25 Jul 2011

The Future of Water -- The Review

This book by Steve Maxwell (with Scott Yates*) offers a chatty overview of present and future water issues.

The title refers to the book's theme: predicting the trends that will dominate future water management.

I had a little trouble with the implementation of this theme. Charles Fishman discusses the future [my review] by describing existing water problems and implying that these problems may occur elsewhere. Maxwell & Yates (M&Y) describe problems, developments and trends (many more of them) but make a more explicit claim that what happens in one place is likely to happen in others. Sometimes this claim works; sometimes it seems misplaced.

M&Y put more emphasis on technological solutions than the impacts of policies on incentives and water scarcity. They often say that we need to change our attitude towards water but most of these admonitions are based on "should do" rhetoric instead of examining why people act as they do.

The book of 11 chapters begins with a prologue set in a future dystopia in which a post-abundance Los Angeles couple recycles their urine for household use, pays $7 per gallon for water, etc. This setting provides a fun reference point for the conversation ahead, but M&Y lay it on a bit thick. They try to ignore desalination (which produces water for about four cents per gallon) by erecting assumed barriers to its use.

In the first chapter, they bracket this reference point by going back to 1910 to set the scene. They then lay out four themes in the book:
  1. Water will be treated as an input to production, like energy.
  2. Water usage will be better monitored.
  3. Different "types"of water (drinking water, wastewater) will be managed as "one water."
  4. Water prices will rise.
This last point interests me, of course, but M&Y do not put it in the same context I do, namely, that we need to change policies and incentives to make scarce water more expensive. A higher price will, in turn, drive themes 1--3.

Rather than pursue this causality, M&Y take their four themes as given and discuss how future water management will look under those assumptions. That discussion leaves out a factor that's dear to my heart, i.e., how policies are made (or not) and the interest groups that try to affect them. As such, their themes are accurate only to the extent that (4) really does happen (either explicitly or via some other method of recognizing scarcity).

The rest of the book proceeds as follows**

Chapter 2 is about water use outside the home. Prediction: smaller lawns.

Chapter 3 is about water use in the home. M&Y predict more "water cleansing" based on the "water footprint" of toilet paper, but they miss the problem with footprinting: toilet paper produced in Finland with local wood and water has a negligible impact on sustainability.

I was intrigued by their prediction that households will use three water sources: greywater for lawns and toilet flushing, freshwater for cleaning, and bottled water for drinking. They make an excellent point: it's too expensive to clean ALL water to drinking quality (a standard that's going to become more strict due to new contaminants) when we only drink 1 percent of the water coming to our homes.***

Chapter 4 covered the use of water in agriculture. I had many disagreements with the content in this chapter -- everything from footprinting to "waste" in flood irrigation to over-reliance on technical solutions to farmers "generally pay almost nothing for their water."

Chapter 5 covers the use of water in industry. This "lite" chapter basically said industry would find ways to use less water because it's scarce.

Chapter 6 gives a thumbnail sketch of different water sources/technologies. I liked the Barcelona example: they are mixing desal brine with mostly fresh wastewater into one discharge pipe. No problem with salt concentrations :)

Chapter 7 talks about storage, i.e., more dams in China and fewer dams in the US. I was also interested to see the bigger picture on China's foreign dam activities: China supplies money (loans) to build dams using Chinese equipment and labor ("tied aid"). Dams are then used to generate cheap power for refining minerals and cheap water for growing food, both of which are exported to China. This pattern resembles neo-colonialism.

Chapter 8 reviews water utilities, I was interested to learn that 9 percent of community water systems serve about 88 percent of the population (more here). M&Y predict more aggregation among the 42,000 systems serving fewer than 3,300 people. (Maxwell is an investment banker who specializes in these mergers, so he knows the business.) Most of these mergers are driven by higher capital costs and stricter regulations on water quality.

Chapter 9 discusses "the future" of the water business, but most of the discussion of water trading and investment is about current events (sometimes old news!). The discussion of "privatization" is excellent, i.e., all water services, worldwide, are delivered by SOME combination of public and private companies.

Chapter 10 gives a superficial description to trends (population, energy, climate change) that will affect water, without a strong discussion of how these changes will affect water management, e.g., climate change will shift precipitation patterns but who will win? lose? and how can we deal with those shifts?

Chapter 11 ends with "solutions for tomorrow," i.e.,
  1. The importance of public understanding.
  2. Thinking globally, acting locally.
  3. Pursuing technological solutions.
  4. Developing smarter laws/policies.
The first is something to hope for, the second is kumbaya, the third will happen if the fourth does. To me, this list can be summarized as "recognize water scarcity in policies and incentives." Unfortunately, there was little discussion of how to change policies or implement higher prices, but that's what MY book is about :)

The chapter washes out for me after this. Most of the discussion involves "rethinking water" instead of recognizing its scarcity (we ALREADY understand what to do when something is scarce). M&Y also draw the wrong analogy ("we need to act as one, as if an asteroid was coming to destroy the earth, when it comes to water management") since water management -- and its complications -- are the result of its local nature and the distribution of costs and benefits from making different management choices.

The book can be quite superficial in discussing projects in a sentence or ignoring deeper incentives, motivations or caveats. At one point M&Y say "we need to go for local solutions instead of one-size fits all," but I think local solutions have always been the rule. They only look one-sized with hindsight, when we decide that we don't -- for example -- want to dam every river.

Bottom Line: I give this book FOUR stars for its short overviews on many topics and interesting perspective on some business implications.

* Yates says it's "the book I wrote for the American Water Works Association and Steve Maxwell."

** Some chapters were boring -- like from an airline magazine -- and some were more interesting (fast paced and thoughtful).

*** I am adding this idea to version 1.1 of my book with a link to this example (via JW) of a community of 60 homes that is going to cut water service because residents cannot afford the equipment that would bring water within standards for fluoride. Surely it would be possible to keep the water flowing for all uses except drinking water that could be supplied in bottles.

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