28 Jan 2011

People choose their paths

Peter Gleick emailed me a response to a recent post (Craig Wilson is wrong about ag water use), and it brings up some interesting issues, which I comment on by [number]:

Your post from yesterday borders on dishonest and ad hominem, though that does seem to be a trend in your blogging now.

"The Pacific Institute's flawed reports (and Peter Gleick)..."? [1] And then you go on to misrepresent our actual reports, which either you don't read, or you choose to misinterpret.

We are far more explicit, and accurate, about the definitions of consumptive versus non-consumptive, beneficial versus non-beneficial, efficiency versus conservation than practically anyone else. We understand far better (apparently) than you, the distinctions and advantages and disadvantages of saving different kinds of water. You apparently do not understand how drip irrigation actually works and when and how it saves water -- having bought into the arguments of farm lobbyists that it doesn't save water.[2] (How ironic: I was just on a panel with a top representative from Westlands on Saturday who described the success their farmers had had in using drip on Pima cotton, reducing water use 30% and increasing yields 30%. Farmers get it. You still don't.) You say we argue for "subsidizing" farmers and then "cite" your own false and misleading blog from last year rather than our report, which is far more sophisticated in its financial arguments, not to mention comprehensive in the tools we recommend.[3]

I realize the only tool you consider worth using, talking about, or forcing on water users is full-cost pricing and markets.[4] But don't misrepresent facts and other points of view when doing so.

Dr. Peter H. Gleick
President, Pacific Institute
Member, U.S. National Academy of Sciences
MacArthur Fellow

[1] I referred to both Peter and PI because they were both quoted in the articles. Taugher's article says:
Wilson will argue Wednesday that farmers who use water inefficiently are violating the constitution's requirement that its use be "reasonable."

His recommendations, if adopted, would mark the first time the doctrine has been applied so broadly.

"It's been taboo," said Peter Gleick, a noted water expert and president of the Pacific Institute, an environmental research organization based in Oakland. "No one has wanted to step up and say, 'This is not a reasonable or beneficial use of water.' "

Gleick added: "We don't have enough water anymore to be able to avoid that conversation."
And just how will that conversation occur? Who participates? Who decides what's "reasonable"? Can a farmer claim that flood irrigation is reasonable because it makes him happy? What if he floods the adjacent wetlands? We all know that the definition of reasonable and beneficial has been changing over the years, but its basic nature is the same: use that makes people happy.  The Pacific Institute's emphasis on measurement and technology is helpful when we need to know numbers, but these numbers are irrelevant compared to the process of deciding water use. As I've written many times (and discuss at length in my book), people have personal subjective opinions on different water allocations. A political mechanism for deciding allocation is not going to please everyone. That's why I recommend a market allocation of water.

[2] Of course drip doesn't "save" water. The main question is where "wasted" water goes. In some places (Westlands, IID, Israel), it's likely to evaporate. In others, wasted water returns to the groundwater or other surface flows. The problem with PI's report (and especially the way that it's been presented and interpreted to policy makers) is that high efficiency irrigation is presented as the solution across California. And Wilson is advocating rulings and regulation on water use technologies, as if outsiders know what type of irrigation farmers should be doing. Westlands is a heavy user of high efficiency because farmers there pay about $200/af for water. Drip makes sense to them, just as it does not make sense for IID farmers who pay $20/af. (That's not to say that I do not advocate ways to move water from places like IID to places like Westlands!)

[3] The executive summary of PI's report says:
The report Sustaining California Agriculture in an Uncertain Future shows that California agriculture can flourish despite diminishing water supply and future uncertainty from climate change, but it will require great strides in increasing the water efficiency of the agricultural sector.

Many farmers and irrigation districts have already been making water-use efficiency improvements. Yet the analysis estimates that potential water savings of 4.5 - 6 million acre-feet each year can be achieved by expanding the use of efficient irrigation technologies and management practices... ["practices" are later defined as]... including efficient irrigation technologies, improved irrigation scheduling, rainwater collection, integrated groundwater management, and measures that enhance soil moisture retention.
So the tools recommended in the report, the tools that everyone reads about and understands immediately, are technological and engineering techniques to get more crop per drop. There's no mention of the incentives to use less water or use these tools. Once again, the Pacific Institute demonstrates a mastery of measurement and technology while ignoring failing to integrate management practices that include incentives, decisions, cooperation, coordination and so on.

And that gets us to [4], where Peter (apparently not a close reader of this blog) misses three main points that I often make here:
  1. I do not advocate "force" (a la Delta water master) for reforming agricultural water allocations. I recommend all-in-auctions for those, within self-governing irrigation districts.
  2. For urban water supplies (not the topic here, except that Peter mentions it), I certainly do recommend that water managers "force" customers to pay prices that reflect scarcity (some for free, pay for more). Full cost pricing is useful for paying the bills but it does not prevent shortages.
  3. As an economist, I am concerned with incentives. With water, that means the incentive to use more or less water. In the debate over means of reducing shortage, Peter advocates [IMO] the "soft path" of reducing demand though water conservation measures -- as opposed to the "hard path" of building infrastructure to increase supply. So let's say that there's a fork in the road, one leading to a soft path and one leading to a hard path. Peter argues that people should take the soft path, but that doesn't mean that people will take that path. I am interested in the incentives for going hard or soft, and I go beyond economics, to politics, sociology and psychology, to understand the institutions that affect our decisions at that fork and how we make decisions at that fork.
A few years ago, I created a tag for this blog, economics vs engineering, to highlight the difference between mechanistic solutions that assume "just adopt this technology" answers and political-economic solutions that address social or political compromise or allow people to choose custom solutions. That's why I advocate water markets for agricultural water: they give farmers the option to sell water instead of using it. Some farmers may fallow land to sell water (the case at PVID); other farmers may adopt technology to reduce their consumption, to save money, or sell their surplus (a solution that often goes wrong due to our habit of quantifying rights in terms of diversions, not consumption; cf lining of the All American Canal )

Although the Pacific Institute's report may mention water prices or markets (or financial arguments that are more about accounting than economics), it's clear to me that its main emphasis, point and impact has been to advocate technological, soft path, fixes that have little economic justification and require political force to foist onto farmers.

Bottom Line: Engineering and numeric calculations mean nothing without the economic incentive and political freedom to change water use decisions.