21 March 2013

Self-evident water delusions

BB sent this press release from California Congressman McClintock, to which I will give a few reactions...

Self-Evident Water Truths (February 27, 2013 to ACWA)

Water – particularly in California – has become such a complicated tangle of competing interests and ideological agendas that I think we have lost sight of some self-evident truths.

Self-Evident Truth #1: More water is better than less water. Can we agree on this first point? I know I’m stating the obvious – but I keep hearing, that, “no, conservation is the key to the future because conservation lessens demand.” That may be true, but ultimately conservation is the management of shortage and abundance is better.

No, that's not true for floods, it's not true for endless rain, and it's not even true for agriculture: agricultural yields can be maximized with the correct amount of water, not more or less. But, wait. Are you talking about MORE water out of the environment for humans? Bad idea. More water for Ag from cities? Bad idea. What do you mean?

Some say that in many cases conservation is the least expensive way of adding supply. But that’s the point: it doesn’t ADD supply. And IF conservation is the least expensive way of managing shortage, it doesn’t need to be mandated, does it?

It does when farmers are told to use it or lose it.

The point at which conservation becomes economically preferable is the point when a water user decides he can save money doing it. The more expensive the water, the more expensive is the alternative he’s willing to employ.

True. Welcome to "raise prices."

Which brings us to Self-Evident Truth #2: Cheaper water is better than more expensive water. If we agree on this, then it naturally follows that before we employ more expensive sources of water like desalination and recycling, we should first be sure we’ve exhausted the less expensive alternatives, like surface water storage.

Well, that's true, but not when "cheap" means selling water at "average prices" that are lower than the cost of production from some sources, i.e., the policy for pricing water throughout California. (Your host, the Association of California Water Agencies, knows this, since its head -- Tim Quinn -- was chief economist at the Metropolitan Water District of Southern California, and he knows how their average cost, "postage stamp pricing" encourages sprawl.)

Self-Evident Truth #3: Water is unevenly distributed over both time and distance. So if we want to have plenty of water in dry periods we have to store it in wet ones, and if we want to have plenty of water in dry regions we have to move it from wet ones. That is why we build dams and aqueducts and canals.

Ahhh, but isn't it also "self-evident" that moving water form "wet" to "dry" places risks both the local ecology that's now "drier than usual" and the importing area assuming that water imports will occur forever, even when they use those supplies so intensively that they need MORE imported water -- as has happened many times in California history?

Which brings us to Self-Evident Truth #4: that we don’t need to build dams, aqueducts and reservoirs if our goal is to let our water run into the ocean. Water tends to run downhill very well on its own and doesn’t need our help to do so. The reason that we build dams, aqueducts, and reservoirs is so that the water DOESN’T run into the ocean, but rather is retained and distributed where it will do the most good.

Now, wait a second, buddy -- who's version of "most good" are you using? That of the salmon or that of the suburban lawn?

We can tell where it does the most good by its relative value, which brings us to Self-Evident Truth #5: Water is valuable, which allows the market to assign a price to it that can account for its scarcity, availability, storage, transportation, demand and substitution costs, including conservation.

Do I have everybody so far?

No, you lost me at "the market" because (1) there's no market for water in California (not even getting into groundwater) and (2) because environmental flows are not included in any market measures.

So, I'm going to cut you off there. You're clearly a proponent of 100% diversion of water for priced uses, and that perspective is totally bankrupt in terms of outcomes (dead ecosystems, wasted subsidies, urban water shortages) and political agreement: Very few voters agree with your 1930s vision of diverting water into machines and filling in the blanks with "markets."

Bottom Line: It's self evident that Congressman McClintock has no idea of how water is misdirected and mismanaged in California. He needs to think more than one election/donation cycle into the future.

4 comments:

E. Hahn said...

What is Ellen Hanak referring to in her paper "Califronia's Water Market, By the Numbers"?
http://www.ppic.org/content/pubs/op/OP_1002EHOP.pdf

David Zetland said...

@E Hahn -- good question, except that the 2002 report talks about SOME trades in the mid-90s. The 2012 update says "Over time, the market has shifted from primarily short-term (single-year) contracts to one dominated by longer-term and permanent trades. Farmers are the primary source of water, and the destinations include other farmers, cities, and the environment. Market growth has slowed since the early 2000s, reflecting a variety of infrastructure and institutional constraints, including new pumping restrictions in the Sacramento-San Joaquin Delta (a major conveyance hub) and more complicated approval procedures."

LT trades, as you know, are not as much about a "market" in the way we understand them (e.g., oil, housing) as they are a way of reshuffling illiquid (pun!) water rights. There's a LOT more to be done before CA has a market like Chile or Australia.

E. Hahn said...

What reading would you recommend for someone interested in obtaining a bit better understanding of market in Chile or Australia?

David Zetland said...

@E Hahn -- start with this: http://www.kysq.org/docs/Grafton%20et%20al%202010.pdf

I've also got a book to review on this topic, but it's not free :(