30 Nov 2013

Flashback: 28 Nov-4 Dec 2012

A year later and still worth reading...

29 Nov 2013

Friday party!

Great promo for UC Davis, where I lived in 2002-2008 while working on my PhD.

It's a great small town for studying, but it's not THAT nice (the HEAT!)

Black failday

I'm not sure if the "biggest shopping day of the year" is a mark of success or failure, but I really wonder about the state of "civilization" when we see this kinda stuff for sale:

I guess that corks are turning into a chore

Yes, popcorn with chocolate/sea salt

I saw these products in the stores, but I still dislike advertising. Want to get mad? Then read this Economist column about the benefits of advertising to children. Want to be happy, read how Coca Cola is spending advertising money on Philippines' hurricane relief. Yay!

H/T to MS

28 Nov 2013

Giving thanks for spending time

I'm just pasting a brilliant comment that may change your life:
Doing nothing is the wrong concept. You never do nothing, because even when your body is still your mind is churning and processing information.

I have a strong dislike against "wasting time." I don't like myself when I spend time on nonsense. And so I fill all of my day with "constructive things." My walk to work is filled with podcasts, the time waiting for the food to bake filled with news articles. While eating I entertain myself with shows or Ted talks or whatnot.

The best decision I made in the last weeks was to stop most of that.

Aristotle recommended to take walks - especially while discussing with another person. And now, walking to work with just my mind and the scenery and passing people as company I feel more relaxed. I feel serene. I learn to understand myself better, just the way a meditation clears my mind.

I mentally plan my evening or reflect on the day - conflicts with the boss, troubles, things I achieved, things I learned. I finally notice the food I'm eating.

The list goes on. I'm not going to stop consuming information and I'm not going to stop using podcasts on some long walks - but I live more consciously, more aware, more relaxed. It's small changes and suddenly I'm happier and can handle stress better.

I think we all tend to drown our minds - emotions, thoughts, worries, little wins, conversations we had or want to have and much more - we drown all of it in manufactured emotions (reddit, games, tv, ...) and interesting, and valuable, but ultimately unnecessary information.

When you say "doing nothing" you confuse something. You are doing things all the time, your brain never takes a break. But when you "do nothing" you finally allow your brain to breathe and process all the things it needs and wants to process. I think all these modern diseases - sleeping problems, stress, depression, distractability, even obesity,... - they have a lot to do with the fact that we don't allow our brains anymore to breathe. We bombard them with stuff - either information or, worse, emotion - and in order to handle this stuff other important tasks - housekeeping tasks such as consolidating memories, reflecting about one's feelings and health and happiness, planning healthy food, considering how to bring up that issue with the boss - are drowned in a sea of emotion and information. They are drowned in a wonderful wealth of "stuff to process" that ultimately prevents our brains from ensuring their own - our - mental and physical health.

We are indoctrinated with an idea that time needs to be "spent". That's why you wonder what people do when they don't do all the things you do. I tell you what: they engage with others and, more importantly, with themselves. They learn who they are and what they value. Without any effort their minds plan the future and consolidate memories of the past.

That, I think, means to be truly alive. "The unexamined life is not worth living," said Socrates. The modern version is maybe this:

The person that lives solely in emotions and information from the outside, the person that never pulls itself out of this messy reality and gives itself over to a mental spa, a time of healing and processing, a time of reflecting, feeling, thinking, seeing, worrying, planning, smiling, that person doesn't live.

Take a walk. Leave the iPod and your phone at home. Find some trees or a place with a nice view. It's even okay if you just lie down on the couch or stand in the shower or sit at your desk, with your eyes looking past the screen. Just be you, for a moment. And then watch, carefully, without judgement, all those things that happen in your mind while you "do nothing."

27 Nov 2013

First draft done!

I finished the first draft of TEoA 2.0 (The End of Abundance: Common Sense Solutions to Water Scarcity).*

Now I am editing and rewriting in response to feedback from peer reviewers.

Here's the draft cover, which will be finalized when we get blurbs (endorsements)

If you want an email when it's ready (Feb 2014?), then sign up here.

* This one may get confused with the first, but the title is too strong for me to ditch. They are different (TEoA 1.2 is 280pp; TEoA will be less than 100pp), so I'll add side-by-side comparisons on the website/amazon. I'll keep both books in print, since they're for slightly different audiences.

PuBliC gOOds?

I was shocked recently to hear a professor of economics say that "ports are a public good because they receive goods that are distributed all over the country, for the benefit of consumers and producers." This nonsensical definition makes sense to port operators seeking subsidies -- a common problem -- but it's false when we remember that those ports are handling private goods, the cost of which consumers are willing to bear.

There's no non-excludable, non-rival public good involved, only private goods that are shipped for profits.

Would producers like more profits? Would consumers like to pay less? Sure, but subsidies to them create private benefits to them -- not public goods.

Bottom Line: Public goods benefit everyone, regardless of capitalization.

26 Nov 2013

God's will?

The recent devastation in the Philippines reminded me of a photo I took last year:

Bottom Line: Don't tempt God. Build on bedrock, on top of a hill.

Why bother with environmental economists?

I got this email:
As a student studying environmental engineering, I'm curious to know what exactly is the role of an environmental economist? Does he add any value to onfield projects and what are the research opportunities available?
Let me answer with a few points:
  1. An economist is good at weighing costs and benefits.
  2. A good economist can also consider who gets the costs and who gets the benefits.
  3. The environment creates benefits that are hard to quantify; economic activities can have environmental costs that are significant. An environmental economist can help you understand these BEFORE you even begin field work, as well as integrate them into choices made in the field ("gee, maybe you shouldn't release that tailwater into the river; people downstream don't like to drink pollution.")
  4. There are many research opportunities, since engineers are not trained in talking to people about preferences, choices, tradeoffs and willingness to pay.
Can you add more?

25 Nov 2013

Monday funnies

Iberia, a Spanish airline now owned by IAG (owner of British Airways) has had troubles, so I was interested to see this image in my email:

Oh, I asked myself. Maybe a new union contract? Change in routes? Sale of excess airplanes?

Nope. This is "change":
All change has to happen some day, a day like today.

Today, we set a new course. The most exciting journey we’ve ever embarked on. A voyage of discovery together with you, delivering the best travel experience ever. So you still feel at home, however many thousands of miles away you may be.

That’s why today we are presenting our new livery, a new image for a new Iberia. We’d love you to be a part of it, to share this exciting journey with us because that’s what make sense of it all.

Today, Iberia is changing. And tomorrow? Can you imagine?
So, an airline that lost 300 million recently is announcing a rearrangement of its colors? I don't think I'll bother to imagine what they'll do tomorrow.

Can a community save itself?

In response to my review of his book, Ralph Pentland emailed me this:
Your breadth of experience(s) and diversity of views gives me hope that someone from your generation may someday find the missing pieces to the water policy puzzle.

If you weren't aware, I wrote the 1987 Canadian federal water policy. Some still call it a text book policy, and it might have been in the world of 1987. But that world rapidly changed with climate change, endocrine disrupting chemicals, globalism, competitiveness, deregulation, the hollowing out of government etc.

When I had a chance to do something similar in China 15 year later, our team started from the opposite end - by spending the first quarter of the project trying to figure out where the world and China's place in it were heading. That likely made more sense, but we still drifted back to fairly traditional solutions.

With the book, we tried a bit harder to understand the relationship between citizens and the political process - starting from the assumption that both citizens and their governments are trapped on an unsustainable path that assumes GDP must always increase exponentially to infinity.

The book assumes we can only get off that path once citizens realize they will ultimately be both healthier and wealthier (broadly defined) if they put natural security first, insist that their governments better harness market forces to the goal of sustainability, and find some way to bring about a renaissance of democracy - hence the long chapter on Magna Carta Natura, fiduciary duty, public trust etc.

By next year, I am sure I will have figured out even that won't be enough - so I am pleased to see someone in the next generation searching for Plato's perfect but elusive water policy "form".*
In response, I wrote this:
I agree with your assessment. It's amazing to me that water failures are so easy to trace to poor management, which is easy to trace to indifference (I was 3 years in the Netherlands, where people are NOT indifferent to flood safety but let their farmers get away with murder wrt water pollution.)

I don't know what' going to open the floodgates of policy reform/implementation, but I think you've put your finger on it -- impacts on personal wealth/quality of life.

Not sure if that will be too late...
Can anyone give a good example of citizen engagement that has improved water policy?

* His reference to Plato is timely. I wrote this recently for TEoA 2.0:
An idealistic vision of water management imagines that there is some set of statistics, projections, values and implications that a czar could use to direct water to its highest and greatest use. This vision fails, on three big accounts: from a lack of adequate data, in the difficulty in understanding how those data affect flows that create different values for different people, and from the unconscious or manipulative way that some people with responsibility for interpreting and responding to the data (or lack thereof) may put water to uses that suit them more than the people they supposedly represent. can fail from inadequate data, misunderstanding the different values that people assign to the flows described by data, or mismanaging flows due to an unconscious or active bias that favors the manager's vision over the community's interests.

We have a long history of discussing these problems. Plato presumed the existence of a philosopher king who would rule wisely. Many people say that outcomes are the will of god. Political economists and philosophers have written about the fairness of making constitutions that treat citizens as interchangable in terms of the power and subjugation. And then there's the reality.

22 Nov 2013

Friday party!

This Nelly video is fun for its hometown element...

For ridiculous, watch "Hot in Herre" [sic]

The economics of drugs

The New Yorker has an excellent article [gated] on Washington State's attempt to legalize marijuana. It contains many statements -- often quoting "Pot Policy Professor" Mark Kleiman of UCLA* -- whose meaning changes with context. For example:
If you’re looking to invest in marijuana, all this is good news. But Kleiman finds it troubling, from a policy perspective. He has long argued that the problem with legalizing any vice—whether it be alcohol, nicotine, or gambling—is that “addiction is where the money is.” Twenty per cent of the Americans who drink account for almost ninety per cent of all alcohol consumption. It cannot be news to beer and liquor companies that their key demographic is the problem drinker.
Let's see... Is sex addition so harmful that we should regulate sex? (Has illegal prostitution helped anyone?) Do we need to worry about facebook addicts who are providing 80 percent of the content? What about those addictive television programs that have 80 percent market share? I agree that some products are bad for you in excess, but this article gives many illustrations of how regulators are trying way too hard.**
According to surveys, people who use marijuana “more than weekly” account for roughly ninety per cent of cannabis consumption. A RAND study indicates that this trend is increasing: the number of “use days” reported by the heaviest consumers has risen markedly in recent years. Marijuana may not be physiologically addictive—you don’t go into severe physical withdrawal if you abruptly stop using it—and no one has ever died of an overdose. But even the most ardent advocates of legalization generally concede that it can become a problematic habit for some users. According to the National Survey on Drug Use and Health, more than eight million people reported trying to reduce their marijuana consumption in 2011.
Eight million may be a lot, unless you consider that 180 million Americans say they want to lose weight, i.e., roughly the same share of Americans who are overweight. I'd guess that the share of marijuana users who want to use less is less than the number of marijuana users -- by at least one person I know very well :)
In a speech, Kleiman said, “The primary impact of legalizing cannabis is there will be probably six hundred and fifty thousand fewer arrests every year and forty thousand fewer people behind bars. And there will be an additional... fifteen billion stoned hours.” He looked out at the half-empty auditorium. “You have to decide whether a stoned hour is a good thing or a bad thing,” he went on. “That decision is going to drive a lot of your judgment about whether legalization is a good idea or a bad idea. But, even if you had your values straight, you’d have to know the facts. And we mostly don’t.”
He's certainly right here, in the sense that federal prohibitions have blocked research into the short- and long-term impacts of marijuana. With respect to "stoned hours," I'm not one to worry. I've never seen stoners fight, and they are safer drivers (the drug DUI rules are a disaster). If anything, we need more stoners and fewer drunks (I bet that government workers would do better without drug testing!).

Bottom Line: I'm glad to see an attempt at legalization, but it's scary to how regulators are control freaks.

* I wrote a paper on opium cultivation in Afghanistan and heroin consumption in the US in 2003, and I'm surprised to see that I did not quote him; perhaps that's because I did not agree with what he said in his work.

** The Dutch are experimenting with paying drunks to work... in beer. That's pragmatic.

21 Nov 2013

A little more tweeting?

I've been using @aguanomics for awhile now, mostly to tweet about posts to this blog, but now I'm going to share a little more content via twitter, #diary tweets will have a little update and/or links to interesting stuff that I'd rather refer now than hold for a blog post.

Hope that's useful.

Speed blogging

  1. A great article on the New California Water Atlas (I'm advising them)

  2. Barry Lehrman and I chatted about Los Angeles, Owens Valley and their aqueduct futures (41 min on YouTube or MP3)

  3. Developing countries are mad that developed countries are not delivering promised money to help cope with adapting to climate change, which is going to "manifest" through a nastier water cycle (Philippine representatives are fasting in protest).

    Addendum: 600 NGO groups have walked out, protesting a lack of delivery of promised $ by developed countries; Poland fired its enviro minister (chair of UCOP19). Looks like +4C

  4. Speaking of adaptation, California homeowners are upset that they will have to pay the full cost of insurance. Politicians complain that risk-adjusted rates are "unaffordable." People should have thought about that before moving into a flood plain. My solution: no insurance = rescue inhabitants but no money for the house. My Dutch colleagues have a better solution -- help threatened [Delta] homeowners see that they need to work together, via games!

  5. How Bangladeshis turn sewage into clean water, fish and flood control

20 Nov 2013

Economic vs. social incentives

I've got a great group of people reading drafts of End of Abundance 2.0, but some of them are having a hard time getting their comments back to me in a timely manner. After I sent a reminder, I got this reply:
You're an economist.... Can't you come up with a better system [of getting us to deliver]?
In response, I said:
Ahhh, but you've put your finger on the problem -- water, like many issues, needs to be managed with a combination of economic and social incentives. It's not like you guys would be doing this -- or doing it as well -- if I was trying to pay or punish you financially. I'm counting on you to do this because it's your passion. (Even if deadlines aren't :)
For more on these interactions, consider reading my paper on how business incentives can interact harmfully with bureaucratic structures or this recent essay: "Market Reasoning as Moral Reasoning: Why Economists Should Re-engage with Political Philosophy" [free download]

Anything but water

See the bike? Woo hoo Vancouver!
  1. An interesting discussion of the golden rule. My favorite: "Do it without saying you're doing it" (does not apply when writing books :). Related: How some cultures cooperate while others do not

  2. I'm very pleased to see more women in power (rising fast in Africa) as a result of quotas - a policy I described six years ago. Mommies > wars

  3. "Amsterdam defends the title as the world's most bicycle-friendly city... Amsterdam does almost everything right." Vancouver? Canada? Not even in the rankings.

  4. An essay on the economics of slums

  5. Tyler Cowen: It's great that the FAA is allowing people to use smart phones; the bad news is how long it took to undo a bad regulation. Speaking of which, driving more stakes into the heart of ethanol

19 Nov 2013

Honor, science and the Dutch

Read this amazing article on the Dutch Professor who falsified most of his social psychology research.

Then consider how the Dutch responded when he wrote a book on his experiences:
When Stapel's book came out, it got a mixed reception from critics, and it angered many in the Netherlands who thought it dishonorable of him to try to profit from his misdeeds. Within days of its release, the book appeared online in the form of PDFs, posted by those who wanted to damage his chances of making money.
The Dutch are much more community-minded than the Americans, because they have a long history of interdependence (you need your neighbors because you cannot maintain the dike by yourself; Americans do not, because they can just move to a new location).

I saw this in action six months ago, when a truck backed over a street post (ingeniously designed to tip over rather than do greater damage to a car hitting in) near my place in Amsterdam. I stopped to take a picture of the truck, as did a Dutch woman. But neither of us needed to turn in the driver. I saw him parked at the "scene of the crime" an hour later, because (1) he knew that others saw him and/or (2) he knows that his job -- as a Dutcher -- is to be responsible for his actions to the community.

Bottom Line: Transaction costs are lower when people behave with honor towards their community. They are more likely to do so when they realize that their actions -- and consequences -- are part of a repeated game.

H/T to DL

18 Nov 2013

Monday funnies!

Who's imitating who? Whom's imitating whom?

Don't leave shit lying around

I'm going to tell you a story -- make an observation really -- in honor of World Toilet Day.*

This picture gives the first thousand words. I took it on 8 Jun 1999 near Zhaoxing, China

As you can see, there are five side-by-side outhouses (and a few chickens), all of them with "collection boxes" under the legs. These boxes are periodically opened and cleaned of nightsoil, which is spread onto fields as fertilizer.

So shit is a resource (a good) not a waste (a bad).

That's not the case in developed countries, where people flush their private waste into the collective sanitation system or in poorer countries where people without access to toilets leave their private waste in common fields and paths. 

So we've got two different problems (shit is seen as a bad instead of a good; people dump their bads into the commons) that can be addressed by turning shit into a good or ensuring that people take responsibility for their shit, respectively.

How do we get those solutions? Composting toilets can do wonders on a small scale, but densely populated places need to have toilets that drain to adequate sewage and treatment systems.

Bottom Line: Take care of your shit -- and help others take care of theirs.
* I am part of the #Blog4Sanitation movement setup by Splashdirect to raise awareness of the importance of global sanitation. Learn more about World Toilet Day.

16 Nov 2013

Flashback: 14-20 Nov 2012

A year later and still worth reading...

15 Nov 2013

Friday party!

You may think you're cool, but are you "no fucks given" cool?

(The footage is from Croatia. The guy says "Ovo nas sad prekida" = "This interrupts us now")

Speed blogging

  1. The EPA has a report on the "Importance of Water to the United States Economy" -- a title that I prefer to their old idea of measuring "the value of water." It looks like I may have had an impact!

  2. A decent article on "rethinking big water," i.e., fewer mega projects, more conservation and recycling. The reporter missed the easy way to price water, unfortunately

  3. Mike Wade (a shill for big irrigators in California) launches another OxyMoronic op/ed. "Guaranteeing water source" claims that the Delta "plan will restore water to those who are eligible to receive it," which is not true for places like Westlands whose junior rights licenses are de facto dry. He goes on to say that "water can be used at one place and time to generate power, and then a second time to irrigate a field of tomatoes and once again for washing clothes in a city." I'm not sure that I want agro-chemicals in my underwear! Should big ag pay Mike $135,000 to produce bad jokes like this?

  4. "City of Sacramento strives to lead in water conservation." That may be tough (or maybe easy?) when they use 8x as much water as Europeans. First kill the lawns, then move out of the floodplain

  5. Bad sign: "Geotechnical engineers are trying to determine how one billion litres of murky water leaked from a containment pond into the Athabasca River"

  6. A deep resource: "The Climate-Aquatics Blog helps field biologists, hydrologists, students, managers, and researchers discuss issues associated with aquatic ecosystems and climate change"
H/Ts to RM and KO

14 Nov 2013

World toilet day!

I'm not a fan of various "days of action," but a rep from Splashdirect (great name) sent me a nice email about WTD (19 Nov) and the infographic below.

Splashdirect is also running a contest for the best toilet story [sic]. The winner will win £250 ($400), but Splashdirect will donate £2 to WaterAid for every entry they receive (via blog post) by 18 Nov.

Imagine not just instant wealth or your £2 contribution to those in need of a toilet. Imagine the fame that you'll get from entering the crappiest contest in the world!

I'll post mine on Monday :)

World Toilet Day - An infographic bought to you by the team at Splashdirect

BC’s Water Sustainability Act Legislative Proposal: Victory for planning, loss for economics?

A guest post by Tim Shah

I've known David for about three years now. I started reading this blog back in 2008, when I was first developing my interests in water policy, management, and economics. For the last three years, David and I have been exchanging ideas, papers, and opinions regarding ways forward for water management. Now that we live in the same province in Canada (British Columbia), I thought it would be appropriate to offer my thoughts on British Columbia’s new Water Sustainability Act Legislative Proposal.

What is it? Why should you care?
The proposed Water Sustainability Act will “update and replace the existing Water Act” – a 100-year old document. The Province initially wrote a Discussion paper in 2009 titled “Living Water Smart” which outlined four policy goals for the new legislation. Since 2009, the Province ran a public engagement process to hear directly from British Columbians. They received suggestions and ideas in over 2,250 written submissions from individual citizens, First Nations organizations, and stakeholder groups.

The Province is now at their final stage (stage 3), looking to collect final feedback before November 15, 2013, before the proposal goes to the Legislative Assembly in 2014 as a bill for debate before approval. Ok, enough on the context, you can read more here [pdf], or you can be a nerd and read the full proposal (100+ pages) like I did, here [pdf]. You can provide your direct feedback on the Proposal here -- by Friday!

Source: Province of BC, 2013

My thoughts
As shown above, the four initial policy goals have now turned into seven policy direction areas (as an aside, I am really glad that the importance of enabling different water governance approaches is still up for consideration*). For the purposes of a blog post (brevity, folks), I will share some thoughts on numbers 2, 4, and 5.

Policy Direction number 2 ‘Consider Water in Land Use Decisions’
For me, the highlight in this section is the proposal to include Water Sustainability Plans. These plans will replace the Water Management Plans by taking a more proactive approach to watershed issues by “integrating water and land use considerations…” Further, they would help governments respond to a conflict (among users, or between users and the environment), and will be site-specific, recognizing the hydrological diversity of BC. I applaud the design of these plans in their collaborative nature i.e. using advisory committees in plan development.

What I would like to see is better integration of these Water Sustainability Plans with efficiency and conservation measures. Currently, they are identified in the proposal as separate area-based tools depending on the spatial scale (e.g., site, stream or area, watershed or region) that can support water management. Why not allow governments to use these proposed Water Sustainability Plans to address multiple issues such as water conservation, risks to water quality, etc?

Policy Direction number 4 ‘Regulate during scarcity’
The government and the public alike recognize the importance of environmental flow needs**. As you see in figure 2 below, when a watershed experiences a drought, the government framework would adopt “water use efficiency” measures such as encouraging voluntary water conservation. As David and other economists have argued, voluntary water conservation is not an effective tool. I would advise the Province to think more carefully about integrating some aspects of policy direction numbers 2 and 4, specifically, using their proposed Water Sustainability Plans, as a tool, to take swift measures in times of scarcity. For one, Water Sustainability Plans should not be developed after a drought takes place; instead, these plans need to be developed in advance and revisited in the event of a drought. Good planning is inherently proactive, which is the purpose of these proposed Water Sustainability Plans. As such, the plans need to account for more frequent droughts, given climatic change, and identify various measures that could be used to alleviate shortages.

Source: Province of BC, 2013

The Province need not be too prescriptive here, but could outline a number of water pricing structures that could be used when water is scarce. Seasonal pricing would be a start (i.e. price of water rises in the summer months when water reservoir levels are lower). This is not a new idea; jurisdictions in the Okanagan region have used various pricing instruments for at least twelve years and have seen promising results.*** People require a price signal, not a benign request, to reduce their water consumption.

Policy Direction number 5 ‘Improve security, water use efficiency, and conservation’
One part of this policy direction is specifically focused on agriculture. Feedback from the public suggested that there should be a dedicated supply of water for agriculture that would be linked to the agricultural land reserve (ALR). “A reserve would help reduce the erosion of water rights for agriculture through changes or transfers to other uses (e.g., changes of purpose and transfer from irrigation to waterworks or other non-agricultural use."

As I argued in a seminar presentation in graduate school, I think the Province should consider a number of tools to fulfill this policy direction, including the use of a water market. As argued in a paper by Johannus A. Janmaat, a Professor of Economics at UBC-Okanagan:
Using a water market to reallocate some of the water supply among a set of water users is not a substitute for watershed planning, managing in-stream flows, and so on; rather, it is a tool for reallocating water, a tool that can be used both to maximize the value society receives from water that is consumed and to redirect water to purposes such as protecting valuable environmental resources.
His paper illustrates how a water market could work in the Okanagan. I recommend the readers of this blog, in addition to those reviewing feedback at the Province, to read this paper.

Bottom Line: The new Water Sustainability Act will surely mark a significant improvement to its predecessor. Its seven policy directions are promising. However, using and allowing for more economic and market-based approaches will certainly help conserve our water resources for generations to come.

Tim Shah is a community planner living in Victoria, BC. He has been studying and working on water policy issues for the last four years. In 2012, he co-published a report with the POLIS Project on Ecological Governance titled “Cross-Canada Checkup: A Canadian Perspective on our Water Future”.

*The POLIS Project on Ecological Governance has published a series of reports on how BC could improve water governance. See here.
**While I didn’t get into environmental flow needs (EFN) in this post, top water policy experts in Canada believe that EFN is indispensable to good water management. Indeed, Ralph Pentland and Chris Wood argue for this in their new book Down the Drain.
***Kelowna, BC (the largest city in the Okanagan region), adopted volume-based pricing for single-family residential users in the late 1990s. Between 1998 and 2000, total annual average per capital consumption dropped 24.29 percent with “the largest decrease occurring in the summer months”. Read the full paper here [pdf]

13 Nov 2013

How (not) to implement water metering

After a long delay, I finally got around to revising my paper -- "Tradition versus dogma: water metering in England and Wales," which I also discussed at the AWRA in Portland (PDF slides and 33 min MP3).

Abstract: Water meters are necessary for tracking leaks, allocating costs in proportion to use, or setting prices to encourage conservation. They are not necessary when water is abundant or water supply is considered an obligatory municipal service. This paper discusses the program to increase residential water metering in England and Wales. The basic impacts of this program are fairly straightforward (demand falling by roughly 10 percent, a shift of costs to heavier water users), but other impacts are more controversial (greater burden on the poor, no measurable reduction in water scarcity, dubious net benefits). After reviewing these issues, the paper concludes with suggestions for improving the implementation of metering.

Please send your feedback, corrections and additions in the next month, as I plan to revise this paper and submit it to journals (it may be my last paper for awhile!)

Why the US Army Corps of Engineers is failing

I gave a talk last week in Portland that I titled "Does the U.S. Army Corps of Engineers need more economists?"

I claim that they do, because:
  • The Corps can neither assess nor rank their projects accurately, due to regional biases
  • The Corps lacks the resources to meet all (Congressional) demands*
  • The Corps has strayed from providing public goods to providing private goods
Here are my PDF slides and 28 min MP3 of the talk.

Bottom Line: Times have changed and the Corps must change with them.

* I was somewhat pleased when Steve Stockton (Head of civil engineering, USACE) answered my question ("should the Corps outsource some of its overload?") in the affirmative [3 min MP3]. I'd love to get involved in this process, probably by setting up a "market" for allocating Corps' resources among the many claimants. Such a truth-revealing mechanism would go a long way towards reducing the games and manipulation that has paralyzed the Corps for the past decade (if not longer).

12 Nov 2013

Speed blogging

  1. I've been watching the PBS documentary of Cadillac Desert (featuring Mark Reisner, Pat Mulroy, Floyd Dominy, et al.). It's a great complement to the book and a refreshing update on how crazy the dam builders were. Episodes cover the Los Angeles Aqueduct, Central Valley Project and State Water project and the impact of US policies on the rest of the world -- topics that I've covered in academic papers and here. The series also gives you a shudder, as you realize that China is now on the same, scary, path, even to the point of building dams to keep the industry happy -- damn the consequences! Watch it!

  2. Speaking of development in the West, someone made a map of how western states would look if they followed J.W. Powell's vision of watershed boundaries. Half the mess we're in now (e.g., lack of trade across political borders) can be traced to our incorrect boundaries (same is true for colonial borders of African countries, btw). Read his 1879 report to understand why

  3. Read this great post on how towns can share ("regionalize") their water facilities. Then hire Lauren!

  4. The English "give up" coastline to make it easier to defend other areas from climate change impacts

  5. Some nice insights on water and culture, from a woman working in Iraq ... and more from a woman researching in Ethiopia

11 Nov 2013

Monday funnies

Some stores could charge for this...

... because a mirror is cheaper than beer!

Biofuels versus food?

MJ wrote from Brazil, asking for advice on his thesis, i.e.
I'd like to calculate the harm resulting from competition between biofuels and food commodities for water, and come up with an answer of which one of them (bioethanol & biodiesel) should take place for the next 20 years to interfere less with food crops production.
Here's my advice:
I think you will want to discuss the differences between a political and economic allocation of water among biofuels and food.

A market price for water would push water to where it's "valued" -- even as those values change over time (seasons, but even days). A political allocation -- often resulting from a careful calculation of costs and benefits that may be wrong from day one (miscalculation) and will definitely be wrong after a few months -- may result in water that's "stuck" in the wrong crop [this and this].

The tricky part is including the price of externalities -- carbon reduction from biofuels as well as local pollutions -- in those market signals. That's not easy to do, but it may be easier than using values from an academic study.

Oh, and the market price for water should reflect its scarcity, of course :)

9 Nov 2013

8 Nov 2013

Friday party!

This messing around with time thing is pretty fun

Anything but water

  1. Women [economists] focus on different things: An analysis of healthcare during pregnancy and a cost-benefit explanation of UK (US) prison failure -- something the Scandinavians have addressed

  2. "Beautiful Trouble lays out the core tactics, principles and theoretical concepts that drive creative activism, providing analytical tools for changemakers to learn from their own successes and failures." The fast-paced, interesting 490pp book is available for download, via the google

  3. Also from the Yes Men is this special edition New York Times (ad to right) I agree that the world could be a better place. Too bad that it's run by asshats. Read it and dream act [pdf]

  4. Agreed! 18 signs you're reading a bad criticism of economics and 6 signs that you're reading good criticism

  5. Things to do before you're 30. I've done all of these, if you count this video as a meme :)

  6. The Straight Dope on fracking (necessary unless we drop energy consumption by 50+ percent), a useful warning on fracking yields, and how Bill "350" McKibben et al. lost the plot in opposing Keystone XL (instead of taking more effective action). The carbon lobby is pleased, of course, to see them diverted -- in the same way as the Japanese are pleased that people are paying attention to whales -- and missing the devastation of tuna
H/T to RM

6 Nov 2013

Water in Oklahoma

I gave a lunch keynote ("The end of abundance... and the start of something new?") in Oklahoma City a few weeks back (PDF slides and 48 min MP3) and then a talk (PDF slides and 74 min MP3) to some OSU graduate students. The former has stronger emphasis on how to address issues;* the latter discusses how academics get water economics wrong.

After my demonstration of the All-in-auction (video to come), I did a 4 min interview with OSU's SunUpTV that puts auctions into local context:

(There's also a 4 min video describing water rights in Oklahoma.)

I'm talking about water metering in England and Wales and failure at the US Army Corps of Engineers this week at the AWRA in Portland. Slides and MP3s to come!

Those are my last (scheduled) talks for 2013. I'll be teaching from Jan-April next year at Simon Fraser University and will TRY to get videos of those lectures.

I'll also be doing a series of online "hangouts" to discuss the various chapters of The End of Abundance 2.0.

Click here if you want to have me give a talk -- or do some consulting :)

* At a recent Vancouver talk, I asked Adam Kehane what to do when one party to a negotiation has an interest in stonewalling to maintain the status quo (i.e., exporters and the Sacramento Delta [pdf] but also see this). He answered with three suggestions:
  • Wait. Events may change their mind
  • Make them uncomfortable
  • Try to see the other's POV. Friends can agree
Someone asked about Israel and Palestine. His reply? "Hey, we're not doing magic tricks here." Good point.

A word from our sponsors: Get Fat Now

Too tired to think? Have a cookie!
I've heard for years about people who blame "something else" for being overweight. This blame does not make sense, given that obesity -- unlike, say, broken legs -- is a modern occurrence, and that's why people need to read "No, you don't have a disease -- you're fat."

Then it's time to take a second look at social signals and personal responsibility and incentives. The social signals include advertising that encourages people to eat more and stay fat. For personal responsibility, I think it's fair to charge fat people more for airline seats or health care, in the same way that smokers pay more for health insurance and bad drivers pay more for auto insurance.

That's why this spoof of an airline that sets fees according to passenger weights is neither silly (it makes sense) nor a spoof (it happened to us in Nicaragua; Samoan Airlines already does it for real).

Bottom Line: Sure, get fat -- just don't expect others to pay for the resulting costs.

5 Nov 2013

Down the Drain -- the review

I picked up this book (amazon.com amazon.ca) in Toronto when I was speaking at a conference on groundwater management in Canada. I was surprised to find that all's not well for water resources, management or science in Canada.

How is this possible, in the country with the greatest per capita -- and huge absolute volumes of -- water resources in the world?
  1. Past abundance has produced a lazy consensus that waste does not matter (Canadians are saved by surplus, not wisdom).
  2. Many industries (pulp and paper, oil and gas, mining, agriculture) have been given easy access to water to "create" jobs and "develop" remote areas.
  3. The Conservative government of Stephen Harper (an oil guy from Calgary Toronto) is not only indifferent to science, monitoring and management. It's aggressive in silencing academics (most work at government universities), closing labs and preventing the dissemination of data.
Down the Drain: How We are Failing to Protect Our Water Resources (2013) by Wood and Pentland is a must-read for anyone interested in water issues and policy in Canada. It's also highly recommended for Americans looking to compare/contrast national and local policies. (Americans will have an easy time with the book because it discusses many policies south of the border -- as is traditional for Canadians with a World Series perspective.)

I marked lots of pages while reading. Here's a summary of my notes:
  • Water should not be managed for its environmental benefits but its impact on national security. Lose water, and you lose the nation.
  • Water use and climate change are drying out lakes; one-in-a-hundred year storms are more frequent.
  • Canada had very strong federal laws for protecting water flows and quality. Those laws have been ignored in a rush to delegate authority to provinces that have often traded sustainable water management for short term economic growth (Alberta, BC and others). A 2012 law removed 99 percent of Canada's inland waterways from federal jurisdiction. Another law threw fisheries under the bus.
  • The 1987 McMillan report [pdf] (1987) is the last, best word on water policy. It's often ignored [pdf], but Environment Canada has an update on pricing water, protecting watersheds, and so on.
  • Canada's decentralized model of water management fails (compared to the EU and US) when the Crown does not step in to reconcile conflicting provincial goals, e.g., BC and AB are exploiting water that the people of the Northwest Territories want to protect (most Canadian rivers flow north).
  • Alberta and its old sands have been -- and continue to be -- a disaster in water abuse and mismanagement.
  • Environment Canada is confused and toothless when it comes to punishing abuses. Page 111: "In more than 20 years of CEPA [Canadian Environmental Protect Act] enforcement, Environment Canada has collected a total of $2.4 million in penalties from violators -- less than the Toronto Public Library collected from delinquent borrowers in 2009 alone."
  • Canadian industry released a larger quantity of pollution into waterways than US industry, which serves 10x the population.
  • "Smart regulation" requires that regulations increase GDP-visible economic gains. This is remarkably stupid -- or just evil -- when costs and benefits to the environment are not even included in GDP calculations.
  • Climate change is reducing Canada's "water income" by 3.5 km^3 per year (as much as they use). The End of Abundance has left the station. When will it arrive in your town?
  • Many Canadians, led by Maude Barlow, mistrust "privatization" of water via markets or pricing. The irony of this "sacred belief" is that it prevents policies that could restrain industrial abuse of water and leaves in place ridiculous administrative rules written by industry. Frackers, e.g., pay $1.10 per million liters of water. Canadians get the over-exploited commons they feared.
  • Wood and Pentland (journalist, and policy expert, respectively) spend the last two chapters outlining a future of good water policy for Canada. Their main point (as you'll suspect from these notes) is to restore science, improve information, and set strong policies to protect environmental water flows.
Bottom Line: I give this book FIVE STARS for documenting and analyzing the water governance failure in Canada. Missing science, policies and prices mean that Canada may lose its "national treasure" to groups that care more about their money than their fellow citizens. Tragic.

4 Nov 2013

Monday funnies

This is cute.

This is NSFW (ridiculous)

Anything but water

  1. Recycling: car shredders and China's scrap hunters

  2. Read Why is Zambia so poor? if you want to understand how development works, or fails

  3. Oregon proposes to tax cars by the distance they drive. This is supposedly more fair than raising the gasoline tax, but I can't see why hybrids (lighter, less polluting) should pay the same as SUVs. I bet that politicians are just afraid of the oil industry

  4. Obama may be a phony who sounds good (except to experts), but since when have politicians underpromised and overperformed?

  5. As a follow up on my post discussing how academics have driven research into the ground in their quest to "publish or perish," consider The Economist's discussion of the failures of academics as well as Aquadoc's lament of professors who fail to cross interdisciplinary lines until a long delay for tenure (if at all). I left this comment at TE:
    I have a PhD but I have given up on academic research because the publish or perish incentives (1) make it difficult to find a matching journal, (2) put way too much weight on impact factors, (3) result in a flood of phony ("open access") journals, (4) result in too many papers for anyone to keep abreast of the research and (5) leave professors with no incentive to engage in public debates.

    It's therefore ironic that I have published a proposal -- an auction market for academic papers (http://www.springerlink.com/content/2q80214867370564/) -- to fix this problem and NOT ironic that no academics have bothered to consider it as a reform.

    The academic world faces a collective action problem (those with the power to reform benefit from the current system), and there's no solution in sight.
    Also read TE's longer briefing

H/T to HZ

1 Nov 2013

Friday party!

RIP Lou Reed, who showed us the Wild Side:

Consider the whole, not the parts

Chris Perry forwarded an email with his comments on a paper by Mark Zeitoun, Tony Allan et al. on Yemen's water shortages:
Your paper left me somewhat bemused. Yes indeed dark forces develop and prosper in any situation where a valuable resource is mismanaged or unmanaged, and there is scope to capture the value of that resource.

You link your argument to "demand management", which has surely proved to be yet another catchphrase in the sequence of "solutions" that have been proposed over the years to solve the problem of excessive, uncontrolled and unsustainable water consumption.

In making that link you quote a few papers I have been associated with (Cornish et al, perry et al, and Hellegers et al). What you miss, which is relevant if not fundamental to your analysis, is that all these papers made the case that two of the major interventions proposed as a basis to achieve demand management were either entirely counter-productive (higher irrigation efficiency) or irrelevant at the scale proposed (water charging), and indeed ran counter to one another. In practice. Improved on farm irrigation efficiency results in higher levels of water CONSUMPTION, higher levels of production per unit of water pumped, and in consequence higher profits (or the potential to maintain profits while pumping from deeper levels). Water charges were proposed as a means to reduce profits from pumping and hence reduce demand, but nobody figured out ex ante the level of charges that would be needed to actually impact substantively on demand (which is what Hellegers tried to do), so nobody thought through the likely minimal impact of increasing prices within realistic boundaries, or the fact that the improved irrigation efficiencies counteracted such minimal impacts many times over.

So it's not as if the failure of demand management was the overturning of potentially effective interventions by dark powers: there were no effective interventions on the table.

That perhaps leaves your main line of argument unchanged, even if it provides a fuller context.

But your main line sees to me to be too narrow, in precisely the same way that engineer's solutions are too narrow (upgrade the concrete); institutional specialists solutions are too narrow (organise the farmers); and lawyers solutions are too narrow (codify water rights). Your narrow view is that it's all politics.

In fact ALL these things have to work together and when one link in the chain (or more often several) is inadequate, then chaos reigns and chaos inevitably leads to capture by the powerful, or a continuing contest among the powerful until stalemate is reached. When the valuable resource in question is land, we call this "war", but in the case of water we seem to think that each disciplinary perspective (politics, engineering, economics, institutions, the law) can separately explain the chaos.

We have to take a holistic view of each of the elements in turn. Political choices are forced by defining and agreeing how much of the resource we can use. In Yemen's case, the options are either continued unsustainable consumption levels until the majority of Ag users run out, or setting and enforcing priorities among users. That debate has yet to be joined because of silly ideas such as improved technology or pricing, which have little to offer. Perhaps Yemen's Choice is precisely to pump the aquifers to extinction, which is fine if it is the actual explicit informed choice of the people. Only when that debate is properly joined will we find out--and the outcome will be defined priorities (which are the role of politicians); translation into rules (by the lawyers); implementation of the rules (institutions) and infrastructure as required (engineers).

Absent the information and the debate, the rest is hopeless. Absent the rest, perhaps the debate is hopeless. But it is not a one dimensional topic.
The authors' responses to his email ("thank you for your cerebral view") explains how academics get their useless reputation. As further reading, check out a post I wrote five years ago about the importance of context in finding solutions.