30 July 2011

Flashback: 24 -- 31 Jul 2010

A year later and still worth a read...

Big Ag sells to Big Urban -- Westlands arranged a swap deal with MWD of SoCal. Did the deal happen (I can't find any news on it)? If so, was it a good deal for both sides?

Bias at California's DWR -- government employees continue to choose censor the "news" people read via their clipping service.

Calculus of Consent -- The Review -- read this to understand the difference between a law and constitution (Congress didn't).

And now what? The UN says water is a human right. Any progress since?

Federal flood insurance sucks. Congress could end the program to save money and stop subsidizing silly behavior, but I am not holding my breath.

29 July 2011

Friday party!

I was at this party last weekend.* It was an epic example of three things:
  1. The Dutch will party -- rain or shine.
  2. The Dutch love to hang out with each other.**
  3. The Dutch misuse of the English word "funny" is sometimes exactly right.


They also have some excellent music! (Digweed is from the UK.)



* A Dutch version of Burning Man :)

* My bumper sticker version: "Everything is social for the Dutch," meaning love, business, eating, travel, etc.

The Greeks didn't xeriscape

According to Emily and some discussants at H-Water, "xeriscaping" (dry landscaping) is a neologism coined in the 1980s at Denver Water; this n-gram shows the word's use.

The term caught on in some places but flopped in California because water was abundant, real estate developers likes grass landscaping, and people didn't want cactus yards.

According to Emily (and totally believable to me), water managers found themselves stuck between choices of cacti and grass when discussing water use and landscaping. They eventually changed direction towards "California Friendly" vegetation suitable for California's Mediterranean (but not desert) climate, which has been sporadically promoted by water agencies and semi-embraced by homeowners.

Why? Real estate developers, homeowners and gardeners prefer turf to xeriscaping because of a preference to tradition; they prefer turf to local plants because it's easier to install and maintain [they think -- see comments]. Water managers take this preference as given and write regulations directed at turf (watering restrictions) instead of using a more-general form of persuasion (higher water prices).

Bottom Line: Xeriscaping (or landscaping appropriate to the climate) is not popular because of strong path dependency. We can get off that path by vastly improving the support for (and regulation of) alternative landscaping and/or raising water prices as an incentive to find less water-intensive ways of decorating our near outdoors.

28 July 2011

Speed blogging

H/T to TM and WL

Why write a book?

Chris Corbin asked me that question and others (on water markets, etc.) related to The End of Abundance.

Read the interview here.

Climate science, fascism and incentives

Rich Mills offers a comment:

We disagree on so many things, and yet we agree on the most important thing.

You seem sure that the earth's climate is in a warming trend that is unnatural and therefore not reversible by nature. I am not so sure.

You seem sure that said warming is a result of the use of fossil fuels. I am not so sure.

You seem almost as sure that the results of warming will be bad for the earth. I am not at all certain that, if the earth were really warming, we can know what the effects will be.

You point out that nine out of every ten scientists who are skeptical of global warming work for a petroleum company, which has a vested interest in not having fossil fuels demonized. I would like to point out that probably ninety-nine out of a hundred scientists who are convinced the earth is warming work in some capacity for a government, which has a vested interest in scientific results that could lead to more regulation and thus more power for the government.

With regard to the warming itself, it is now well-known that the famous “hockey stick” graph first used to demonstrate man's responsibility for global warming, was wrong. In fact, “The Little Ice Age” that ended in the mid-nineteenth century explains much of the warming of the late nineteenth and early twentieth centuries. Some warming was to be expected after an unusually cool period.

In addition, there is no real “normal” temperature for earth around which the climate should remain in proximity. The earth's temperatures have varied greatly throughout the millennia.

Finally, on the subject of the warming itself, I believe it was about eight hundred years ago that Vikings started settling in Greenland. They farmed, raising both human food crops and feed for their dairy cattle. After a couple hundred years, the winters started getting colder and longer, and the Vikings died or left. A couple years ago, retreating ice in Greenland revealed some previously unknown Viking settlements. Land that for several hundred years was unfit for human farming had been farmed before the onset of the Little Ice Age. In other words, the earth was warmer during the later period of the Viking age than it is today. Presumably the human impact on the climate was negligible at this time, but I guess one cannot be sure.

But we do agree on some things.

I think your idea for auctioning water is brilliant, though I wonder if the use of more frequent auctions (weekly or even daily), combined with the emergence of futures and options markets in water, might lessen the need for the “fascist” elements of the “all-in” system. At any rate, even keeping the all-in system, I think more frequent auctions would be better.

I could even support a pollution and carbon tax provided it was linked to the ending of the “progressive” income tax for which could be substituted a modest flat tax and a national sales tax of the “Fair Tax” variety. The resulting tax system should aim to be revenue negative, because I don't think the government needs to take such a big bite out of the economy.

And we agree on the big thing: that free markets, with their attendant private property rights and a system for redress in the event of the violation of those rights, almost always offer the possibility of the most flexible and practical human responses to changes in the environment. Government fiat is, at best, clumsy, slow and a medicine whose side effects seem inevitably worse than the disease it was meant to cure. At worst, and most often, government fiat allows groups with the most political clout to profit at the expense of the majority of relatively “cloutless” people.

To this, I responded:
I agree that there is bias in science, but there's a very strong reward to undermining poor research (fame!) so I am still with the "CC is happening" crowd.

Even so, we agree on the best ways to deal with mitigation. I am spending more time on adaptation (i.e., given that it's happening, what shall we do?) and market signals can be useful in minimizing harm (far more than a government SNAFU)
And Rich replied with:
In regard to your statement about the reward to undermining poor research, there are also risks (potential costs). One of those would be ostracism. That possibility can also be a powerful motivator. I'm not knocking scientists. They're human, that's all I'm saying. Also, I'm open to being convinced about climate change, but I haven't been yet.
Your thoughts?

27 July 2011

Bleg -- raw water pricing and the poor

TF asks:
I had a quick question surrounding the issue of water pricing mechanisms. Hammering out some ideas with respect to the Philippines initiative to implement a raw water pricing scheme. I've read some critiques and concerns about this with respect to the affordability of water for the poor.

I'm wondering if you could explain how a cost-recovery, raw water pricing system could be implemented to foster better water practices but at the same time, be equitable and accessible to poorer populations (especially in the developing world context such as the Philippines - where there are hoards of illegal connections especially among the urban poor on the fringes).

Also, I'm wondering how the idea of how a pricing scheme would fit into a human rights framework (water as a human right connected to food as a human right, etc.).
TF...
  1. I describe how "some for free, pay for more" pricing would work in chapter one of my book, which is in the free sample chapter.
  2. That said, the best way to serve the poor is transfer income to them; let the utility charge prices to cover costs (they do this in Chile).
  3. I am not a fan of the human rights in water argument because it's used as a justification for making ALL water free -- which is economically and environmentally unsustainable (see Chapter 11 in my book or this paper).
  4. Miya water is trying to improve water reliability in Manila by reducing leaks, theft and non-payment.
Does anyone else have thoughts on these issues?

Do turf removal programs save water cheaply?

A lot of water managers offer rebates to customers who remove lawns or replace old appliances.

These rebates are wasted when they pay customers who are going to take those actions anyway, but let's assume that they really DO motivate customers to change their potential demand for water.

So my question is this: What's the cost per acre-foot (or cubic meter) of these programs?

Let's examine the most famous program: The Southern Nevada Water Authority (of Las Vegas) will pay $1.50 per square foot to remove turf (and replace it with "desert landscaping"), for up to 5,000 square feet (464 m^2). Let's assume new landscaping uses zero water and that efficiently irrigated turf uses 62 gallons per square foot per year (source below).

Let's do the calculations: One acre foot of water contains 325,851 gallons, so 5,255 square feet of turf need to be removed to reduce water demand by one acre foot. How much will that cost SNWA? About $7,900. Of course, that's a one time payment and saving will occur over many years. If we use a 10% discount rate (turf removal reduces water use for ten years), then that's $790 per acre foot saved.

Is that a lot or a little? Farmers in Palo Verde Irrigation District (just down the Colorado River) pay about $4 per acre-foot for untreated water. The cost of desalinated water is roughly $1,000 per acre foot. So turf removal may be economical but probably isn't. For example, it's definitely not cost-effective when the payment goes to homeowners who already want to remove their turf or when owners who "feel good" about saving water use more (the rebound effect).

For more on not effective, read "Cash for grass" (on this page), where a landscape expert discusses three other programs and suggests six ways to reduce landscape water use that may be more efficient.

Bottom Line: Payment for lawn removal may be an easy program to administer, but it's probably not cost-effective in saving water or economically-efficient in finding the cheapest way to reduce water use. A direct incentive to use less water (raise prices!) would not only be more efficient (some people would remove turf; others would take shorter showers) -- it would also generate revenue.

Addendum: The author of the paper ("Sylvan Addink, PhD. Certified Professional Agronomist") has patents for managing water use on landscaping and a company that "provides environmentally enhanced landscaping irrigation." Seems that we have a biased source, but --luckily -- I wasn't relying on his numbers/arguments.

26 July 2011

Fracking and the Constitution

Another guest post from JW (earlier post):

In the Spring 2011 issue of Trout Unlimited's magazine the following quote appeared in "Pocket Water" (page 9) in a story about TU's position on fracking in New York State:
The Governor ignored the will of the people - as expressed by the New York legislature - as well as his earlier statements that gas drilling won't be allowed in New York until we can be sure that it won't harm the environment.
"The will of the people" sounds good, sounds right, but if you are on a different side of the issue, "the will of the people" becomes "the tyranny of the majority".

Fortunately we live in a constitutional republic, a country ruled by laws, and not ruled by men. Our rights are protected by the Constitution and its Bill of Rights, and are not subject to the whims of the majority. Minorities, and even corporations, have rights, including property rights. The Governor would not be upholding his oath of office, "to support the constitution of the United States" (2006 New York Code, Article XIII) if he continuously bowed to "the will of the people".

Trout Unlimited -- and its members -- care deeply about clean water, as do I. If they want my continued financial support, they will also have care about the Constitution and individual rights.

What about fracking? Environmental laws and regulations have evolved to become more effective at protecting individuals from negative externalities. Even though fracking techniques have been used for many decades the recent increase in the use of these methods may mean that use has out run regulations. However, scrutiny is high on shale gas drilling and I am optimistic that regulations will be further developed that protect both the environment and property rights.

Speed blogging

The Los Angeles Department of Water and Power is placed at No. 13 on a list of "The 19 Most Hated Companies in America," mainly for suspicious billing practices. Maybe it's time for LA to simplify its inefficient politicized (big hot lots get more water) water tariffs?

The Dew Bank collects dew for drinking water (wonder about cost-benefit):

The EU issues a boring statement on sustainable water management. Africans are looking for more data on drought. Kansas farmers are using water options to reduce the harm from drought.

State of the Oceans? Mass extinctions. Thanks for asking. In unrelated (?) news, the Americans decide to create ... an ocean health index.

Aguanomics is one of the top 25 water conservation blogs.

Gates Foundation donates $8 million to UNESCO-IHE (the Institute for Water Education), where I just taught. Win! They are also looking to reinvent the toilet. Tyler Cowen calls fail.

Caution! Children at Play

This op/ed warns that republicans may try to gut environmental laws during last minute negotiations over the debt ceiling in Washington.

That's not the half of it. I forgot about all the vote buying and special interest riders that are part of tight negotiations involving ideology. (Remember California's water bond?)

Bottom Line: We're about to get a load of wasteful laws that harm the average citizen.

Fracking update

Seems that my suggestion that frackers self-regulate is becoming more viable.

Bloomberg agrees with me, but there's more!Do you see (hysteric) national regulation coming? I see it coming...

In the meantime, Marsh & McLennan offers insurance against water contamination. There's a market solution (or the beginning of one) here, folks, so let's not be too hasty to over-regulate!

H/T to MH

25 July 2011

My recent talks

SF: Meditation Mondays and Sexy Salad :)
I did one on The End of Abundance to people running eco-start ups in San Francisco [58 min 13 MB MP3] and another to the US Army Corps of Engineers in Virginia [60 min 14 MB MP3].

Sorry -- you may have to turn up the volume.

Then I talked to members of the National Ground Water Association [30 min 22 MB MP3]

Title: Unsustainable groundwater management: Robbing from your neighbors or yourself?

Summary: Aquifers are complicated, but groundwater management institutions are more complex. Sometimes they match the complexity of the aquifer, but it's more common to have mismatched institutions that reflect past conditions, asymmetric power relations, and external influences. I will discuss a typical profile of unsustainable management, some simple economic tools for managing groundwater, and speculate on why those tools are not often used.

Monday funnies

This is so dumb, I can't even fathom...
  1. Congress decides we need a US Presidential Dollar coin program.
  2. People don't buy the coins; they prefer paper.
  3. Then...
    The U.S. Mint sells the coins at face value, using taxpayer money to cover shipping and handling costs. If you want to buy $1,000 in coins, you simply pay $1,000 on your credit card and wait for the shipment to arrive in the mail.

    Credit card rewards enthusiasts leapt at the program. They use a simple strategy: Purchase coins. Wait for coins to arrive in mail. Deposit. Use deposit to pay credit card. Repeat.
In summary:
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. --Milton Friedman
H/T to KB

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.

23 July 2011

Flashback: 17 -- 23 Jul 2010

A year later and still worth a read...

Lobster thieves -- property rights on a tropical island.

Some Answers about Fiji Water (I made them up, but I bet they are better than the ones Stuei's lawyers would have sent.)

The Appeal -- The Review -- a good novel exploring the power of money over justice.

Conferences in exotic placesI will be going to a few more this year (Amsterdam, Athens, Albuquerque, La Jolla, Milwaukee, Tilburg) so this is an appropriate example of my suffering. (But seriously, I hate the jetlag.)

22 July 2011

Friday party!

Interesting way to recycle a car...

Notes from EAERE

I attended the annual meeting of the European Association of Environmental and Resource Economists in Rome.

Here are a few miscellaneous notes:
  • Rome is beautiful (the "gala dinner" was at the Villa Giulia, picture at right).
  • Our hotel put shampoo in little plastic sachets. These are better than plastic bottles (cost, environment), and I wonder when they will catch on everywhere?
  • The EU's Directorate-General for the Environment has a booklet with the title " EU environment policy supporting jobs and growth" [no web link? WTF?] that pitches a "win win" version of environmental protection. Although I agree with the sentiment, they recast data to make their case in a way that's more agit/prop than fact. According to the booklet, e.g., 40% of Romanian employees work in the "natural resources" sector. I reckon they are coal and steel workers.
  • Dale Jorgenson gave a boring talk on the industrial distribution of impacts from higher energy prices (link to presentation; look at top papers here for his work), but one of his numbers was fascinating: he estimated that the quantity of coal sold would fall by 62% by 2060 but its price would rise by 370%. Using a baseline revenue of 100 in 2010, that implies revenue of 140 in 2060 (constant dollars). That's a win for those who remain in the coal business (and any investor with a diversified portfolio).
  • Check out the World Business Environment Survey.
  • In the panel session on climate change, Richard Tol made the interesting claim that global warming (currently locked in at +2.1C since we're at 430ppm CO2e now and will be at 450ppm in a few years) is estimated to reach +4.1C with optimal policy by the 23rd century. It will reach +4.6C without any policy. The upshot (to me) is that we need to start working on adapting to climate change. Distributional problems (bad for Bangladesh vs. not much Norway) are going to be more important than these mean temperatures. Oh, and remember that the chance of "human wipeout" exceeds 50 percent with a +5.7C increase in average temperatures.
Coming soon, notes and links to interesting papers...

21 July 2011

Reviews (so far) for End of Abundance

18 Jul 2011: Tyler Cowen @ Marginal Revolution:
There are five new popular books on water this year. The two I will recommend are: Steven Solomon, Water: The Epic Struggle for Wealth, Power, and Civilization [aguanomics review] and David Zetland, The End of Abundance: Economic Solutions to Water Scarcity. Of the five books, this one has the most policy truth.
17 Jul 2011: Tim Shah @ Enviroboys:
I strongly recommend that anyone interested in earth's most precious resource -- the one that keeps us going everyday, provides a natural beauty to our planet and provides a habitat for millions of species -- read this book! The stories, ideas and insights in this book are so valuable whether you are a water manager or someone interested in conserving water. I enjoyed reading the book very much and continue to enjoy Zetland's blog (Aguanomics). I think it's people like David who take the time to write such books, deliver public lectures and write blog posts on this topic that will help shift the way we manage our water in the 21st century.
July 2011 @ The Horinko Group:
The Horinko Group highly recommends reading David Zetland’s new novel [Novel?], The End of Abundance: Economic Solutions to Water Scarcity.

Poll results -- Eco-pets

Hey! There's a new poll (distant relations) on the right sidebar! ===>
Pets are good for the environment...(choose one)
Nope 46%29
Yes if they are cute 16%10
Yes if they are eaten 17%11
Yes if they are outdoors 11%7
Yes if they are small enough 10%6
63 votes total

Pets don't come out good in this one. Large, foul-tasting, ugly indoor pets appear to be bad for the environment (and maybe just plain bad). Small, cute outdoor pets that are eaten may be the way of the future. Squirrels maybe?

Bottom Line: We usually do things that make us happy, not because it's the "right" thing to do. Does that mean we need to redefine "right"or "happy""?

20 July 2011

Tricks of the trade

I am a capitalist, but I am not happy when companies (or people!) fool me into paying for things I do not want. (I recently read, but cannot find the link to, a story pointing out that consumers are not as "efficient" in calculating and comparing prices as economists sometimes assume.)

Case-in-point, I booked a flight on Cimber Sterling A/S, a Danish airline, from Amsterdam to Copenhagen.

On the website, I chose my flight and then chose my seats. I was surprised to see how many seats were available but didn't notice the 7€ fee for choosing a seat. After I was distracted by a different website (where I did notice the fee), I hit "buy tickets" without removing my seat reservations.

Too late. Money gone.

So I emailed customer service and asked for a refund ("please cancel my seat reservations. I chose them by accident and do not care for a reserved seat.")

I got this response: "Sorry not able to refund seating," which was just about as nice and helpful as a club into the back of my head.

This policy is ridiculous -- it's as if I walked into a store, bought three cans of coke, paid for them, walked out, and then decided I only wanted two cans. How many stores would refuse to take back an unopened can that was purchased two minutes earlier?

Maybe a few, but those stores wouldn't stay in business for very long.

Bottom Line: Watch out for cheap-shot theft by companies that take your money when you're not looking and then refuse to give it back.

19 July 2011

Speed blogging

  • The Fresno Bee writes that Senator Feinstein is working hard to balance her constituents' conflicting demands for water (for ag or the environment, for example) ahead of her re-election campaign. Besides the obvious question (she's 78, may be she should retire?), I suggest that she lower her blood pressure by moving more water allocation decisions from the political to the economic arena (markets!).

  • Jennifer Moeller-Gulland (a colleague on my EU project) wrote her Oxford MSc on water markets in the UK. Check out ``The Initiation of Formal Water Markets -- Global Experiences Applied to England" [PDF]

  • Tracy Mehan sent a good example of fiscal mismanagement at a water utility that had no rate increases since 2005 and was tranferring $2 million per year to the city. Those transfers were ended, but the utility is NOW short on money. Why? It was underinvesting in maintenance. Now it needs a 15 percent rate increase but is asking for only an 8 percent increase. Fail.

  • A report on groundwater management in California says that some local areas do a good job without central interference. That's great, but the problems are in the areas where management transfers water from some to others or is unsustainable for all. We need to monitor and report groundwater levels and withdrawals.

  • The IWA World Congress on Water, Climate and Energy takes place in Dublin, Ireland from 13-18 May 2012.
H/Ts to DL and RM

Bon strategy to reach Jovi

Cristie sent me this update on her quest to win a contest to manage JBJ for a day [earlier post]:
It was a nail biter! I had to employ quite a bit of strategy at the end, but Bon Jovi has declared me the winner of the referral contest :) Thought I was going to lose my shorts on this one, but it worked out. Oddly, the #2 girl chasing me drove the price up substantially by chasing me, and she risked it all at the end essentially "doubling down" two hours before the contest ended without having much of a game plan. She even added 55 people AFTER the contest closed. It was crazy.

I just wanted to thank you for your help on this and for your humor. Believe me, I do have far more substantial hobbies than this...
I asked for clarification about her competitor's late additions, and she replied with:
It was strange. I don't know if she didn't read the rules to see when the contest ended (11:59pm Pacific Standard Time), or if she didn't understand that time zone. It is also possible that she was just trying to enter her people after the fact to sort of "sneak in" ... she did surpass me 1hr and 50 minutes after the contest ended. She also may have naively thought..."well, as long as they keep taking my referrals and giving me credit for them, then I will keep entering." In fact, when I woke up the next morning, Bon Jovi's website had her in the lead! That was unnerving. I did take multiple screen shots along the way to document that I had actually won and I embedded them in an e-mail or two to Bon Jovi Management... just in case.

Another thing that was odd, and honestly needs to get fixed, is the fact that the contest should actually shut off. After the contest time frame is over, if someone tries to enter a referral, a page should pop up that indicates that the contest is closed and that if you would still like to submit your referral, you can, but that you will not be given credit for it in terms of the contest. English is a second language for this girl and maybe she just didn't understand the rules. That being said, I am a big believer in personal responsibility... if you are entering a contest written in a language that you are familiar with but not fluent... take caution!! I don't get it. I actually sent her a message via Facebook 9 minutes and 13 minutes after the contest ended letting her know that she was wasting her resources given that the contest had closed.
I agree with Cristie's thoughts on this problem and personal responsibility (as well as her solution), but I think the contest organizers should refund money/allow cancellations on those later additions. Maybe some of them DO want to become fan club members, but the disconnect between the contest rules and technical behavior of the site (including updating the lead) was unnecessarily confusing, and the cost/benefit of new membership changed substantially after midnight.

18 July 2011

Monday funnies

Colbert on fracking:


...and the mistake he made about water on fire.

Addendum: Talisman pulled the coloring book.

Miya Water's quest to plug leaks

While in Jerusalem, I had the opportunity to speak with Tami Gaoni Feldman of Miya Water.

Her company is in the business of reducing non-revenue water (NRW), or water that goes into pipes but never reaches a customer's meter gets paid for.

Well-managed water systems might have a NRW rate of 5 percent (due to fire hydrants, flushing the system, minor leaks, etc.). In a poorly-managed and maintained system, NRW rates range from 40 to 90 percent. The most common causes of high NRW rates are theft of water, non-payment of bills, leaking pipes and miscalibrated meters.

IBNET tracks NRW rates for about 2,000 utilities.

Tami told me that Miya is working with one of two utilities in Manila, where the 300 staffers in the NRW division tackle 100 leaks per day and overall system losses of 300 ML per day (about 240 acre feet per day). Miya has had some success so far in reducing NRW from 67 to 50 percent.

Miya uses three main tools to reduce NRW: monitor and fix leaks, manage system pressure to reduce leaks in low-demand periods (middle of the night), and increase payment for services. As a first step, Miya makes sure there are water meters at big junctions, to make it easier to track down branches with high 24/7 baseline use.

These technical details were interesting, but Miya faces an additional problem: water managers and politicians facing water shortages prefer to increase supply (via desalination, reclamation, groundwater pumping, etc.) instead of reducing NRW losses.

This behavior does not make sense from a cost-benefit perspective. A decent NRW program will increase revenue per unit of treated water pumped into the system. Those revenues mean that NRW programs "pay for themselves."

I hate to say it, but this feature is even more attractive than my "raise prices" recommendation: it's an engineering solution (water managers like those) that will not increase prices (politicians like those).

So why is it hard for Miya to sell its services?

I see two main reasons. First, a good NRW program requires up-front financing to pay for staff, software, meters, and so on. For most cash-strapped utilities, additional money is hard to come by. So why not get a loan from a bank or development agency? Because (according to Tami, but within my understanding) bankers are not familiar with NRW programs. They are more comfortable with making loans on physical assets like desalination plants that can be pledged as collateral.

Now stop and think about this for a second. What happens if a water utility fails to repay a loan on a NRW program? There's no collateral to grab. What happens if it fails to repay a loan on a plant? Yes, there's collateral, but then what? Are the bankers going to drag a plant from Dhaka back to Geneva? So the "collateral excuse" is hollow.

That leaves conservatism and one other excuse: managers and politicians like new facilities that they can pose in front of, cut ribbons for, etc. There's no photo opportunity at a non-leaking pipe.

We couldn't think of any other reasons, but maybe you can.

Until then, I will conclude that NRW reduction programs are an underutilized method of improving utility performance.

Bottom Line: Every water utility should have a program to track, report and reduce its NRW rate -- for its financial stability, environmental stability, and the good of its customers.

17 July 2011

Flashback: 10 -- 16 Jul 2010

A year later and still worth a read...

Why do businesses let money run down the drain? ...how past habits may no longer be efficient.

Statewide Groundwater Regulation? Some pros and cons from Damian.

Yes, split IID in two (still a good idea)

Monday funnies (should be titled "sex selling water")

15 July 2011

Friday party!

Change happens...

Anything but water

  • Politics -- children or leaders? See figure =>

  • Useful discussion on academic publication:
    People are busy. Most of them had only read the abstract (and maybe the concluding section) of the first draft working paper to begin with. Worse, they had just relied on their favorite blogger to summarize it for them. But, guess what? Their favorite blogger has moved on and won’t be re-blogging on the new version of the working paper. Many won’t even know that there is a more recent [and maybe contradictory] version.
    More from John Whitehead.

  • Google+ has potential:*
    Google believes that with Circles it has solved the tough sharing problem that Facebook has inexplicably failed to crack. “With Facebook I have 500 friends — my mom’s my friend, my boss is my friend,” says Shimrit Ben-Yair, the product manager in charge of the social graph. “So when I share on Facebook, I overshare. On Twitter, I undershare, because it’s public. If Google hits that spot in the middle, we can revolutionize social interaction.”
    I joined but will take my time to see how it works.

  • Bad news about good news: "The lull in global warming from 1998 to 2008 was mainly caused by a sharp rise in China's coal use"

  • Good essay on the eurozone debt crisis ("once Greece goes"). I favor the haircut scenario: 50 percent debt writeoff. [More from Tyler Cowen]

  • Most post-WWII growth in American government jobs was in LOCAL government (from about 4 million to 14 million employees); federal employment was relatively flat.

* To eliminate this problem? "New Service Adds Your Drunken Facebook Photos To Employer Background Checks, For Up To Seven Years"

H/T to RM

14 July 2011

Bleg -- what to study?

A potential student asks for your thoughts on possible research needs as they relate to helping people better understand planning and management of resources, i.e.,
What are currently the most important research needs regarding the availability and use of water in arid climates -- particularly in the Western United States?

For a student planning to continue graduate level education in water resources, what courses or line of study would be the most relevant and important -- Law? Natural Resources Management? Hydrology? Resource Economics? Community and Regional Planning? Other? All of the above?

Water in Rome

Roman aqueducts brought massive volumes of fresh water to the city during the empire. (The Aqua Appia -- built in 312BC -- traveled 16 km, dropped 10 m in height and brought 73,000 m^3 of water per day to Rome.)

Two aqueducts met at the Porta Maggiore. Even today, the area is a "utility hub," with power lines and transport rails cross-crossing in front and behind the Porta.


What happened, I think, is that most of this water just flowed through Rome. It was not stored on a large scale. People used it in the bath houses, from where it went into sewers, and for drinking and bathing from "always on" fountains and taps like this (Anne was the leg model :)


What's interesting to my modern eyes (and end of abundance perspective) is that ALL of this water was "non revenue," not just because people got water for free, but because the system was 100 percent "leaking."

That was not a problem when water was abundant, but it is (increasingly) today.

Bottom Line: We will know that the Romans have water scarcity (and are seriously addressing it) when they put close valves on their always-on taps.

13 July 2011

AT&T Fail

(Yes, I know the headline is redundant.)

So I've had an AT&T GoPhone for use in the US since Oct 2010. One of the GREAT features was free international text messaging (you pay $2 per day for unlimited talk and text).

I just got back to the US and found that my text to the Netherlands costs $0.25. Not a big price, but a big surprise because I had not been charged before.

I called them and -- after 45 minutes -- found out that the Netherlands is NOT included in AT&T's list of 100 free countries, but Netherlands Antilles was. (AT&T's rep insisted they did not unilaterally change my service contract; wish I had an old screen shot of those 100 countries!)

Which countries are on the list? Italy is not, but the Vatican is; Great Britain is not, but Gibraltar is; France is not, but French Antilles/Guiana/Polynesia are! China is, but India is not.

Seems that AT&T wants to list as many free countries as possible without listing countries that many customers want to contact. Good old bait and switch.

But wait, why was I getting free messages? "There was a mistake in our programs that wasn't fixed until April 2011."

I don't know if I am more upset as a customer about the fixed service or more worried about AT&T's competence. But the Death Star has never been too good at that (except when handing over customer records to government spies.)

My op/ed on fracking is posted

"Regulation: an acceptable cost for frackers" is posted here.

[Better to comment there, but you can also comment here. I do not vet comments.]

Addendum: Colbert makes fun of fracking and pollution. See? Industry needs to read my op/ed :)

Speed blogging

  • Atlanta and Georgia won the right to water from Lake Lanier. Now that the court has established the rights, it's time for the politicians to negotiate who should get water and who should get money. A tri-lateral monopolistic negotiation among governors would be a nightmare. Better to allow users to bid for water in an all-in-auction, with revenues going to those with the property rights.

  • "Consider climate change in hydropower relicensing"? Definitely!

  • T. Boone Pickens makes lemonade out of his failed attempt to mine and export water from the Texas Panhandle to thirsty cities by selling his 211,000 acres of water rights for $103 million to local cities. (Not sure how much water is connected to those rights, but remember that the Ogallala aquifer is mined.) I am not sure who won and lost in the deal -- Pickens, the politicians, citizens, the Ogallala, or everyone.

  • PepsiCo grant supports clean water in rural China. This is a waste of money in a country that's got $3 trillion in cash reserves. I hope that Pepsi is getting lots of advertising out of it, and I wonder if the central government will see it as a sign of their incompetence.

  • San Diego is spending $12 million on a test plant to recycle water. Might be a good price if it convinces citizens to accept "toilet [to treatment plant] to tap" supplies.
H/T to DL

12 July 2011

Why does Orszag care about water in China?

Peter Orszag writes that China should use more "smart pricing" for its water.

Orszag is vice chairman of global banking at Citigroup and a former director of the Office of Management and Budget in the Obama administration. His money-to-power-to-money profile is common in Washington, but why is he interested in water in China?

His first suggested responses (lower pollution, use more desal and canals to increase supplies) are, respectfully, wishful and stupid.

His third suggested "solution" to water scarcity is to increase prices and market allocations. Yay! I say.

But what's in it for Citigroup? Here's the key quotation:
If China moved more aggressively to price water in a manner that reflected demand and supply, it could teach the U.S. a lesson in using market economics to address environmental issues. As a colleague of mine at Citigroup Inc., the analyst Deane Dray, has written, “water has never been priced efficiently.” In the U.S., water is generally heavily subsidized, and prices aren't adequately linked to usage levels.

Just as we need to price carbon in order to avoid a climate crisis, we need to price water to avoid a water crisis. Market forces can work wonders for the environment, but only if we have the political courage to create them.
And that's the end of his column, no China in sight.

So Orszag is actually talking about more prices and markets in the US. Why does he take the indirect route?
  1. Americans do not want to be directly told they're doing it wrong;
  2. Americans who admire China may think that we should do it if they do; and
  3. Americans who fear China will want to make sure we "stay competitive."
Although I have my doubts about the means, I agree with Orszag on the ends -- and there is absolutely a need for more market mechanisms:

Example 1: Some Central Valley farmers wrote this:
Current attacks on the Valley’s water [include] the view that water is nothing but a commodity and must be sold to the highest bidder. This is a foolhardy concept which, if followed, will condemn the United States to depend upon foreign sources with unreliable health protections for its food supply.
Besides their incorrect conclusion (water prices in markets will not rise by that much for CA farmers), they appear to see the glass as half-empty (farmers will have to pay more for water) when it's really half-full: farmers, as net sellers, will gain a lot from markets. [oh, and I LOVE their "foreign terrorist food" claim!]

Example 2: The California Roundtable on Water and Food Supply (CRWFS):
calls on decision-makers to employ agricultural water stewardship as a guiding framework to inform agricultural water management in California... Water stewardship practices include water efficiency measures, groundwater recharge and conjunctive management, soil moisture retention and soil health improvements, on-farm storm water and rainwater storage, and much more... The recommendations seek actions to build a stronger knowledge base to support decision-making, strengthen the technical support system for farmers, and build more effective policy that produces tangible results.
CRWFS members include the Pacific Institute and California Farm Bureau Federation, two organizations that favor engineering and informational fixes over market and price incentives. Their call for more knowledge, regulation and aid for farmers will probably produce very little improvement in water management or efficiency in California (which is the way some farmers want it -- "just give us the info booklet and let us get back to draining those rivers").

Bottom Line: Americans should use price and market signals to allocate water volumes and improve quality.

H/Ts to DL, TM and a little birdie.

11 July 2011

Found any typos in my book?

Two people have sent me emails noting two typos in The End of Abundance. One is HUGE but funny.* The other is just annoying.

(I fear the ones that change my meaning.)

If you are reading the book and have found any typos, please email them to me!

The virtue of self-publishing is that I can revise quickly.

I will put out version 1.1 around 20 July.

* You might think it's a good idea to delay your order until 21 July, but then you will not own the collectable version with the huge, funny typo. Time to strategize?  :)

Monday funnies

I saw this Holy Trinity on the streets of Rome. Didn't have my camera, so here's a reconstruction:



Now we need to decide who's the father, son and holy ghost.

The Big Thirst -- The Review

I enjoyed this book (subtitle: "The Secret Life and Turbulent Future of Water") by Charles Fishman. It has a good pace, is easy to read, and provides a lot of useful insights on how we see and manage water.

I started reading it a few days after publishing my book, and it was weird to read similar stories to the ones I covered. (I am not sure of Charles was reading my mind or blog, but it was nice to be in good company :)

In the book, Fishman hits a lot of important points: water management is local, the problem is not water "use" but slow natural recycling, the importance of politics/power/security in management, abundant water doesn't need to be managed or priced like scarce water does, there's little incentive to conserve free water, and so on. His business writing background is handy for adding context, e.g., each tanker bringing water to Barcelona supplied sufficient water for 32 minutes of demand.*

Here are notes that I made while reading, by chapter:**
  1. Gives an overview and manifesto for the book, i.e., the new era of water scarcity requires that we recognize its value and discard old cliches.

  2. Covers the physics and physical properties of water.

  3. Covers water management in Las Vegas. Fishman is awed by Pat Mulroy's "results" there, but I am not. Per capita use may have dropped by 31 percent between 1989 and 2009, but it's still (using his numbers) 240 gallons/person/day. That gigantic number would spin heads in Asia, Australia or Europe, where 930 liters per capita per day is perhaps 400-600% of local averages. The chapter has good stories of how businesses facing higher prices or shortages reduce their water use and an interesting profile of the head-in-the-sand attitudes of Georgia's politicians towards impending doom. (Although they appeared to be right, given their recent victory in claiming water from Lanier.) Mulroy also seems a bit unhinged, as she rants against Great Lakes residents who do not want to export their water to people like her who "need" it more.

  4. Contains a great profile of the destruction and post-hurricane rebuilding of Galveston's water supply and other "modern" cities that face engineering supply problems.

  5. Looks at how businesses reduce their process water demands at a wool shed, hotel, a Coca Cola plant, cruise ship, bottling plant, IBM fab, etc. The chapter goes well until he claims that "tap water is much more tightly regulated and monitored than bottled water" [p. 134 in final version], repeats an unjustified claim that bottled water undermines our willingness to pay higher prices for public water systems, and makes a false equation between retails sales of bottled water and money spent on maintaining the public water system in the US. I argue against all three of these opinions in my book, but I doubt that your average bottled water drinker is unwilling to pay $5 more per month (10%!) to increase the reliability or quality of his water.

    It gets worse. When discussing drinking water services, Fishman says "The global economy has contrived to deny the most fundamental element of life to 1 billion people" [p. 136 in final version]. This is just a total failure of a statement (it's the politics!) from a business reporter. He recovers a bit when saying that less bottled water drinking in Maine isn't going to help someone in India, but then he goes on to blame "the market" for "failing to find any solutions for real water problems."

    These three pages are a pity, and they reveal a flaw in an otherwise excellent book: Fishman appears to be more nervous of competitive, for-profit companies that deliver value (GE selling a glass of water to you in the desert) than the monopolistic and corrupt politicians who don't care if you die in the desert or down the street from their offices. Moving right along...

  6. Describes an Australian town's emotional (and ultimately futile) rejection of recycled water. His conclusion from the tale of Toowoomba's dry taps is that times are changing (End of Abundance!), and American would be wise to watch and learn from Australia's experience. I agree with that, but add the hopeful thought that America's 52,000 water systems mean that there are 52,000 managers with the opportunity to do the "right thing" (manage scarcity) without waiting for permission to make necessary changes.

  7. Ventures into the bush to look at Australian agriculture. He spends time with a farmer facing drought and does a good job explaining the ignorance of city folk who call farmers "water wasters" without understanding either agronomy, irrigation or economics. He uses the idea of "water envy" to describe how some people think others are wasting, but I think "water ego" is more appropriate. The presumption that one person deserves water more than another is not based on some objective measure of consumption (my car, your salary) as much as a subjective decision that my use is more important than yours. It's not like you need a car like mine -- you need MY car. That's the case with water. The end of abundance means there's not enough to please everyone, so some people think they should have yours. Fishman's discussion misses this point, I think, because he mixes up water as a natural resource and water as an environmental good.

    Later in the chapter, Fishman makes a good point (not for the first time, not for this idea): "Our water systems are anything buy robust. They are durable...[but] they have no adaptability, no flexibility. Our water habits rely on... assumptions of water availability." Exactly. That's why I wrote my book, to extend the story from situations Fishman describes to an analysis of why those situations arise and how to address them. The Wall Street Journal's review on Fishman's book clued me in on this part one-part two quality: The Big Thirst describes the issues; The End of Abundance explains how they arose and how to correct them.

  8. Moves to India to describe a place with less than 24/7 service and unsafe water. This chapters is really good. It describes water management (and failure) from urban to rural, from industrial to agricultural uses. The lessons there offer useful parallels to the successes (and failures) in the developed world.

  9. Discusses the problem with "free" water. Fishman rightly points out that water in Las Vegas is quite cheap, but then overshoots in claiming that much cheaper water in Imperial Valley (which also draws from the Colorado River) is "exactly the same water." That's not true when you consider the importance of pressurized and treated water; property rights; and the fact that the price of water service doesn't reflect the price of (free) water as much as the cost of running the system (Fishman later says this, but his reason for cost pricing -- "people need water" -- is not my reason: water is provided by regulated utilities or agricultural cooperatives). These missing factors mean that Fishman's outraged text (a penny for the water in a bag of carrots!) is misplaced. That said, I found these passages quite fun to read, since I discuss nearly identical material (Vegas vs. Imperial) in my book.

    In a later discussion, Fishman absolutely blows apart one water manager fantasy: higher prices do nothing to reduce demand and hurt the poor. (Mulroy claims that higher prices in Vegas will not make sense "because the Sultan of Brunei will not use less." But she forgets that they WOULD impact other customers.) Fishman then advocates a version of "some for free, pay for more" water pricing. (No, he doesn't quote me or this blog. He does talk to Mike Young, so there's something in the air.) The rest of the chapter on pricing, markets and monopolies gives an excellent summary of these ideas.

  10. Concludes with good illustrations of the ways we enjoy water, the political role of leading the fight to improve water service and how our ignorance can lead to mismanagement. He hits two good points: water management is local and management failure is political. Unfortunately, he then makes a few too many shortcuts (e.g., end "silly" practices) in assuming or advocating greywater systems, more crop per drop, mandatory water footprinting, and so on.

    Fishman temporarily backs away from pushing certain ideas; he claims "we need to change our relationship with water;" but then he returns with two pages of [paraphrasing] "we must change silly attitudes." I agree with that, to a point. In my book, I take attitudes (silly, cheap, green or traditional) as givens and spend more time on setting incentives to reach economic and environmental sustainability. I do not worry as much as Fishman about the black box of human behavior. (I am guessing that we'd agree on this in conversation, but I've only the book to read!)
Bottom Line: I give this book FOUR STARS. Read it to learn about "our relationship" with water, but turn to my book (sorry, but I can't avoid saying it) to understand the underlying reasons for our current water conditions and how to improve water management.

* But his journalistic style can be too breezy:
  • "Statistical alliteration" -- repeating the same numbers, ratios, etc. three times in the same paragraph -- slowed me down as I tried to understand non-existent differences.
  • It's not true that a "flat screen TV... needs its own water supply." Sure, power generation requires water for cooling, but the implication is that a flatscreen TV needs a rooftop reservoir.
  • I am not sure that "we think of places like Barcelona as water wealthy," or that our emotional relationship to water explains why "water pipes beneath our streets are poorly maintained." I don't like having thoughts attributed to me that I do not possess.
  • He says that "IBM's new water division reaches other companies" when he means it SELLS to other companies.
  • 36 million visitors to Las Vegas, 86 percent of them from the US, does NOT translate into 20 10 percent of the US population when you count repeat visitors. There were other examples of lazy statistical inference.
  • Reductions in water use do not automatically increase profits if they come with heavy capital expenditures. Fishman knows this, but sometimes he does not emphasize the importance of that trade-off.
  • The Murray-Darling is not "running out of water" -- there's too much demand for the annual supply. He then confounds various demands exceeding supplies with "no wonder there's a water shortage." False explanations lead people to pursue the wrong remedies.
** I also had a pre-publication draft, so I am not 100 percent sure that all of these comments are relevant to the final version.

09 July 2011

Flashback: 3 -- 9 Jul 2010

A year later and still worth a read...

Independence Day -- 90 percent of the Declaration of Independence is still good after 235 years :)

Water Bond DOA -- California's water bond never survived. The cross-subsidies described in this post was one reason why, and they are ALWAYS a bad idea. That doesn't mean that we won't see local water managers pursing gold-plated fantasies.

In the end, we need to be clear on how to make good public policy for the public

Why I quit Facebook -- I rejoined and then quit again. I don't miss it. (Irony: Just joined Google+ and not sure how that will go...)

08 July 2011

July 4th, part 5

This is a Canadian "Water Cop". Can we get some of these guys in the US?

Anything but water

07 July 2011

My talks in SF and DC next week

On Monday, July 11, I will be hosted by Hub Bay Area for a "Hub Brown Bag Lunch: The End of Abundant Water." I'll be speaking on California water issues. I'll also have some copies of my book to sell/sign.

The free event will be from Noon to 1:00 PM at 901 Mission Street, Suite 105, San Francisco, CA 94103-2905.

There are still some spaces open.

Register here.


On Tuesday, I will be participating in a closed workshop hosted by the Institute for the Future in Palo Alto.

On Thursday, I will be talking with some government folks about water auctions in Washington DC.


On Friday, July, 15, I will be talking about water (my book) at the Institute for Water Resources at the US Army Corps of Engineers, from 1 to 2pm. Outsiders can participate via webinar:*
Audio Conference
USA Toll-Free: (877)336-1839
USA Caller Paid/International Toll: (636)651-0008
ACCESS CODE: 6859053
Web Meeting
Web Meeting Address: https://www.webmeeting.att.com
Meeting Number(s): (877)336-1839 or (636)651-0008
ACCESS CODE: 6859053
SECURITY CODE: 4000

* Download the client software from here.


On Saturday, if all goes well, I will be back in Amsterdam!

July 4th, part 4

Watch this one carefully...


(I violate most of these, and I am happy that I have take my freedom to do so.)

Payment for services rendered

Lloyd Carter reports on the salaries of various top Westlands* staffers, many making over $150,000 per year.

$6 million in salaries may be a small price to pay in a district that grosses $1 billion per year, especially when many of the top officials spend more time on lobbying for cheap water** than directing irrigation rigs.

That said, I also find this amusing (sad?):
Westlands General Manager Thomas Birmingham makes $350,004 a year, plus benefits, expenses and a state pension program funded by CalPERS. For comparison purposes, the governor of California and its 37 million people makes $212,179.
I guess he's providing 50% more benefits to the People of California.

Bottom Line: Sometimes you get what you pay for, sometimes you don't.
* Westlands is a California public agency.

** Cheap because Westlands has not paid for 80% of the capital costs in its delivery system; it still owes over $700 million to the Bureau of Reclamation, if I remember right.

How much for a irrigation water meter?

(via RM) I got this:
Commission Recommends Ag Water Measurement Regulations

The California Water Commission at its meeting June 15 recommended that the state adopt agricultural water measurement regulations.

Developed under SBX7-7 as part of the comprehensive water legislation of 2009, the proposed regulations would require accurate measurement devices on nearly all irrigation laterals and turnouts in the state, numbering more than 115,000 gates, and would require between 5% and 12% volume accuracy for delivered water. Water supplies would face a deadline of July 31, 2012, to begin measuring volumes delivered to farm and ranch customers.

At a previous water commission meeting, Department of Water Resources officials had suggested that certified volume measurement devices could cost $6,500 each and $1,200 per year for monitoring, repair and reporting.
Those numbers do not seem credible. In this post, I reported that urban "smart meters" (can be monitored in real-time) cost $400 each to install and $2 each to monitor per year.

I understand that agricultural meters are different in size and configuration, but they do not need to be that accurate (5-12% error!).

I bet a pitcher of beer that a competitive market for installing and metering ag water use would come in at 10% of DWR's prices -- $650 per meter and $120 per year of monitoring.

You up for a challenge, Mark?

Bottom Line: DWR is making up big numbers either because they want the money for themselves or want to block agricultural meters by making them look too expensive.

06 July 2011

Watch me talk about TEoA

I forgot to link to the YouTube videos in which I describe my book.

Here's the 13 minute overview video:



You can also go here to see short, three-minute videos on each of the 12 thematic chapters (environment, agriculture, dirty water, human rights, etc.)

July 4th, part 3

A guest post from JW:

Buried deep (page 240) in the book, Now, Discover Your Strengths, by Marcus Buckingham and Donald O. Clifton, Ph.D., is the sentence, "Communism's demise was inevitable because it offered respect to the community but never the individual, and so it drained itself of vitality and spirit, one person at a time."

Wow! Think about that and its implications for a moment.

While the the focus on the community, rather than the individual, is only one of the reasons for Communism's demise it is an important and under-appreciated reason. Some people seem predisposed to focus on groups rather than individuals. And those who focus on groups seem to favor groups of different sizes, from the family, to the village, to the earth.

I belong to the small group of people who believe the individual is important -- much as the authors of our Bill Of Rights did. Further, I believe that the voluntary cooperation between individuals results better and more satisfying lives. That noble goals do not justify ignoble acts, such as coercion.

Consider Buckingham's and Clifton's insight the next time a politician presents their solution to the crisis of the day.

Poll results -- Give and take

Hey! There's a new poll (eco-pets!) on the right sidebar ==>
When it comes to making mistakes (counting change at the check out, bargaining over goods, buying high and selling low), I tend to...
...be a taker (taking in more than I give away) 3%2
...be a giver (giving away more than I take in) 18%12
...not pay attention 15%10
...change depending on whether it's work or play 26%18
...offset give and take with karma 38%26
68 votes total

Karma. I like the karma answer. I tend to "keep the change" when given too much because I consider that gain to be a wealth transfer from innumerate to numerate people. OTOH, I am quick to leave a heavy tip for people who give me a break (in times of discretion), especially when it's out of their own pocket.

I especially like spending a windfall on treats for other people.

Bottom Line: Humans are social animals who like to share the joy (as well as the pain). In these cases, the economics (insurance) are reinforced by the psychology (care and concern).

Speed blogging

  • Sudan and Ethiopia are planning dams on the Nile. These are the result of instability in Egypt, which has threatened to attack countries blocking Nile water. Chinese money and engineering mean they are unlikely to pass a benefit-cost test.

  • Virtual water transfers unlikely to redress inequality in global water use: "Most inequality (76%) in water use is due to agricultural production and can be attributed to climate and arable land availability [physics], not social development status. Virtual water use is highly unequal and is almost completely explained by social development status [money]."

  • Coca-Cola's "green" billboard isn't. Why? Because the plants on it (neat!) have zero net impact on carbon (they live, absorb carbon and die, re-releasing it). Coca Cola should buy some rainforest and send customers a postcard with images of REAL carbon conservation.

  • "We have too much water," says Milwaukee's Mayor, as he offers discounts to businesses that use a lot of water and employ people. The economics of these decreasing block rates are sound -- as long as the price covers costs and prices can rise when demand approaches supply.

  • Get to work! The deadline for entering a three minute video in the contest "Tracing the journey of a drinking water drop" for International Water Week in Amsterdam (from October 29 to November 4, 2011) is October 1st 2011.

  • In Water: Asia's New Battleground, Brahma Chellaney expertly paints a larger picture of water across Asia, highlights the security implications of resource-linked territorial disputes, and proposes real strategies to avoid conflict and more equitably share Asia's water resources. (I've ordered a review copy.)
H/Ts to JH, DL, RM and TM

05 July 2011

July 4th, part 2

Part 1 was George Carlin. Here's Part 2:

Senza tasse

I just got back from the annual conference of the European Association of Environmental and Resource Economists in Rome. I've got several posts coming, but this one is, uh, cultural...

The Economist has said that "tax evasion has long been a national sport" in Italy, but I was surprised to see its extent.

When dining out on our second night, we got a printed bill on a plain piece of paper; since we paid cash, there was no evidence of our transaction. I've seen that kind of transaction in other countries, of course, but it was suspicious (other places often give you a numbered bill/receipt).

I was therefore ready for this situation:


In the photo, you see the cashier has the register open. He's putting cash in the drawer and giving receipts for drinks to customers. The customer then takes the receipt to get her drink down the line. The bartender who takes the receipt in exchange for the drink then returns the ticket to the cashier, where it's used again.

Some people may call this recycling. I'll call it an ingenious way to sell 10 drinks while reporting one sale to the tax authority.

(I asked an Italian why the guy doesn't steal money; she said that the crew boss probably told everyone to use this method; nobody wants to rip off the crew -- just the tax authorities.)

Bottom Line: Italians don't like to pay taxes because the State fails to benefit them because people don't pay taxes.
Addendum: Surowieki reflects on the same problem (non-tax payment) in Greece.