31 Jul 2012

The not-so-perfect protein

Editor's note: James Workman taught "Unlocking the Real Worth of Water" as a visiting professor at Wesleyan University last semester. He told his students that they -- like all people -- needed to be "water resource managers" because water allocations are increasingly driven by subjective individual values, not top-down planing. The students addressed these ideas from different perspectives (local utility, energy/water nexus, and water and food trade); each choose one essay to post here. Please tell them what they got right or wrong.

Haley Greenberg writes...

Organic, whole grain, gluten-free, fair trade? Sounds good to me, and undoubtedly every other Whole Foods shopper. Our health-conscious, foody-nation, however, may have more to learn than just how good quinoa is for our waistlines.

Quinoa, often mistaken for a grain, is actually more like a beet than barley. This curious chenopod has certainly exploded as a new “it” food in the US as a healthier alternative to rice or pasta. With increased international demand for their good, quinoa farmers in the Bolivian highlands have been able to better their farms and families with new equipment and investments in better housing and education. Bolivian consumers, on the other hand, have been less fortunate, struggling to meet nutrition needs.

Capitalizing on the wonders of the global free-market economy, Bolivian exporters are definitely in the midst of a global boom. But, the question is, will they soon feel a local bust from exploiting the complementary wonders of the global virtual-water trade system? Perhaps more so than virtual-water and international trade flow analysts may like to admit.

Aguanomics webinars, newsletter, newshour!

  1. We've held two webinars so far to discuss chapters from The End of Abundance. You can go here to watch the archived presentation and discussion.

    The next webinar on chapter 2 ("Dirty water" -- wastewater and water quality) will take place on Friday, 3 August at 8:00 (pacific)/11:00 (eastern)/17:00 (europe). Sign up to attend here.

  2. I've also started a weekly aguanomics newsletter for those of you who do not have time to visit the blog as often as you'd like. In it, I will highlight a few good posts and pass along news and views on other events (not too much!) and perhaps some job postings. You can sign up here.

  3. In the near future, I am also thinking of hosting a weekly aguanomics news (half-) hour to comment and discuss (yes, audience participation!) water and other issues. These may also include guest perspectives. These will probably happen -- live -- each Tuesday, around mid-day. Tell me (here in the comments or via email) what you think of that idea and how to do it well.

30 Jul 2012

Two bottles of your finest oil, please!

Editor's note: James Workman taught "Unlocking the Real Worth of Water" as a visiting professor at Wesleyan University last semester. He told his students that they -- like all people -- needed to be "water resource managers" because water allocations are increasingly driven by subjective individual values, not top-down planing. The students addressed these ideas from different perspectives (local utility, energy/water nexus, and water and food trade); each choose one essay to post here. Please tell them what they got right or wrong.

Amara Davila writes...

Don’t you just love the taste of bottled oil? You know, that nice thick, oil that’s been manufactured and has traveled long distances to get to your refrigerator.

Maybe not, but if you understand the concept of “embedded energy” or “energy footprints,” you’ll understand why drinking that nice cold bottle of Dasani water means you are essentially drinking all of the energy it took to get to your door. That’s the oil, embedded in the supply, from all stages of the life cycle. This includes manufacture, processing, transportation, extraction of materials, etc.

To expand on this yummy visual exercise, think of a sealed bottle of water. If you add up all the embedded energy, that clear, tasty water will transform itself into a bottle ¼ full of oil. Drinking a bottle of water is like using that amount of fossil fuels. The Pacific Institute estimates that the “total amount of energy required for every plastic bottle is equivalent, on average, to filling each plastic bottle ¼ full with oil.”

Monday funnies

I just want to know what happens when the batteries run out (or is it methane-powered?)

Anything but water

  1. "The UK National Ecosystem Assessment was the first analysis of the UK’s natural environment in terms of the benefits it provides to society and continuing economic prosperity."

  2. Doing it right: "Ten Years After Decriminalization, Drug Abuse Down by Half in Portugal"

  3. The Economist reviews two books differentiating capitalism from crony capitalism and regulatory corruption that we're seeing in Europe and the US.

  4. Some details on the evolution of car-sharing schemes.

  5. Watch this TED talk on "eco-mindshifts" -- it gets interesting after the first few minutes. Then read this article for its discussion of how environmentalists can get attention (in the absence of markets for the environment or politicians who represent majority interests), i.e., "Even in our digital, Internet age, taking to the streets and facing arrest still matter. Thus the organizers chose to focus their actions on the White House—an appropriate site since President Obama alone had the authority to approve the pipeline."
H/T to CD

27 Jul 2012

Friday party!

This is crazy-awesome:

Join us for today's webinar

Topic: Chapter 1 ("Water from the tap") to The End of Abundance.

Time: 8am Pacific Time (5pm in the Netherlands) today, until 9-9:30 am.

Click here after 8am and I will try to add you to the meeting.

The scum of society

I like many things about the Netherlands (for example), but every paradise has its blemishes.

This is a fake passport...
Take the asshole, for example, who took my payment for a ticket posted for sale on markplaats (the Dutch Craigslist) and disappeared. Sadly, I fell for the scam about 30 minutes after someone wrote (in Dutch!) that he was an "Oplichter" (scammer).

What's weird to me is that the scammer (D. Koorn, link via MV) not only gave me a fake passport but also a real bank account number. I thought that those two bits of evidence would give the police enough to work with (the bank said that they would not act before the police did), but the police only said "don't use marktplaats." That's hardly good advice (like saying don't drive if you want to avoid a car accident), and it's terribly lazy when this guy -- according to others -- has been pulling the same scam, 30 euros at a time, for nine years.

Bottom Line: Every society has its scum, and they are only allowed to persist when the institutions for delivering justice fail in some way.

On Thu, Aug 9, 2012 at 9:48 AM, Secretariaat Team W-G&V (Parket Amsterdam) wrote:

Dear Mr. Zetland,

Thank you for your email. I am sorry to hear that you lost your 30 euros.

We have contacted the police department regarding your complaint and we have been informed that this case will not be pursued and we will respect this decision. Cases like this - we call those Marktplaats fraud cases” are only actively investigated and prosecuted under certain circumstances, for example when large amounts of money are involved. I hope you understand.

I advise you to file a complaint through www.mijnpolitie.nl as well, in order to make other people aware of the fraud committed by D. Koorn and to prevent them from doing business with him as well.

Yours Sincerely,

K.M. Römer, Officer van Justitie

In reply, I wrote:

Dear Officer Romer,

Thank you for your reply. I am sad to hear of this decision NOT because the amount was so much, but because

(1) This guy has been taking money for years in small amounts that leave his victims without any police protection

(2) He is using a forged passport to do so (this is a criminal felony in the US; is it not in the NL?)

(3) He is using bank accounts that obviously require a BSN.

I am no police officer, but it seems that one policeman might find this man -- and end his numerous crimes -- with only a day or two of work.

Criminals, in other words, make a regular business in stealing from people without fear of the police or laws, and they do so knowing that they police will not bother to catch them. This kind of tolerance - the kind with a clear criminal and victim -- puts the Netherlands in the same category as Greece or Italy, where fraud has grown out of control.

Please feel free to contact me to pursue this matter. Many people would be happy to see this man caught, convicted and punished. Marktplaats would also be a better place for Dutch people to make legal and safe business, instead of a place where criminals work to steal our money.

(I have also filed a report at the website you gave me.)


Anyone interested in the details of this crime can see all the details in this ZIP file.

26 Jul 2012

It’s a small, dry world after all

Editor's note: James Workman taught "Unlocking the Real Worth of Water" as a visiting professor at Wesleyan University last semester. He told his students that they -- like all people -- needed to be "water resource managers" because water allocations are increasingly driven by subjective individual values, not top-down planing. The students addressed these ideas from different perspectives (local utility, energy/water nexus, and water and food trade); each choose one essay to post here. Please tell them what they got right or wrong.

Hannah Vogel writes...

Our planet is a blue planet. It’s three-fourths water. But it’s also a small, dry planet, and it’s getting smaller and dryer every day.

Earth is a closed system; excepting heat energy, not much gets in or out of our atmosphere. We’ve got a set amount of water, but its distribution is anything but set. Water flows through nations in many forms, whether it’s shifting rain patterns due to global climate change, depletion of closed aquifers, channelization and development of river ecosystems, or the import and export of water-intensive commodities. In today’s highly interconnected global society, the choices we make about water use in our everyday lives can have incredible ramifications halfway across the world. Like a Butterfly Effect, only wetter.

Nowhere in the world is this more evident than in the Arab Spring countries. The political regimes weren’t the only things that the people rose up against. The regimes, in addition to their frequent brutality, were incompetent managers of water and food resources. Yemen is expected to be the first country in the world to run out of water, and top officials were regularly digging illegal wells in their backyards while leaving their people to import increasingly expensive water and crops. Over 800,000 Syrians had their livelihoods wiped out by one of the most severe droughts in history, and the government did nothing to help and was overwhelmed by their migration to urban centers. Arab nations have to import around half of their food and over two-thirds of their water supply originates outside of the region. Last year, even with heavy government subsidies, Egypt experienced food price inflation of 11%.

California's Delta plan

...is badly designed, either through incompetence or corruption.*

The current "plan" (via DL) to build two $14 billion "peripheral tunnels" to convey water around the Sac-SJ Delta to farmers (75%) and cities (25%) in central and southern California suffers from three fatal defects:
  1. Users are not going to pay for the tunnel in proportion to their use (other people's money!).
  2. There's no sign that users have functioning demand management programs in place (that means markets for farmers and scarcity water pricing for cities). There's no point in giving them the same/more water until they do.
  3. The conveyance -- and exports it implies -- does nothing to restore the Delta ecosystem.
I give the current proposal an "F" for (1) subsidies to special interests, (2) inefficiency, and (3) unsustainability. In other words, it's another example of policy failure in my home state, which saddens me.

Bottom Line: California needs a wholesale reorganization of the way it manages water in policy and practice. I'm not going to waste my time on its current failures until I see some sign of seriousness.**
* See the Delta Vision Foundation, Jeff Michael's blog and analyses, and this PDF for more background and criticism from people who know a lot more than I do.

** I reserve the right to comment on novel expressions of stupidity or corruption.

25 Jul 2012

Watergy Nexus: Our interconnected consumption

Editor's note: James Workman taught "Unlocking the Real Worth of Water" as a visiting professor at Wesleyan University last semester. He told his students that they -- like all people -- needed to be "water resource managers" because water allocations are increasingly driven by subjective individual values, not top-down planing. The students addressed these ideas from different perspectives (local utility, energy/water nexus, and water and food trade); each choose one essay to post here. Please tell them what they got right or wrong.

Delphine Starr writes...

Feel guilty for that twenty-minute shower on a cold winter morning? Worry not. You’ve been turning off your lights, installed energy-saving light bulbs, and you’re biking more to reduce gasoline consumption. Your carbon footprint has shrunk and you (and your wallet) feel good about it. So why not treat yourself to that nice long shower? The water bill’s so cheap and you’d rather be saving money on pricier commodities such as gas, electricity and food. Anyway, saving the world means reducing carbon emissions, right?

You’re headed in the right direction, but only about halfway there. What you (and I both) have neglected is that water is energy.

"What?" you think, "Water isn’t energy; water is water." Well, let’s look at your shower. How exactly did the water get to your pipes? It takes 440 BTU (British thermal units) to heat one gallon of water. Since a shower uses up to 5 gallons of water per minute, that’s about 2200 BTU per minute. According to these numbers, roughly 44,000 BTU was needed in order for that water to be extracted from an aquifer, purified, distributed, and transported to your showerhead. That’s about 13 kWh. It seems simple when all you have to do is turn on the faucet for hot water to magically appear. Yet the energy embedded in that shower of yours is enough to power a light bulb for a full 130 hours or run your refrigerator for 2.6 days straight. How are you feeling about your carbon footprint now?

Join us for today's webinar

Topic: The introduction ("The beginning of the end") to The End of Abundance.

Time: 8am Pacific Time (5pm in the Netherlands) today, until 9-9:30 am.

Click here after 8am and I will try to add you to the meeting.

Drought scarcity and shortage

The US is "in drought" according to one definition or another, but damages will result from (1) massive losses in corn and soybeans that are the result of farmers trying to make as much as possible from ridiculous subsidies and (2) too many people living in hot places with "cheap" water.*

Those are US impacts, but I worry about the drought's impact on food supplies and world food prices and the suffering and social instability that will result.

Bottom Line: The end of abundance means we cannot count on cheap water everywhere.
* This article compares the current drought to worse conditions in the 1930s; Env-Econ discusses the drought, Krugman, etc.

H/Ts to SJ and DL

24 Jul 2012

Energy and water: More than meets the eye

Editor's note: James Workman taught "Unlocking the Real Worth of Water" as a visiting professor at Wesleyan University last semester. He told his students that they -- like all people -- needed to be "water resource managers" because water allocations are increasingly driven by subjective individual values, not top-down planing. The students addressed these ideas from different perspectives (local utility, energy/water nexus, and water and food trade); each choose one essay to post here. Please tell them what they got right or wrong.

Hichem Hadjeres writes...

I was really excited about getting an internship for Joule Assets, a start-up company that specializes in energy efficiency consulting for businesses, and although I had the rather basic and mundane task of researching and entering information into a massive database to be used by future clients, I developed a firm grasp on the inner workings of the energy industry, especially as they pertain to vulnerabilities. For example, I learned that one of the main issues that electricity utilities face is keeping up with demand during the summer months, and while utilities certainly have the resources and capacity to supply electricity, it is far too costly for them to do so, resulting in profit losses. As a result, utilities implement demand response programs, which pay customers to use less during peak hours of demand, and they do this in order to save on production costs such as fuel.

Initially, it seemed to me that utilities were on top of their game by cutting costs and reducing externalities through programs like demand response. However, I soon realized that many utilities do not factor the single most important resource of electricity production when calculating costs, water. With the exception of solar panels and wind turbines, all conventional methods to produce electricity are extremely water intensive. If there is a shortage of water, there will be a shortage of electricity; this was the case in the 2007 drought in the western U.S., whose unprecedented water shortages saw significant reductions in electricity production.

Speed blogging

  1. G. Tracy Mehan reviews [PDF] TEoA in The Weekly Standard: "Here is a succinct, articulate book ... that explains the beneficial role of economics in encouraging wise stewardship and social harmony in water and waste-water supply and provision." Michael van der Valk says it provides a "provocative outside view" -- PDF in Dutch -- in H20 Magazine.

  2. Head over to Growing Blue (a website devoted to explaining the importance of good water management) to read two overview articles I wrote: "Water and the economy" and "How we should manage water but sometimes don't." There will be more articles in the future.

  3. Planning ahead: "Cross-Canada Checkup: A Canadian Perspective on our Water Future" reviews water issues (quality and quantity) across that (now) water-rich nation. The Canadian Water Network, likewise, is supporting more research on the Blue Economy.

  4. Tough field work: Collective action and the rules of surfing. (Not from The Onion!)

  5. "In my study on university students [PDF], I asked them which household activity consumes the most water - more than half said showers (the right answer, of course, being toilet). So not only is society (or part of society) is keen to control your time in the shower,* their undue emphasis on a single activity is misinforming young minds. May be they should have a campaign to limit the # of flushes. Even if misguided in its method, at least that would be right on target."

* Sri refers to the discussion of "anti-social showers" in TEoA, in which I complain about too much micro management of our water use. My solution is neither regulations on showerheads nor education on the number of flushes, but a price of water that's high enough to reduce ALL water uses.

23 Jul 2012

Webinars this week!

I will be going through The End of Abundance, one chapter at a time, starting with the introductory chapter ("The beginning of the end") on Wednesday 25 July.

I'll cover chapter 1 ("Water from the tap") on Friday the 27th and do the rest of the chapters in Part One on succeeding Fridays. (I'll get to Part Two starting on 14 Sep.)

All webinars will start at 8am Pacific Time (5pm in the Netherlands).

In each webinar, I will cover the main points of the chapter, discuss changes and updates to be included in the second edition of the book, and take your questions. Questions, corrections and other comments will help me improve the book for its second edition.

There is space for up to 100 people (!), but you can register ahead of time here.

Those of you who cannot register in advance can click on this link to access the webinar at 8am on Wednesday. I will try to add you as the meeting progresses.

Archived meetings will be available for those of you who cannot attend the live event.

2050: How Texas saved its economy

Editor's note: James Workman taught "Unlocking the Real Worth of Water" as a visiting professor at Wesleyan University last semester. He told his students that they -- like all people -- needed to be "water resource managers" because water allocations are increasingly driven by subjective individual values, not top-down planing. The students addressed these ideas from different perspectives (local utility, energy/water nexus, and water and food trade); each choose one essay to post here. Please tell them what they got right or wrong.

Matthew Lichtash writes...

Welcome to 2050. 49 other States have collapsed from resource failures due to withering temperatures, stifling population, water shortages. Texas alone stands unscathed, having adapted in the wake of a catastrophe that occurred 39 years earlier.

In 2011, Texas endured one of the worst single year droughts in the state’s history. July was the warmest month documented since the records were first kept in 1895. Wildfires, livestock mortality, and crop loss contributed to massive, multibillion-dollar losses to the economy.

In hindsight, this was a blessing.

Monday funnies

I guess you need to buy the Anadin if you use both Menhancer and Performa?

Has anyone ever bought these in a men's room? Anonymous stories welcomed!

A massacre in the US

This man speaks truth
I only saw it in the news.* Why did it happen?** Maybe because the guy was an angry asshole, but that doesn't mean that people want to find a "reason." On that topic, Marilyn Manson wrote an elegant and perceptive rebuttal in 1999 (in response to the Columbine Massacre).

Read it.

Columbine: Whose Fault Is It?
by Marilyn Manson

It is sad to think that the first few people on earth needed no books, movies, games or music to inspire cold-blooded murder. The day that Cain bashed his brother Abel's brains in, the only motivation he needed was his own human disposition to violence. Whether you interpret the Bible as literature or as the final word of whatever God may be, Christianity has given us an image of death and sexuality that we have based our culture around. A half-naked dead man hangs in most homes and around our necks, and we have just taken that for granted all our lives. Is it a symbol of hope or hopelessness? The world's most famous murder-suicide was also the birth of the death icon -- the blueprint for celebrity. Unfortunately, for all of their inspiring morality, nowhere in the Gospels is intelligence praised as a virtue.

20 Jul 2012

Friday party!

George Carlin on political rhetoric BS:

Missing the point

I've co-authored a chapter on "land grabs" [pdf] in which we question the accuracy of this populist wording. Isn't foreign direct investment good? How can you tell the difference between a "bad grab" and "good FDI"?

Well, some people are more sure of themselves, as you can see in this slide.

That definition, unfortunately, excludes voluntary exchanges in markets, i.e., trade. How did the authors of this definition not see their error? Most of them are neo-marxists who do not trust markets.

19 Jul 2012

Siamese synergies: water and energy

Editor's note: James Workman taught "Unlocking the Real Worth of Water" as a visiting professor at Wesleyan University last semester. He told his students that they -- like all people -- needed to be "water resource managers" because water allocations are increasingly driven by subjective individual values, not top-down planing. The students addressed these ideas from different perspectives (local utility, energy/water nexus, and water and food trade); each choose one essay to post here. Please tell them what they got right or wrong.

Ben Gottesman writes...

The Edmonston Pumping Station pushes water 2,000 feet over the Tehachapi Mountains and into Los Angeles at 142,000 gallons per minute, a feat unrivaled any other water system in the world. The annual energy expenditure to transport this water would be enough to power a third of California’s households. This is story of the big engine that could, but shouldn’t.

The State Water Project was a gambit. Water at any cost, regardless of the energy expenditure. It epitomized the triumph of irrationality over reason, confidence instead of doubt in our ability to engineer over nature, natural security and gravity.

Shapers of American infrastructure are starting to evolve past this mentality. However, a key step in this evolution is missing. Policy makers still fail to recognize the intimate connection between water and energy, even though there are plenty of facts confirming that they should.

Lies, damned lies and subsidies

In response (and agreement with) Jeff Michael's useful discussion of the costs and benefits of the "Delta conveyance" [PDF] I clarified the different ways that government can deliver a subsidy that benefits special interests at a cost to the rest of the population, namely:
  1. Financing a project with a government guarantee to get a lower interest rate
  2. Financing a project with cheap money FROM the government
  3. Allowing a beneficiary to pay a share of costs that's less than their benefits, e.g, farmers paying 25% of the cost of the conveyance but taking 75% of the water.
  4. Lowering project costs, via "loans" of personnel or equipment, access to "surplus" inputs, acquisition of land via eminent domain, etc.
  5. More?
Bottom Line: Special interests LOVE government project not because government is good at building dams, roads, etc., but because they do not have to pay the cost of what they get.*
* The same is true about international aid. The "needy" participate not because donors are really good at delivering what they need, but because donors are giving them stuff for free.

H/T to RM

18 Jul 2012

Water binds our fates

Editor's note: James Workman taught "Unlocking the Real Worth of Water" as a visiting professor at Wesleyan University last semester. He told his students that they -- like all people -- needed to be "water resource managers" because water allocations are increasingly driven by subjective individual values, not top-down planing. The students addressed these ideas from different perspectives (local utility, energy/water nexus, and water and food trade); each choose one essay to post here. Please tell them what they got right or wrong.

Evan Hazelett writes...

My water footprint might have helped fuel the Arab Spring. The Arab Spring was encouraged by water scarcity. And water scarcity’s roots and impact now extend beyond isolated locales, transformed into a globally integrated issue.

Globalization and trade liberalization have altered national economies. Domestic producers everywhere face competition from firms worldwide. Firms generally win contracts by competitive advantage. The Middle East and North Africa (MENA) have competitive advantage in oil production, but many MENA nations import most of their agricultural goods. Rainfall is minimal, 70% of the land is unsuitable for cultivation, and most farms are small and scattered, eliminating the advantages of economies of scale. These nations, as such, are greatly reliant on other countries for their food.

TEoA webinar -- chapter 1 [Correction: 0]

So here we go...

The first aquanomics webinar will be in ONE WEEK,on 25 July. I am guessing that this is going to be fun and interesting, but it's also different, so expect a few logistical and communication complications. (I am still trying to identify the webinar software.)

I'll be on video, speaking, for the first 15-20 minutes. Then I will start answering your questions. (You can email me questions in advance.) We may have some open discussion.

To get the most out of the webinar, I suggest that you...
  1. Read the book! You can buy the book in paperback, PDF or Kindle formats here for $20, $10 and $9.99, respectively. Chapter 1 The Introduction ("The beginning of the end") is also available for free [PDF].
  2. Watch this 13 minute video in which I discuss the whole book or this 4 minute video about Chapter 1.
Sign up here to participate over the web.

17 Jul 2012

Save the world -- go vegetarian!

Editor's note: James Workman taught "Unlocking the Real Worth of Water" as a visiting professor at Wesleyan University last semester. He told his students that they -- like all people -- needed to be "water resource managers" because water allocations are increasingly driven by subjective individual values, not top-down planing. The students addressed these ideas from different perspectives (local utility, energy/water nexus, and water and food trade); each choose one essay to post here. Please tell them what they got right or wrong.

Charming Yu writes...

Many Americans label themselves as "carnivores" without knowing that a "carnivore" diet exacerbates and accelerates water scarcity. You might not feel the effects of water scarcity as a result of living in an area where water can be accessed via the tap 24/7. The effects of water scarcity might be unevenly distributed at the moment, but we will collectively feel them sooner or later when we can no longer outsource our thirst. We cannot afford to be frivolous in our consumption patterns. So what can you do about this? You can walk away from that plate of steak.

Meat production and processing is so intensive that it takes 480 liters of water to produce the bacon on your breakfast plate as opposed to 70 liters of water for an apple.* As a result of a couple additional steps in meat production, like food for pigs, that increases the amount of water used, non-vegetarians consume about 5000 liters of water per day just in food consumption. Vegetarians, on the other hand, consume about 2700 liters of water per day. Think about how much water you can save by opting to eat an apple rather than a couple pieces of bacon!

Fair to efficient to fair

I recently did some consulting on "making markets" for water.

In the conversation, we arrived quickly at an important point:
  1. The government is going to decide (or affirm) the initial distribution of water, but
  2. There needs to be some form of market to REdistribute that water for efficiency.
Further, (1) determines who gets the "rents" from water resources, but (2) will make sure that water goes to highest and best use -- in economic terms.

I still think that environmental flows that provide public goods (making them hard to value) should be reserved before (1) even occurs.

Also note how this pattern (fair, then efficient) contradicts the conventional pattern in political economy, i.e., allow economic activities to happen first, then use political tax transfers to deliver fairness, but it really doesn't if you think in terms of ordering, stocks and flows, namely:
  1. Make a politically fair allocation of a stock of assets (land, water, etc.) to citizens.
  2. Allow an economically efficient reallocation of those stocks via markets so entrepreneurs can produce flows of benefits to themselves and customers.
  3. Politically redistribute some of those economic surpluses (via taxes*) to pay for public goods.
Bottom Line: Keep incentives aligned with stocks and flows of economic and natural assets if you want to maximize BOTH fairness and efficiency.

* I prefer property taxes as the purest type of tax. Income taxes discourage work; expenditure taxes are labor intensive. Both are much harder to track/administer.

16 Jul 2012

Zero footprint canoes

Editor's note: James Workman taught "Unlocking the Real Worth of Water" as a visiting professor at Wesleyan University last semester. He told his students that they -- like all people -- needed to be "water resource managers" because water allocations are increasingly driven by subjective individual values, not top-down planing. The students addressed these ideas from different perspectives (local utility, energy/water nexus, and water and food trade); each choose one essay to post here. Please tell them what they got right or wrong.

Glenn Hartman-Mattson writes...

A five-day canoe trip into the Boundary Waters of northeastern Minnesota has a carbon and water footprint of zero, right? You aren’t driving anywhere, you aren’t showering, there aren’t any light switches, no refrigeration, and no outlets anywhere. You are in a pure environment and really living deep green. You’re paddling down Moose Lake with the sun on your back; the only power you’re consuming is coming from your very own arms and core. Your usually guilt-stricken conscience takes a deep breath, “Ah yes. I’m not using a single drop of oil or municipally treated water right now.”

Alas, your conscience is mistaken. Even this trip consumes water and burns carbon. You’ve just discovered virtual water and the water-energy nexus.

Monday funnies

This, via RM, is funny (NSFW):

Anything but water

  1. This paper discusses the impact of crop patterns on direct and indirect deforestation in Brazil. Read this [PDF] if you want to understand the details of Payment for Environmental Services (PES) on deforestation in Costa Rica.

  2. Interesting blog post discussing the economics of Apple's decision to drop "green certification." Apple then re-joined the program -- more, perhaps, to do with greenwashing than eco-consciousness.

  3. Did you see that article on how US water quality has not improved by much [PDF]? This paper looks at air quality in the EU, finding a mix of gains and no changes.

  4. This paper, meanwhile, explains low fines for violation of environmental laws as the result or strained enforcement budgets, i.e., settle cheap to avoid a long, costly fight.

  5. The mafia also likes renewable energy subsidies. Meanwhile this IMF paper [PDF] says "fuel subsidies are a costly approach to protecting the poor due to substantial benefit leakage to higher income groups. In absolute terms, the top income quintile captures six times more in subsidies than the bottom"

13 Jul 2012

Friday party!

This -- via DL -- is fun!

Anything but water (Friday the 13th edition)

4. British pound exchange rates. Note the 27% spread.
Don't get ripped off, take money from an ATM.
  1. Dan Ariely describes how transparency can lead to more corruption and "green" consumption can increase overall consumption. The solution is NOT to hide facts and dump oil on flowers, btw.

  2. "The latest issue of PloS Medicine focuses on ‘big food’ – 7 articles that examine the activities and influence of the food and beverage industry on health." Is sugar worse than tobacco, in damaging our health, environment and economies? Any other contenders?

  3. New discoveries of "cheap" fossil fuels mean that we're going to burn them and defer moves into more expensive, alternative energies. The climate is already screwed, and this will make it worse. Is current weather a sign of disasters to come or are they already here? [watch the video!] These questions remind me of Bambi (climate deniers) vs. Godzilla (climate impacts). Guess whose happy bubble is about to be smashed?* I've got to get to that Julien Simon essay on excessive optimism. He will only be right in the unlikely event that we manage to save the Earth in addition to ourselves.

* I had beers with an atmospheric scientist last night and asking him about CC... "Chaos and destruction," he said. How? CC will speed up the hydrological cycle, so that we get more "fat tail" events -- more extremes in weather -- and our systems (and cultures) are not built for that. Then we started talking about climate refugees. More beer, please.

12 Jul 2012

Your government and YOUR work?

I am considering working for a branch of a government that imprisons citizens without trial (let alone assassinating them at a distance).

Does it matter if I work for a different branch? Does it matter if I don't work for the government but I pay taxes that support these activities? Does it matter that the work will happen (perhaps for the worse) even if I am not involved?

What if I work from "within the machine" to help other citizens? What if I work from within the machine to overthrow it? What if I just want to make money to retire on a beach and don't care who dies?

Where is the line? Does it move?

Thwarting good bureaucrats

I often critique bureaucrats (non-elected government employees) for their propensity to stick with their vision (personal bias) instead of serving the public interest, but there are ALSO many bureaucrats who have skills and passion for their jobs.

Some of them are thwarted by a system that makes it hard to do their job well (I'm thinking teachers who have to "teach to the test" or who cannot hug or discipline kids for fear of lawsuits), but there are also more direct ways of stopping them.

Underfunded budgets, for example.

I know of many examples in the water sector where some mandate or law that sounds good on paper does not function in practice because those charged with implementation lack the time or money necessary to do their work. They then engage in "office triage" to try to accomplish as much as possible. Outsiders may then criticize them, but outsiders often have their own priorities and a limited view of the big picture.

I have a few suggestions on how to bridge the "resources-performance gap"
  • Replace central budgeting with user fees. Ask users (stakeholders) for priorities
  • Cut unnecessary paperwork (I love hate reading "reduction of paperwork act" notices on forms!)
  • Reduce monitoring of private activities that can be policed in a market
  • Levy SIGNIFICANT fines for breaking real rules (hear that Wall Street?)
  • Allow different bureaucracies to compete -- innovators win!
But forget all of these ideas (but leave yours in the comments!) -- make sure that politicians who set budgets "pay the price" for underfunded mandates. It's sometimes an accident, but quite commonly intentional, that politicians will say "me the hero" when making a policy but turn into a scumbag when it comes to funding. Then there are the full time scumbags who lie about the policy because they KNOW they will not fund it.

Bottom Line: Some bureaucrats cannot do their jobs and others do useless jobs, but those who want to do useful jobs should get the resources they need.

11 Jul 2012

Why should George Soros invest in water?

KG sent the following vignette:*
So, I am walking down the street and I have the opportunity to have a conversation with one of America's most significant investor/philosopher/philanthropists and businessman, George Soros...

I wonder "What does he think about water wars, do they exist now, will they occur in the future, are they violent, what does a water war look like?" I think now "He has said something like that "we should not be the victims of the Philosopher King that social change is within the people's grasp." He lived through the transition from communism to capitalism and has rolled quickly into socialism...

He is a figure whom leftist-liberals would smile upon as man benevolent to humanity and the goodness of government. He may not like the idea that water should be commodified/privatized, he might say that it is "inhumane and will result in discrimination against the poor." He might say that "water is a basic human right, and that it should be publicly owned privatized institutionally distributed."

Now, I have to convince this man why he should invest in water...

What would you say to George Soros about investing in water?

PS: I am concerned that our symbolic and religious view of water may not be healthy (read, for example, "Water, theology, and the New Mexico Water code" [PDF] by Martha Franks). Why don't we value water within the institutions and systems in which it exists? Has religion done it for us, or historical conditioning of self-entitlement to the earth and its goods i.e. the rhetorical public interest? Do you think people fear their own ability to value something so essential to life, it's kind of a big deal, or is it just snickers vs kit-kat?
In response, I wrote:

Sending the right message

Although it's obvious that face-to-face interactions lead to better communication and results, it's also obvious that such communication is more costly than "remote" emails, phone calls, and -- heavens forbid -- SMS messaging.

Remote communication can be useful when we are talking one-on-one, but it can be a disaster in a one-to-many format. I'm not talking about radio broadcasts or even blogging, but when a bureaucrat somewhere "sends a message" to citizens, users, or -- heaven forbid -- "stakeholders." The chances that this bureaucrat miscommunicates rise with his cultural, social and logistical distance from the listener. The chances that he fails to understand the magnitude of his miscommunicating (concluding, for example, that he's got the right idea) also rises with distance. Examples? How about "leaders" who direct wars from a distant office, state or national water ministers "governing" vast regions, or aid donors who have never visited the country they are "helping."

These failures are worse, of course, when remote controllers are de facto monopolists who will not lose their jobs for failure to listen to "customers" who have no alternative but to accept what they are given.

Bottom Line: Communication is about speaking AND being understood.

10 Jul 2012

Talking water in DC on Friday?

I'm in DC for some work on Wed and Thurs this week but have nothing scheduled (!) for Friday.

Email me if you want to chat about water, politics -- or life in general :)

Webinar: "What Keeps You up at Night?"

True stories and real solutions to water management challenges by Marty Laporte (Stanford University), Jim Genes (UC Merced), David Zetland (Wageningen UR), and Shahram Javey (Aquacue, Inc.)*

As a facility manager, administrator or sustainability leader, it's your job to promote efficiency and manage water and energy resources. But how do you manage something with little or no data? You need real-time tools that give you the information you need in a simple and clear fashion, to make informed decisions.

In this 30-minute session you'll hear stories from other pros like you who face the same challenges and have found practical and economical solutions through new approaches, technologies and best-management practices. A 15 minute Q/A session will follow.

Register for Fri, Jul 13, 2012 10:00 AM - 10:45 AM PDT

Once registered you will receive an email with information you need to join the Webinar.

System Requirements:
PC-based attendees: Windows 7, Vista, XP or 2003 Server

Macintosh-based attendees: Required: Mac OS X 10.5 or newer
* I advise Aquacue.

Put ME in charge!

Every ad was a variation on "do the right thing"
...because we tell you to.
I was attending a session on the EU's Common Agricultural Policy (CAP) at Greenweek in Brussels a month ago.

During the Q&A, I asked for a show of hands from those attendees (most of them from bureaucracies, NGOs and "civil society" rather than businesses) on whether it would be better -- from the perspective of environmental sustainability -- to replace the CAP with local agricultural polices.

This question has two easy answers:
  1. Yes, replace the CAP (with its known distortionary subsidies) so that national governments can find their own "appropriate" ways to protect their environment.

  2. No, leave the CAP in place, to force national governments to adopt "EU-appropriate" environmental protections.
Now you probably know my answer to this question (#1 in case you don't), but I was curious to see what some of the other 120 people in the room thought. All of them, bar one, agreed with #2.[1]

So there are two potential explanations for this result. People either thought that the CAP was good for the environment (a notion that fails the laugh test), or they thought the CAP was the best way to deliver environmental sustainability.

Now why would that be? Perhaps because people in Brussels think they can specify environmental programs that will work from Greece to Denmark, from Spain to Estonia. Those policies -- rendered through the CAP, remember, not the Water Framework Directive[2] -- would then be implemented effectively by local authorities. Note that such a result would require BRILLIANT planning and execution from Brussels, and who could do that but... ... the people in the room!

So, here's why I think that 118/120 people thought that the CAP was a good tool for delivering environmental quality, given that it doesn't now: All the people in the room thought that they -- and not necessarily the people next to them with their hands up -- would be able to implement those plans. In other words, they could do the job if they were in charge.

Now, I am just going to say right now that I've got no practical reason to accept this response, since it (1) rejects "subsidiarity" -- or pushing policy implementation down to the lowest level and (2) supposes that an agricultural subsidy program can deliver environmental goals -- a violation of the "one tool per task" law of policy design.[3]

But (3) may be more important. Who were the people raising their hands? Bureaucrats with a certain "by the book, command and control" personality that is quite different from that of entrepreneurs -- the people with a known ability to motivate people to change behavior and adopt new ideas.[4]

These "master planners," in other words, have a very slight chance of success and a much greater chance of failure even if they are motivated and smart. (It's more likely that they are biased or corrupt.) Their answers implied that they do not respect disaggregated, bottom-up solutions that empower those subject to the environmental standards, since those 118 people knew more about protecting all of the EU's 200 plus environmental niches than locals did.[5]

Bottom Line: Lots of people think they should be put in charge, but they shouldn't. Empower people to defend themselves (via bureaucratic regulation/laws/etc.), so they can find local solutions to local problems.

[1] True, they had to raise their hands for #1 and do nothing for #2 (the default option), but I have no problem with the fact that some people are too shy to raise their hands. The one guy who agreed with me, in fact, just nodded in my direction and said "yes" -- he didn't raise his hand.

[2] Not the topic, but I'd also argue that the CAP will only be effective in setting standards for "good environmental quality," while leaving implementation and enforcement to local authorities with the flexibility to find their own solutions -- a situation that is not -- informally -- allowed within the CAP just now.

[3] Read Hayek on the knowledge problem, or how bureaucrats are myopic.

[4] I thank JP -- a senior bureaucrat -- for this helpful insight. Also read this interesting article reporting that 35% of entrepreneurs suffer from dyslexia. Compare this number with 10% of the population as a whole and 1% of professional managers. Dyslexics may not be good managers, but they are sure better at spotting and finding solutions to problems!

[5] But isn't it better to put the EU in charge if locals cannot get the power to remove vested interests who are blocking good environmental policies? No, because those local power brokers are not only going to be able to block or delay the EU. What's necessary, instead, is a form of "local empowerment" that gives local environmental groups a property right in a clean environment. That's what they will need -- per Coase -- to change their local situation. Read my paper on top down vs bottom up delivery of international aid -- a topic that Bill Easterly has covered for years.

9 Jul 2012

Monday funnies!

What's wrong with this picture (from a toilet in the economics faculty in Prague)?

Think for ten seconds before you click to see the answer...

Aguanomics webinars

As I mentioned recently, I will be holding a series of FREE webinars that up to 25 people can attend live.*

These webinars will cover chapters from The End of Abundance, i.e.:

Part I: Personal water choices:
  1. Water from the tap on 25 Jul (Wednesday)
  2. Dirty water on 27 Jul (Friday)
  3. The liquid lifestyle on 3 Aug (Friday)
  4. Water for profit on 10 Aug (Friday)
  5. Food and water on 17 Aug (Friday)
  6. Water for power for water on 24 Aug (Friday)
I plan that each webinar will run for one or two hours, beginning at 8:00 PT (11:00 ET or 17:00 NL).

My goal is to give a brief overview of the material in the chapter (hopefully VERY brief, since most attendees will have read my book and/or have familiarity with the topic), before moving on the questions and answers.

I plan to post webinars on my site for download (audio only, it seems). The webinar itself will probably have a video component.

 I am planning to pay for, and use, Adobe's connect service, since that seems to give better quality than Citrix GoToMeeting (but what about WebEx?)

So, how does that sound? 

Does anyone have an idea of whether it's better to have the FIRST meeting on another day besides Wednesday? I am going for Fridays since (I think) most people are more relaxed for a meeting on these days.

* Note that these are the free side of my "fremium" strategy of subsidizing general advice by consulting one-on-one with those who want confidential advice suitable to their particular situation ($100 per hour, increasing by $50/hr after five clients). If you're interested in this, then please email me.

6 Jul 2012

Friday party!

Every culture has their drugs. Some are worse at living with their drugs than others:

Also read this science post comparing the personal and social damages among drugs.

Adaptation to climate change

This EU site lists some adaptation tools but does not have many for prices or markets (here's one) because the site only tracks what's been done before (case studies), not what can be done or has been done outside the EU. While they work on that, check out this UK report on managing water scarcity [PDF]...

...and note that 29 US states do not have any adaptation strategy. That's no surprise given the typical lack of long range water planning anywhere in the US. Key findings (via DC):
Nearly nine out of 10 states are poised for more frequent and intense storm events and/or increased flooding.

While at least 36 states are facing possible water supply challenges, only six of those have comprehensive adaptation plans.

Six states – Alabama, Indiana, Kansas, North Dakota, Ohio, and South Dakota – have done virtually nothing to address climate pollution or prepare for climate change in the face of growing water risks.

Water preparedness activities appear to have “slowed or stalled” in four of the nine best prepared states – Alaska, Oregon, Pennsylvania and Wisconsin.

Only 22 states have developed plans and formally adopted targets or goals to cut the pollution that causes climate change, which comes mainly from power plants and vehicles.
Bottom Line: Water is the vector through which we will experience the impacts of climate change, via storms, droughts, floods and so on.* We will need to prepare for more variation in the weather. The easiest way to do so is by designing institutions (from hard infrastructure to soft market instruments) to handle more or less water. Institutions, of course, must be adopted to local conditions.
* I wrote a draft of this post about 6 weeks ago, but this recent story captures what I am talking about:
Through most of last century, the U.S. used to set cold and hot records evenly, but in the first decade of this century America set two hot records for every cold one... This year the ratio is about 7 hot to 1 cold. Some computer models say that ratio will hit 20-to-1 by midcentury.

5 Jul 2012

Bleg: Dam(n) silt

Can any engineering types tell me why dams are not designed to flush silt from filling up the reservoir? I know that strength is an issue, but isn't it possible to make some kind of "silt-tunnel" in the same way that dams have turbine tunnels?

Speed blogging

  1. Check out UN-Water's Key Water Indicator Portal and the Sustainable Water Resources Site for lots of information.

  2. This 1994 paper [$] describes "marginal opportunity cost (MOC) pricing for municipal water supply -- a pricing method that reflects the marginal production or private cost (MPC), marginal user or depletion cost (MUC) and marginal environmental or external cost (MEC)." I call that "full cost pricing," but I guess that FCP was taken...

  3. Aquadoc quotes Famiglietti on how VERY little we know about groundwater.

  4. Yet another journal: Water Resources & Economics.

  5. Determinants of Residential Water Consumption in Ten Countries are prices, low-flush toilets, and environmental awareness.

  6. How wasteful are subsidies to US farms? Try this:
    The average marginal value of irrigation is $380, while we find that on average $1 of intermediate inputs provides $0.96 of final output. These results are driven by a small subset of states with large negative values, indicating persistent misallocation of resources... government subsidies increase value of output by $0.083 per real dollar of subsidies.

4 Jul 2012

Want to write on water to win a prize?

The Emerging Scholars Award is an opportunity for early-career scholars and practitioners working in water-related fields to publish a brief article that presents their research, projects, or opinions to a global audience.

Participants are required to:
  • submit an 800-1000 word article relevant to one of three themes: "Water Security", "Water Economics", or "Transboundary Water Governance"
  • be a PhD recipient or PhD candidate under the age of 35.
Applications close Monday 27 August and open Friday 6 July at midnight (GMT).

The top 10 finalists will be offered the opportunity to publish on the Global Water Forum site and in the GWF Discussion Paper Series during September/October 2012.

First prize is US$500; second prize is US$300; third prize is US$200.

Prizes will be judged by leading academics from the Australian National University: Professor Quentin Grafton, Dr Jamie Pittock, and Dr Daniel Connell.

More details are available here.

As a guide, see here and here and here for examples of different types of articles recently published on the Global Water Forum.

How to really take a vacation

  1. Get out of town and do something cool
    Interlaken, Switzerland -- a VERY expensive place.
    Do NOT recycle during lunch, evenings or Sundays!
  2. Don't check your email

  3. Remember that life is about living, not work (you're lucky if your work isn't :)

3 Jul 2012

The real facebook

My $1.99 consultancy

I had a brief chat with Michael Hanemann at a recent conference. Michael was my adviser at UC Berkeley (he's now at Arizona State) and the designer of Los Angeles's increasing block rate program. I am not a fan of IBRs, but he defended them as "fair" given that they charge heavy water users more (the top block, btw, is meant to be so expensive that nobody uses it but not so expensive that rationing occurs). He also defended LA's system of giving allocations of cheap water to larger lots in hotter areas, as "fair" -- a word that I wouldn't use.

Anyways, I find IBRs difficult to calculate accurately, since they require estimates of demand elasticities, consumer "buckets," etc.

Here's my preferred alternative. If you use it, you can send me $1.99, as my consulting fee:
  1. Estimate system fixed costs. Allocate these costs to customers as fixed charges in proportion to their flow capacity, e.g., 1 inch pipe/meter costs 2.56x a 5/8 inch pipe because it delivers 2.56x the volume,
  2. Estimate variable costs for delivery of units within system capacity. Charge customers a variable water price per unit equal to that cost.
  3. If the system is approaching capacity (e.g., demand exceeds 80% of supply capacity), then add a surcharge onto the variable price of water. I suggest 100%.
  4. Rebate excess revenues to customers in proportion to their fixed charges.
Note that this system balances fiscal stability with an incentive to conserve water, without adjustments for the number of people, size of lawn, etc.

Bottom Line: Simpler water charges are easy for customers to understand and change with scarcity.

2 Jul 2012

Monday funnies

This, via MO, is weird/funny:

Master plan update

My last "master plan" post was in Dec 2009. Lots has changed since then:
  • I moved to Amsterdam in Sep 2010 after my UC Berkeley postdoc ended.
  • I got a job at Wageningen University working on water policy in Europe (1/2011 -- 6/2013).
  • I published TEoA in June 2011. It got good reviews and sold well.
  • I've been speaking, writing and blogging [here!] for public consumption.
In recent weeks, I have decided to cut my losses on academic publication (read this). I have therefore divided my academic writing into three categories: published, working, and "finished." This last category includes "papers that are, supposedly, not rigorous enough for academic journals." I disagree, but I can't hope to change an entrenched academic paradigm in which the winners from the status quo control the status quo -- not that I haven't tried!

Skip this section if you're not into the philosophy of science...
I was pushed over the edge when this paper was rejected by a journal because the referees did not like our inductive method, i.e., we had run an experiment to see how information changes peoples' willingness to contribute to a public good. In one version of the experiment, subjects could see how much their team members contributed to the public good; in another version, they could infer that contribution, but it wasn't so obvious.

It turned out that information display led to a BIG difference in behavior: many more people responded to the contributions of others when those contributions were clear. Even more interesting, the change in behavior was almost entirely due to a change in women's responses. This figure shows how strong the change in female behavior was (left) compared to men's relative lack of change (right):

Female responses on left, male on the right. Thin line from "more information" treatment.
This result was unexpected because we had not designed the experiment to look for gender effects. The referees did not like our "ex-post rationalization," which others would call induction (finding an explanation for real world phenomena). They wanted us to re-run the experiments (big time and money costs) with an intentional design to test for gender effects. This deductive method makes sense for real sciences (mathematics, chemistry, and even engineering) where control over all variables is possible, but not for social "sciences" that study humans. That doesn't mean that some economists don't try to pretend that humans can be categorized into nice neat boxes.*

I gave up on that paper in the same week as I gave up on another paper that was going to get bogged down in a fight over statistical details.

* More and more on the cult of scientism, academic rationalization, and the (autistic) ivory tower.

I've always been interested in using academic rigor to improve public policy much more than spending endless brain cycles addressing every theoretical nit. As a "systems guy" interested in applying economics to real world problems, I just cannot afford to attend to such trivia when there are far bigger arguments to address (e.g., "should government control water allocation?") and non-academic audiences to engage and enlighten (the motto of my alma mater, UCLA, is "fiat lux").**

So, I am now winding down my academic writing to spend more time on outreach, which means that I will:
  • Continue blogging, so read closely and bring more readers!
  • Spend more time on public speaking and less time on academic speaking
  • Start a "fremium" aguanomics webcast/conference call (post to come)
  • Write a short e-book on regulation
  • Write TEoA 2.0
  • Teach applied environmental policy at Wageningen
It also looks like I may be getting my next job in the US. If that plan comes to pass -- you'll be the first to know -- then I will be at the VERY center of water debates and applied policy.

Bottom Line: I am changing from an academic intellectual to a public intellectual.
** I attended a panel on Rio+20 at EAERE during which Marianne Fay (World Bank economist) said that we don't need more theory. We need more empirical information, policy analysis and recommendations and outreach to convey "academic" ideas to the people who need them. Working on it!