27 Mar 2012

Business and water -- your thoughts?

I just wrote this paper, and I'd LOVE to get your thoughts on its logic and clarity -- hopefully in the next 10 days...

When Worlds Collide: The Interface of Businesses and Bureaus in the Water Sector

Abstract: The increasing importance of water scarcity and consequent increase in business influence is increasing the prevalence of high-powered capitalistic tools in the water sector, one that has been dominated historically by organizations operating under low-powered incentives. This paper compares the institutions of business to those of water management through three interfaces. The first compares bureaucratic management tools – such as water footprinting and conservation technologies – to business tools that rely on prices and markets. The second explores how high-powered incentives within a low-powered institutional setting can result in harmful outcomes, as when regulations on bottled water, hydraulic fracturing, and food exports fail due to mismatched costs and benefits. The third discusses how changes in information mean that business tools for managing risk from floods and drought are more appropriate than bureaucratic tools suited to a past of uncertainty. Institutions that match allocation mechanisms to water uses with appropriate incentives – high powered business incentives for economic uses and low powered bureaucratic incentives for social uses – will maximize our water wealth; mismatches will produce excessive negative externalities and opportunity costs.

You can download it here.