31 Jan 2012

Accelerated theft

I saw this image when I checked into my flight:

It may seem like an innocent way to add more miles to your account, unless you consider that many flights are paid by companies. The miles go to the person, the company pays.

Many companies have allowed workers to keep their miles, as a type of perk, but those perks were limited by ACTUAL flying. Now a worker can "accelerate" the transfer of miles money from his employer to himself.

Environmental Economics and Government Policy

I attended (and recorded!) an interesting panel discussion at the ASSA in Chicago

Environmental Economics, Policy, and Politice
Moderator: Robert Stavins (Harvard University)
Joseph Aldy (Harvard University)
Michael Greenstone (Massachusetts Institute of Technology)
Robert Hahn (University of Oxford)
Adele Morris (Brookings Institution)
Richard Newell (Duke University)
William Pizer (Duke University)

Most participants had worked for a few years "inside the machine" and then gone on to further academic research. They had a number of interesting stories.

In response to my question ("were you able to revoke policies that failed an economic cost-benefit?"), they answered "No. It's really hard to kill a policy that's in place. Most of the good we did was in preventing bad ideas from moving ahead."

Good news, I guess.

Here are two MP3 recordings. The first has everyone's opening remarks; the second has the Q & A.

Bottom Line: It's hard to work for change from within the government. On the one hand you have access to decision makers and the policy process; on the other, you may be trapped in bureaucratic silos or excluded from decisions where the policy is to ignore economics.

30 Jan 2012

Monday funnies

Way more sad than funny.

Poll results -- food, energy and water

Hey! There's a new poll -- persuasion -- on the right sidebar (maybe I should have made it YOU instead of "people") ===>

Which of these areas needs MORE government involvement
Food 15%12
Energy 35%28
Water 51%41
81 votes total

So this was a trick question, in a way.

First I think that the government already plays a smaller role in Food and Energy that government. More interesting is voters' response that the government needs to play a bigger role. Where does that come from? Environmental flows? Irrigation? Tap water prices?

Bottom Line: I can probably trace 75% of water problems to one government idea or another. That said, I understand the need to coordinate, regulate, etc. But that "minimum government" rule is often exceeded in negative outcomes from government programs (e.g., subsidy to agriculture). What's needed is some simplification of government programs so they can more useful.

27 Jan 2012

Friday party

Win win?

Anything but water

H/Ts to RD and DH

26 Jan 2012

Tablets deliver the digital revolution to reading

I bought a tablet computer a few weeks ago (Samsung Galaxy Tab 10.1), and I've had some time to get used to it.* FYI, I didn't buy the iPad because it had fewer features and (big for me) I was not interested in getting locked into Apple's "walled garden."

Here are a few notes:
  1. There's the awkward process of figuring out how to balance your "digital life" among several devices (I have a laptop, iPhone, iPod Nano and now this tablet). Looks like I am using the tablet more for casual internet browsing and emails and -- very important -- reading (more below).
  2. Android apps are definitely lagging Apple apps. I need to sideload my Economist (via Calibre, a free eBook program) and can't get the New Yorker. That said, I can't say I am really suffering from a "lack of apps."
  3. Reading on a tablet is no big deal. The Kindle is lighter to hold and has a longer battery life (30 days vs 3 days?), and the tablet has some problems with glare in the sun. I'd be happier with a lighter tablet, but it's a WHOLE computer with a bigger screen, so that's a tradeoff I am willing to make.
  4. Reading: I just downloaded about 30 free books.** The number of free, but good, books -- combined with "loaning" Kindle books --- means that I could probably read for free for the next few years (or decades). Ease of access (free, plus instant download) means that a lot of people are going to be reading these books.*** Writing and publication are definitely going in the same direction as music (and film). Awesome for consumers, tricky for producers.
  5. Size matters! This tablet is much easier to carry around, throw on the bed, etc. I can see taking it to conference, etc. instead of a laptop.
  6. I am starting to understand more about "the cloud" -- I've uploaded most of my music (via google music) from my laptop. I already use (and LOVE) Dropbox, so I can see a time when we will have most of our data stored and sync'd in the cloud. Security is not so much of a worry to me (hacked passwords are a bigger problem).
Bottom Line: Tablets are finally delivering on a "consumer-centric" digital experience that promises to give more pleasure than it takes in time, inconvenience and money.

* Damn. The price has dropped by $28 (6 percent) in the last month.
** I bought End of Abundance to make it easier to get it again from Amazon; I am pleased to see that the hyperlinks work as advertised, although it's annoying that the format doesn't look right unless you page fwd/page back so the Kindle can catch up, but that's typical with HTMP rendering. I was annoyed to find that hyperlinks do not work with Adobe reader for the PDF version of the book; I bought EZPDF Reader so that hyperlinks work but that program -- like Acrobat does not allow me to display 2-up pages. Any ideas there?

** Yes, I am thinking more about how to market TEoA via Kindle...

25 Jan 2012

Speaking at the Commonwealth Club (SF) Feb 1st

I'm speaking at noon at the Commonwealth Club in San Francisco on "California's water future," i.e.,
How should California manage its water in the future and which incentives will motivate the biggest changes in conservation and agricultural efficiency? Which water policies and practices have backfired? Join water economist David Zetland for a fresh perspective on how we can manage our most precious resource in the 21st century and what we can learn from past mistakes.
I'll talk for 30-40 minutes and then take questions.

It's $20 to get in (I don't get anything), $8 for CC members and $7 for students

I'll try to post a recording of my talk.

Externalizing the internality

Behavioral economists have a new twist on the old idea of "internalize the externality" (e.g., include the cost of pollution in the price of gasoline), i.e., "externalize the internality."

By this, they mean call attention to something important that we tend to ignore because it's hard to vizualize internally.

I will be reviewing Ariely's book on these ideas soon, but the important point is that "free" distorts our behavior: we spend too much on "free" things ("buy one, get one free") in the same way that we do not pay attention when a 100 percent price increase is from trivial to "double-trivial," e.g., when water goes from $0.001 per unit to $0.002 per unit.*

Both prices are too cheap to notice (the internality), so we fail to change (externalize) our behavior.

There are two ways around this:
  1. Get people to notice how much water they use relative to their neighbors (like here).
  2. Raise prices to a level that's "noticeable" (e.g., $4/gallon gas) and rebate excess revenue to customers who use less than average volumes (people really notice refund checks!).
These externalizations will change our habits in two ways. First, people will reduce their demand because they are paying attention (wait -- there's a price?). Second, they will reduce their demand if the price is higher (ohhh -- and it's higher!).

Bottom Line: Prices only work when we notice them, so make water prices (and consumption) relevant.

* Residential water often costs $1 for 1,000 liters/250 gallons.

24 Jan 2012

Some reading material

From hydrology.nl/:

Principles of good governance at different water governance levels

The right to water and water rights in a changing world

Complex and Dynamic Implementation Processes: new book on water governance (in the Regge River of the Netherlands)

Transforming Landscapes – Transforming Lives: the business of sustainable water buffer management

Traditional irrigation systems and methods of water harvesting in Yemen

Dynamics in groundwater and surface water quality – From field-scale processes to catchment-scale models

Present & Future – Visualising ideas of water infrastructure design

Business, water and risk

This article is typical in its discussion of water risk in company supply chains. It includes analysts complaining about risk, companies claiming they hedge risk, consultants offering to study the risks, and various "statistical" methods of understanding those risks.

What it fails to include is "regulatory uncertainty," i.e., a political decision that changes water allocation in an instant.*

Bottom Line: The biggest danger to businesses is not risk but political uncertainty. That's why reliable and predictable rules are the key to business prosperity (jobs, profits and happy consumers).
* Recall that risks can be modeled with probability (how many heads in 1,000 coin flips?) while uncertainty cannot: is the politician going to flip a coin, eat a sandwich or answer the phone? The article mentions how Coca Cola "factors in" local government leaders, but it fails to discuss their dominant role.**

** As a good example of government's inability to understand risk (or ability to ignore it), consider this government agency that "stated what it wanted to do, paid people to say that it is safe, and will complete the circle by declaring it to be a good thing." What's it? Mining groundwater from under the Mohave Desert for export to Southern California lawns. And that, my friends, is how government incompetence (or laziness) can combine with private greed to destroy the environment.

23 Jan 2012

Monday funnies

I often feel this way when reading consultant reports prepared for conferences...

Price water like gas -- and go home

CB sent this article, in which a politician opposed the use of increasing block rate pricing (the more you use, the more you pay per unit of water):
"This bill is directed towards a practice of conservation rates that I think are obscene and predatory," Hays said. "And I don't want to have any of my constituents subjected to such a rip-off. It is my plan to stop it."
This politician must be thinking either:
  1. The water company is ripping people off. Prices should not rise above the cost of service, or
  2. Heavy water users should pay the same per unit as light water users.
(1) implies that the monopoly is making profits, which is usually not allowed. (2) implies that heavy use should not be additionally discouraged (through higher rates per unit). A volumetric price is a good enough incentive to use less (and method of covering costs).

But, wait, there's a third explanation:
Hays said the state should fine people if they're wasting water rather than let companies generate revenue by charging higher rates based on consumption.
This is not just a terrible idea (like paying a fine for driving an SUV AND paying the price at the pump), but also extremely inefficient -- how many extra people -- and time -- will be needed to administer a system of "fair" fines.

Once again, I am amazed at a politician's lack of foresight.

The debate from the other side ("we need higher prices to penalize heavy users") is not much different.

Bottom Line: Stop squabbling over "moral" tariff structures and fines. Charge a single price for water that's high enough to prevent shortages (like a price for gasoline). That price -- presumably -- will cover costs. Excess revenue can be rebated to customers at the end of the year (per meter).

20 Jan 2012

Friday party!

Or, more properly, giving of thanks...

Bottom Line: We need to pay attention to actual causal forces -- not the ones that make us feel good. This applies to many situations, religion being only one of them.

Save the people

One of my favorite "deep reforms" for the liberation of individuals from their cruel overlords is quite simple: Give every person on the planet a second passport.*

Such a system will make it easier for people to vote with their feet, abandoning odious regimes (e.g., North Korea, Cuba, Iran, Somalia) for a different life.**

The Economist favors a version of this idea, but mine is based on some simple facts:
  • People with more choices will be able to improve their lives.
  • Odious regimes that lose slaves are more likely to reform (Ireland! Poland!).
  • Movement and communication across countries will make it easier to see good and bad ideas.
  • Mere awareness of one's "other country" will weaken nationalism and improve trans-national cooperation. (I've held for years that the Peace Corps is the best foreign policy program the US could have ever hoped for.)
Some people object to this idea because they fear an invasion of "foreigners trying to take our jobs and wreck our culture."

That fear is interesting when it comes from members of the "lucky sperm club" who did nothing to earn their rights. It's also easy to counter by, e.g., requiring that ALL citizens pay into welfare before they take advantage of it or by requiring all citizen-residents demonstrate a minimum level of cultural and linguistic knowledge.

OTOH, that fear is also based on a typical problem: how much are we willing to share to help others? And what if those others are not "like us"?

Based on my experience, people are not, in fact, very generous in welcoming strangers, but that's no reason to abandon an idea that could do a lot to improve the lives of so many people. Note that residents of rich countries benefit from new blood and new ideas, as anyone who's studied US history knows.

Bottom Line: The worst monopolies are government monopolies; we need a way of escaping them.

* FYI, I have two -- US and UK. I am VERY happy that I can live and work in any of 28 countries. Passports would be issued to others in proportion to the welcoming country's population
** I am also happy to be outside the US. I may be out for a long time, or not, but there are some things about my "home country" that drive me nuts.

19 Jan 2012

Fixing problems from the bottom up

I came up with this idea while leading a discussion in Bonn about "breakthrough" ways to help people in developing countries who are facing facing food and water problems.

After hearing a number of weak hopeful suggestions, I set a few ground rules:
  • You cannot solve problems with lots of money, e.g, vertical farms or build a first world sewer system.
  • You cannot assume cultural evolution, e.g., "act like the Dutch."
The crux (or Nexus) of the solution requires that we find a way to insert the sharp end of the wedge into a problem, as a means of creating some opportunity -- and momentum -- towards overturning an unacceptable status quo (e.g., sporadic, unclean water).

I have two answers to these problems. The small-scale solution is to make it easier for outsiders to understand the scale of the problem -- and the scale of the reward awaiting its solution. (I'll blog on the large-scale solution tomorrow.)

I suggest that each "block" of houses conduct a daily or weekly survey of how much time/money each household spent on gathering and preparing water for consumption. Those statistics could be posted on the corner of the block. That sign would make it easier for residents to understand the scale of the problem they all face, easier for entrepreneurs to understand the rewards awaiting their solutions, and easier for politicians and regulators to understand the scale of water managers' failure to provide good service to citizens.

Such a blackboard on the corner -- a device that allows any message to be broadcast -- could be used for a number of local community problems.

Bottom Line: We need to know the scale of the problem before we can make an appropriate response -- and sometimes "we" need help.

18 Jan 2012

SOPA, PIPA and other BS

Congress has been making laws for years that did little to promote innovation and quite a lot to protect monopolists from competition.

The debate over "appropriate" protection for intellectual property is vast; my opinion is that it's swung too far in favor of Mickey Mouse and patent banks and too far away from innovators and entrepreneurs.

The current proposals for SOPA and PIPA are even worse on at least one count -- trying to enforce US laws out of US jurisdiction.

I can't really say much about boycotts, etc. I am just going to join the people who break laws written for special interests that have no foundation in promoting what's best for society. It's time to find a better way (one that's not written by lobbyists.)

Bottom Line: Just because it's illegal doesn't mean we won't do it.

Correction: Yes, some environmentalists lie

In this post, I accused Coyote (and his readers) of being too quick to condemn participants in a lawsuit for trying to make vague evidence work for them. I put more emphasis on the uncertainty over measuring pollution, but it turns out that the parties concerned were more interested in spinning evidence as plaintiffs accusing Chevron/Texaco in the Ecuador oil-water-pollution case.* Read this New Yorker article.

As a believer of "innocent until proven guilty" and the burden of proof -- even in a civil case -- resting with the plaintiff, I am changing my opinion on this one -- these environmentalists did not do the right thing -- they pushed their little evidence too far in their quest for Chevron's billions.**

Bottom Line: Don't lie -- even if others do.
* Chevron bought Texaco during the 20-year lawsuit.

** Oh, and let's not forget that Ecuador's national oil company was Texaco's partner, that the government had already agreed that Texaco had made amends for damages, and that Texaco's practices were "legal" at the time they were taken.

17 Jan 2012

Good performance or poor oversight?

Jack Moss of Aquafed (the International Federation of Private Water Operators) showed this slide during a presentation in which he discussed the "unlevel playing field" that private operators (investor owned utilities and contract operators) face.

His point is that the lights of contracts (open-tendered with clear targets and published), regulation (reporting, hearings and outside oversight), academic studies (on regulatory data), and competition (for contracts) on private operators are capable of showing good and bad performance -- as well as attracting the attention of citizens, activists, the media and politicians.

But that's obvious. What's NOT so obvious -- and yet so important -- is the LACK of lights shining on public (or municipal) water operators. The Los Angeles Department of Water and Power does not have to compete for its service area. It does not have a fixed-term performance contract. LADWP is regulated by the LA city council, which does not specialize in water regulation, spend all its time on water regulation, compare LADWP to other operators, or have an arm's length relationship to LADWP (they share a budget, for example).

All of these factors make it more difficult to know what LADWP is up to, hold LADWP to a performance standard or punish LADWP for failure (remember the burst pipes that resulted when LADWP screwed up watering restrictions)?

But LADWP is not alone -- at least 80 percent of Americans (and perhaps a similar share of world citizens) get their water from public utilities that are not under the spot light.

Bottom Line: What gets measured gets managed, and we surely need to know what ALL water utilities are doing in their quest to deliver clean affordable water to customers.

16 Jan 2012

Monday funnies

Maybe Canada will save us in November 2012?

How NOT to do benefit-cost analysis

A political economist* has written a study on the effects of piracy on local incomes in Somalia [BBC version], concluding that "the positive economic impacts of piracy are widely spread, so a military strategy to eradicate piracy could seriously undermine local development."

Let's draw a few parallels by analogy, e.g.,
  • The positive economic impacts of slavery are widely spread, so the eradication of slavery could seriously undermine local development.
  • The positive economic impacts of the war on drugs are widely spread, so an end to the war on drugs could seriously undermine local development.
  • The positive economic impacts of attacking foreign nations are widely spread, so an end to war could seriously undermine local development.
What we are seeing here is a classic example of failing to see the forest for the trees. Sure, there's some benefit to pirates who attack, seize and ransom ships, but the negative impacts of these actions -- from direct impacts to shippers, passengers and crews to indirect impacts to consumers and taxpayers -- are far far greater.

Ask yourself this question a different way: is piracy so good for development that we should have it in as many places as possible? I hope you're able to see why that answer is no.

Bottom Line: There are costs and benefits to every activity. It's not just important to make sure that benefits exceed costs, it's important to make sure that those who get the benefits also bear the costs!

* I've been telling people I am a political economist for awhile now, but I just updated the blog banner from "the economics of water (and other stuff)" to "the political-economy of water (and other diversions)." Better?

13 Jan 2012

Friday party

Not a head-banger, but cute kids...

Anything but water

12 Jan 2012


Someone spent some time on this image, which I am posting at 12:01 on 12-01-12 :)

Speed blogging

H/T to ML

11 Jan 2012

Garbage in Egypt

January 13 is World Cleanup 2012! Read this overview of similar voluntary clean-up efforts.

No owner, no respect...
There's a lot of garbage on Egyptian streets -- a classic example of a "negative externality" imposed by people who drop trash in "open access" areas shared by everyone. (I saw many guys just casually drop trash just a short distance from a nearby rubbish bin.)

There is not a lot of trash inside houses, where owners would be spoiling their own areas and outsiders cannot get access without permission.

Litter, in other words, results from two conditions:
  1. Someone does not care about the impact of his actions on others. In other words, he has neither social preferences regarding the welfare of others nor an intrinsic desire to do the right thing.
  2. Others do not have an incentive to stop that person from littering a common area. They suffer from a problem of collective action: it only takes one person to prevent littering or clean up litter that affects everyone, so everyone waits for that one person to show up. When no individual takes on the cost of cleaning up, everyone suffers the eyesore (and other adverse impacts).*
Note that BOTH of these criteria are necessary and sufficient for a garbage problem to persist. People who care about cleanliness will not litter; litterers will not be able to inflict damage on others if they try to spoil an area of private property, where the owner receives BOTH the costs and benefits of cleaning.

Since condition #2 occurs everywhere in the planet, we can therefore trace the littering problem to condition #1 -- too many people who do not care.**

My initial reaction was to complain about the problem to Egyptians. A few said that the post-revolutionary government would take care of it, but that isn't very likely (littering has survived many governments). The real problem is a lack of "clean awareness" among Egyptians, but how can we counter that?

Education, of course, so I decided to do a little "teaching by doing..."

I spent a few hours cleaning up a beach with an Aussi guy Tristan. Here's a video about that effort. (NB: It's 16 min, but there's 8-9 min of underwater video that you can skip if you want to hear all the talking -- including the interview I did with an Egyptian guy who collects garbage underwater.)

Bottom Line: The first step after identifying a problem is to get to work on addressing it. Others are more likely to follow the bold ones who take the lead.***

* The garbage problem can also be blamed on a lack of deposits on plastic bottles and (I think) a government-awarded monopoly on garbage collection in cities. (There are certainly enough un- and under-employed people around to clean the place up!). Besides being an eyesore, rubbish everywhere contributed to overflowing sewer and storm drains that made streets treacherous after any rain. Plastic is the biggest culprit of litter (even "biodegradable" plastic), and my local market -- Albert Heijn, the market-leader in the Netherlands -- no longer gives away plastic bags. People either bring their own or pay 20 cents for a heavy-duty one.

** In response to another version of these thoughts, NH wrote:
Regarding the garbage every where in Egypt.. did you know that after Feb. 11, 2011 (the date on which Mr. Mubarek left authority), Egyptians started cleaning and painting walls and the sidewalks in every place in Egypt starting from Al Tahrir to every narrow street. All of us were very enthusiastic to get Egypt back to its real nature as a center of human civilization..
*** Tristan actually mentioned "it's the first follower who transforms a nut into a leader" when he joined me -- a video I had posted here the week before!

10 Jan 2012

Speed blogging

  • The biggest municipal bankruptcy in US history can be traced to corrupt and incompetent water managers in Alabama (prior post).

  • Thailand considers "water derivatives" as a potential insurance hedge against flood damage. Good idea (see this and this post).

  • Holy cow! Jeff Michael says that there's been no benefit-cost analysis of the "Delta conveyance;" he also wonders if farmers are willing to pay $700-800/af for their share of the costs of the project (assuming benefits even exceed costs). I'd say no. The farmers expect others to pay.

  • The students who reduced their water use by 14% during a "water battle" (where consumption was compared, one dorm against another; see prior post) further reduced their demand by 6%. Now THAT's demand destruction!

  • Water (the journal) has a bunch of articles on re-using wastewater.
H/Ts to DL, RM and NT

Bleg: Water and sewage treatment in the developing world?

AM asks:
I was curious to hear your thoughts on water and sewage treatment in the developing world. Any suggested readings on the issue of treatment would be much appreciated.
My first impression is that there are more opportunities for decentralized treatment solutions in developing countries that lack proper treatment networks. These opportunities can be thwarted by laws that give the incumbent water/sewerage provider a monopoly over an area they may not be able to serve, but those cruel laws are not so common.

I also think that development aid (money and technology) tends to affect this sector -- for better or worse.

Also read the archives of this LinkedIn group.

Can you readers give AM some more ideas or insights?

9 Jan 2012

Monday funnies


The Nilometer

BH suggested that I check out the Nilometer when I was in Cairo, and I did. It's an interesting measuring device that would record the highest level of the Nile as it flooded (the center pillar is marked). That level was used to determine the tax rate on farmers, with higher waters attracting a higher rate and lower waters (with potential for a food shortage) leading to zero taxes.

The Nilometer has not been used since Aswan High Dam (AHD) went into service in 1970, ending flood cycles that had occurred for millennia. Floods damaged property, but they also renewed the fertility of fields, built up the Nile Delta, and flushed water ways for the benefit of aquatic life. Fertility and Delta health are not now declining.

It's my impression that it will make more sense to breach AHD in the future, as the losses from evaporation behind the dam, siltation and lower fertility start to become more expensive relative to the benefits of reliable irrigation. There's a lot of hard infrastructure in the way of normal flooding, but most of it can probably be set back.

Aquadoc also has an interesting post on how higher groundwater levels associated with AHD are damaging buildings near the Nile.

Bottom Line: There are costs to blocking a river above and beyond the cost of concrete.

6 Jan 2012

Friday party

Wow. This is amazing.

It's also interesting to read about the founders and their business (NOT hobby!) model...

Speed blogging

5 Jan 2012

Cleaning the pipes

Speaking of Blue Revolutions...

I'd like to suggest that all you readers (and many more non-readers!) tackle one part of water management that's been bothering you.

It may be a leaky tap or a slow-draining sink.

It may be that thirsty lawn or the clogged rain gutters.

It may be understanding your water bill or setting your hot water thermostat.

It may be learning where your tap water comes from or the age of the pipes below your street.

It may be organizing a discussion group with your neighbors to understand your local water policies.

The first step is the hardest -- you need to identify a problem and set aside some time to deal with it.

I will help with the next steps, in providing advice/opinions on how to tackle the problem -- on the blog or via email. Also feel free to list your ideas in the comments, to inspire yourself and others.

(Slow draining sink? This article explains how to clean the "trap" pipe of hair and yucky goo in a way that's more effective and cleaner than using Draino.)

If you need some motivation, then remember what Matt was able to accomplish with only a funny dance:

Bottom Line: A little human action can lead to a lot of change. It may not be comfortable to change your routine, but the benefits of a little effort can go a long way -- for you and your fellow humans.

4 Jan 2012

Blue Revolution -- the review

What if everyone in the US (or China or Italy or...) woke up one morning with a complete and proper respect for the value of water to themselves and all that surrounds them?

Would such a revolution change the way we used water? Would it end the disputes over water for the environment or agriculture? Would it put regulators out of business, as water companies delivered the water their customers wanted, at appropriate prices and quantities? Would such a revolution end the headlines of "water crisis" or make the Human Right to Water an obvious result instead of a powerless slogan?

There is no doubt that such a sea change would have major impacts on the way we use and manage water. There is also no doubt that such a change would not end the problems we have with conflicting visions of how water should be used. People already appreciate the value of water used to grow food, power industry, keep us hydrated (and so on). What they lack is an appreciation for the value that others put on these activities (and vice versa). The real question then, is how to make it easier to reconcile our different values when allocating scarce water among multiple demands.

These are the thoughts that remained with me after I read Cynthia Barnett's Blue Revolution: Unmaking America's Water Crisis.*

I heard Cynthia give a talk on this book a few months back (@ AWRA in Albuquerque), but I have known of this project ever since we spoke on the phone in May 2010 about water governance (she records those conversations, my application to California's Water Commission, and my views on water with admirable accuracy in the book). If there's one thing I know, it's that Cynthia has a passion for this topic -- the way we manage water -- and a professional's way of addressing it.

And here's the most important part: I agree with pretty much everything she says in this book. She and I are approaching the same problem (water governance) from different angles. She's into the intrinsic motivations to do the right thing, and I am into the extrinsic motivations of prices and markets. Both of us know that these motivations reinforce each other; both of us push our perspectives with respect for the power of the other perspective.

Markets and prices will not help us manage water for personal and social uses (part I and part II, respectively, of my book) without appropriate policies enacted by people who must have an intrinsic desire to do the right thing. People with respect for water cannot know how exactly they should act without assistance from price signals or market mechanisms. It's just a fact that intrinsic and extrinsic mechanisms are mutually dependent (I refer to them under the "20/80 rule").

Keep those ideas in mind as we look at the chapters one-by-one:

Chapter 1 (the illusion of water abundance) works on this theme: American lawns are the biggest crop in the country -- at 63,240 mi^2 (164,000 km^2, or the same size Tunisia and much larger than Bangladesh or Greece), and we dump a lot of water on them. Cynthia sees this result as a lack of a water ethic. I see it as the result of cheap water policies. Either way, there's a lot of activity that depends on lush water use, and Cynthia absolutely nails a huge implication of that little fact: industries from real estate and construction to gardening and energy have grown around a cheap water model. These "water-industrial complex" businesses are quite pleased with that model, and they are willing to fight to keep it.

Chapter 2 (reclamation and restoration) expands on that theme, looking at the iron triangle (my phrase) of politicians, businessmen, and engineers who build big projects to direct water to favored uses. Cynthia lives in Florida, and her comparisons between engineering the Everglades and California's water plumbing are dead-accurate (and totally disgusting).

Chapter 3 (The Netherlands) covers territory that's familiar to me (I still learned a few things!), but Cynthia's explanation of how the Dutch learned to respect the water that threatened them with death (and work together in that struggle) provides an excellent example of a "water ethic" that leads to appropriate management.

Chapters 4 and 5 cover the use of water for energy generation and irrigation. Guess what? Both industries like cheap water (and don't worry too much about using too much!)

Chapter 6 (the water-industrial complex) is my favorite in the book, because Cynthia looks at the incentive to build big projects (public money! ribbon cutting! consultant fees!) and -- more interesting -- traces the flow of campaign funds from engineering firms. CH2MHill and Black & Veatch make appearances, but she goes into detail on PBSJ, which started by working for government projects in Florida. Do I need to spell it out to you? Engineers are keen lobbyists to build more projects to divert water from here to there (and back again!), since they make their money on reports, projects, and so on. Nobody makes any money when a river flows from the mountains to the sea.

Chapter 7 (Singapore) reviews how the city-state built a water ethic based on renaming reservoirs as lakes as well as a need to wean the city off water imported from (semi-hostile) Malaysia. Citizens with a stronger connection to "their" water reduce their demand at the same time as they support the big changes, such as drinking "NeWater" (reclaimed wastewater).

Chapter 8 (the Big Dipper) covers hairbrained schemes to move "surplus" water from rivers to thirsty cities (Vegas baby!).

Chapter 9 (the business of blue) covers water for business, pricing and human rights. Milwaukee, Maude Barlow and I appear, and I thought the chapter presented the issues of "appropriate" pricing well. She says that "price isn't everything," and I don't mind agreeing with that (since it's still a long way from Barlow's plea of "give everyone water and charge banks the cost of delivery" populism).

Chapter 10 (Australia) offers another example of a water ethic having an impact on water use in Perth, but I think that Cynthia still takes it a bit far. Yes, people started to live with twice-per-week irrigation, but they still BUILT a desalination plant. I say that 20% of the people care about doing the right thing and 80% care about saving money, and this chapter does not give me any reason to think that those numbers should be 100/0. I'd say 50/50 at best.

Chapter 11 (an American Water Ethic) traces many examples of people working to improve our water condition.

Chapter 12 (local water) makes this important point [p. 220]:
A natural water body somewhere feeds every tap and toilet in the nation. But most people couldn't identify their water source. So how would they know if it's in trouble?
As someone who used "local" 142 times in my book and wrote "Most water management is local, and locals can do a lot to make sure their water is well managed," I couldn't agree more.

From this overview, you may have got the feeling that you've seen this kind of book (stories of what works and doesn't) before. I know that I have, and I recommend this book over both The Big Thirst and Unquenchable for its quality discussion based around a big organizing theme -- the need for a revolution in the way we think about water. And that brings up a tricky problem: how will this book's natural audience bring these ideas into the minds of people who don't care? That's perhaps a good reason for why I see this book as a suitable complement to mine, which does spend a lot of time on the problem of getting action out of the "unenlightened."

Bottom Line: I give this book FIVE STARS for being easy to read, accurate, perceptive (the water-industrial complex!), and passionate in its call for a revolution in the way we treat water.

* I received a review copy of this book. I'm also quoted in it.

3 Jan 2012

Who reads footnotes anyway?

From Intro Stats, which is apparently written by authors with a sense of humor (check out the PDF of chapter 1)

Anything but water

  • Marginal Revolution's top ten posts for 2011 (MR is the best economics blog)

  • You won't be jealous of China if you consider where they came from; should you be depressed about where we are vs. where we were headed? I am in terms of lost opportunities and bad policies but not when factoring in human venality and political corruption. Speaking of which, US debt (a stock/liability) now exceeds GDP (a flow/income). Time to cut back some of that military spending?

  • Good news: Congress kills ethanol subsidy and tariff. Bad news: Volumetric minimums for ethanol in fuel will keep demand artificially high. So the environmental and economic destruction will continue.

  • This is interesting: Coyote (libertarian blog) claims that this video shows that environmentalists are falsifying science to make money for themselves. Given its one minute duration, I came to a different conclusion, i.e., "These guys are not talking about money for themselves, but money from a lawsuit, which may go to many people (some will go to them). They are just trying to do WHAT ACADEMICS ALWAYS DO, which is to argue what should be happening when NOBODY has any evidence of what's actually happening."

  • Speaking of which, this nice comment on what it's like having a deep understanding of mathematics matches my feelings on how I look at economic problems (I've been thinking "economics" for most of my life. Seriously.)
H/T to WM

2 Jan 2012

Monday funnies*

Peter Koch, a Dutch cartoonist** made some drawings while I spoke to a company on water issues.

I liked these, on trade and responding to crisis (of the Euro or climate change?)

* Funny sad or funny ha ha, not sure...
** He works all over Europe, so contact him if you like his work.

Where I'm going in 2012

Happy new years!

My vacation in Egypt gave me some head space to consider my personal and professional options for 2012.

I have been worried about my career as a public intellectual, wondering if I could succeed (on my own terms) by continuing to pursue a combination of outreach, teaching and research that puts much more emphasis on public than academic discourse. (I reckon that a typical professor shares his time 5/15/80 into outreach, teaching and research, respectively; I allocate my time about 50/15/25 50/25/25.)

As I've said several times before, the academic business model is based on research a lot, teach a bit, get tenure and then consider public outreach while you enjoy tenure (lifetime job security). (Many professors who spend 5 years in graduate school and 6 years writing academic papers are not later inclined nor accustomed to outreach.)

That's not my business model for several reasons:
  • I don't want lifetime job security now (maybe ever)
  • Academic research and publication is not producing good results (post to come).
  • I see outreach as a critical function for academics who study what makes things work.
At the moment, I am lucky to have a job that gives me extra time away from research to write for this blog, give public talks (most of them free), answer a dizzying variety of email requests, write/market my book, etc.

I was thinking that I might quit this job to become a vagabond economist, but I reconsidered for two reasons: (1) I enjoy the academic environment and my colleagues and (2) I think that I may be able to move ahead in my career (in terms of jobs and impact) on an academic path.

This means that I need to get more academic work into publication at the same time as I look for an opportunity that allows me to continue a career that places more weight on outreach. That probably means an academic job (maybe a think tank), but my disinterest in tenure makes it easier to imagine a series of visiting lecturer positions around the world.

And let's remember the big picture here: The importance of sound water policy is growing, and my interest in it remains strong. That said, I am spending less time thinking about headlines that seem drawn from the same file year after year and more time thinking about how to implement good policies. That task requires reputation, connections and luck in -- addition to good ideas.

Bottom Line: So, that's my thinking as 2011 ends and 2012 rolls in. I don't know how much it matter to you, but I like to state things in the open -- to motivate myself and set expectations that will affect our interactions.