30 Nov 2012

Speed blogging

  1. The US GAO (they are awesome) gives no recommendations in their report on the costs and benefits of shale gas, but their report will be useful for people interested in facts.

  2. Here's a 105 minute (mp3) discussion about different themes in the End of Abundance (dams, bottled water, water pricing, etc.)

  3. An interesting post on the many dimensions of "water security," and an article on how increasing risk is driving farmers from irrigated to rainfed agriculture.

  4. Hot off the press! "This report [from the European Environment Agency]... provides an overview of the state of Europe's waters and the pressures acting on those waters, looks in greater detail at the economic and social factors driving these pressures, and concludes with a summary of the societal and policy challenges that must be met if water is to be managed sustainably."

  5. Academics on scarcity-adjusted virtual water flows and the virtue of small dams.
H/T to DL

29 Nov 2012

The Land Grabbers -- the review

Fred Pearce sent me a review copy of his new book, The Land Grabbers: The New Fight over Who Owns the Earth, which I enjoyed very much for its detailed description of the pros and cons resulting from foreigners investing in land in developing countries.

In the book, Pearce appears to see more cons with land deals than I do. Perhaps that's because he saw only bad land deals, or perhaps he associates ALL large-scale agriculture with exploitation, inefficiency and environmental degradation. Any of you who read my paper ("The Political Economy of Land and Water Grabs")* will know that I am annoyed that we do not have a good definition of when a land deal is a "bad" grab or "good" foreign direct investment (FDI). Pearce appears to call ALL deals grabs, but I think there are many well-run, sustainable farming operations that produce profits for the farmer, good jobs for locals, and quality food for markets.

Anyway, here are my notes on the 300pp+ book, which has six parts and 27 chapters covering "grabs" from buy-side and sell-side locations in Europe, N and S America, Africa and SE Asia.
  • Many grabs convert "fallow" land to industrial-scale agriculture, but local communities often "cultivate" this land in long rotations of crops, grazing and recovery. Their methods are not just sustainable; they are cheaper and more productive for meeting a diverse range of local needs. Nomadic herders have practiced sustainable land management for centuries.

  • Such methods are also egalitarian. Poor farmers can eat, but poor urban residents will suffer from political corruption and/or favoritism.

  • That said, Pearce seems over-suspicious of markets (and financial instruments) that can improve food security and supply, views that I recently called shortsighted and misleading.

  • Food security, for example, is often used as an excuse for protectionism that favors local food growers over consumers. Grabs directed at security also fuel "countervailing" grabs in which market supplies are replaced by managed supplies that will waste calories, inputs and environmental flows. Yes, the Saudis are engaging in grabs, but that was only after their failure to grow wheat at home (a bad idea that wasted water) and their exposure to volatile food markets. The trouble with their "grab" strategy is that they will not be able to export food if large-scale shortages arise and their "indigenous" farms are wasting water now that they will need in the future. It's far more efficient, for example, to rely on markets for supplies, store a year's supply of grain in case of market failure, and save water for cultivation should market interruptions last longer than a year.

  • Land grabs are also often water grabs. The weak property rights that allow land grabs (by definition, a grab takes land from other users) are almost surely accompanied by even weaker rights over water and even greater misuse of that water.

  • Grabs, as a business strategy, often depend on corrupt dictators who will not be around as long as the 50-99 year contracts may promise, making it difficult to invest over the long term or care about sustainability.

  • Even worse, most grabs are arranged in distant bureaus, where "buyers" and "sellers" may not have a clear idea of what they've agreed, let alone who else may be interested/affected by their agreement.

  • It seems that Pearce considers deals involving foreigners to be "bad" while deals with locals are "good," but local thieves are not just more common, but more thorough, since they know the maximum local tolerance for greed.

  • That said, it's great to improve local productivity. It just takes a lot longer because locals do not just "copy/paste" good ideas from other areas. The upside is that locals who develop "organically" will have diversified, robust systems that will contribute to market stability. Pearce would agree with this assessment, I am sure, but local is not the ONLY way to go...

  • Remember remember remember that foreigners cannot just show up and exploit (at least not in these post-colonial days) -- they need corrupt local partners, and THOSE people are the ones with power to make or break a deal (as I discussed in my paper).

  • Unsustainable operations are a bigger problem than grabs. They are fueled by a combination of short-term thinking (high discount rate) that may be fed by over-capitalization (need to generate cash to pay off debt), poor property rights (get money before land is gone), tragedies of the commons (get water before neighbors take it), etc. These problems occur in ALL countries, but they can be minimized by stable, sensible policies.

  • Land grabbers may be taking "marginal" land (often conservation areas, etc.) but only because domestic farmers have already taken prime land, often before environmental perspectives had any weight.

  • Pearce appears to laud reverse grabs, e.g., when Chavez or Mugabe break large farms into smaller holdings, but those "fair" actions are often driven by corruption or revenge. Even worse, the land often ends up with cronies who cannot farm instead of poor farmers who can.

  • Remember that there would be NO land grabs if individuals or communities had title to their land! That's why many grabs are occurring in Africa -- about 80 percent of the land there is "managed" using informal, communal methods.

  • Pearce also covers the interesting case of "green grabs" -- where environmentalists take land out of production (or protect it), to keep it pristine. These grabs sometimes exclude locals from their traditional lands; they can also be sustainable (e.g., locals live in the lands under traditional conditions, while earning money from fees paid by foreign tourists who want to hunt beasts with cameras or guns).

  • Pearce loses his way when discussing "grabs" in Australia that are really FDI. That's not the case in Cambodia, where corruption underpins land seizures, but it's not good to mix up fair deals (even if they upset nationalists who prefer to avoid competing with foreigners for land) with theft.

  • There's an interesting discussion of grabs in Malaysia and Indonesia, in which rainforests are cut down for timber and palm oil plantations. It's not just that these grabs impoverish locals of their traditional lands, or that the biofuels produced on the land may actually be "carbon positive" but that the wood products produced from them are certified "good" by the FSC when they really are not. The main point is that eco-labels are meaningless unless there's a 100 percent accurate way to prevent counterfeits -- and that's hard in corrupt countries.

  • Take this last point with my point on property rights and long term views above, and you will see how real sustainability results from accurate pricing of resources that belong to a community over the long term (50+ years).

  • The world's largest sugar farm in Sudan uses 2.4mafy (~3,000 GL), or 4 percent of the Nile's flow!

  • Water grabs, no surprise, reduce environmental flows that nourish wetlands that traditional users depend on for food, fiber and fish. No rights = hunger.

  • Mega farms may be unsustainable, but subsistence farms cannot generate enough production. Perhaps the middle way -- small-scale, mixed-use farms managed by owner/entrepreneurs who innovate and adapt to local conditions -- are the best way to feed the world over the long run. Oh, and don't forget that these guys need to trade and benefit from trade.
Bottom Line: I give this book FOUR STARS for its vivid description of the problems related to land grabs that benefit outsiders at a cost to locals whose land is taken from them. Read it to understand the choices between hunger and food, rebellion and stability but don't forget that property rights (legal, traditional or communal) would stop unfair grabs while allowing local people to benefit from their resources, locally and globally.

* The working paper is no longer online, due to spurious copyright claim by the publisher of the book where it eventually appeared. Email me if you want to see it.

28 Nov 2012

Off to Asia!

Cornelia and I will be in Malaysia, Brunei, Philippines, Indonesia and Singapore for seven weeks (7 Dec to 29 Jan). During this time, I am going to dial down the intensity of blogging (e.g., no speed blogging), while trying to give you some first-hand accounts of life in those countries.

We've already planned most of our itinerary:

Malaysia: KL to Sarawak to BSB
Philippines: Manila and north, then Negros
Indonesia: Bali to Flores, then back to Singapore, KL and home.

...but we welcome suggestions on places to go, people to see and WHAT TO LOOK FOR.

So please leave your suggestions in the comments or email me.

27 Nov 2012

Anything but water

  1. The EU should kill the CAP (common agricultural policy) as a give away to farmers that does nothing for food security or equity and harms the environment. The same holds for US farmers. When will voters stop politicians from transferring their money to rich farmers lobbyists?

  2. Dan Ariely's podcast on "ego depletion, and how the longer we resist temptation, the more likely we are to give in later."

  3. A GREAT post on the high price of false security (e.g., TSA).

  4. (Unintentionally) funny and VERY true analysis of how the Monitor Group of management consultants went bankrupt due to their inability to deliver value to consumers. (Curiously, their website does not mention the BK, but their top news item is "Global Entrepreneurship Week Policy Turns Up Unexpected Results." I guess so! Oh, and I received $500 for consulting with them for one hour one time. Their client paid more, but at least MY advice was worth the price :)

  5. Transparency leads to development in India, i.e., better water and nutrition.

26 Nov 2012

Monday funnies

Not sure how accurate this is, but it appears to be based on the fact that horse-fucking is NOT illegal :-\

Thanksgiving for us, not them

I am in Nicosia (Lefkosia, to the locals) in the Republic of Cyprus for an EU meeting. I walked across the "green line" to the Turkish Republic of Northern Cyprus last night, to enter a country that's totally different (beer brands) but totally the same (guys watching football and smoking in outdoor cafes).

This island has been occupied by humans for over 3,000 years, with different rulers taking over every so often (Byzantines, Venetians, Ottomans, and the British, among others). From this history, it's possible for any group to invoke a narrative of oppression, struggle and victory over any other group, and that's what the Greeks on the south side and the Turks on the north side of this divided island have been doing for the past 50 (500?) years.

It reminds me of the struggle taking place a few hundred kilometers from here, between Israelis and Palestinians. It reminds me of many other struggles: Blue states versus Red states, one tribe against another, Turks and Armenians, Armenians and Azerbaijanis, Indians and Pakistanis, Pushtuns and Hazaras, et al. et al. et al.
Insanity: doing the same thing over and over again and expecting different results. -- A. Einstein

DD sent me this nice rant from a UC Berkeley sociologist, about the genocidal celebration of Thanksgiving (not just the Europeans killing off the natives and taking their money, but American "tolerance" of the Holocaust).*

Hopefully, you see the connection between these nationalist movements (or oppression or liberation) and genocide: they are both narrations of the superiority of one group over another, and they are both intolerant of the differences that are actually the foundation of our strength as a species. These differences do not just make it possible for us to trade profitably with each other -- they are the differences that make it possible for us to imitate, differentiate and innovate from each other. Where would the world be if the Third Reich (or the Roman Empire) had indeed taken over everything? In a miserable, monolithic shithole, I reckon.

I don't know if humans will ever stop fighting with each other, but I do hope that more of us will see how stupid chauvinism and nationalism is -- not just for the fear and misery, but for the lost opportunity.

Bottom Line: I give thanks for the kaleidoscope of human diversity and its contribution to my life.

* His only mistake is to mention a "genocide" against turkeys, when that's the opposite of the case. We keep turkeys around for the same reason we kept slaves -- because they are economically valuable. That's why there will never be a turkey extinction problems like there's a polar bear extinction problem.

Watch the EU's conference on the water blueprint

The conference is on Monday (9:30-17:30) and Tuesday (9:00-13:00) this week in Cyprus (UTC+2 hrs).

The program is here, and I'll be on Monday's panel (16:10-16:50).

It will be livestreamed from here (and archived later).

23 Nov 2012

Friday party!

Aren't you glad that market competition has delivered that miracle in your pocket?*

* Yes, government had a role to play in allocating spectrum and designating frequencies, but there have been some heavy government failures in doing this, e.g., non-GSM in the US and various corrupt allocations in other countries.

If water is valuable, then charge for it

DB sent me this survey from Xylem, a spinoff from ITT providing technology to "solve" water problems, that reports Americans are "concerned" about water issues, "willing to pay" for solutions, but "unaware" of their footprint -- or how water problems or solutions might affect them.

No duh.

So, besides the blatant sales context of the survey, I think it's useless because it does not reflect people's thoughts or choices when they face constraints or tradeoffs. Put those factors into context, and then you will get a better idea of what people want, know and will pay for.

Bottom Line: We won't know how valuable water is until people need to pay for it.

22 Nov 2012

Speed blogging

  1. Cynthia Barnett in the LA Times:
    The illusion of water abundance at its most obscene: the water sector and large water users are so adept at capturing water and moving it around our cities and regions that the average American never has to worry about how it all works — until it doesn't, just like credit default swaps or too-big-to-fail banks.
  2. Here are (pptx slides and 15 min mp3) for my London talk "Untangling the price, cost and value of water" -- plus our panel discussion on value, tariffs, metering, etc. (21 min mp3).

  3. "IWMI Examines Role of Water Users’ Associations in Groundwater Regulation in China" and VW works to protect groundwater in Mexico (is that a non-market failure?)

  4. Very funny: "Texas town adds sugar to water supply to encourage residents to drink more water" (there are 2 Tbl of sugar in 8oz of coke).

  5. Wessex water (UK) issued a study of the effect of metering and tariff designs on water consumption. Meters cut demand by 15 percent; tariffs can cut demand by some bit more (statistically), but complex schemes may cause more customer complaints than the savings deliver.

21 Nov 2012

Anything but water

  1. Dan Ariely, in response to my proposal to ban advertising, told me that advertising functions as a coordination mechanism that allows people to find each other via shared "branding." He also said it's good when ads are not full of lies, an occasion I'd welcome.

  2. Speaking of Ariely, here are some of his "Arming the Donkeys" podcasts (iTunes links): Men are rewarded more than women, but they also die more (related to this post), how men and women trade sex for resources, how to schedule your time (without running out of it), and why we should pay more attention to morality than incentives when dealing with people. (FYI, I've listened to about 70 of them and like these :)

  3. 99 cool life hacks

  4. Your thesis committee and how to interpret their punctuation. So true.

  5. An update on "fake" academic journals that take money to publish rubbish from professors who are desperate for tenure. (Here are posts on the scams and why open access is good; here's a paper offering my solution.)

20 Nov 2012

Public talk in Amsterdam Wednesday

I'll be at the ABC Treehouse from 20:00-22:00, discussing the End of Abundance. Come by and tell your friends and colleagues!

Learn aguanomics online!

I've been following the development of online teaching with great interest.* Here are articles on how one guy started Khan Academy, how regulatory authorities have occasionally blocked this innovation, and some of the strengths and weaknesses of online instruction (i.e., it's not good for students who need instruction and have access to it).**

Anyway, you can check out how it works by spending 8 minutes watching this video that I made in response to the unit on water in developing countries at Marginal Revolution University.

In the lesson, I point out the big political and economic factors driving water (mis-)allocation that few people understand. Tell me what you think (here or in comments/questions there).

Click here to forward this video to people who need to learn more.

Bottom Line: Online education is going to make it easier for motivated students to learn from a larger variety of better instructors. Other students are likely to benefit indirectly, but nothing beats one-on-one teachers with passion.

* I taped and uploaded 28 videos from my UC Berkeley class on environmental economics and policy (with subtitles in 50 languages!). As of about now, they have an average of 17,000 views each -- the class had 85 students -- and over 480,000 views in total. I see that online "classes" are quite different -- my 80 minute lectures showed me talking; most online lectures have 3-5 minutes of slides.

** More depressing, Kling claims that eduction is only about the certificate (i.e., a signal of willingness to work hard or spend money employers look for as a sign that employees will be obedient), not curiosity or learning.

19 Nov 2012

Monday funnies

Inscamtion: Scams inside of scams inside of scams

---------- Forwarded message ----------
From: Economics And Financial Crime Commission
Date: Thu, Nov 1, 2012 at 4:48 PM
Subject: 2012 Scam Victim Remenbursment

Economics And Financial Crime Commission,
15a Awolowo Road Ikoyi,
Lagos Nigeria.
Website: www.efccnigeria.org
Fraud victims/$950,000
Our ref: 10667fv
Your ref: 890.


We came across your email address while going through the list of people that have received fraudulent mails from Nigerians. I am Ibrahim Abdullahi Lamorde. Chairman economic and financial crimes commission (EFCC) of the federal republic of Nigeria. Per-adventure you fell victim to fraudsters [scammers] and we are looking for evidence from you so that we can get these people and prosecute to life imprisonment for tarnishing the image of our country and making the world an unbearable place. Hence, we implore you to take precautions. in addition, stop replying any mails you suspect forward every of their mails directly to this office, so that we can commence investigation. Your interest will be highly protected and you will be compensated financially with the sum of $950,000 if you cooperate with us.

We understand that some of these fraudsters claim to be in London England, Benin republic and South Africa but be rest assured that we know they are operating from Nigeria. We implore you to assist us with this investigation.

We shall compensate you for all your help.

Yours truly,

Mr. Ibrahim A. Lamorde.
NB: Scammers pay BIG money for the names of people who have fallen for their lies, for "proven value."

Addendum: The daily blog email of this post ended up in my spam folder :)

Price gouging and water rationing

I covered the institutional economics of Hurricane Sandy awhile back, but I did not think of the similarity between the debates over price gouging (see footnote *** in that post) and water pricing until listening to this excellent podcast.

Here's the simple case:
Some people call raising the price of products subject to higher demand "price gouging," but economists call it an efficient and fair way to allocate goods among people. 
Let me restate that:
Some people call raising the price of products water subject to higher demand "price gouging," but economists call it an efficient and fair way to allocate goods water among people.
Bottom Line: It's more fair to allocate economic (private) goods by price than by some political or engineering formula that does little to reveal how valuable the good is to people.

16 Nov 2012

Friday party!

Think about how you see time from a subjective, cultural and personal perspective.

A local conference for local issues

CM asked me for advice on how to plan a regional conference on water, energy, food and development.

Here's my advice:
  1. Get local water managers, regulators, lawyers, engineers, business people, et al. to give guest lectures, establish internships, participate in "what do we do in the future" debates, etc. In the end, local water management is going to matter the most and that takes cooperation among all parties. Read this post for more.
  2. Ask those people for the hot topics that they'd want to see at this conference. If you get any politicians involved (state legislature to local mayors), then get then on a panel to debate this stuff.
  3. Record and upload EVERYTHING. Keep people on the record AND make it easier for others to "attend" later.
  4. Follow up on discussions and promises made according to DEADLINES.
  5. Repeat until there's no innovation to do and the system runs smoothly.
Did I miss anything?

15 Nov 2012

Anything but water

  1. This short podcast discusses how we are more open to change when our lives are up in the air (a version of sunk costs). I'd use this phenomenon to advise water managers that their customers are more likely to accept changes in tariffs, etc., amidst drought, disaster, etc.

  2. Agricultural secrecy means that we cannot find out how much US farmers are making from subsidies, i.e., a perfect recipe for corruption.

  3. The Economist covers damming the Mekong in Laos (electricity exports to Thailand, money for the dictators and hunger for Cambodians), banks that fund deforestation and how Bangladesh has developed by helping women.

  4. Kevin Drum gives good post-election advice for democrats and republicans, and some republicans really need to listen.

  5. The Straight Dope on Peak Oil (looks like 2100, globally)

Blog design/layout update

After a few years with the old layout, I dropped all my customizations and used some blogger defaults. I am not pleased with the title font/color, but maybe the tools in the posts (email, share, agree, etc.) are useful?

Please tell me what you think, make suggestions and help me fix things!

Are models* useful?

Misleading water model...
SW asked if he should take a course with a heavy emphasis on modelling as a means of understanding the economy and environment. Here's my response...

LOTS of people use models, but the big question is whether they are USEFUL.

Academics love them (modelling in your room, alone). Policy makers love them (move the levers of society and the future). Do businesses love them? That's not so clear since THEY have real money on the line.

Modelling is often abused and misleading, so the main idea is to NOT take your results as conclusive but as a demonstration of your thoughts on how the world works -- or demonstration of how little you know of how it works!

Alfred Marshall (famous economist from 100 yrs ago) said this:
  1. Use mathematics as shorthand language, rather than as an engine of inquiry. 
  2. Keep to them till you have done.
  3. Translate into English.
  4. Then illustrate by examples that are important in real life.
  5. Burn the mathematics.
  6. If you can’t succeed in 4, burn 3. This I do often.
If you want an example of using models to "understand," then look at my most intensive modelling paper, where you will see the pre-ordained result of my model specification and parameterization. The big point, then, is that I used it to clarify my OWN feelings/intuition. Does it prove anything? No. Will it change someone's mind? Not unless they agree with my pre-conditions. Will it be useful? Yes, if they reconsider how THEY model the world and those issues.

Bottom Line: Modelling is only as good as your starting conditions: garbage in, garbage out.

* There's a blog called "economists do it with models" but she's a bit too clever for my taste.

14 Nov 2012

Speed blogging

  1. A really interesting post discussing groundwater management in China via a fee on metered abstractions. Water levels are up. Costs are recovered. DO THIS! EVERYWHERE!

  2. I gave a talk on water economics -- the big picture -- to a class on Integrated Water Management. Here are my slides [pps] and the mp3 files [45 min 31 min]

  3. I'll be speaking in Amsterdam on 21 Nov (20:00 -- 22:00) on TEoA. Come by!

  4. An interesting article (by lawyers) exploring the pressures the US Army Corps of Engineers faces as it tries to manage projects across the US. I wrote "markets" about 50 times in the margin.

  5. Alex Maziotis discusses the costs and benefits of breaking up water monopolies.

  6. The ecological, economic, social, and political consequences of ocean acidification

Can we choose between fish and cows?

Julia Anderson, a former student of mine, wrote this guest post after spending some time studying land use and ecosystems in California's High Sierra:

The federal government has protected the Golden Trout Wilderness (GTW) to preserve natural processes in the eastern Sierra Nevada mountain range of California. The mountains of the GTW cradle verdant meadows and streams that support diverse wildlife, recreation, and economic activities. The meadow streams are the native habitat for the California Golden Trout – California’s state fish and a species of special concern designated by the federal Fish and Wildlife Service due to its rarity. Coincidentally, the meadows are also an ideal environment for wilderness cattle ranching – which represents a longstanding tradition within the minds of many westerners. It is in these meadows that a litigious dispute has surfaced between environmental conservationists aiming to protect native trout habitat, and proponents of cattle grazing. The conflict is over how to best manage the land to serve both people and the environment.

Cattle grazing has occurred in the GTW for over 130 years [pdf]. Every summer, ranchers bring cows into this high country ecosystem through a permit system regulated by the Inyo National Forest. As the cattle graze, they alter trout habitat by devouring native meadow vegetation, trampling and compacting stream banks, and defecating in streams. Scientists have found that these impacts alter golden trout habitat in ways that do not support healthy populations and recruitment. In a habitat study comparing ungrazed areas to grazed areas, scientists Knapp and Matthews found that golden trout were most abundant, with the highest densities and biomasses residing in ungrazed areas (see Knapp and Matthews pdf).

The controversy in GTW centers on what the land managers of the Inyo National Forest should do: Reduce the level of grazing in Golden Trout Wilderness in order to restore golden trout habitat or continue to allow, and even re-open meadows to grazing at the expense of California’s sensitive state fish? Margaret Wood, Inyo National Forest District Ranger, quoted in a Los Angeles Times article, stated that her decision will be based on the “best available science”. While it is imperative for scientists to conduct objective field studies to determine the impacts of disturbance, it is equally important to apply economic analysis when making crucial decisions for land management.

Economic analysis can show whether or not there are more net gains to people from the presence of happy, healthy golden trout swimming around, than there are for people from the continuation of the rights a few individuals have to graze cattle in the GTW. An economist could determine which management activity is worth pursuing by conducting a cost-benefit analysis. The benefits of grazing in GTW include a source of revenue for the Inyo National Forest, a source of income for a few cattle ranchers, and grass fed beef for consumers. The costs entail the environmental damages associated with grazing and none of those costs are currently being covered by the grazing permits. These costs are difficult to determine because of the challenge of assigning a price tag to habitat loss or degradation, monitoring, and the true cost of restoration. However, these costs can be examined through the application of valuation of ecosystem services.

For instance, economist Caroline Alkire has raised the argument that the presence of a large, healthy population of golden trout does and could further generate a source of revenue through the sale of fishing licenses. It could also be argued that, with the absence of cattle, more hikers might frequent the Golden Trout Wilderness, resulting in possible increased revenue to local tourist communities by staying in hotels, dining in restaurants, and promoting businesses. By degrading the habitat in which golden trout thrive, cattle are destroying the potential benefits derived from recreational angler fishing and other visitors to Golden Trout Wilderness.

There are additional benefits derived from the presence of happy, healthy golden trout that are not conveyed in the revenue resulting from recreational fishing or hiking; otherwise known as “use-values”. Many people gain happiness with the knowledge that the golden trout are thriving in a protected environment for various reasons. These “passive values” could be quantified by enthusiastic and creative people interested in determining the best land use practices for society and the environment. The following are these values:

Existence Value: Would the public find pleasure and comfort in the knowledge that GTW provides a place of safety for golden trout? Are people generally indifferent? Or would they prefer cattle ranching continue?

Option Value: Maybe there are anglers or aspiring hikers who hope to one day spend a backcountry adventure in the GTW admiring the beauty of the golden trout.

Bequest Value: Does anyone gain value from the knowledge that future generations will have the golden trout?
    Bottom Line: The Forest Service may have scientific proof that grazing causes negative impacts to trout habitat, but until they have more information on how the public values golden trout and un-grazed habitat, they cannot hope to convince the ranchers about the benefits of maintaining golden trout. Until then, they don’t have the right kind of information to find the right level of compromise between conservationists, ranchers, and anyone else who has an interest in the meadows which are home to the last remaining population of California's state fish.

    13 Nov 2012

    Politicians need to read this

    ...because voters do not know the difference between their facts and their biases [pdf]:
    Disagreements about the optimal level of wealth inequality underlie policy debates ranging from taxation to welfare. We attempt to insert the desires of ‘‘regular’’ Americans into these debates, by asking a nationally representative online panel to estimate the current distribution of wealth in the United States and to ‘‘build a better America’’ by constructing distributions with their ideal level of inequality. First, respondents dramatically underestimated the current level of wealth inequality. Second, respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution. Most important from a policy perspective, we observed a surprising level of consensus: All demographic groups—even those not usually associated with wealth redistribution such as Republicans and the wealthy—desired a more equal distribution of wealth than the status quo.
    H/T to GK

    Anything but water

    1. US subsidies to renewable energy jobs are 25x the subsidies to fossil energy jobs, and fossil energy isn't really subsidized at all ($0.0011 per kilowatt-hour).

    2. eBooks and piracy and what it's like to have your book given away for free. Although I put more weight on readers than revenue from my book, I also prefer that people pay to buy my book, but I wonder if I should make a "free to download, donate if you got value" option. Your thoughts?

    3. The Dutch eat their fries with mayo. I'll never go back to ketchup.

    4. National Geographic laments elephant poaching (ivory is often used for religious figures and vanity displays) but fails to see the connection between banning trade in a valuable commodity and poachers. The drug war fails for the same reasons. Regulate trade so communities see elephants as sources of legal revenue and elephants will be as common as cows (relatively speaking :)

    5. Got time to explore someone's imagination?

    12 Nov 2012

    Monday funnies

    This is funny (even of slightly cruel).

    Redundant sustainability

    I've said this often in the past, but I seem to repeat it all the time to people who think that "green growth" is an oxymoron or that we don't need the environment (or economy) to have a good life.

    Economic sustainability implies that business can carry on indefinitely, because goods and services are being produced and traded in a way that creates value for vendors, producers and consumers.

    Environmental sustainability implies that an activity can continue indefinitely, because human activities do not disrupt natural cycles that deliver environmental services to us, directly (clean water) or indirectly (healthy ecosystems).

    See how they fit together? See how "unsustainable" practices in either knock the other off balance?

    Now go be sustainable!

    9 Nov 2012

    Friday party!

    Nate Silver called 49/50 states in 2008 and 50/50 states in 2012, showing how useless pundits are. Colbert covers the story (so does Jon Stewart):

    Nate is probably partying (in a geeky way) but you should too: statistics are useful.

    Oh, and I agree that a bet is a tax on bullshit. I'd love to see politicians pay $1 million for every lie and pundits pay $1000 every time their predictions are wrong.

    Anything but water

    1. Nietzsche said: "All things are subject to interpretation. Whichever interpretation prevails at a given time is a function of power and not truth." Here are another 39 of his pithy wisdoms.

    2. The Swedes are burning so much trash that they are importing it. (They also recycle.)

    3. A podcast on "the tendency of urban voters around the world to vote for candidates on the left relative to suburban and rural voters."

    4. One of the bigger developments in medicine and health will be understanding how good bacteria keep us alive and healthy (hint: reduce your use of antibiotics). Also read this article.

    5. "Incorruptible Indian bureaucrat hounded out of office for fighting graft – 43 times" -- that's a bad sign if he's THE ONE. What about the other millions of bureaucrats in India?

    8 Nov 2012

    Hurricane Sandy and choices for the future

    I live in the Netherlands, where living below sea level for many years has driven the Dutch to take flooding and storm surges very seriously.*

    It's therefore interesting to compare the damage from the storm to the early warnings that Americans had from the Dutch and scientists. Were the Americans right to have ignored those warnings? After all... "Hurricane Sandy was a fluke, right? A storm surged from 90-mile-per-hour winds of a hurricane colliding with a northeaster, perfectly timed with a maximum full-moon high tide. The statistical likelihood of this is once in every 500 to 1,000 years."

    Huh. I guess the 2010 book on my table [pp 51-52 of Book II here] is about 497 years early:
    Storm surges along the eastern seaboard of the US are associated with either late summer-autumn hurricanes or extra-tropical cyclones in the winter period, so called nor'easters... the height of the hurricane surge is amplified if it coincides with the astronomical high time and additionally occurs at the time of new and full moon... hurricanes have struck the coastal New York area six times in 1900-1990, resulting in severe coastal flooding, damage and destruction of beachfront property, severe beach erosion, downed power lines, power outages and disruption of normal transportation.
    When I visited with Piet Dircke in Rotterdam (the center of Dutch vulnerability to floods) two years ago, we discussed the problem of flooding, and he gave me his book (free to download, by the way). He was also disappointed that New Yorkers were not interested in investing the time and money necessary for protecting their city from surges and floods. How was that possible when the CEO of New York was saying this?

    Well, it's possible because they were trying to avoid relocating people and neighborhoods or paying $20-30 billion for a real (i.e., Dutch-quality) system for protecting the area that would [p. 59]:**
    ... stretch across from Sandy Hook, N.J. to Far Rockaway, Long Island... providing protection to the outer boroughs of Brooklyn and Queens, additional northern NJ communities, Jamaica Bay and JFK Airport.
    Now it would probably have been impossible for New Yorkers and others in the region to build such a system in time for the (unexpected) arrival of Sandy, but was there any plan in the works? Not that I know of. That's unfortunate, as the storm caused $20 billion in damages to New York alone.***

    So what will happen next? The Dutch would engage in a ruthless triage -- moving people away from vulnerable but poor areas while building up 1-in-10,000 year defenses for places that are too valuable to abandon (e.g., Rotterdam).

    Will the People of Sandy engage in the same ruthless triage, or will they make the same mistake as we've seen with the rebuilding of the Ninth Ward in New Orleans? That political decision to rebuild is a costly and populist gesture that is likely to end when the returnees are flooded again in the future.

    Although that mistake is possible, I am hoping the Bloomberg and others take the time to read this book (and all the other warnings and studies) and make the right decision to rebuild in safer places while leaving those who want to stay in unsafe places to pay for their own foolishness.

    Bottom Line: Climate change means that the environment is not going to be reliable and business as usual is going to get more costly. We need to learn a few things from the Dutch: (1) Be realistic; (2) Plan seriously; and (3) Spend seriously. Anything less is not just going to be tragic, but criminally incompetent.

    * You may want to read my posts on the Delta Works and Delta Commission, which addressed these dangers in the past and for the future, respectively. Read this post on why it's difficult for the Dutch to export their water "expertise" -- mostly because the rest of the world faces water shortage rather than water superabundance.

    ** They were paying more attention to redeveloping New York, since valuable real estate generates property taxes and flood barriers cost money. I just saw Urbanized (2011), which has an extensive narrative on The High Line and other cool projects but nothing about urban defenses.

    *** As well as causing vast grief and inconvenience. People unable to use the flooded subways or tunnels took to bikes to avoid horrible traffic jams (as well as the need to buy gasoline, which was available for sex). It's a gratuitous tragedy that so many politicians have embraced "anti-gouging laws" that prevent prices from rising to balance supply and demand. Some gas stations stayed closed to avoid angry customers (or offer fuel for sex!); others stayed open but had cars waiting for hours to fill up. Read more on how these laws are counter-productive here and here.

    H/Ts to MR, MS and MV

    7 Nov 2012

    Speed blogging

    1. This Nature Conservancy site helps you identify the source of your drinking water in California. Go learn something.

    2. Another article on the difference between investing in water as a resource and water services.

    3. Jamie Workman and I discuss Heart of Dryness (his book on sustainability in Botswana), good dams-bad dams and his work on fisheries at EDF (70 min video). Also read this article linking poor water management to dead fisheries.

    4. Top ten desalination disasters... from a financial perspective.

    5. Water Alternatives has a special issue on "corporate engagement in water policy" that, IMO, puts too much weight on vague "stakeholder interests" and too little on the importance of government failure. I lament this omission because my paper on that topic was rejected from that issue, which also has an apologetic paper on water footprinting that's really a veiled defense for using a failed methodology. Do NOT put these people in charge of your water! If you want to read something a little more relevant, read how businesses are wrestling with the value and management of water.
    H/Ts to PJ and ER

    From elections to governing

    Peter Gleick* inspired me to write with this comment on yesterday's post:
    I consider your decision not to vote grossly irresponsible -- why should anyone in the future listen to anything you have to say?
    Peter apparently assumes that (1) my vote would matter, (2) my vote qualifies my opinions as worth considering, and (3) work without voting is not worth doing.

    As I replied to Peter, I prefer to judge someone's work by its logic and appeal to common sense. I consider voting on ideas and laws (that may or may not work as proposed) to be a separate issue.

    In fact, as I said yesterday, I consider it MORE important to concentrate on the process of governing, the everyday implementation of laws, and the actions that determine how well we work with each other in managing our economy, environment, and civil discourse.

    This focus on everyday work over occasional votes means two things. First, elections are not winner-takes-all events that instantly allow the winner to impose his ideas on the losers. Elections merely place one side on a higher ground from which they must work with the other side. We are not barbarians who put losers to the sword, take their property, and rape their women in an effort to dominate. The whole point of civilization is not just reasoned discourse as a means of reaching agreement and improving our lives. Its point is that we live in harmony with ourselves and others, dying happily in our beds, surrounded by loved ones in a prosperous community.**

    Second, I wonder how partisans from both sides are going to respond to these election results. Although some on each side think that it's ok to pull dirty tricks in an "all's fair in love and war" rationalization that nearly always backfires in ways that reveal their narcissism and foolishness, many others -- including the ones who considered both sides before making a decision for either side -- are more reasonable. These are the kinds of people I want to live with. These are the kinds of people who I'd trust to make policy or decisions on my behalf.****

    What I fear is that Republicans will see this loss as an excuse to double-down on their unpopular plans to impose their beliefs, policies (and lies) on others.**** I fear the same of the Democrats, but they have two advantages -- a reaffirmation of a weak consensus in favor of their policies and a need to make their policies work with a minority that can block anything too extreme. The trouble will come when (or if) this Republican minority vows to block policies based on their ideology instead of logic or common sense, a strategy that's turned the US into a caricature of "greatness."

    What I want to see in the US, going forward, is an acknowledgement from the Republicans that they lost and that they need to work with the Democrats, and a Democratic willingness (already in evidence) to work with the Republicans. That's how you govern; that's how you prosper; and that's how you move ahead as a country.

    Bottom Line: It's not how you vote that matters, it's your attitude towards your fellow citizen that matters. Elections have winners and losers and elections have consequences, but no election makes you a dictator with the ability or right to rule without respect for the rights and dreams of all citizens.
    * For those few of you who have not heard of him, Peter is a (MacArthur) genius, "visionary," "water hero" and all-round "fellow." He also doesn't like it when I criticize his ideas, but he appears to possess an ironic sense of humor regarding the connection between the ethics of action and the validity of one's views.

    ** I ran the "fishing game" for a class of students yesterday. The game is meant to illustrate the tragedy of the commons by putting candy on an "open access" table and allowing students around the table to capture fish. Fish that survive period 1 multiply so they can be harvested in period 2. I've run this game five times in the US and the fish are wiped out every time in the Period 1 (sorry, tragedy!). Yesterday, I was surprised that the students (80 percent Dutch and some foreigners) did NOT wipe out the fishery. They not only got more fish through their forbearance and lack of greed, they added an excellent observation to my "Europe is different from the US" data set.

    *** As I've said yesterday, we'd have more agreement on policies if the policies were more oriented towards public goods (roads, environment, wars) and less oriented towards private actions (marijuana, gay marriage, abortion, religion, etc.)

    **** Some Teapartiers apparently think Romney failed because he went to the center (presumably they also think that the two "Rape-is-God's Will" candidates who lost their elections should have elaborated on other things God would want).

    6 Nov 2012

    Is this the democracy you want?

    BB writes:

    I saw The Hunger Games movie last Sunday and was struck by the parallel between the country in the movie and the US.

    Every four years the US has a more and more lavish spectacle to convince the people that they can really change the way things are by voting.

    Two heroes are offered with some minor players on the side, both of whom promise that “it” will all be different if they win.

    To which I say...

    Translation:"Fight the power"

    Elect today and get to work tomorrow

    The unprecedented election is today.

    Check out this website to see which candidate matches your views. It's far more informative than making a decision based on tax returns, sound bites or skin color. It also shows (to me) that alternative party candidates offer no hope sound policy positions.

    I decided not to vote from the Netherlands, since California is in the bag for Obama, but now I'm thinking I should have voted libertarian, since that "message" would have more weight.

    In any case, I -- like the Economist -- think that Romney's schizophrenia (craven populist, social darwinist or fiscal terrorist?) and the neanderthal policies of his party makes him unsupportable for president.*

    But -- and here's my big point about this election and your vote -- remember that "democracy every two years" is not working. I could say MANY things about why that's a problem, but here's my attempt to keep it simple:
    1. Representative government does not make it easy to elect ONE person to represent us on many issues.
    2. Government power has extended into areas of life best left to individuals.
    3. Both parties are vying to take over government to inflict their policies onto others rather than implement policies that serve us all.
    4. The solution (less government) implies a DAILY battle to remove government shackles, not a bi-annual struggle to get the "right guys" in.
    Bottom Line: Go vote, but put the other 95 percent of your energy into pushing for effective (read: smaller) government of, by and for the people.

    * I would prefer to see a few more of THESE bumper stickers:
    • Patriotism is loving your country; nationalism is hating others.
    • The difference between patriotism and nationalism is TRUTH.
    H/T to CC

    5 Nov 2012

    Monday funnies

    This is perhaps the biggest reason I hate Starbucks -- their phoney sizing:

    Greed is good. Sometimes.

    Remember Gordon Gekko's "greed is good" speech? It's funny that economists have always considered it an innocent statement of the importance of self-interest, while most of the rest of the world have associated it with ruthless selfishness, social darwinism and ripping off neighbors.

    The necessary (?) clarification that we need to keep in mind during this season of electing leaders and voting on laws is that these ideas can be reconciled by noting that "greed is good" WHEN:
    • Rules protect the innocent against greed from (white and blue) collar theft. These same rules -- the rule of law, in other words -- make it possible to earn and accumulate wealth.

    • A safety net ensures that the wealth produced by greed is partially redistributed to protect those without the wits or the luck to do well. Taxes fund common pool goods like social insurance (unemployment, health, education) and infrastructure (roads, police, fire, courts, etc.) that help people "build that." I prefer simple taxes that are not distorted by lobbyists and legal clauses -- like property taxes.

    • Government functions support the creation and trading of private goods without dictating what those are. Consumerism that increases the demand for resources is not great, but it can be troublesome when consumption produces negative externalities.
    Bottom Line: Greed is good but don't steal.

    2 Nov 2012

    Friday party!

    This guy describes how he left his miserable day job to create surreal self-portraits. Win.

    The importance of water

    ER sent me this excellent video:

    I HIGHLY recommend it to anyone interested in a good overview of how and why sustainable water management is important. Send it to your grandparents, show it to your students, your kids, your boss.

    1 Nov 2012

    Speed blogging

    1. Another story of farmers "losing out" to frackers. That's the market, delivering water to its highest value. Farmers, note, are often sellers.

    2. An in-pipe energy turbine. Cool.

    3. This paper discusses the impact of adding another tier to increasing block rates in Santa Cruz. People subject to higher prices use less water in case you were wondering.

    4. Ariel and Monique are young engineers with a fun (and geeky) water blog. I liked their posts explaining charcoal filters and how to provide effective assistance overseas.

    5. Photos of Google's data centers highlight the importance of a reliable water supply.
    H/Ts to AC, MM and PP

    Capitalism, growth, steady state and prosperity

    AC asks:
    I assume you're familiar with the zero-growth movement, which advocates for ending our reliance on economic growth as the be-all and end-all of human achievement. In a way, it demonizes the market-as-god concept and tries to instead put human and environmental health/sustainability as the ultimate goals of society.

    So, my question for you is this: how would market-based water pricing and private water companies operate in this new type of zero (or negative) growth economy/society? Or, do you think anti-growth types are all head-in-the-cloud idealists? Or something else?
    First of all, capitalism is compatible with growing, shrinking or "steady-state" versions of the economy (in aggregate or per capita) because capitalism and markets deliver value in exchange for profits. If people want to eat meat, then capitalists will deliver. If they want to eat carrots, then markets will deliver. Will we see profits and employment grow? Not if productivity outpaces demand. Is that a problem? Only if you worry about the physical economy and per capita consumption (on a value-added basis) is falling.

    Since neither of these is likely, I'd predict that capitalism will deliver when people are consuming fewer goods (perhaps of greater value) and/or shifting to services. Also note that capitalism is compatible with improving the provision of non-private goods (e.g., parks, roads, etc.)

    Just as a side-note, remember that "steady state" is really a myth in both biological and cultural terms. Evolution and history only run in one direction, so it's really impossible to "stay steady" (unless you're dead). I'd suggest that we use the terms "evolution" to refer to the changes we prefer in natural and human processes and "crash" or "revolution" to refer to the uncomfortable, costly and abrupt changes that we'd prefer to avoid, but that may be worthwhile when the path is unsustainable.

    Bottom Line: Humans should pursue economic growth only when it's compatible with increasing human welfare, not as a bureaucratic fetish or outcome of processes that privatize gains and socialize losses. The capitalism that is compatible with both can be abused by political actors who do not serve the common interest.