31 Oct 2013

Human rights or market competition?

The bad old days...
In a recent paper, some academics conclude that "system operators, utilities, and management boards remain largely unaffected by the changing public policy landscape for human rights realization."

That's what I said (long short) when I argued for property rights as a more efficient means of getting water service to people. Why is that? Companies pay attention to the people with money. In most poor countries, water utilities pay more attention to those providing the subsidies (from government or aid organizations) to cover operating and capital spending (if any).

Those utilities then do what they please, as monopolies can, when it comes to serving poor people in slums.

How can we break that paradigm? We can borrow from history and our experiences of how phone service improved when traditional phone monopolies were disrupted by competition from long distance (remember when MCI "insulted" AT&T with their low rates?) and mobile phone providers.

Are mobile phone providers charitable? Do they have unique insights into our needs? No, neither. They serve customers because they will fail if they do not, when others take those customers away.

Bottom Line: Competition will deliver water to people faster than regulation or charity. Competition will arrive when (1) monopolies lose their control over the service area (in LDCs this happens when kiosks are allowed to sell water) and (2) when people lacking water have money. Most of them can find their own money (e.g., the poor in Phnom Penh), but others may need help from the State (Chile) or money in their pockets (my rights proposal above or via direct aid).

30 Oct 2013

Should Christians engineer a better world?

I'd say no, for exactly the same reasons that I'd say that Buddhists, Muslims, et al. should not: better worlds do not result from pushing a solution onto people; they result when people have the power to control their destiny and find their own solutions.

Bottom Line: The road to hell is paved with good intentions.

Speed blogging

  1. Victory! The US government is phasing out subsidies for flood insurance (wow, a private market may emerge!). Some people are upset that price increases constitute a "taking" of their property values (who wants to pay full price to live in a flood zone). If that's true, I recommend that they sue for reimbursement from the land developers who build "high security houses" there in the first place

  2. I saw Watermark a few weeks ago in the theatre, which was a great way to enjoy the huge panoramas of water in motion and water abuse by humans. The directors (from Canada) spoke after the film, taking the high road of "we need people to think about how they see and use water" over the low road of "do this to solve our water problems." I agree with that perspective, given the importance of local ideas and local support for solving water problems (some academics discuss governance). Here's the trailer:

  3. Footprints are just about as dead as ethanol, i.e., they are policy irrelevant, one-dimensional indicators

  4. "Jellyfish take over the oceans" is not the title for a horror movie. It's news -- and bad news -- for humans who want to swim, eat fish, or use ocean water for cooling and other industrial processes

  5. A lifecycle assessment of the tradeoffs between saving water and spending energy when it comes to wastewater recycling

29 Oct 2013

The cultures of countries

Is success a nicer mob? Or no mob?
I've lived in the US and Croatia, 3 years in the Netherlands and now a few months in Canada.

Someone who lives in a few countries can often find similarities and differences among them, but it's not as easy to explain these differences to people who have NOT lived in the countries.

In the past, I explained how the Dutch see the US, as similar to the way Americans see Mexico, but I've seen more contrasts since then.

Last week, I linked to an analysis of the US as a kludgeocracy and mentioned that the Dutch are more inclined to suffer short term pain from a reorganizing to get long term gains. American policymakers, in contrast, just add "compensating" layers on top of old and failing policies.

As an analogy, consider how Microsoft maintains backwards compatibility with its operating systems. That habit makes it easier for customers to blend new and old systems, but it also introduces instabilities and insecurities. Apple, in contrast, abandons old systems (hardware or software) when a new system offers a big jump in performance. Apple upgrades can leave folks with old systems out in the cold, but they deliver better performance to everyone else. (Apple's "planned obsolesce" may deliver more sales, but it's not clear if more comes from people who've been abandoned or people enthusiastic for a clean break.)

If the Netherlands is an Apple country and the US is a Microsoft country, then what is Canada?

Canada is a Blackberry country that has a "World Series Perspective" on performance. Canadians only care that they beat the US because they think "the world" is composed of two countries. That's myopic in the same way that it's wrong to limit the discussion of mobile phone systems to Microsoft (marketshare 3%) and Blackberry (4%) when Apple (40%) represents the success of craft (the Netherlands) and Android (50% share) represents the messy, flexible and popular ideals of the masses.

Bottom Line: Those who have a World Series Perspective on success are fooling themselves. You need to consider the WHOLE world when you want an accurate perspective on human innovations, success and failure.

28 Oct 2013

Monday funnies

Those crazy Japanese...

Anything but water

  1. Read "the ideological migration of the economics laureates" if you want to see how flexible (or not) leading thinkers have been with respect to their views of the world

  2. As Cornelia says, it's not a question of IF, but WHEN oil pipelines will spill. There have been 300 spills in North Dakota. That rate may not be bad if (1) they are cleaned up or (2) there would be more spills from using trucks or trails to haul oil/gas, but we may never know how bad some of these spills are if the government covers them up (the 300) or if the government fails to report, regulate or punish pollution -- as is all-too-frequently the case with Alberta's oil sands

  3. Listen to this podcast if you want to understand how the dead hand of government (monopoly, regulation) stifles and slows transportation

  4. Anyone with a career should read this wisdom from Scott Adams (Dilbert): Have a system, not a goal. Systems help you adapt and expand; goals, once met, are useless. My system is to stay engaged in water sector debates and change directions according to the opportunities that arise

  5. Trolls may have the right to free speech but do they have the right to disrupt the conversation? I was at a conference a few years ago where a young woman was trying to ask a question that did not fit within the topic at hand (blogging). When the moderator cut her off, she complained about her rights being infringed. She may have a private right to say what she wants, where she wants, but she does not have the right to disrupt a "club" conversation or break its rules. So, I think it's okay to cut off people who are not on topic, given past agreements on the topic. On that note, does Russell Brand have the right to call for a revolution? Yes, in terms of speech (he was being interviewed), and yes, in terms of his complaint that politicians pay more attention to the 1 percent than the 99 percent. Taking Brand's critique as relevant, how did we get to such inequality in the US (and, to a lesser extent, in other rich countries)? James Surowiecki points out that CEO-pay benchmarking ends up inflating salaries because compensation committees target "above-average" (the miserable version of the Lake Wobegon effect).

25 Oct 2013

Friday party!

A few months back, I posted the Robin Thicke video. This is a great parody of the chauvenism that some people see in it:

Oh, and here's a funny spoof

Speed blogging

  1. If you're interested in water governance, shortage and conflict in India, then watch (or listen to) my water chat with Mike McCullough (70 min) on his thesis [docx]

  2. How to deliver water in Africa (hint: capitalist kiosks > charitable handpumps)

  3. Ten ocean landscapes worth looking at (sample to right)

  4. An EU project, WATER CHANGE, uses modelling to plan for climate change adaptation. Check it out if you're into that stuff or want to see their results for Catalonia

  5. Natural infrastructure uses natural environments to deliver services (e.g., clean water) at a lower price than man made infrastructure, and you get functioning ecosystems as a bonus!

24 Oct 2013

Anything but water

  1. Read this long and fascinating analysis of how the US Government fails. It's always a little joke, how the Dutch constantly reform their laws and ministries, but that's a small price to pay to avoid the US disaster that results from kludges being piled on kludges. If you only read one article on governance this year, then read this

  2. I've said for awhile that citizen ignorance explains why Americans get the bad policies (they deserve). Now I see why: one-third of US adults are innumerate

  3. Canada is opening up wholesale markets for medical marijuana. I think this is because the government is worried about a flood of cheaper weed coming from Washington State, where legalization will allow growers to get way more efficient (no more indoor grow ops)

  4. This is what happens when the government tries to steer markets: EU utilities have lost a half-trillion euros and Arizona utilities battle to end feed-in tariff subsidies to solar. As I replied to Alex @ the Breakthrough Institute:
  5. UBC's Green College is a multi-disciplinary, mixed-sex residential college that really breaks down silos. Want people from different disciplines to talk to each other and collaborate? Have them eat and sleep in the same place (sometimes the same bed!)

  6. First Nations in Alberta are upset that the federal and provincial governments are not listening to them on pollution. I'd say that's because those governments are not serious about clean oil/gas production (=no local pollution). Pathetic
H/T to DD and TS

23 Oct 2013

Low flush fallacies

VZ asks:
You say that low flush toilets are not that useful, but what about all the other usage of water in the household (shower, dishwasher, laundry...)? Does that water also get filtered in the same way (and hence it doesn't matter if you use less of it) or that's a different system and it makes sense to use less? Well, it makes sense to use less anyway (financially), since that's the ways incentives are setup, but just wondering about the environmental benefits.
First of all, it makes sense to use less water if you have a water meter and the cost of additional water ($) is not worth the benefit (happiness).

But, second, the entire concept of charging for water use needs to be put into the context of the water system, i.e., will water that goes down the toilet and drains be available, after treatment, in the environment (or as recycled water returned to customers for landscape irrigation or for drinking)? If that's true, then "efficiency" in terms of less water per shower, flush or wash will not really translate into any saved water.

Third, the real target for water savings should be outdoor use -- mostly landscaping  -- since that water tends to evaporate and/or sink into the ground, from where it cannot be reused.

That's why I think that outdoor watering should attract a higher charge (scarcity) or ban (shortage). Water budgets, by the same logic, do not make sense if they "lock in" a certain allowance of water for landscaping. That's why they are a bad idea in water-scarce areas and a waste of time in water-abundant areas.

Bottom Line: Flushed water does not disappear, worthless. It has value because it can be used again.

22 Oct 2013

Speed blogging

  1. The poor suffer when New Dehli's tanker mafia fills in for the failure of public utilities

  2. Water trades in Australia's Murray Darling are slowing down because dams are too full to buffer water movements. Spot prices are rising because there's no opportunity to buy water from cheaper, surplus areas

  3. A great post on water stress in the US. Southern California is most at risk. I hope lawns are worth it

  4. This speech [pdf] discusses water pricing -- and water institutions -- in New Mexico. I asked some contacts for more DATA on prices, but all I got were names for brokers and lawyers. The Southwest does not have water markets -- it has occasional, inefficient trades -- and that's the way the brokers like it

  5. The Daily Show interviews people in GA and TN regarding state lines and water claims. Funny, but pathetic
H/Ts to ZD, DL, RM, CR and TS

21 Oct 2013

Monday funnies

This, via CD, is funny at the same time as it shows how New York City doesn't yet get bikes. (The same is true in Vancouver.)

Water management via ABCDE and F

Chris Perry has a useful mnemonic for managing water that I rewrote for TEoA 2.0:
  • Account for the available resources (read these posts)
  • Bargain through the political process to determine allocations and priorities
  • Codify priorities and allocations into rules
  • Delegate implementation to appropriate agencies
  • Engineer the infrastructure necessary to deliver the water
  • Feedback to correct errors and adapt to changing conditions
Under feedback, I'd include means of reallocating water (e.g., water markets, public trust takings, etc.), since administrative measures are not as accurate as user signals of supply and demand.*

Chris tells me that his framework has been used:
  1. As a basis for discussion of "Governance" at an FAO "Expert Consultation" earlier this year
  2. As a means to assess where irrigation is going in SE Asia, in a joint study funded by the World Bank/FAO/ADB in China, Indonesia, Thailand,, Malaysia and Vietnam
  3. As the basis for WaterAid's Water Security Framework [pdf]
...and he explains its role thusly:
My take is that it is a successful way to help ensure the discussion about water resources management is multi-discplinary and not dominated by the succession of new "languages" (engineering efficiency; economic pricing; institutional reform, livelihoods; sustainability; green growth; etc) that have so dominated the issue of water resources management over the years
Want more detail? Read his paper on ABCDE+F [pdf]

Bottom Line: Don't put the cart before the horse! You cannot allocate water without knowing how much is there; once allocated, you cannot reallocate it without the institutions and infrastructure for managing and moving water.

* Unlike command-and-control types who think that they know where water should go, I am a fan of market reallocation (we're talking bulk water here, not retail water that utilities sell), and that's why I came up with all-in-auctions.

Addendum: Chris sent this comment in response to our emails on similar/conflicting "solutions" that do not get at more basic problems:
Yes, people talk past each other and that, really, is the point of ABCDE.

In a real discipline (think, say, medicine) you CANNOT just turn up with some new solution without referencing your proposal to (a) what particular aspect of medicine does the new solution apply to (surgery, pain relief, eyesight, breathing…); (b) what is known and practised already in that specialist area, and (c) relating how the new technique will fit with every other affected element.

For example, a transplant surgeon recently installed a new adult kidney into a small baby because that was the only matching organ available. This involved shifting bits of the baby's other internal organs around to make a space and installing the kidney on the "other" side from normal. Before doing that he had to understand or find out from other experts what all the implications might be of this approach.

In water we just let these waves of "newspeak" take over the agenda for years on end WITHOUT obliging them to go through the consultation steps noted above on the known history and approaches and the impact in relation to other disciplines. A key indicator of that is that each wave comes with a new language (sustainable; livelihoods; demand management…) that the others have to learn to join the debate. Its exclusionary… and in fact one observable fact is that people who "really" manage water resources (California Department of Water Resources; Murray Darling basin; Dutch National Agency (??), India's Central Water Commission, etc etc etc) just tend to ignore each suggestion that emanates from the latest conference because it would take to long to explain reality.

I am not sure you have done this with all-in-auctions. Twenty years ago I had debates with Mark Rosegrant about water markets, and my line was that just as soon as he could deliver defined and enforced water rights in the countries we were interested in (India, Pakistan, Egypt…) then I would be fully up for helping make them tradable. So far, I did not hear back. And when you add the consumptive/non-consumptive dimension and third party impacts, I am not expecting to hear any time soon. The economic theory is great. Reality, though, is a challenge. Just think through the ABCDE+F of your all-in auctions.
In answer to his last question, I said:
On AiA and markets, I agree. That's why I say -- in the paper and always - that it's good to use them on a small scale, where rights are clear, infrastructure is in place, etc. BUT water is not reallocated among the community of users. Only AFTER small AiAs are working is it feasible to link them up -- but that implies that ABC, etc. is processed in.

18 Oct 2013

Let's get serious, America

Aquadoc posted some information from a recent Columbia U. report on fixing and financing water infrastructure. Read it [pdf] but also take my comments into consideration:
Regarding this statement ("It will be difficult for many utilities to raise rates high enough to pay down existing levels of debt"), I'd say that rates (or taxes) must rise. Most utilities have been underinvesting since the "big push" of installing networks over 100 years ago. They've drawn down capital, and now it's time to bite the bullet and spend. Americans pay less for water than Europeans, and they get what they pay for.

On (1), it's important to benchmark performance (e.g., IB-NET) to see how well they are doing. Want to push that to its limit? Use my method for improving manager performance [pdf]

On (3) and (4), it's important to keep leakage and recovery in mind. Most leaks are in the system -- not the household -- and recovery means that conservation (demand down) is not as important as reducing leaks and recycling water.*
Bottom Line: Water managers can deliver quality water services, but they need to be pushed to achieve quality and properly funded.

* Speaking of recycling, Portland just dumped another 8 million gallons because someone peed in the reservoir. Those managers need to grow a pair and tell customers that their water isn't that clean BEFORE it goes through the treatment plant. The cost of drain/refill, alone, is much higher than the TINY cost of cleaning some pee out of the 8 million gallons. Upside down priorities.

Correction: That was in 2011, when it was ALSO a bad idea :) -- thanks to CF for the correction...

H/T to RM

Friday party!

Warning -- sexually-explicit, legalistic Catholicism

H/T to MA

Anything but water

  1. Wake up Washington, part 28: Here's a climate and energy plan that goes beyond President Obama's current [totally inadequate] proposal. On a related note, check out this argument that regional treaties will be more effective than a global climate change policy. I agree (I've argued that we should call it "local warming" to get local traction that can be built up) with those economists, but I agree that other economists need to fix their flawed models of climate change
    Do government databases need a salary, or is the USG willfully incompetent?
  2. One way to reduce urban congestion is higher parking fees (raising the cost of fuel or car ownership hits rural people). Extra fees can subsidize municipal mass transit, but I'd just deregulate public transport -- entrepreneurs care about getting you there because they can get paid

  3. Alberta's replacement for the Keystone XL? How about oil planes?

  4. Has Iceland done better by making banks pay? This article argues that the macro data are not as good as some thing, but I think that this article's discussion of the micro recovery is more relevant (so, yes, I still favor making Wall Street pay)

  5. The Dutch have replaced Americans as the world's tallest people. Public health, exercise and nutrition matter
H/T to TS and BT

17 Oct 2013

Where's your water -- and your money?

I made this [PDF]. Does it give a clear explanation?

Addendum: Thanks to PM for the American Water Works Association Water Audit XLS, which lets you do this for real.

16 Oct 2013

Oklahoma! Water! Talks! Next! Week!

I'll be there next week, giving a a keynote at the Governor's Water Conference (Midwest City) and then a few seminars at Oklahoma State University.

The theme of my talks will be "the end of abundance" -- and what to do about it -- and the organizers have given me some ideas on local issues (disputes with local tribes, Texas, Arkansas as well as instate management of ground and surface water for cities and farming) to cover, but I'd love to get your ideas.

I'd also be pleased to mete up with you if you happen to be in the area.

So, email me or comment here!

I always ask questions

From the ever-insightful PhD comics

Speed blogging

  1. Read the Twenty-first century manifesto for the New California Water Atlas!

  2. I had a nice chat (56 min on YouTube or MP3) with Tim SolWoong Kim on his project (the Pursuit of Water), water supplies in Haiti and how to use media to create change

  3. This issue of Water Alternatives has many articles on self-supply of water, an area that most of us forget about. Far more interesting (to me) is this past issue of Water Alternatives, in which veteran water advisers describe how they overcame or failed to deal with political barriers to improved water management in various countries. Highly recommended for insights on the difference between theory and practice. On a related, but more humorous, note check out the various ways that Burners failed to turn projects from idle dreams into reality in the middle of a windy desert

  4. International Rivers and other anti-poverty, pro-environment groups protest the World Bank's subsidies to big dams and fossil fuel projects. Too bad they didn't start campaigning when I called this out last year

  5. The poles are going to see a larger effect from climate change, but the impact will be more harmful at the tropics, because those ecosystems are not geared for extremes

14 Oct 2013

Monday funnies

This is just me being ridiculous...

Columbus and the destruction of endless resources

Today is Thanksgiving in Canada and Columbus Day in the US.[1]

Both of these holidays touch on the topics of indigenous people, resource use and sustainability -- and not in a good way.

Native Americans (First Nations here in Canada) definitely got screwed by European settlers (the Oatmeal's summary of why Christopher Columbus was a nasty imperialist should be required reading for all Americans today), just as many peoples were conquered and exploited by colonists. I'm relieved that most Europeans think it's a bad idea to invade countries to liberate their peoples and exploit their resources, but sad to see that some other countries (Russia, China and the US) still seem to think that Their Way is the right way.

Britain has NOT invaded the white countries
What caused a change of heart in Europe? And how is it possible that the ancestors of today's "civilized" Europeans were different? The Belgians, e.g., are now known for beer, chocolate, and unstable governments but it was only 60 years ago that they ran one of the most brutal colonial regimes on the planet.

I'd explain these differences in three steps:
  1. Humans will use abundant resources if they can
  2. They can do that if the "owners" of these resources have a different version of property rights (i.e., communal rather than private ownership) and are too weak to defend their property
  3. Europeans fought so much that they got strong enough to take everyone over, until colonial subjects got strong enough to kick them out and domestic opposition to colonialism ended support for it at home
The result of going through this process, combined with the horrors of wars that resulted from listening to exceptionalist nationalists, has led most Europeans to conclude that it's condescending, foolish and inhumane to continue to occupy people against their will.[2]

As you can see from my wording, Americans, Chinese and Russians (and perhaps others) may still suffer from these weaknesses. They have developed with an expansive view of resource exploitation, and they have not directly experienced the follies of nationalism. The Americans did not internalize the failure of Vietnam; the Chinese have a sense of manifest destiny that includes everyone who eats rice; and the Russians have a similar post-imperialist, post-badass need to justify their greatness.

These three nations, in other words, are full of people who lack the humility and experience of failure necessary to counteract their chauvinistic impulses.

These are big themes, so let me clarify two things. Canadians, Americans, Russians and Chinese see resources as something to exploit because they have not really had to live with a limited set of resources. Europeans are better at resource conservation (and by extension, environmental protection) because they've hit their limits. These differences explain how policies and outcomes are so different in exploiting vs conserving cultures.

Exempting Canadians, these three countries are also less respectful of others' rights to resources (or a clean environment) because they don't have a history of peer-to-peer detente or experience of having their resources taken from them.[3] Many people from these countries have mistakenly interpreted their "exceptional" luck with an "exceptional" excuse to disrespect and/or exploit others.[4]

Will these trends reverse? Only if the citizens and leaders of these countries gain some perspective on the importance of conserving resources and respect for the rights of other peoples. From what I've seen in their (lack of) response to various resource and environmental disasters, I'm not sure that they are making any progress.

Bottom Line: History is only destiny for those too lazy to learn from others' failures.
  1. I'm guessing that the Canadian holiday is earlier because the harvest (and first frost) are earlier in Canada [NB: It's way more complicated than that]. I'm also guessing that the Canadian Thanksgiving is similar to the American one in terms of family reunions and eating pumpkin pie and turkey; I don't think they've got the same crazed shopping crush, but maybe that's only because there are SO MANY shopping days left before Xmas
  2. Many post-colonial countries -- in Africa especially -- still struggle with these issues because their tribal loyalties justify exploiting citizens from other tribes
  3. They have a longer history of being under British control and non-history of colonialism, so they tend to shy away from ruling over others. That said, some Canadians think it's a great idea to USE resources, as they come from a culture of exploitation
  4. I'm willing to blame some of these countries' dysfunctional domestic politics on taking this attitude towards others. As one recent example, consider how Azerbaijan's rulers announced election results even before the election took place!

11 Oct 2013

Friday party!

Nice video of the "Bike crawl" we attended a few weeks ago

BC needs water markets AND good regulations

Maude Barlow, the well-meaning but misguided "Voice of the People" said recently that
[British Columbia may introduce] water trading... which would be a terrible mistake... [because water licenses are converted] into private property... The idea is if you can make money selling your extra, you’re going to be more efficient with the water you use. Then you’re able to hoard, buy, sell, trade those water rights, that property with other water users...

But in fact, where it’s been tried around the world, most particularly Australia and Chile, what’s happened is that the big users come in and gobbled up the small users because they have more money And then the big investors come in and start buying up those water rights, and then the international investors come in. And in Australia, the price of water went through the roof. And when the government, years later tried to buy back those water rights, they couldn’t afford it.
In response to this, I left the following comment:
It's interesting that Maude begrudges the fact that markets lead to higher prices when water is scarce, as if small, poor farmers are better at producing food with water. I agree that small farms are nice, but they need to get explicit subsidies if that's going to be a public policy. On the Australian government's cost of repurchasing rights, I'd suggest that those high prices were REALLY designed to help farmers (oh, and those would be the small farmers who OWNED rights before the prices rose in the big farm selling spree) to recover from the loss of water for irrigation.

I'm surprised that Maude didn't add that the Australian government HAS taken water back, by lowering yield (wet water) on licenses.
I went on to add some comments, in which I agreed with her, i.e.,
I agree that BC needs stronger controls and regulations, but that's never been a concern in this company province. Loggers and papermills caused damage; now oil and gas are. It IS time for Canadian industry reduce their water pollution, whether by regulation or taxes on discharges.
How can we square the circle? Well, Maude outlines the choices:
...whether it will be through markets or whether it will be through public trust is really up in the air... What we’re really needing, here in British Columbia, is for groundwater and surface water to be protected as a public trust for all time.
I'm pretty shocked that Maude thinks that ALL water should be controlled under public trust, since that implies that all the water belongs to the people as a collective. Such a regime would exclude the private use of water, whether that be for irrigation, industry, fracking or municipal water services. It would mean, in other words, that water would need to flow from mountain top to ocean, without any human diversions.

That's a bit strong, so I'd suggest that we go with the common sense middle ground that Maude does not appear to accept: some water should go to private uses, while the rest should stay in the commons, as public trust flows that keep the environment healthy. Those flows should be quantified (perhaps leading to a reduction in private diversions) as well as protected by insuring that various uses do not pollute surface and ground water in the commons.

I know that BC does not currently have a good handle on quality, and it can do a lot better. Next time, I hope that Maude calls out BC regulators for failing to protect the common flows that exist, rather than making a grab for the private water that flows in our taps, irrigates our fields, and underpins a lot of industrial activity.

Bottom Line: British Columbia can do a better job regulating and improving water quality. The government may even need to change the way that water is divided between private and public uses. No matter its actions, markets can improve the way we manage private water, to ensure that scarce water goes to the best economic uses.

H/T to MY

10 Oct 2013

Anything but water

  1. Fascinating (and funny): 20 Things I Learned While I Was in North Korea

  2. No duh: "Fed's move [quantitative easing] fantastic for the rich." If you're not in that category, then check out this guide to getting out of debt and then get mad at the uselessness of financial advisers

  3. Shell Canada wants to "fuel change," but I think it's a little pathetic that they are spending $2 million on "aww cute" projects. It's not just the fact that Shell can deduct $2 million against its revenues of $467 billion, but that it could take far more effective actions to improve the environment

  4. "There has never been an instance of groundwater contamination due to hydraulic fracturing in British Columbia" -- and there's plenty of water for fracking, but the record for water use in Alberta -- including a LACK of records -- is not encouraging

  5. This survey paper [pdf] explores how experiments have been useful in designing environmental markets -- including markets for water, carbon, etc.

9 Oct 2013

What is reddit?

I read it as a great way to enjoy the internets. Watch this to understand why

Academic non-results

Even the Greeks had to facepalm
Someone sent me an academic paper exploring how to set prices to increase efficiency (total demand falls) without harming the poor (their low consumption does not fall).

The author used a model of utility (how much water benefits different classes of people) to calculate how to set increasing block rate prices for water.

I wondered about this "finding" and emailed the author to ask about the assumptions behind the model, i.e., "did you assume utility functions that are unobservable in real life?"

Yes, came the reply.

Then I asked: "What pricing would you recommend if you didn't know anything about household characteristics (# of people) or income?"

To which the author replied: "We cannot really say anything in general, but what this paper suggests is that the price should probably not be zero."

Bottom Line: Water prices should be positive -- and we really need to worry about academic contributions to water policy.

8 Oct 2013

Speed blogging

THIS is how to reduce runoff from your driveway
  1. Engineering porn: 10 awesome movable bridges

  2. Peter Gleick has copy/pasted the water sections from IPCC5, which reports that precipitation will intensify, timing and location of precip will change, glaciers melting will accelerte and sea levels will rise. There's no mention of ocean acidification, but you can read the summary [pdf] for yourself :)

  3. The EU is recommending that water tariffs reflect the FULL cost of water, including its value as a natural resource. Great!

  4. The problem with assessing the impact of "risk" on company operations is that definitions of risk vary!

  5. Coca Cola has partnered with DEKA (Dean Kamen, of Segway fame) to deliver clean water (and Coca Cola, vaccine and food) via 1,500 kiosks in LDCs. I wonder how they will balance between charity, profit and advertising
H/Ts to BE, MR and TS

7 Oct 2013

Monday funnies!

How To Be A Vancouverite!

After you watch that, then BE SURE to check out Things are somehow different in Canada...

H/T to JT

What kind of job do you do?

Cornelia and I were thinking of the different types of workers and jobs, and we came up with this scheme:

As definitions, I think these may work...

Types of workers:
  • Bureaucrats just do the job they are told to do*
  • Professionals practice craft, to do their job as well as possible
  • Intellectuals look beyond their job, to see a larger significance, which can result in poor performance as well as breakthroughs
Types of jobs:
  • Academic jobs may not be relevant to everyday life
  • Public jobs are relevant to the society
  • Private jobs are relevant inside an organization
Does it look complete? Can you find yourself in there somewhere?  Can you see how you may move around the grid and -- if you do -- how residence in one section may affect your feelings and conduct in another section? That's what I was getting at with my proposal for bureaucratic term limits.

* OMG, you MUST read this essay "On the Phenomenon of Bullshit Jobs"! Excerpt:
But rather than allowing a massive reduction of working hours to free the world’s population to pursue their own projects, pleasures, visions, and ideas, we have seen the ballooning not even so much of the “service” sector as of the administrative sector, up to and including the creation of whole new industries like financial services or telemarketing, or the unprecedented expansion of sectors like corporate law, academic and health administration, human resources, and public relations. And these numbers do not even reflect on all those people whose job is to provide administrative, technical, or security support for these industries, or for that matter the whole host of ancillary industries (dog-washers, all-night pizza deliverymen) that only exist because everyone else is spending so much of their time working in all the other ones.

These are what I propose to call “bullshit jobs.”

It’s as if someone were out there making up pointless jobs just for the sake of keeping us all working. And here, precisely, lies the mystery. In capitalism, this is precisely what is not supposed to happen.

4 Oct 2013

Friday party!

Funny lyrics and devious images...

Canada beats the US, by a few cents

The Canadians (like the Dutch) have discarded tradition in favor of convenience and sensibility.

Tyler is calling for an end to the penny, which I've supported for a few years. Who opposes the ban? "American exceptionists" and the zinc lobby. Read more here.

3 Oct 2013

Anything but water

  1. An entertaining clarification of the difference between Holland and the Netherlands

  2. College may be worth it, but I wish that people would see education as a goal, instead of just a means to money. In a related story, Wharton is putting first year MBA classes online, for free. Why? Because people will still pay a lot to meet other MBA students at Wharton. That's not because they will be good study buddies; it's because they will use connections to get a leg up in making money and deals. That's good when it lowers transaction costs but bad if it eliminates competition. Don't have money for four years or time to watch free classes? Maybe you want to buy a diploma online. Read this GREAT story of an academic who took down a counterfeit empire that was based in Washington State

  3. If we're going to eat more meat (either b/c of the primal diet or merely to "eat rich") then it's good to see that meat production can be sustainable. The key is fewer feedlots and more grazing over varied landscapes

  4. Venezuelans are buying airline tickets but not flying -- they use tickets to arbitrage black market currency trades. Some may want to fly, to escape food shortages caused by land seizures and government interventions in markets and prices

  5. Electricity regulation was more about giving extra profits to utilities (i.e., regulatory capture) than investing in larger networks. From what I've seen in the US and UK, it's probably the same with water

2 Oct 2013


Looks like the government did something useful before shutting down:*
Airline passengers should be allowed to use their personal electronic devices to read, play games or enjoy movies and music, even when planes are on the ground or flying below 10,000 feet, according to recommendations an advisory panel sent to the Federal Aviation Administration on Monday.


Consumer electronics makers have long called for the relaxed rules. Amazon, which makes the Kindle electronic reader, once loaded a plane with Kindles to see whether it would have an impact on flight instruments.

“We’ve been fighting for our customers on this issue for years — testing an airplane packed full of Kindles, working with the F.A.A., and serving as the device manufacturer on this committee,” Drew Herdener, a spokesman for Amazon, which makes the Kindle. “This is a big win for customers and, frankly, it’s about time.”

* Although I'm not sure if it should get credit for undoing a silly policy. Oh, and read this great description of the shutdown (via JP), which uses idioms reserved for developing countries.

Institutions, plural

These comments (from a mailing list) are insightful [Some links are subscriber only]:

BR asked:
First of all I would like to say that I am here following North (1990) to define institution. Professor Gerald Roland of UC Berkeley introduced the concept of slow-moving and fast-moving institutions to understand the institutional change (See Roland (2004) and other related articles). Political institution belongs to fast-moving institution while social norms can be good examples of slow-moving institution. Slow-moving institutions change gradually and give the shape of fast-moving institutions according to him. He draws numerous examples to establish his propositions that importing institutions from one country or setup and making them work in another setup (may be on similar ground such as CPR [Common Pool Resources] management in both the setup) may actually lead to collapse of the institution in the latter. The reason may be that such transplantation or importing may harm the congruence between slow-moving and fast moving institutions. This congruence is required for (transaction)cost effective development. His arguments have some historical background also.

Based on this perspective, I was wondering whether we can identify any case study/work dealing with CPRs where such transplantation and importing have been done and whether we can reinterpret the reasons for why institutions decline in CPR Management. I know and read one such article of institutional misfit by Katrina Brown where she shows how institutional misfit leads to high cost of CPR conservation.

My hypothesis in this context is that in the case of long-enduring institutions such as Spanish irrigation system, slow-moving and fast-moving institutions are complementary and in case of the failed CPR management such institutions were either transplanted from elsewhere or lack both complementarity ans substitutability. The issue has also some historical relevance I think.Robinson's paper (robinson et al., 2013, World development) appear to help me in this regard. Can any of you suggest me in this regard with reference/work/advice?
RM replied:
Probably the best single piece on this topic was Ostrom’s “Going Beyond Panaceas” [pdf], part of a special issue she edited in PNAS that introduced her SES framework, that had broad categories of factors that affect institutional performance; each of those can then be considered at deeper levels. This deals with the problems of “transplanting” institutions.
JA added:
Right, there are no panaceas for environmental problems. However, some form of institutional instruments leading to cooperation seems unavoidable, and pure economic instruments cannot do the job for CPR. That is more easily said than done, though. I am thinking on water pricing and water markets to manage water resources such as aquifers (where the problem in India is quite serious). Economic instruments have been basically chosen in the European Union and Australia to solve water management problems.

You may take a look at the results of both types of instruments in this piece comparing economic instruments (Western La Mancha aquifer), and institutional instruments (Eastern La Mancha aquifer).
JR elaborated:
I suppose the economic translation of "no panaceas" is:
  1. No institution is capable of achieving a first best solution. This is true for private goods as well as for natural resources such as forests, fish, water, and grazing land.
  2. No institution is second-best in all conceivable circumstances.
The challenge is to devise a framework that is capable of determining which institution is welfare-maximizing under specific assumptions. Various articles with circles, squares, and arrows showing possible interactions and tables showing the conditions favorable to one institution or another are useful, but I suspect that their authors realize that a more complete theory lies ahead. The best article I can think of on comparative analysis institutional analysis for the management of renewable resources is Copeland and Taylor's AER piece on "Hardin," " Demsetz," and "Ostrom" institutions. That piece provides a mapping from resource and transaction-cost characteristics to the second-best institution that prevails in the steady state. The remaining challenge is to develop a similar theory that does comparative institutional analysis for a natural resource at various levels of scarcity. Under what conditions, for example, might a resource be optimally managed first by no property, then by common property, and finally by private property as the resource is depleted, possibly to a sustainable steady state?
But JW disagreed a little:
I’m not sure the 'no panaceas' idea translates into economics the way economics is usually done. Ostrom’s point about no panaceas was that in complex systems mean field theories tend to give very poor policy guidance - logical but poor. Getting the incentives right requires careful attention to the particular circumstances of the local and broader social and ecological environment. For example, property rights can provide strong incentives to conserve, but when the circumstances of the environment and/or the way the rights are designed does not provide adequate feedback about the outcome of the person’s actions, there is little an individual can learn about how to further her/his self-interest through conservation; this leaves the property right of little or even perverse value for conservation. This is equally true of collective/community rights, even if the social circumstances might otherwise be favorable for effective collective action. The bottom-line is that institutional design has to be tailored to the often very particularistic circumstances of a time and place.

If she were around Ostrom might be tempted to paraphrase the old joke about Milton Friedman who, when asked what he would say if the real world did not conform to his (mean field) theory, replied ‘so much the worse for the real world’.. or something to that effect.
To which, JR replied:
In her "Beyond Panaceas" paper, Lin Ostrom and co-authors noted: "In the context of governance of human–environment interactions, a panacea refers to a blueprint for a single type of governance system (e.g., government ownership, privatization, community property) that is applied to all environmental problems." Copeland and Taylor went further by providing conditions under which a resource is optimally governed (in the steady state) by three institutions (in their case open access, privatization, and community property).

Field theory, mean or not, is beyond my pay grade, but even Georgescu-Roegan said that "abstraction is the highest ladder of any science," and different levels are appropriate for different problems. I like to think that Lin would take pleasure in knowing that her diversity of institutions message was carried on by a diversity of models.

1 Oct 2013

Big Men -- the review

I saw this documentary at the Vancouver International Film Festival (=not in general release). It describes how an American oil company tries to make a deal with the oil it finds off the coast of Ghana. The film has depth -- due to years of work by its director -- in covering the different view and outcomes in a region where oil has been a curse (there's a lot of footage about Nigeria, its corruption and conflict in the Niger Delta), capitalists have to overcome a colonial past, and everyone worries about broken promises.

Bottom Line: I give this film FIVE STARS for its balanced portrayal of the complexity of balancing between profit and greed, truth and friendship.

Lies, damned lies and eating

I was pretty shocked to see this advertisement in a bus in Victoria (the capital of British Columbia). It may portray the "average" ice cream eater, but it omits the consequences of eating their product. My dad just had a quadruple bypass. It wasn't exactly because he was overweight (he's 80), but he DID have to stop eating ice cream a few years ago "to avoid heart trouble." Where is THAT moment mentioned?

In the last year, I have not changed my mind on banning advertising. If anything, I have an even stronger belief in that regulation. We have plenty of ways to discover new products, good products, and good businesses (e.g., word of mouth, reviews, consumer reports). Advertising, OTOH, is always aimed at making something look better than it is.

For example, what do you think you'll find in this product?

Perhaps four cheeses? Sorry! There's more fructose, salt, oil and corn starch than cheese!

Here's a simple regulation: images on labels -- if any -- should show ingredients in proportion to their presence in the product.

Bottom Line: Ban advertising as harmful to consumers; require truth in labeling.