31 Aug 2013

Flashback: 26 Aug-1 Sep 2012

A year later and still worth reading...

Charge the poor to subsidize the rich -- water prices need to vary by location. Here are more thoughts on Rates, consumption and utility revenues

Dutch Deltaworks are handy for protection from storms and flooding (hear that New York? Sacramento?), but the Dutch are now putting more emphasis on "natural infrastructure" defenses

30 Aug 2013

Friday party!

This is from a Vancouver toilet washroom, where guys probably then say "sorry"


PS: I've never groped a girl (I wasn't dating), and I don't support it. I'm wondering if this is funny or rude, or if it would be better for the girl to be slapping the guy back. Thoughts?

America's biggest mistake

...may be the War on Drugs.
  • Drugs are cheaper and purer
  • More people die of overdoses and contaminated drugs
  • Violence in the US and drug-producing countries is worse
  • $billions have wasted on SWAT teams and dead bystanders
  • Drug gangs and cartels are richer than ever
  • The rule of law is weaker and police are more corrupt*
These results are similar to the results of Prohibition, which also failed due to a mistaken belief that righteousness would conquer consumer demand.

To learn more about why the policy has failed and why ALL drugs should be legalized and regulated and why drug abuse is a public health (not criminal) problem, I recommend watching "How to make money selling drugs." This tongue-in-cheek but factual documentary shows how drugs generate profits that lead to criminal and political failure.

Here's the torrent.

Bottom Line: Every policy has winners and losers; justice and truth loses when corruption takes over. Follow Washington state, end the War and chill out.

* Read this very good -- and very sad -- New Yorker article on police abuse of civil forfeiture laws.

H/T to RM

29 Aug 2013

Anything but water

  1. Reading! Some clever and funny advice for economics graduate students [PDF], how to start a business (failure is good!), how to be idealistic in an imperfect world, and a defense of humanity's right to sin against Earth (I agree that there's too much hyperbole, but I disagree that no action is necessary)

  2. Case studies: Thai rice subsidies spin out of control and the US government attacks a raisin farmer for engaging in business

  3. Commons versus private property: Nobody would pay so Ecuador's forests will be cut for oil

  4. Big business takes over government and citizens, worldwide, suffer

  5. Listen to this podcast, in which a brilliant political scientist discusses violence, instability and development. (Europe developed because nation-states fought themselves into progress, stalemate and stability)
H/Ts to and RM JP

28 Aug 2013

Time flies

A perceptive comic

When to submeter a multi-unit building?

BF asks:
I've noticed that there are still many multi-unit residential buildings that have a single water meter, and residents are typically charged a flat fee by the landlord (who then pays the bill, whatever it is). Do you know of any research that looks at the potential value of requiring meters at the individual (household) level? I guess this would be similar to comparing a fixed fee system vs any of the block rate / marginal price systems.

Obviously, all the research on price elasticity assumes individual metering exists and matters, so I was surprised to see that many residential buildings have only one meter, and perhaps the value of individual meters is still an open question for building owners?
I've discussed sub-metering within a building before, but I've come to believe that
  • Individual unit meters don't matter as much when water is too abundant to ration. They may be popular if people want payment in proportion to use rather than payment for access to water services
  • The cost of meters may exceed the benefit of reduced water use
  • People are not very price sensitive (i.e., low elasticity) when it comes to indoor water use, so pricing may not have much impact. Combine that fact with increasing block rates that are inefficient and unfair, and you may get a worse outcome than sticking with uniform prices and a master meter
  • Submeters need not be the utility's problem. It can install a single master meter and send a bill to the building (a common practice), which then finds a way to allocate the bill. Allocation in proportion to headcount, number of rooms, rent, etc. can make sense. Building occupants may decide to install cheaper meters (not built to withstand tampering, etc.) if they want to bill for use
I'm not finished with my metering paper, so I'll recommend Berraque's paper opposing multi-unit meters [pdf]

27 Aug 2013

Resolving the Keystone XL debate

I support the Keystone XL, but some people do not.
In the escalating war of words, Alberta has said it will spend $5 billion on a pipeline to take its oil east, and Obama has pledged that Keystone can go ahead if it "results in no net increase in carbon emissions." These two statements indicate how the impasse may be broken.
  1. Let's ignore facts such as Keystone has nothing to do with US emissions (that's demand), Canadian oil sands are likely to be mined (releasing carbon) even without Keystone, and how Keystone could displace equally dirty Venezuelan or Nigerian oil
  2. Let's assume that "no net impact" means displacing additional emissions related to the production of oil in Canada (again, not its consumption, which emits the same carbon as oil from other places), which means that Keystone will add 4-21 million tons of carbon per year to emissions [pdf]. Let's call that 20 million tons, but let's assume that ongoing improvements will reduce that figure to 5 million tons in 40 years (the life of the pipeline)
  3. Let's note that you can buy carbon offsets in Europe for EUR 4.50 (=USD=CAD 6.30)***
Now, let's do the math, taking as "sunk" the Government of Alberta's pledge to spend $5 billion to get its oil to market.
  • 20 million tons will cost $125 million to offset (via EU ETS) in year one and $31.25 million in year 40
  • Using a straight average of these two ($125+31.25/2) times 40 years (ignoring discount rates, which don't matter), we get $3.125 billion, which is much less than the $5 billion on the table
So now we see how the Keystone can go ahead:
  1. TransCanada spends its money to build the pipeline
  2. The government of Alberta funds the offsets
  3. The oil goes to market
(2) may run into trouble if the price of offsets rises, which will mean that the pipeline is either shut down or that the government/TransCanada comes up with more money for offsets, but that's a much easier action to take since its regulatory trigger is known in advance.

Bottom Line: Build the XL based on "polluter pays" and stop the empty debates.
* Alberta gets about 30 percent of its $40 billion budget from oil [pdf]; most Albertans work (in)directly for the oil-gas sector.

** Pipeline spills on land routes are not a big deal compared to spills near water; natural gas leaks are not very environmentally harmful but an explosion can kill you. That said, the Keystone folks may be lying about controlling spills and leaks. I'll have post(s) on fracking and pollution related to oil & gas production (the real problem) soon. In the meantime, read this excellent analysis of drilling for oil off the coast of British Columbia -- note the author's statement that some blame for the Deepwater Horizon spill rests with poor regulation; I said the same, more strongly.

*** I think that carbon offsets are often BS, but they're widely used and abused -- as California will find.

26 Aug 2013

Monday funnies

The Yes Men spoofed Shell and Gazprom's environmental hypocrisy* by delivering a Siberian polar bear gift to the zoo in Amsterdam




* Gazprom's environmental record is laughable, but Shell has hypocrisy problems.

Speed blogging

  1. Want to comment on California's water markets? Fill in this survey (10 min). Interested in tools for climate adaptation? Fill in this survey (10 min)

  2. An Indian court halts dam construction for fear that more dams will lead to more flooding, landslides, deaths and damages. That's what's going to happen as climate change increases variation. Time to restore watersheds, to allow natural features to absorb higher flows (and drier lows)

  3. A great response to the NYT's puff piece on charity:water, i.e., we need bottom up, sustainable business models

  4. Shortage on the Colorado River, again. Maybe MWD, Westlands, IID and Vegas can agree that it's time for water markets. Or maybe they will just keep trying to bribe or threaten politicians to give them water that's either not there or not theirs?

  5. The Pacific Institute worries that water bills are "unaffordable" in the California's Central Valley. That's because water providers need to clean up water polluted by agriculture. I don't think that bills are too high -- since there's a price to pay to make it drinkable -- but I do think that the State's Attorney General has a good case to sue polluters, to make them pay for their damages.
H/Ts to GM, RM and TS

24 Aug 2013

Flashback: 19-25 Aug 2012

A year later and still worth reading...

My TEDx talk: Water policy for the people -- Watch it for my fumble, but also to learn about how the powerful take water from everyone else

Winning the subsidy battle -- a template for action

Too much sun in Aridzona? -- I wonder what's happened with that interesting transaction?

I'd call this bad news, i.e., the US has 5 percent of the world's people and 25 percent of its prisoners. Luckily, there seems to be a move to reduce this terrible stupidity

No, Mr. Kightlinger. You're part of the problem... and still seems to be. I've seen no moves to improve water distribution/allocation in SoCal, and MWD is still spinning the Delta-conveyance as a good idea, but wishes aren't horses

23 Aug 2013

Friday party!

NASA made this film from flights over the arctic. Cool.

How newspapers serve the community

Many newspapers have lost advertising to Craigslist and cut staff to concentrate on celebrities and sports. Those papers will go broke, for lack of value to the community. Newspapers, at their best, are useful for investigating and discussing local policies and events. They do not need to be printed on paper, but they do need to be accessible and "on the record" so that citizens and authorities have a focal point, in black and white, for everyone to reflect on.*

That's why I loved this editorial from the Chilkat Valley News, which serves the region near Haines, Alaska (pop. 1,400) -- click to enlarge


Do you have any examples of your YOUR local paper (or a blog) served the community?


* And that's why it's depressing to see the government of Myanmar -- which so recently decided that civil rights were a good idea -- discuss a law to regulate newspapers "to ensure that they served the needs of Myanmar" -- as decided by government censors.

22 Aug 2013

Fish guts?

I took this near Tok, Alaska:


...and I've got two questions:
  1. How can fish guts contaminate groundwater?
  2. How long should you boil water to kill all the bad stuff? We've seen 2-10 minutes at campgrounds.

21 Aug 2013

How to build a water market

Just a reminder of what you need...
  1. Define and quantify yield (allowing for variance) for surface and/or groundwater, by time and place
  2. Exclude environmental flows (e-flows) necessary to maintain a minimally healthy environment
  3. Assign remaining water ("sustainable yield" or SY) to tradable permits in flows (temporary water) and/or rights (permanent water). Flows are assigned each year/period as a percentage of rights.*
  4. Note that "consumptive rights" are SY less return flows, i.e., return flows will fall if consumption (=efficiency) rises. "Diversion rights" ignore return flows, so their sum should not exceed SY. Leakage from diversion rights go to e-flows. 
  5. Study transaction costs to choose between a consumptive or diversion regime.
  6. Establish and identify delivery infrastructure for flows and trades at a reliable price/access. 
  7. Register rights and/or flows in one place.
  8. Subtract carriage losses from any trades.
Most of these steps are based on conversations I've had with traders, what I've observed, and the Australian system for the Murray Darling (as I understand it).

Did I get all the steps? In the right order? Do you have examples of other functioning water markets?

* It seems that trading activity is shifting from rights to flows in the MDB.

20 Aug 2013

Anything but water

  1. A article that compares Portland with Houston on zoning. Some supporters of Houston say -- without irony -- that cheap sprawl is better than expensive compactness. I'd say that they are missing the point of life in a city: it's about human interaction, not cars

  2. The economics of swimsuits resemble the economics of Christmas trees!

  3. Health: Don't just exercise -- stop sitting down!

  4. A thoughtful post on monitoring your kid's internet behaviour. Parents know better than the NSA

  5. More details on scams to make academic publications "popular." These result from the high-powered incentives that academics face to produce "important" research

19 Aug 2013

Monday funnies

I put this up four years ago, but it's still a funny example of political gibberish. (I was reminded of it by a local up here in the Yukon, where they have more to lose from oil spills.)



The costs and benefits of a bridge

You have plenty of time to take photos...
We took a ferry across the Yukon River to Dawson City yesterday -- after waiting for 30 min. That gave us time to think about the costs and benefits of replacing it with a bridge.

First, you have the costs of building the bridge. The river is about 250m across and a bridge with a metal-grate bed (standard here, with ice and snow) might cost $10 million (I don't really know; tell me)

Second, you have the benefits:
  • Avoided costs of fuel and upkeep for the 24-hour ferry. Let's say that's $2,000 per day in summer. There's no ferry in winter, when the river's frozen.
  • Avoided labor costs.* Five staff on three shifts may cost $3,600/day.
  • Avoided waiting time. At peak hours, the ferry is taking 60 cars/hour across the river, with 2 people in each car. Let's call that 1,000 cars/day with 2,000 people, each of who waited 30 min @ an opportunity cost of $20/hour. That's $20,000/day.
  • Avoided accidents from the ferry crashing or damaging cars or hurting staff. Then there's the risk of accidents to people driving over the river ice in winter. These numbers are available, but I'll ignore them.**
Let's assume a three month summer (pop. here is 2,500 and LOTS of visitors) and a nine month off-season (pop. 1,000; few visitors) where the ferry runs at 100 percent and zero percent capacity, respectively.

Now, we get bridge benefits of ($2,000+$3,600+$20,000)*(90 days) = $2.3 million.

Those numbers indicate that a bridge may "pay for itself" in about four years.

So why isn't there a bridge? I'd say that the obvious reason (jobs, tradition) is not as important as the problem of funding a bridge that will create benefits that are mostly non-cash, i.e., the time saved to people who do not have to wait to cross. This is an example of visible winners (ferry workers) and invisible losers (ferry passengers).

Taking time into consideration, it's possible that a bridge will be built, but I wouldn't count on it. Sadly, it's more likely that a bridge will be built AFTER a ferry accident kills someone or dumps a bunch of cars into the river -- or maybe never. Too bad.

* Labor -- and JOBS -- are COSTS. They are NOT benefits as far as projects and businesses are concerned. They ARE benefits to the workers, but the whole point of "progress" is to move labor into uses that produce net benefits. A project that has jobs but no benefits is a waste (think TSA staffing). I asked one ferry-guy "why no bridge?" and he said "because the ferry is traditional and a bridge is ugly." Those are not good explanations compared to "job for me." Also note that a bridge need not harm the environment.

** There's also some "benefit" for tourists who want to watch the ferry struggle across the river, but visitors complain about ferry delays -- their #1 complaint about visiting Dawson, according to a touring company.

17 Aug 2013

Flashback: 12-18 Aug 2012

A year later and still worth reading...

Two girls go against the macho culture to invent the invisible bike helmet

Just a thought... about taking drugs and taking responsibility -- don't mix them up

A birthday gift for you! A long post summarizing Aguanomics 101

16 Aug 2013

Friday party!

The people of Antwerp (Antwerps?) go to the water park when it's hot. There's also music and beer :)

Teaching versus lecturing

Believe it or not, I don't post everything I write on this blog, but this email brings up some interesting issues:
In the EEES Final Key [pdf], you wrote something I haven't read anywhere else during my time at Wageningen UR (1,5 years), and I thank you for it. I know it's slightly strange, but I do appreciate people like yourself making an effort to make a difference in thinking. You actually used the words teach vs lecture, stressing the difference and your opinion - and for that, I thank you.
The key says:
Note from David: Many of you had a hard time (=low points) with my questions, usually because you did not read the question and/or consider the economics of the situation. As I told you many times, real economics is NOT about math and assumptions that whose “solutions” actually work. Real economics is about understanding incentives and choices and how to move people in the “right” direction.

I hope that you will take ten minutes to compare your answers to my answers, to see where you were not thinking like an economist. Some of you may only care about your scores. Others, hopefully, will learn from your mistakes and THEN see how you can make a difference OUTSIDE of WUR with the improved understanding you gained in this class. As I mentioned, I wanted to teach – not lecture – you in this class, since learning lasts far longer than a grade. (I also wish that we had more than 3 weeks to “get to know each other” on these issues, as it takes some time to move from copy/paste the lecture notes to critical thinking.) Let’s have a coffee and discuss these questions – and anything else in economics or education. Email me at dzetland@gmail.com.
I didn't get any emails from my students, and I am not sure if any of them took my words to heart, but I had to say what I did and will keep teaching the way I do -- when I teach two classes at Simon Fraser University in Vancouver in the Spring -- because I hate the current paradigm of crushing curious and inventive young brains under the weight of rote learning and worthless test regurgitation.

It's unfortunate that many professors are pleased to have students memorize bullet points off ten year-old slides, just as it's unfortunate that many teachers are rated based on their ability to advance through centralized lesson plans rather than develop student skills and feed their curiosity.

Bottom Line: Students want to learn. Help them or get out of the way.

For more on these issues, I HIGHLY recommend watching these TED talks:

15 Aug 2013

Speed blogging

  1. The news from Australia [pdf]: "Volume/price evidence suggests that water markets are changing; improved storage and allocation levels have lowered permanent water prices while the transition towards greater reliance on temporary water has made temporary markets more active"

  2. Very cool: Crowdsourcing the price of water in France

  3. Interesting profile of charity:water, fundraising and psychology

  4. A Vanouver property developer is spending $5 million to raise the foundations of a new project, to cope with rising sea levels. We're headed for 4.6m in the next 100 years (+2C) and perhaps 7 m in total. How high are you? Speaking of adaptation, how about crops that love salt?

  5. I'm not sure if this is any good, but the EPA's 2012 Strategy on Climate Change addresses: protecting water infrastructure; coastal and ocean waters; watersheds; and, water quality.
H/Ts to DL and LV

14 Aug 2013

Happy birthday to me!

I'm 44 today and definitely enjoying my life. In the near future, I'll be exploring the culture of Canada, life in Vancouver, and what's been going on with water policy in North America (that means the US and Canada -- and sometimes Mexico -- for you Americans).

What I'm curious to know (and perhaps frustrated to NOT know) is what I am doing wrong or what I am getting wrong, when it comes to improving water policy. I've seen lots of problems, and I've suggested lots of solutions, but I can't accept the possibility that special interests (those who benefit from current, unsustainable policies) are able to block change that will benefit the majority of us.

Is that the problem? Is there something I am missing? Can you suggest better ways for me to discuss these issues? People to talk to? Areas to tackle? Do tell.

Bottom Line: My life is great, and I'd love to improve others. Help me out :)

13 Aug 2013

Olympic boycotts

I remember when the US led a boycott against the 1980 Moscow Olympics, as a response and condemnation of the USSR's invasion of Afghanistan. That boycott was effective at drawing attention to the diverging sides in the Cold War but it did nothing for athletes and little for Afghans.*

Now there's talk of another boycott -- of the Russian Winter Olympics in Sochi -- due to an international annoyance with Russia's homophobic policies (let alone Putin's thuggish mafia-state). This version is stronger in its aims -- a change in domestic legislation instead of the reversal of an invasion -- and unlikely to happen. Athletes don't like the idea, and politicians are also talking it down.

The aim of the boycott is laudable, but it's not going to happen for three reasons. First, there's the problem of hypocrisy: lots of countries have inhumane laws (think about anti-abortion laws in the US). Second, there's the problem of self-interest: many countries want Russia's oil or diplomatic cooperation. Third, Russia is already well on its way to implosion. The Olympics are way over budget; the State is weakening from within (like the USSR before it) due to autocratic tendencies; and the Russians tend to unite against outside threats.

Although I agree that countries that invade other countries should be shunned, I also see that those countries (I'm talking about the US here) get away with it because the weaker countries do not have friends willing to stand up to the US. Hypocrisy is a terrible thing.

Bottom Line: Those who live in glass houses should not throw stones, but they can surely support others trying to clean up their houses. Support human rights in Russia, the US and elsewhere.

* It's ironic that the tables have turned, but nobody talks about boycotting the US for its invasion of Afghanistan.

12 Aug 2013

Monday funnies

This (from my dad) is old but relevant:
Time is like a river. You cannot touch the water twice, because the flow that has passed will never pass again. Enjoy every moment of life. As a bagpiper, I play many gigs. Recently I was asked by a funeral director to play at a graveside service for a homeless man. He had no family or friends, so the service was to be at a pauper’s cemetery in the Nova Scotia back country.

As I was not familiar with the backwoods, I got lost and, being a typical man, I didn’t stop for directions.

I finally arrived an hour late and saw the funeral guy had evidently gone and the hearse was nowhere in sight. There were only the diggers and crew left and they were eating lunch. I felt badly and apologized to the men for being late.

I went to the side of the grave and looked down and the vault lid was already in place. I didn’t know what else to do, so I started to play.

The workers put down their lunches and began to gather around. I played out my heart and soul for this man with no family and friends. I played like I’ve never played before for this homeless man.

And as I played “Amazing Grace”, the workers began to weep. They wept, I wept, we all wept together. When I finished, I packed up my bagpipes and started for my car. Though my head was hung low, my heart was full.

As I opened the door to my car, I heard one of the workers say, “I never seen nothing like that before and I’ve been putting in septic tanks for twenty years.”

Apparently I’m still lost... it’s a man thing.

Anything but water

  1. Grow food from perennial grasses (and save the earth) or maybe eat insects? I'll pass on those: I'm looking into the paleolithic lifestyle :) Speaking of food, this video doesn't say much about honey bees, but one comment -- that colony collapse disorder is linked to pesticides in corn syrup fed to bees -- makes sense to me: I saw that happening in Montenegro, and it's probably happening everywhere where farmers are keen to turn cheap syrup into expensive honey.

  2. We know that kids are bad for the climate (American kids consume WAY more than Indian kids), but what about those pets?

  3. Edward Snowdon. It's not about him. It's not about privacy. It's about the future of the internet

  4. An interesting post on "article-level metrics" of academic impact (and fraud). I addressed this problem in a paper a few years ago

  5. How to build rapport with people, through empathy
H/Ts to BB, SB and RR

10 Aug 2013

Flashback: 5-11 Aug 2012

A year later and still worth reading...

Privacy, efficiency and the police state -- Edward Snowdon has proved that this guy was right

"Water conservation" ...defined

9 Aug 2013

Friday party!

The next guys ferment them into a better product :)

Local versus regional control

In response to this:
"The public sector is often better at handling inter-agency cooperation and the private sector is often better at delivering cost-effective, measured results. In either case, the local government plays the most important role as it needs to oversee and regulate all players. Poor regulation can lead to bad results, regardless if projects are done through the private or public route." Zetland interview with BNamericas [PDF].
Jim Brobeck of AquAlliance sent this example:
The concept of local control is being touted in the creation of the Northern Sacramento Valley Integrated Regional Water Management Plan (NSVIRWM). Individual counties are the units of local control that are considered. The "local control" ideology is preventing the regional counties from devising a regional plan to manage export/transfer/sale of water. Counties and irrigation districts all have different groundwater management plans.

The Tuscan Aquifer System is a complex multi-layered high production basin that is located under 4 different counties. Two of these counties (Butte & Tehama) are located on the upgradient side of the system where it is thought most of the recharge occurs and there is GW interaction with streams and vegetation. The other two (Glenn & Colusa) are perched above the deepest portion of the semi-confined system. While members of irrigation districts comprise about 1% of the regional population they weild a disproportionate measure of political power, particularly in Glenn and Colusa. Butte has a Groundwater Transfer management ordinance that has discouraged GWS transfers using wells in the county. Glenn Colusa Irrigation District, adjacent to Butte, is moving ahead with GWS transfer/sales using wells 1-2 miles west of Butte that tap the shared aquifer with 700-1000' deep wells. DWR and USBR seem to appreciate the inability of the region to come up with a plan to regulate the basin as a whole and allows management on the "sub-inventory unit" (political rather than geological boundaries).

The irrigation districts are well funded with state/federal grants and with the economic prowess that comes with river diversion water rights. Butte County (which has a dept. of water and resource conservation) is stretched thin fiscally as are NGO advocacy groups.

My point is that local control absent regional/state/federal regulations can sap regional resources.

Regions that are rich in natural resources often seem to be chronically economically depressed with a hierarchy of oligarchs that control the resources. Paying off a small (rich) local family is cheaper than spreading wealth evenly. Rice farmers in irrigation districts comprise about 1% of the population but control most of the water used. In the Sierra/Cascade east of the basin most of the private timber land is owned by one family (Red Emmerson: Sierra Pacific Industries). This allows exploitation to occur by outside investors in a cost effective manner.
I agree with Jim, since I define "local" as the watershed, i.e., how he's using "regional."

8 Aug 2013

Speed blogging

  1. via Ecosystem marketplace, we get water quality trading in Indiana, stormwater trading in Washington DC, and a study that says water flows are better for Australian ecosystems than infrastructure upgrades. I've come to believe that a prosperous future means a LOT more water flowing and a MUCH smaller human footprint. Maybe that's why Louisiana is suing oil/gas companies for the damage they've done to wetlands -- damage that's causing a lot of harm to humans too

  2. That idea has not penetrated some heads at the World Bank, which is backing big dams again. That's not news if you read my post on the Dam Zombie 16 months ago

  3. Ofwat has changed its price formulas for water companies in England/Wales. I wonder how this was affected by (or caused) the departure of Ofwat's head, Regina Finn?

  4. I won't agree that Phoenix is doomed until they kill off their lawns (and all the irrigated hay)

  5. More insight into Singapore water management and yet another article speculating on how to "invest" in water (mostly via water technology companies). As usual, I caution investors to mid "regulatory risk" -- something that Singapore has minimized
H/T to GC

6 Aug 2013

So how do you grow?

AM writes:
I've recently had a chance to read your joint piece with Christopher Gasson entitled "A global survey of urban water tariffs: are they sustainable, ef´Čücient and fair?" [pdf] and it prompted me to seek your thoughts (from the perspective of a policy analyst) on phase development.

If (hypothetically speaking) you had complete autonomy in designing the managing the development of water and wastewater management services for a city in a developing country, how would you go about phasing the construction and financing of those systems in consideration of government subsidies and ensuring quality control by balancing the benefits that come with public and private involvement in the process?

Do you believe there might be a "formula" for phasing development of a community's water service needs that takes into account current population, per capita wealth, land area of the community in question, and density? Furthermore, can (or rather should) that development be broken into bins in a continuum within which we place a particular community in order to gauge demand and the appropriate level of financing/investment structure necessary to achieve a comprehensive and sustainable utility network?

I might sound a little naive since there are broader factors that must be taken into account (i.e. the regional/national economy, the cost of materials, the role of government, the role of international organizations such as the World Bank and IMF), but I am of the belief that there might be a recipe with which to guide governments and communities to a state of readily available service.
This is a great question and very relevant in cities that are growing and/or suffer currently from a lack of water/sewerage.* The main problem involves money, i.e., who should pay for what?

In my dissertation, I discussed how Southern California grew unsustainably based on cross-subsidies, such that it was first too cheap to move to a new place and then how too many people strained water supplies (this paper summarizes that dynamic).

The problem is the same in developing countries from a water perspective. It's also -- I'd argue -- the same from a financial perspective, since water and sewer service are actually quite cheap, even relative to poor people's incomes. The main difference will be corruption, which can destroy ANY good idea. So, I'll have to make that note ("deal with corruption" -- usually via transparency and community oversight/control) and move to financing.

There are three sources of money: tariffs, taxes and transfers. In water abundant areas, tariffs do not need to be volumetric; they should be where water is scarce. Tariffs should be charged to users from day one. Taxes on property can pay for sewerage services; in the Netherlands, they are charged for the number of people at an address. Transfers are a form of subsidy. In rich countries, they can go to the poor via the tax system (a negative tax), but that's harder in poorer countries. In those places, they can be allocated to the poorer neighborhoods (e.g., favelas) in proportion to the number of people, from the central government. (Chile "charges" poor people for water services but then forgives the cost of service for a small initial volume of water use).

I recommend that mix of sources (more reliance on user pay than subsidy) because I prefer that water companies work for people instead of politicians.

The other issue is the mismatch between spending and revenues. It's expensive to build a water/sewer system, but that system will last for decades. That implies that the system be financed with debt at first, which will be repaid by users over the following decades. Such a system can work everywhere, but it needs to be guaranteed and managed separately from other debt streams. That's why I prefer "corporate" water utilities (either private or public). Recall that the State of California just "borrowed" $billions derived from carbon permits to pay general expenses. Like I said, corruption can screw up everything.

Bottom Line: Water and sewer services should be phased in as cities grow, with debt for expansion being repaid by user fees.
* Watch/listen to this great TED talk on "crap," i.e., the importance of sewerage services.

5 Aug 2013

Monday funnies

I've wanted to do this more than once...

Anything but water

NB: I'm in Prince George, BC at a Tim Hortons for BC Day, i.e., the center of primal Canadian energy :)
  1. This podcast clarifies why free trade is better than (not-so-)fair trade

  2. Renewable energy crashes in Spain (solar) and Germany (wind)

  3. Capitalism doesn't like sleep, so guard it if you want to be more human than machine. Similar: why commuting makes us crazy

  4. Skytruth: Using remote sensing (satellites) to find the people who area breaking the laws and destroying the commons

  5. Entrepreneurs make the impossible possible by seeing the world in a different way

3 Aug 2013

Flashback: 29 Jul-4 Aug 2012

A year later and still worth reading...

Aguanomics webinars, newsletter, newshour! -- I did the webinars and do the newsletter, but never got to the newshour. Gotta try everything when marketing ideas :)

A bureaucratic victory over the needs of the poor -- the Millennium Development Goals did not deliver advertised improvements in water services

I am Hosni Mubarak -- a perceptive post linking US biofuel subsidies to anger in Egypt*

The battle for green growth -- path dependency makes it difficult to achieve


* By coincidence, I am working on a paper with Brent.

2 Aug 2013

Pressed for time

I'm squeezed between moving to Vancouver and taking a long trip to the Yukon.

I'm not sure if I'll be able to blog very much in August.

Sorry!

1 Aug 2013

Speed blogging

  1. I moderated a discussion hosted by Save the Delta on options for the Delta. I was surprised that the panelists were willing to continue exports at the same time as they hoped to restore the Delta. Listen to it [49 min MP3]

  2. I also had a very interesting "water chat" with Laci and Chach of the New California Water Atlas, on their efforts to drag state bureaucrats into the 21st century. Listen to that too [22 min MP3]

  3. Interesting: Tourism and water scarcity, low tech ways to store and conserve water (instead of investing in guns), and a short overview of the US (federal) government's role in water management

  4. Each degree (Celcius) increase in global temperatures will increase sea levels by 2.3m. That's bad news for Florida and other places where land is subsiding (due to tectonic shifts or compacting soils)

  5. The impact of "lumpiness" on water quality markets and a survey of the impacts of water meters -- they are not just about saving labor costs; they can make it easier to interact with customers