf] for 15-30 November, but you have to sign up by 10 Nov.

09 November 2010

Need a well-driller in Latin America?

Charlie emails with this:
I have been working as a drill rig operator at a large, remote mine in Northwest Alaska for the past eighteen years. In about seven years I will retire. In 1976 I purchased my first drill rig in Oregon, a cable tool drill. I worked it for for five years in Northeast California (Modoc County) and Eastern Nevada, drilling domestic water wells for private citizens and windmill wells for Dept. of Interior Bureau of Land Management. Since that time I have been involved in many different types of drilling all across western US and Alaska. I presently live near Fairbanks, Alaska. Most of my time is spent here on a "four week on/ two week off" schedule.

For the past few years I have searched for an avenue to help bring water wells to people in need in Latin America. I am not interested in evangelism of any sort. I simply would like to help get water to people. I have never forgotten the amazement in people's eyes when they see clean clear water coming from below their feet on the dry ground they live on. Most of the projects/agencies I find, to some degree, seem to want to trade water wells for conversion to a church. I have no beef with churches... but I don't want to be involved in evangelism.* I lived near Guadalajara, Jalisco for three years in the mid eighties, and speak fairly good Spanish and read and write Spanish (poorly).

[snip]

Most R&R weeks off are planned for home in Fairbanks with children and grandchildren, and/or visits to Texas with sisters and my father. Although, I could entertain short trips to help out with or look into projects or agencies for the future. My passport is up to date. While planning and saving for retirement personal travel funds are somewhat limited... My schedule is "etched in stone" and is reliable and easy to plan one week-ten day trips around.

[snip]

For the past two years I have searched on a regular basis for projects that I can fit into. I will respond to all leads, and will be interested in participating in any project that we can locate that will fit my finances and present employment/retirement schedule.
So if you know of an organization that can use a very experienced volunteer driller to get water to people in Latin America, then email Charlie.
* I agree with Charlie on this one. Give water or give god, but don't force people to "believe" in your god in exchange for water.

Speed blogging

  • American Water Intelligence is a new publication from Global Water Intelligence. Pricey (but accurate) news and opinion on the business of water.

  • "FLOW (Field Level Operations Watch) is an Android mobile phone app that captures data on water points and sanitation projects in 11 different countries. The data is automatically uploaded to Google Earth so it is free and available for anyone to see and use." Good idea, but it seems to be aimed at techno-geeks instead of people living in LDCs. They may prefer to use their phones to make money.

  • More of our money in the toilet: "The Biomass Crop Assistance Program, estimated to cost $461 million, took effect on Wednesday...U.S. officials say the program will assure a supply of non-food feedstocks as the infant cellulosic industry grows." Seen this waste of OPM before, on other infant industries that never grew up (hydrogen car, micro processors, etc.)

  • "A [free] guide to understanding, assessing and managing water in grocery supply chains," and "A free and easy to use tool for companies and organizations to map their water use and assess risks relative to their global operations and supply chains" Both of these seem to be about more consulting contracts and greenwashing than the bottom line.

  • Massive FAIL: "Saudi Arabia should end government water subsidies to lower demand and save its dwindling water supplies...Consumers pay only 1 percent of the cost of water...half of the domestic oil consumption is used for desalinating water...Roughly 88 percent of water use goes toward agriculture, which contributes less than 3 percent of the country’s gross domestic product."
H/Ts to LD and DL.

08 November 2010

Drink booze and talk water in SF

"We are thrilled to announce the first in a series of WaterTap gatherings in San Francisco. Hosted by Imagine H2O, WaterTap Happy Hour will convene and grow a community of entrepreneurs, investors, and other stakeholders interested in solving the challenges of water. Imagine H2O aims to build the ecosystem that will enable water entrepreneurship to thrive.

At WaterTap you can:
-Meet a lively group of passionate folks working to change the world
-Enjoy happy hour at one of San Francisco's most popular venues
-Find collaborators, investors, mentors, feedback, ideas, and overall good company
-Learn about the Imagine H2O Water-Energy Nexus business plan competition, which will close on Nov 15th

Who: Water aficionados and entrepreneurs
When: 6-9pm on Thursday November 11th
Where: Azul, 1 Tillman Place, San Francisco, CA 94108 (near Montgomery BART)

RSVP to http://ih2o-sf-10.eventbrite.com/"

Monday funnies

How To Report The News



In other news, This is a news website article about a scientific paper.

Daylight savings sucks

The EU set clocks back last week. The US is doing so this week.

No "daylight" is saved with this rubbish (read this or this). The day still has 24 hrs, and the number of light hours has not changed.

It only inconveniences a HUGE number of people. (Arizona has it right.)

Unfortunately, Japan is thinking of adopting it, to "create 100,000 jobs." I reckon that most of those jobs are the delusion of macro-economists (who have tried to "stimulate" Japan with gimmicks for 20 years) or the result of people spending time adjusting clocks and schedules and taxis making emergency trips for people who are off schedule.

Bottom Line: Governments don't need to manipulate our behavior (for safety, jobs, etc.). They need to make it easier for people to be safe (better information) or hire people (easier regulation).

06 November 2010

Flashback: 1 -- 6 Nov

These were relevant a year ago -- and still are...

Why are the Chinese intent on damming the Mekong? from my student and still relevant.

Low Cost of Living in the Co-ops aka, cost, meet benefit.

BEST: The Political Economy of Lobbying -- how I sold $1 for $3.75 to my students, and how lobbyists in Washington DC are also wasting lots of our money (even before we get silly laws). About 15,000 views of this short video so far. (Here's More on Lobbying and Rent-Seeking)

Poll Results -- Lawns in the Desert are not a human right, according to opinion.

Al Gore's Green Investments aka, who cares? Marketing is NOT corruption.

Why Chino Failed -- This time I am right :) -- can't sell water if there's no conveyance for delivery, following up on Chino Water Auction FAIL.

BEST: Subsidies and poverty go together -- end subsidies and make farmers and farm workers rich.

Poseidon's Desal Pricetag: $550 million maybe they should use a different power source? Like Nuclear? Yes, we need to talk...

BEST: Bringing Dynamism to Bureaucracy via term limits!

05 November 2010

The Rally was pretty sane

I had a great time at the Rally to Restore Sanity and/or Fear last Saturday.

Most people were polite and sane (almost like we were in Canada, eh?)
I suggest that you watch the Rally from 1 hr 32 minutes on CSPAN to hear about fear-mongering in politics and the media. Stewart said "hard times do not mean end times. We can do this if we work together." That sounded familiar because I wrote something similar in the preface to The End of Abundance:
The end of abundance means the end to a way of life, and the rules and habits connected to that life. It does not mean the end of life itself, nor a future of crisis, misery and destruction. The end of abundance merely means the beginning of scarcity, and the need to adopt rules and habits that reflect that scarcity.
Those in a hurry can watch the last 12 minutes, with Jon Stewart's speech on sanity.

Those who want to see spin and lies (seriously!) can watch the Fox news coverage.

Those who want to see the immoderate left should check out Reason TV's attempt to identify the center, and a funny display of Kenyan Keynesian geo-nomic ignorance.

Bottom Line: Most people are sane; some are awesome (watch it!)

H/t to WEH

04 November 2010

Comment form changed again

Anyone (even anonymous) can comment but everyone has to pass the capcha.

Let's see if this makes it easier to comment but not to spam...

My talks in DC

First off, thanks to all the people who took care of me in Washington DC last week!

On Wednesday, I gave a videotaped keynote ("Bridging Knowledge Gaps in Water Management") at the Center for Strategic and International Studies. Here are files for audio [mp3] and my slides [pdf].

I was surprised at the variety of attendees (about half from government, few economists) and pleased with the breakout sessions. The big barriers to improving federal water policy include: politicians who thrive from conflict, lack of budgetary force behind collaborative efforts, and turf wars.

On Thursday, I gave a talk to people from the Economic Research Service of the USDA. Unfortunately, I forgot to record that talk, but here are my slides [pdf].

My visit to ERS was interesting because I learned how politicians "immunize" programs against failure and cancellation: They apportion responsibility (and budgets) among different agencies that then defend their turf/budget like their first-born child. When failure results, every agency can blame others for being the weak link in the failure chain.

This insight is VERY important, since it directly contradicts an important requirement for success, that a residual claimant exists to take the blame (or credit) for a program, business or idea. Mr. Truman was famous taking such responsibility.

The analysts at ERS, for example, are not allowed to say "should" in their discussions of different policies, but at least one audience member was VERY DETERMINED to not talk about ethanol. He wanted to talk about water, which has nothing to do with ethanol /sarc.

Next, I spoke to a smaller group at the International Food Policy Research Institute. Here are files for audio [mp3] and my slides [pdf]. We covered the numerous problem with corruption in water management in developing countries (see this and this [pdf] on g/w in India and this [pdf] on g/w worldwide) and got into an interesting debate on whether the Green Revolution helped more peopl elive better lives or merely allowed the population of poor people to expand. The folks at IFPRI defended the former position, but I favor the latter position. I found these data but am looking for more research on whether greater food availability leads to an increase or decrease in population (controlling for women's education, technology, income per capita, etc.) Email me if you have anything interesting.

On Friday, I spoke for a few minutes at the start of a two hour discussion on groundwater policy (and many other aspects of water policy at the Competitive Enterprise Institute. Here are files for audio [mp3] and my slides [pdf]. Fred Smith (President at CEI) and G. Tracy Mehan (ex-EPA) spoke often, but there were about 15 participants from a variety of fields. In this group, the center of gravity shifted so far that I was defending public water providers, unlike the case at ERS, where public policies were the cause of problems. Interesting :)

I also talked to people at the Department of State, Steve Solomon (author of Water), and Congressman Miller's office. The best part of ALL of my talks was people's interest in what I had to say, willingness to engage new ideas and total pragmatic (not dogmatic) perspective on solving problems.

I also decided to work hard at getting a job that will allow me more time to continue these conversations; more on that next week.

Bottom Line: Face to face discussions of water policy are the most productive, but they take a LOT of time :)

03 November 2010

Just a few amusing things

...if you're tired of all the political BS


Or how about running from the camera?


Or, maybe wasps?


No? Maybe The Beatles vs Joan Jett vs Cypress Hill vs House of Pain vs RATM?



Bottom Line: Have a great Wednesday!

Anything but water -- political edition

I may comment on elections, but these posts fit the political meme.

02 November 2010

Poll results -- The politics of water

It's a voting day, after all...

There's a new poll (votes you regret?) on the right sidebar --->
I have participated in the politics of water...
...by lobbying on issues 24 votes
...by voting on an issue 28 votes
...by voting for a water manager 9 votes
...by voting for a director of a water agency 8 votes
....by voting for an agency politician (based on their water views) 16 votes
...by moving to a different constituency 6 votes
...by organizing my community 17 votes

These are very interesting answers, and I'd love to get more details from any of you (whether you completed the poll or not). Was your effort to influence policy successful? or not? What surprised you? What advice would you give to others who want to affect water policy?

Seems I only did the first and last, although my decision to move to Amsterdam* did have something to do with Dutch water policies being way better than policies in California (and a LOT to do with Anne).

Bottom Line: It's tough to improve things but no pain, no gain.
* Watch this space for future career/living location updates...

Two home runs!

This doesn't happen too often, and I don't expect it to happen again. (The Giants even had to wait 50 years.)

I started work on Save the Poor in 2003, and the first draft of An Auction Market for Journal Articles in 2004 (Here's a post discussing it at Marginal Revolution.) Submissions to journals started a few years later. They were accepted in 2010 and 2009, respectively, and published in the same issue of Public Choice by coincidence. Oh happy day!

Just don't say that academics move too fast!

Both articles are currently online and FREE to download (open access, woo hoo!)

Save the poor, shoot some bankers
Abstract: Bilateral or multilateral organizations control about 90% of official overseas development assistance (ODA), much of which is wasted. This note traces aid failure to the daisy chain of principal-agent-beneficiary relationships linking rich donors to aid bureaucrats to poor recipients. Waste results when aid middlemen (un)intentionally misdirect ODA. Waste can be reduced by clarifying domestic goals for ODA, using fewer middlemen with greater intrinsic motivation, empowering recipients, and/or replacing bureaucracy with markets.

An auction market for journal articles (with Jens Prufer)
Abstract: We recommend that an auction market replace the current system for submitting academic papers and show a strict Pareto-improvement in equilibrium. Besides the benefit of speed, this mechanism increases the average quality of articles and journals and rewards editors and referees for their effort. The "academic dollar" proceeds from papers sold at auction go to authors, editors and referees of cited articles. Nonpecuniary income indicates the academic impact of an article — facilitating decisions on tenure and promotion. This auction market does not require more work of editors.

01 November 2010

Good debate on water policies

Four people sent me this article summarizing comments by Bruce Babbitt (WWF), Peter Gleick (Pacific Institute), Gretchen McClain (ITT) and Sheila Olmstead (RFF).

Babbitt and Gleick were both too extreme in their views, but the overall debate on infrastructure, property rights, human rights, pricing and climate change covers a lot of stuff that we've seen here (check out the tags on the right sidebar for more).

Here's a good bottom line:
Babbitt said he had a foolproof solution to whet America’s appetite.

“Pricing,” he said. “I rest my case.”

Monday funnies

This comes from my dad. Our only political agreement is that most of the Congress needs to lose.

The most eye-opening civics lesson I ever had was while teaching third grade this year.

The presidential election was heating up and some of the children showed an interest. I decided that we would have an election for a class president.

We would choose our nominees. They would make a campaign speech and the class would vote.

To simplify the process, candidates were nominated by other class members.

We discussed what kinds of characteristics these students should have.

We got many nominations and from those, Jamie and Olivia were picked to run for the top spot.

The class had done a great job in their selections.. Both candidates were good kids.

I thought Jamie might have an advantage because he got lots of parental support.

I had never seen Olivia's mother.

The day for their speeches arrived.

Jamie went first.

He had specific ideas about how to make our class a better place.
He ended by promising to do his very best.

Everyone applauded and he sat down.

Now is was Olivia's turn to speak.
Her speech was concise.
She said, "If you vote for me, I will give you ice cream."

She sat down.

The class went wild.
"Yes! Yes! We want ice cream."

She surely would say no more.
She did not have to.

A discussion followed.
How did she plan to pay for the ice cream?
She wasn't sure.

Would her parents buy it or would the class pay for it? She didn't know.

The class really didn't care.
All they were thinking about was ice cream.

Jamie was forgotten.
Olivia won by a landslide.

Remember to vote tomorrow!

I took the two photos from the Rally for Sanity and/or Fear. WEH sent the lifeguard cartoon. Bush's cartoon came from the interwebs.

The Rational Optimist

Here's a podcast with Matt Ridley, author of that book.

His thesis is that we are doing quite well in terms of life expectancy and quality of life, worldwide. I agree with that but left the following comment:
  1. Environment is, at best, indirectly improving with the expansion in our living standards. Without a price on clean air, etc., there is little reason to assign positive value to it [and it gets overused].

  2. Adaption to climate change will be easier for rich countries, but what about LDCs? They will not be able to save themselves with an iPad app.
Oh, and yes, the industrial revolution/current living standards were driven by our use of coal and other fossil fuels. The problem is not that these fuels will run out, but that their use will poison us and our environment.

Bottom Line: Things are getting better, but we have to make sure that we take all costs of growth into account.