10 March 2015

Notes from the trenches

I really like hearing that my opinions on water policy make sense, e.g., this email:
I found your interview on Econ Talk very interesting and look forward to reading your book. As a civil engineer and someone with an interest in environmental economics and policy, I have put a decent amount of thought into issues surrounding water scarcity.

I have long thought that variable/surge price would be an effective mechanism for managing demand but until listening to you, I hadn't really thought about the potential financial disincentives for utilities implementing measures that would ultimately reduce water sales/revenue - I now understand why you favor keeping fix costs relatively high to stabilize revenues.

I was very pleased to see in your book that you mention the possibility of issuing rebates with excess surge rate revenues. I personally am fond of a pricing model where surge pricing is implemented rather liberally, but essentially all of the surge revenue is distributed equally back to customers on a semi-regular basis (quarterly maybe). I believe that requiring customer to pay a "market" rate on their monthly water bills would help manage demand, but rebates would help avoid complaints of price gouging or social justice. Additionally, utilities could require costumers have no outstanding balance in order to receive the rebates which should help reduce unpaid water bills - Detroit, Michigan for example has made a lot news due the fact that a huge percentage of customers never paid their water bill.
And then there's this, from RP:
First of all, I loved your talk. Water scarcity is something that I ponder often and your talk brought up some interesting things I hadn't thought about before.

I do have a scientific question though that your talk brought up for me. If water usage is greater than natural replenishment what happens to the molecules of water after they are used? Seems to me that they would go back to the "system". When I drink water, I later pass it as waste. When someone waters their lawn (even wastefully) the excess goes down the storm drain or evaporates to the atmosphere (to come down later as rain). Why can't cities capture this wastewater, clean it and then "balance" their problem. Let me restate that I agree with what your are doing... Just trying to think through the larger picture. Why doesn't the usage balance out? What am I missing? I know it has to be something as it doesn't appear to be working out that way? I understand the aquifer issue (we don't have millions of years to filter through sandstone) but seems like we should have an abundance of wastewater with all the wasteful use of previously stored aquifer water?
In reply, I wrote:
Glad you enjoyed it. The simple answer is that the water does not return to the right place at the right time to be 100% "replenished"

I tend to say that we use the water "economically" rather than "physically" e.g., it's THERE, but polluted.

Many cities are looking at closing the loop -- as opposed to discarding wastewater -- b/c the economics (and regulations) are converging. Check out chapter 4 in my book :)

1 comment:

  1. @RP

    Water use and consumption need to be thought of as separate actions. Most used water is in fact passed on or retasked in its flow through a basin (ie most all indoor household use is recycled, directly or indirectly). Exterior use is mostly consumption in that a large fraction is evaporated, this applies to both urban and rural agriculture, or industrial uses such as cooling. The consumed (evaporated water) does in fact remain in the water cycle, but likeley not in the same watershed. For example, recent work by UC scientists finds that evaporation from California's central valley (14.7 km3 June-Aug) goes to the Colorado river basin. Where the direct and induced effects result in a 30% increase in the flow of the Colorado river. Although some of that comes back to California, it doesn't make it to the Central Valley.

    Unless agriculture in California changes on a large scale to be more like Almería, Spain we can never reuse all the water that would balace natural replenishment. And to do so would be costly as water cannot be used over and over without bringing desalination into the picture. (you get 2-3 uses typically, depending on how efficiently it is used) And, desal isn't required becasue we're adding lots of salt with each use, its becasue water is a very efficient solvent that dissolves minerals (salts) every time it is applied to the ground, naturally as rain, or unnaturally as irrigation. When we then evaporate water through various consumptive uses these natural salts are left behind, at higher concentrations.

    [Side note: The equasion for that effect is precisely the same as the City of Davis (Table 4 -Water Shortage Surcharge) that David linked to earlier this month, where a 20% water loss translates to 25% higher salt concentration, 50% water loss to 100% higher salt concentration...and extending,..a 75% water loss to 200% higher salt concentration....with hyperefficient irrigation the water loss percentage can be higher than 85%.....in house conservation has the same effect on the relatively fixed amount of salts people excrete/add]

    So, unless we are prepared for the costs associated with desalination, a basin's wastewater must ultimately be released to the ocean, where nature can use solar desal and send it back our way.

    All ancient civilizations based on irrigated agriculture fell into the trap of trying to close the loop with efficient reuse and, after a good run of a century or more, they collapsed due to the resultant salination of their local water sources. We can avoid it if we are willing to pay the price for desal....the big question is who should pay for it?

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