30 Apr 2015

Waterlution Innovation Labs in SF and Sac next week

More information here

We are getting on with the job... eventually?

I received a final communique from the World Water Forum that ended last week. It sounded awfully familiar, so I looked back in time a bit...

7th World Water Forum ("Water for our Future"), Daegu 2015
The world's largest water meeting, the Seventh World Water Forum, concluded with a fresh commitment to action towards four overarching goals: water security for all; water for development and prosperity; water for sustainability; and constructing feasible implementation mechanisms... The Government of the Republic of Korea presented an “action roadmap” and monitoring system as key deliverables of the Forum, which can be used as guidelines for addressing water issues... Benedito Braga, President of the World Water Council, said that pledges made during the Forum will be conveyed to the ongoing negotiations of SDGs in New York, the US, and emphasized that the Forum had sent a clear signal to the world that, “We know what needs to be done and we are getting on with the job.”

6th World Water Forum (“Time for Solutions”), Marseille 2012 [pdf]
“Time for Solutions” was not just a vain slogan. On the contrary, the 6th World Water Forum kept all its promises by placing solutions and commitments in favour of water and sanitation at the heart of its mission, and by making action its reason to be. The website www.solutionsforwater.org, put in place to gather concrete responses to water and sanitation issues, boasts more than 1,400 solutions spread across the planet and coming from all sorts of stakeholders. Since its launch, the site has recorded more than 60,000 visitors from 189 countries. With over 1,600 active members, it will remain open well after the Forum [there are no comments after 2012], as the World Water Council is committed to continue its development and to monitor the commitments made during the 6th World Water Forum.

5th World Water Forum (“Bridging Divides for Water”), Istanbul 2009
On the road towards the 5th World Water Forum, the international water community worked together according to a precept of “Bridging Divides for Water.” Those who actively participated in its preparation and in the event, itself, soon realized, however, that there is more that unites us than divides us, above all, our fervor to provide water to those most in need. In Istanbul, we improved our common understanding of many issues by accepting to discuss “other” points of views. We planned new ways forward to ensure that, together, progress can continue to be made. In some cases, the bridges that were built may still be fragile, in need of reinforcement, but important connections were established.

4th World Water Forum (“Local Actions for a Global Challenge”), Mexico City 2006 [pdf]
The 4th World Water Forum undoubtedly provided several opportunities to develop a shared understanding of the many issues that make water so important to our life, to initiate new partnerships between the many organizations that make up the so-called “water community” and to pave the way for the strengthening of local actors and local actions... Several recommendations were made, but it is mainly through the reflections triggered by the debate and through the many partnerships that were initiated, that future action will be influenced.[snip] The World Water Forum is not and should not be a conference or an end in itself. It must be a triennial process through which the water community interacts with the rest of the world, the week of the Forum being simply a pause in the water management improvement processes. Between two World Water Fora, action has to take place, and follow-up on the various recommendations and commitments made needs to be carried out. Monitoring of this follow-up will be organized in the coming years in order to report at the 5th World Water Forum on the results, achievements and corrective actions to be taken.

The 8th World Water Forum will be in Brazil in 2018. I'm guessing that we will hear of everyone's commitment to dialogue and interaction. I'm hoping that they will have restored water service in Sao Paulo as well.

29 Apr 2015

Under the Dome -- the Review

This amazing documentary gives me a lot of hope for China (and us) in the way that it addresses, dissects and criticizes Chinese government policy, (in)action, and progress in dealing with local pollution (the movie's subtitle is "Investigating China's Smog"), which will have to be addressed before global pollution (GHGs) is.

I was pretty much glued to the film the whole way through, as Chai Jing (a TV-anchor who quit her job after her baby daughter was born with a lung tumor) pretty much sets up and knocks down every cultural, economic, and political cause, effect and barrier to addressing China's smog problem. I learned that China has plenty of laws to control smog, but that those laws are rarely enforced. I learned that the main problems come from protections given to China's dirty coal producers, dirty truck producers and -- above all -- Sinopec, the oil and gas monopoly that doesn't see a need to invest in cleaner fuels or natural gas. The problem is not growth per se, but (as usual) rent-seeking crony capitalism.

Aside: I am curious to know how Chinese viewers perceived some segments that crossed rock-video editing with informal personal questions. My guess is that these moments do not stand out to them as much as they do to non-Chinese.

This video was released and watched 200 million times before it was censored in China. I know that politicians there care more about maintaining power above all else. Hopefully, they will use this film to pressure for reforms without weakening their power. The Chinese people surely deserve it.

Bottom Line: I give this film FIVE STARS for its insightful analysis and criticism of the causes and solutions to China's smog problems.

Water incentives in jails

Andrew Boryski sent me an email after my Reddit AMA with some interesting details on water use abuse in California jails:
In 2013 I was convicted of a white collar crime and spent 23 days in LA County jails before I was able to get the situation sorted.

During that time I saw the biggest waste of water in California. It happened at all three facilities I was incarcerated in.

California Wayside penitentiary was the worst. There are no regulatory values on the boilers so in order for the showers to be bearable temperature during the day, inmates are forced to run the water in the sinks or a shower all day so that it depletes the hot water.

I was in two different sets of barracks both with the same problem, I was in north I think there was about 16 sets of barracks total. Poor maintenance all around, toilets leak and ran all night. All sorts of things, but the simple values on the boiler to regulate hot water would be the biggest thing.

Honestly all day the sink would run, think like a big industrial wash sink. In twin towers downtown LA they had to put us in the gym area for a full day to try and fix a shower that would not turn off. The humidity was crazy in this big windowed locked room that I would have to say 60 or so inmates where housed in.

They never did get the shower fixed just turned it to a slower trickle.
Although I am not surprised to find that prisoners (and guards) would waste water and energy that they did not have to pay for, I was shocked to see the magnitude of the waste.

Indeed, this example reminds me of a recent story: "The Number One Worst Polluter on Earth Is... The U.S. Federal Government." Why? Incentives? Governments often excuse themselves from following rules. When they do follow them, they are not necessarily careful, since the cost of waste falls on taxpayers.

Bottom Line: All people and organizations should pay the price of their water use. If they don't then they will waste YOUR water -- and YOUR money!

28 Apr 2015

Anything but water

I see a bright future for this one...
  1. Is seems that US farmers will get a "heads I win, tails you lose" reform to the Farm Bill

  2. Urban sprawl "drives" climate change, literally. Related: Vancouverites hate on a bicyclist who complained about aggressive drivers (that's one reason we moved back to Amsterdam)

  3. Yoram Bauman ("the world's only stand up economist") will be doing an AMA on Reddit TODAY, from 11am Pacific. He'll be talking about climate change policy, especially revenue-neutral carbon taxes.

  4. Engineer porn: This machine lays train tracks. Related: Politicians are more interested in headcount and new projects than maintaining existing projects

  5. Few Americans are "libertarians" but the share holding "libertarian views" is larger than the share of conservatives

  6. The Future of Food journal has a new (online) issue on small scale agriculture, and they are accepting suggestions for future themed issues

  7. John Oliver on "municipal violations" (government extorting money from citizens), a practice that's just been dealt a blow in New Mexico
H/Ts to CD and JM

27 Apr 2015

Monday funnies

Make money fast!

A man buys a horse from a farmer for $1,000. He pays half as a deposit, and when he goes to pick up the horse, the farmer informs him that it's dead. The man asks for a refund but the farmer advised that he already spent it. The man takes possession of the dead horse and leaves angrily.

A month later, the farmer runs into the man at the bank and notices he's depositing nearly $5,000 in cash. The farmer asks where he got it and the man says "Well, after you ripped me off, I started selling raffle tickets for a horse. I sold about a 1,000 at $5 each."

The farmer says, "Well wasn't the guy pissed off to find out the horse he won was dead?"

The man smiles and says "yup, so I gave him his $5 back"

Nepal's earthquake, groundwater and damage

The producer asked me to look at this documentary on Kathmandu's evolving water crisis a few months ago. I finally got 'round to it a few days ago, just before the earthquake hit, killing thousands and damaging many buildings. The documentary is interesting in its own right (government monopoly and corruption are driving the crisis), but the part that I immediately remembered was how local experts predicted (at 19:09) terrible damage in the event of an earthquake. Why? Groundwater overdrafting destabilizes subsurface soils.

Bottom Line: Groundwater abuse doesn't just deplete the water that you (or your neighbors) may want later -- it increases risk in ways that may be very costly.

Dear John -- I think you need to talk to your neighbors

In Living with Water Scarcity, I wrote:
The end of abundance
Scarcity is like the fuel warning light in your car. Ignore it for too long, and you’ll be stranded. People who grew up with water abundance may not see the flashing light. Their attitudes and habits — and the social, economic and political institutions that reinforce them — make it hard to respond to water scarcity. Neighbors who share water from rivers, lakes, or aquifers may refuse to acknowledge that there is not enough water for every need. Others fight to get their “fair” share. A third group wants to address scarcity, but they cannot without help from others.
"I am going to water this lawn until WE run out of water."
Last week, a court ruled in favor of John, Jim and other neighbors who claimed that increasing block rates were "unfair" because those rates reflected a need for water conservation (reducing demand), rather than reflecting the cost of delivery.

The trouble with their logic (and their "victory") is that the cost of delivering water -- unlike the cost of delivering gasoline, housing or other commodities -- does not include any cost for water, since water "rights" are acquired for free. The result of this hangover from an era of abundance -- as every economist will tell you [2] -- is that scarce water will be underpriced and overdemanded, such that supplies run out. The implication, in other words, is that guys like John and Jim will continue to water their lawns with water that others in the community would rather keep around for drinking, cooking and bathing. Indeed:
Too many people so busy fighting for their right to misuse public resources and generally demand the right to act like an uneducated, selfish and classless idiots. It's far too easy to block respectable legislation by creating a legal gridlock and far too easy to create legal gridlock based on unreasonable assertions. The spirit of greater good needs to prevail here and elsewhere in our society.
So, you can see that John and Jim's neighbors are already pissed off about abuse of "the public good," i.e., the water that they must share as a common pool good because they are not allowed to price it as the private good it is.

That's a long prologue to an announcement that I am not making

I was thinking of launching a Kickstarter to fund a "California water tour" to various communities, to have discussions on the end of abundance and ways of living with water scarcity.[3] I decided -- after thinking about it, reading many emails and articles, and even considering charging fees -- that it wasn't worth it. That was painful to me in the context of the State's support for my education, my friendships, and the clear interest in my win-win solutions.

It's not that I think that change is impossible, it's that there are guys like John out there who are unwilling to face facts (falling water supplies) or pay for their luxuries (green lawns in desert conditions). Indeed, John is just the latest of many "no can do" people who are preventing the change that California needs.[4] To put it simply, California's water management is the result of its messy politics, complex laws, and warring communities. As an ex-resident, I have neither the standing, nor the interest in fighting in the trenches with people who cannot add 1 and 1.[5]

I am glad to see that lawyers are already reinterpreting the court's decision, that simple "show me the water" ideas may reduce abuse of shared aquifers, and that the discussion on water use is finally getting some nuance.[6]

So it's up to you Californians. Some of you think the time is ripe, and others may disagree, but the drought doesn't care. Nobody cares about your beliefs when there's no water.[7]

Bottom Line: Californians need to reform their water management to allocate limited supplies among social and economic demands. The good news is that any community can begin this process without worrying too much about what other communities are doing. The bad news is that every community needs to have people who are willing to push against the water managers who learned their trade in an age of abundance and Johns who feel entitled to take what belongs to everyone. I am willing to help any and all water heroes, but the job is really your responsibility.

  1. I'm pretty sure that their victory will be Pyrrhic. Absent pricing as a tool, the only choice is regulation, i.e., no outdoor watering. Now John and Jim will not be able to have ANY lawns.
  2. And here they are...
  3. Yes, those are my books [pdf], and the names were not accidents! :)
  4. The first were the managers at the Metropolitan Water District of Southern California. They even rejected pilot trials of auctions to allocate water among member agencies, preferring to waste $millions of ratepayer money on zero-sum lawsuits. Talk about abuse of office!
  5. via FB: "Here is an analogy: I go to a restaurant and order a chicken dinner at 5:00 in the evening for $12. An hour later my buddy shows up and orders the same, to which the water says, "Due to a recent shortage in chickens, yours will cost $15." Who should the burden be on? The restaurant (state) that didn't prepare for the demand or the customer? The problem isn't water supply. It is our state government failing to store water for times like this. We should not have to open our wallets every time the politicians put us in a bad spot." DZ: Sorry, but you haven't worked in a restaurant, where it's "We're out of chicken. How about fish?" When it comes to water, you need to limit demand within supply. But you, like John, don't seem to get that.
  6. That said, I've heard a LOT of complaints from other people with "dead obvious, used elsewhere" solutions that are getting no traction in California. I trace their lack of success to water managers protected status. Fire a few managers for presiding over shortage, and I bet they'll start looking for new ideas!
  7. "If you listen to the spokespersons on all the sides and the pundits on all the sides, you'll pretty quickly come to understand that waste is always water used by other people," says Jay Lund. "This is, I think, a natural human condition in such a dry place."
H/Ts to JD, ND, RM, JR, SS and DV

24 Apr 2015

Friday party!

What do young men do when they can't drink, go to movies, or talk to girls? This:

What do they do when they get free cars from their daddies?

Drifting and crashing. (Better than terrorism, I guess.)

Anything but water

  1. "The End of Asymmetric Information" ("as Described by Yesterday's Economists") does not exclude future, interesting -- and devastating -- examples of one side deceiving the other, but falling transaction costs are removing some barriers to markets that hadn't functioned due to trust issues

  2. This short primer on economical writing [pdf] has good advice for everyone. The author of the primer, Donald Deidre McCloskey, wrote an excellent critique of economics (If You're So Smart, Why Ain't You Rich? [pdf]) that is echoed in this speech by Charlie Munger, i.e., Warren Buffet's billionaire buddy

  3. Interesting conversations: President Obama (!) with David Simon (creator of The Wire) on the failed war on drugs, Peter Thiel (PayPal) tells Tyler Cowen how government and bureaucracy (esp in the academic world, where "publish to the index") have killed innovation, and Russ Roberts, Vernon Smith and Otteson on Adam Smith (remember that he was a moral philosopher who said more than what we see in economics today)

  4.  People keep elective idiots because politicians press simple, shallow buttons. Related: deconstructing the Kremlin's propaganda machine (hint: nothing makes sense, so don't try to think)

  5. Years ago, I wrote an opinion [pdf] favoring free trade over "fair" trade that focussed on the oversimplified (and thus deceptive) side of the fair trade industry. This recent letter from economists [pdf] explain show fair trade is relatively harmful for poor farmers (and costly for rich consumers)

23 Apr 2015

Speed blogging

  1. False dichotomy: Should California waste $98 billion on a bullet train or on a pipeline to carry water from Alaska? Neither. Save the money (and political controversy over water exports) and reform California water management

  2. This brochure [pdf] from Aquafed (the international association of investor-owned utilities) provides 30 cases studies of how "private" (but regulated!) operators can improve water systems

  3. Sao Paulo's Sabesp is seeking 23 percent tariff increases to correct for inflation and falling revenues (less water to sell in a drought). The increase includes one percent or so for performance improvements. I'm not sure this is a wise move, given (a) disruptive shortages and (b) leaky networks. I left this comment on the story:
    They're going to have a hard time, politically, unless they can show they are improving operations (reducing leaks). It may be better for them to go to capital markets and payback loans with post-improvement tariff increases. Risky? Yes, but it forces them to succeed on their own money.
  4. ERRA is looking for more water regulators from MENA, ex-CIS and Eastern European countries

  5. Climate change (and drought in California) is making it profitable to "farm the north." Great, now all we need to do is amend the Farm Bill to remove the disincentive for states to compete with California in growing tomatoes, etc. Related: The Myth of Europe’s Little Ice Age and Law Symposium on Agricultural Water Use Efficiency
H/Ts to BB,JD and RM

22 Apr 2015

Canadians (and others interested in energy policy) MUST watch this

A Norwegian* delivers a brilliant, clear and complete critique of Canada's Alberta's failure to manage oil in the interests of its people instead of corporations. (Related: my thoughts on Alberta's tar sands tailing ponds and their risk to the environment.)

Bottom Line: Companies are not going to leave if you raise their tax burden (from $4/bbl to $50/bbl as in Norway): It's not like they can get oil anywhere in the world!
* With Canadian work experience!

H/T to CD

What can I do?

Perhaps a good post for Earth Day...

TF emails:
I'd like to to ask you for advice on the field of resource / water economics and your career. I'm a young professional that's currently working at a large government contractor near DC. After some consideration, I think that I'd like to work in resource economics, as it seems like an objective and insightful way to deal with increasingly urgent and complex problems. My current work has some light statistical analysis, but nothing too technical and certainly no econometrics. I'd also like to work as a research assistant before I go to grad school for economics, just to "dip my toe in the water" and confirm that economic research is as stimulating as I might expect.

What advice would you give me to get this initial experience in economics research? I'm finding in general that I don't quite have the skills required to get a formal RA position. Any input would be fantastic.
In reply, I wrote:
Communication skills are VALUABLE. Near DC, there a numerous nonprofits, water agencies, consultancies AND academics. Ask around to see who's doing good stuff. Use informational interviews to meet people and learn. Somewhere, you may get a job offer, but maybe not until you move, incrementally, with your skills, to gain experience. There are many ways to succeed with patience.

FYI, I didn't have a plan, but things worked out. I am also cross-subsidized by my professor job, so I can help others for free without going hungry. People in industry don't need cross subsidies, but they may not get time/permission to share their knowledge.
That exchange may be helpful for young professionals, but what about (young) activists who want to improve water management around them?

I had an interesting conversation on that topic with Anna from UNC-Chapel Hill. Listen to this 30 min MP3 in which we discuss "tomorrow's managers" (student interns at water utilities) and "experience exchange" (staff swapping seats at neighboring or distant utilities). Both are designed to help people absorb the complexities of the water business while facilitating the diffusion of new ideas.

Also related, via RS, is the idea of "practical authority," i.e., a community-led, multi-stakeholder intervention into the operations (and failures)  in water management. This book review [pdf] discusses the idea as applied (with success) in Brazil.

Bottom Line: Water utilities, as local monopolists, are mostly immune to competition -- and thus the need to innovate. Some try to innovate, some need to be helped. You can help them.

21 Apr 2015

A change in perspective

Drones will help us see. This view of Oregon's Detroit Dam is from Chris Corbin:

How to price water for conservation in California

Yesterday, a California court ruled that tiered water prices (increasing block rates, or IBRs) were "unconstitutional" because the rates were not based on the cost of service at each tier.

This does not surprise me, as tiered rates were originally designed (as I heard from Professor Michael Hanemann, my UC Berkeley advisor and an early consultant for LA's IBRs) to allow politicians to choose the break between the cheap price for most and higher price for "heavy users." (The higher price was supposed to be based on the marginal cost of additional water supplies, but that target is often missed, sometimes in brutally unfair ways.)

The main idea was that politicians could "move the lever" between blocks and tiers. For example:

Politicians choose the "cut off" between blocks. Red+yellow areas are same in each figure. 
The trouble is that people do not "behave" the same when facing different pricing structures.
In theory, water managers should not care where the line is, since prices would be set (once politicians chose the break between blocks) to recover their full costs, but that target is very hard to achieve. People do not behave as models predict. That's why utilities pay $40,000+ to consultants with complex spreadsheets (sample crazy XLSX) who try to make sure that all the customer "buckets" generate the correct revenue.

So that's why IBRs are so complex to design, destabilize utility finances, do not reflect actual costs, and confuse customers.

It's for these reasons that I decided to end my support of  "some for free, pay for more" water pricing (and all other types of IBRs) a few years ago. IBRs are too complex at the same time as they are ineffective. They are also, of course, unfair when you consider that the number of cheap blocks usually ignores the number of people (i.e., the excuse for "cheap" water).

Instead, I went back to the future, to a single volumetric charge that reflects the cost of water sourcing and delivery and fixed monthly charge that reflects the cost of the water system. Those charges were used for years without many problems before IBRs became trendy in the 1980s.

The only addition I made was of a "scarcity surcharge" that would reflect the cost of getting new water (e.g., desalination).* That charge would be added to the volumetric charge whenever a utility was running out of its "normal" supplies, e.g., California now. This surcharge would apply to ALL water and it would reduce demand in the same way that higher prices reduce demand for any commodity (e.g., coffee, gasoline, etc.).

Let me repeat here the fact that higher prices are also more effective at reducing demand than the very unpopular command and control regulations California has implemented.

* My key innovation was to rebate the resulting excess revenues back to customers. (There are excess revenues because the higher price -- based on the cost of new water -- is charged against ALL consumption, some of which comes from cheaper sources, e.g., groundwater) The rebates would not be in proportion to consumption (as that would cancel the increase) but per meter. What does that mean? It means that heavy users would end up reducing the service cost of light users who tend to be poorer or more careful with water.

For example (from a presentation I am giving next week in London):

My design, therefore, does not destabilize utility finances and promotes water conservation without hurting the poor. Read more about it here.

Would this design be "constitutional"? I would say yes, in the sense that the utility would not retain any revenue. If that doesn't work, then I'd recommend that every utility build a small (100,000 gallons/day) desalination plant that costs $10/1,000 gallons to run and use that marginal "cost of service" to set their rates. (San Diego could do this NOW with its 56 MDG plant that will provide water for 7 percent of the population at three times the average cost of water.) If that doesn't work, I suggest they get smarter lawyers or pack their bags. Californians cannot continue to ignore common sense if they want to avoid drying up and blowing away.

Bottom Line: There are many ways to charge more for water if you need to pay for your water system or protect your limited water supplies. Choose a simple, fair way.

H/Ts to LH, SK, RM and JR

20 Apr 2015

Monday funnies


Water Markets FAQ

NB: I will update this post over time. Please comment or email questions or quibbles.

Read my free book (especially chapters 5 & 6) for a different take on these ideas.

Australia and Chile have successful, large scale water markets that have allowed farmers to grow more with less and made it easier to reallocate water across sectors. Markets in both countries have had problems, but those pale in comparison to the problems in places without markets.

Bulk water vs urban water
When we talk about water markets, we're really talking about trading bulk quantities of water, not markets for water among urban residents. Urban water is priced/rationed/managed by a local monopoly with a duty to cover its costs and maintain service reliability (read this). Bulk water can be bought and sold by the government, utilities, farmers and environmentalists. In my book, I describe how governments should reserve environmental water flows "for the people" before allocating remaining water in markets among agriculture, industry and cities.

Markets, auctions and occasional sales
Markets, by allowing buyers and sellers to trade water, make it easier for communities to face their realities and harder to blame neighbors. A system of "shared" water is easier to administer while everyone is "fair" but treacherous when water is short and neighbors take "more than they deserve"

Markets are good for ongoing trades. Auctions are good for reconciling many values in a short time. Trading should occur as often as its necessary to make bulk water allocation decisions, which means everything from daily (larger urban systems) to annually (irrigation districts).

Quantity and quality
It's much easier to trade water in one-dimensional quantity than multi-dimensionsal quality, but quantities need to be identified. Surface water trades need to consider conveyance losses between buyer and seller. Only "wet water" should be traded, since "dry- or paper-shares" (shares or rights that may not yield water until there's a big increase in supply) may not ever yield wet water.

The main idea is to trade only in "consumptively used" water, i.e., ignoring the water that is initially diverted but then returns to the local system for another's use. Read more here.

Groundwater and surface water
You CANNOT trade surface water without knowing who has rights to groundwater. Ground- and surface water are usually physically connected, even if they are not legally connected. This post discusses "groundwater adjudication" (rights).

Rights and Laws
Water rights fall into three main categories: riparian, ground and prior appropriation. Riparian rights allow one to take water as long as that diversion does not affect others; these rights tend to be used in water rich regions. Groundwater rights allow one to take "as much as needed for beneficial use" from under one's land. These rights can be problematic if groundwater rests below several properties. Prior appropriation rights, or "first in time, first in rights" to divert a quantity water from a river without regard to the impact of the diversion on others may seem easy to trade, but they are defined in quantity at a place.

Some people think that those who got rights "for free" should not be able to sell them. Such a prohibition ignores the benefits of reallocating water from a social perspective as well as the fact that rights holders either (a) paid money for the rights (by buying land -- including valuable water rights -- from the original owner) or (b) do not pay attention to what they paid as much as what the water's worth (for local irrigation or traded cash). Water markets also make it more likely that farmers will be able to collect cash that can be used to repay debts on water infrastructure.

In many western US states, these rights are heterogeneous, which makes them hard to trade or value. They also tend to be, simultaneously, absolute (in quantity) but poorly defined for trade. This is because rights are often defined as a quantity for a beneficial use, in a place. "Beneficial use" tends to be associated with "use it or lose it, but don't trade it," thereby making it more profitable to flood irrigate alfalfa than sell water in a market because flood irrigation in its defined place is allowed, but trade "to another place" means that one does not have a beneficial use for the water at its defined location. Farmers thus "waste" water on "low value crops" because they are not allowed to sell that water for use elsewhere.

The Australians reformed their water rights by (a) defining them as licenses that the government could take back in the public interest (usually by reserving some water for the environment), (b) simplifying rights into "high security" and "low security" in terms of their wet allocations (not year of issue), and defining trades as "beneficial use."

Dams, canals and rivers
Dams hold water; canals and rivers make it easier to move water. Water markets function best when trades occur within a watershed or distribution network that allows buyers and sellers to complete the deal. In some cases, owners of the "conveyance" should be forced to allow traded water to pass in their infrastructure at a fair price, i.e., prohibited from inhibiting trade with high "wheeling" (water moving) charges. Evaporation and leakage losses need to be factored into water trades, to ensure that buyers and sellers do not "rob" the commons.

Society, the poor and the environment
Water markets benefit society by putting scarce water into higher-valued uses, whether these be lawns, pools, showers, or almond crops. The alternative -- political conflict over allocations -- is more harmful in its opaque waste of resources (via lobbying) as well as less than best allocation outcomes.

The poor need not suffer with water markets. First, they can be paid "dividends" for the rental of "the people's" water by their government. Second, poor farmers will not lose from markets if their rights are protected (my all-in-auctions idea) or if markets make it easier for them to get water otherwise allocated in a political process. Poor people in corrupt countries are usually screwed, but markets make it harder by revealing the value and allocation of water.

Some useful posts on water markets:

17 Apr 2015

Friday party

Fuck yer selfies and get back to life...

H/T to RM

Speed blogging

(This should clear out the backlog of links...)
  1. The Omni-processor produces clean water and energy by burning sewage sludge. Makes sense on a small scale (e.g., ship) but maybe not large scale, due to cost. Vancouver, OTOH, has a larger waste-to-energy district heating system in place. Thoughts?

  2. WaterFund offers hedge and debt products benchmarked against on water scarcity (they index prices for some cities). I'm curious about the accuracy of their benchmarks and value of their products to investors. Anyone?

  3. USGS reports on America's groundwater quality

  4. Awesome! "Grass Valley irrigation company creates Montana's first private water bank" (I was slightly involved)

  5. Oklahoma's academics and bureaucrats don't talk about fracking-induced earthquake because their salaries come from energy companies

  6. From Canada: "A Primer on Conservation-Oriented Water Pricing," "Evolving Water Allocations," and "Using Markets to Transfer Water Rights in Canada"
H/Ts to CC and DD

16 Apr 2015

But what about the POOR people?

AR asks:
A couple days ago the subject of California’s drought came up at work, and as the only economist in the room I of course began talking about how they need to raise the price. While some of my colleagues agreed it made sense for some users (like ag), when I said it would have positive effects in municipalities there was a lot more push back. The reason? The notion that, say, people who really, really valued their lawn would keep watering, which pretty much leads to the idea that poor people will have to pay higher prices because the rich won't conserve.

What do you say when confronted with social equity concerns?
Here's my reply:
That objection comes up a lot, and it tends to result in policies that allow rich to continue to irrigate at low ("pro poor") prices, thereby making the mess worse.*

I always say that increasing the price from $3 to $6/1,000 gallons isn't really going to hurt America's poor (who have cars, mobile phones, etc),** but people won't believe this and -- importantly -- neither will the politicians who can keep their thumbs on prices.

That's why I came up with a "tax and rebate" plan that overcharges heavy users (not the poor) and subsidizes low users. It seems complicated compared to "low prices help poor people," but my idea really does promote conservation while helping the poor (meaning those who use less water per capita).

Remember that most consumption subsidies benefit the rich (=heavy users)

Bottom Line: Price water correctly so systems are maintained and supplies are sustainable. Give income support to poor people.

* Davis is bad, LA is worse.

** I'm not so worried about "free water" in developing countries when the alternative is sickness and poverty, but it's not necessary (see Phnom Penh [pdf]) and certainly counterproductive where governments are corrupt.

15 Apr 2015

Speed blogging

Waves of Trash in Indonesia
  1. I'm quoted in this good article on pricing water to address scarcity and interviewed on California's crisis by Deutsche Welle (German radio)

  2. Aquadoc has excellent posts on misleading measures of water use (fracking and Nestle come in WELL below 1 percent), why it's not a good idea to recharge aquifers with seawater and how to understand groundwater systems. That last on is important because, e.g., "15-40 percent of a river's flow comes from the water below ground"

  3. Here are many many case studies on how to address water scarcity. They are looking for more! Related: Case studies and tools for climate adaption

  4. Here's a really great infographic on different water flows and uses (like my book in pictures!)

  5. Wow. UC Davis scientists built this "Augmented Reality Sandbox with Real-Time Water Flow Simulation"

  6. SJ Water explains where customer money goes (in terms of system costs) as well as why their finances are mostly from (unstable) volumetric charges. Time for them to adapt my pricing scheme for fairness, efficiency and revenue stability!
H/Ts to MC and BP

14 Apr 2015

Correcting the Economist on California water

I read dozens of water articles per week. Most are shallow, but some are good.*

The Economist's was, unfortunately, not as good as its audience (of the powerful) deserve, so I left this comment:
Sir --

Your article mixes (water) metaphors.

In the case of urban water, there is still plenty of space to reduce outdoor irrigation that current water pricing based on cost of delivery but missing a "price" for scarcity has clearly not discouraged. Second, farmers pay less for water because they self-supply via groundwater or irrigation districts using "rights" that they received for free, long ago. They cannot face higher "prices" unless (a) that State charges them a Public Goods fee for groundwater and/or (b) they can sell water in markets that would reconcile wildly varying values of water. Third, Israel's water management is totally inappropriate as an example for California, which has better relations with neighbors, a stronger environmental ethos, and far higher water availability.

The best way forward, as you might expect, is to induce better signals of scarcity for consumers by restricting depletion of common groundwater supplies and reforming policies to restrict demand within the bounds of supply.
H/Ts to BB, ND and RM

* This post is particularly welcome, in drawing attention to the State's schizophrenic approach to water conservation targets. (I prefer a bottom up version of "live within you means" over pushing residents towards a state average, but sometimes you just gotta say "you're not even hitting your own [flawed] target."

Thoughts on my Reddit AMA on drought and shortage

My third "ask me anything" on Reddit was the most popular so far. There were 2,700+ comments (300+ from me) on a range of topics. Many were directed at silver bullet solutions ("reduce demand through vegetarianism!" or "increase supply with desalination!"), many were "what can I do?" or "how screwed are we?", and a good number came from people wanted to work on water issues. About 20-30 percent were about water issues in other countries (India, Saudi, Brazil, Mexico, et al.)

As usual, it was a fun but exhausting 6-7 hours of give and take.

I am VERY happy that an AMA-bot has collected and formatted the popular questions and my answers, but these were my favorites:
Q1: Why does everybody in CA politics go on about people having to preserve water personally when only about 6% of the water in California is used for personal consumption? Most of it seems to be used for growing fringe non-essential agricultural products like alfalfa and almonds.
A1: "It's something you can do while we get more campaign donations from farmers"

Q2a: If you were emperor of California and you could implement any three projects related to water, what would they be and which would be given priority? Why?
(1) Intertie distribution systems and allow water markets to allocate bulk water, BUT
(2) Cut off long-distance water transfers. It's time to live within your means and restore ecosystems that provide HUGE benefits.
(3) Bring urban systems into full performance such that treated wastewater (and stormwater) could be recycled into human use. How to pay?
Q2b: Um... ok... can I get an ELI5 (Explain like I'm 5) on this anyone?
(1) Allow people to share water (or sell it)
(2) Use your water, not your neighbors
(3) Don't break your toys; if you do, fix them so you can use them.

Q3: Does the CA water board recognize you/your work? After watching the CA Board's meeting yesterday, live, I saw a few presentations that showed frustration at the board's lack of progress. Is the politics and the bureaucracy the real culprit on progress?
A3: Yes. They may say their hands are tied by procedure, etc. (see this), but there's also a constituency for business as usual. It's time to bang heads, like they did in the 80-90s in Australia

Q4a: What are the biggest lifestyle changes individuals can make to help combat shortages of fresh water?
A4a: No watering outdoors
Q4b: What, in your opinion (unless there are facts to back it up with), is the biggest culprit/beneficiary of the outdoors watering?
A4b: Developers, real estate agents and gardeners

Q5a: If California were a blank slate in terms of water law, what legal framework would you suggest to allow for the most economically efficient use/distribution of finite water resources?
A5a: I'd follow the Aussie example with LIMITED licenses for surface and groundwater, so that demand was "capped" and trade could occur (not strictly necessary for, e.g, local g/w). California has a mix of prior appropriation, riparian and g/w rights that conflict.
Q5b: So I'm a resident. This sounds like a good idea, and we have this mostly stupid system of ballot propositions. Could the voters fix this damn thing in 2016? Who would be against it, besides farmers with senior rights?
A5b: Void all rights, reform rights for issue. Auction them. Pay off prior owners of rights. My idea

Q6: When it rains in SoCal, I see all the dry river beds, Santa Ana River, etc. flowing and think we should be pumping that into holding areas [for groundwater infiltration]. Is there any chance of that happening instead of letting it flow out to sea?
A6: Yes! There's a BIG project in LA to remove concrete and allow water to infiltrate.

Q7: I heard some houses don't even have meters in California. I think Sacramento area? Is that true?
A7: True. Water was "too cheap to meter" in the past. Meters are, AFAIK, only 70-80 years old. In the past (and now in places), water was a "civic service" paid by property taxes, rather than a utility service with user fees. There's a different philosophy behind each choice.

Q8: Don't any other Californians wonder why the rice farmers constantly have those commercials explaining that they aren't a water intensive crop and that they provide habitats for birds!?
A8: Rice is not actually a problem when it's grown off of flood flows...

Q9: What does it cost to move water in a pipeline – like the keystone XL deal? vs the cost of desalinating water? Or what other wacky options are out there?
A9: Desalinated water costs about $1,000/acre foot (US measure; roughly $1/m3) which means a barrel (42 gal) costs about $0.13. Oil is worth about $40/bbl, so it's WORTH shipping by pipeline.
These are only a few, but there are many more as well as the FAQ-type links I provided at the top of the AMA. (Luckily, it looks like people downloaded around 1,000 copies of Living with Water Scarcity. Free is a good price :)

I'll add here a few things that I should have on the AMA, i.e., a primer on water in California from the Legislative Analyst's Office (source of the figures) and statistics on urban water consumption [my XLXS from here] that show the highest users (above state median of 100 gallons/capita/day -- four times the use of people in Amsterdam) are mostly in southern California. Lawns anyone?

Bottom Line: People are very interested in water issues, but they do not often know how policies lead to outcomes (my book explains). Nature makes a drought and man makes a shortage, so it's up to us to reform the way that water is priced in cities, limit withdrawals to protect environmental flows, and improve water re-allocation so the best lobbyists farmers can grow more with less.

13 Apr 2015

Monday funnies

Oh, the irony (via RM):

Related: Californians are free to waste other stuff, as long as they conserve water

Anything but water

  1. This essay resonates with me, as it relates to a trend ("money will fix this problem") that began with Bush II. Consider:
    If two people punch each other, or even draw a knife on each other, police are unlikely to get involved. Drive down the street in a car without license plates, on the other hand, and the authorities will show up instantly, threatening all sorts of dire consequences if you don't do exactly what they tell you.

    The police, then, are essentially just bureaucrats with weapons. Their main role in society is to bring the threat of physical force—even, death—into situations where it would never have been otherwise invoked, such as the enforcement of civic ordinances about the sale of untaxed cigarettes.
    Related: The monetization of higher education, e.g., "The current denaturing of the universities treats them less like a park than a shopping mall"

  2. An excellent explanation of how academics can should use blogs and how the internet makes you angry

  3. Legal prostitution has many drawbacks, but it does reduce some forms of rape (lots of poor logic in this article, mostly claiming that legalization will not stop rape. No duh)

  4. Edmonton (capital of Alberta, Canada) has decided to give its sidewalk space to cars

  5. Did you know that "The early bird gets the worm, but the second mouse gets the cheese"? :)

  6. China's Mr Wang tackles corruption with fear and violence. He may succeed
H/T to CD

10 Apr 2015

Friday Party!

This is what it looks like to see an entire country in a good mood:

I predict a big jump in GDP -- especially in the beer and picnic department :)
Addendum: By no coincidence, it was also "rokjesdag" (national skirt day), and there are plenty of selfies to prove it.

Who's your regulator?

April's activity for the 2015 WaterSmarts Calendar asks you to find out who regulates your water utility. Why does this matter? Because the regulator works for you, to make sure your water is safe, reliable and fairly priced.

This activity is connected with Chapter 3 of Living with Water Scarcity for those of you who want to pace your reading.

April is also the month in which Deepwater Horizon blow up, the Titanic sank, and the microscope was invented. The calendar has those interesting dates and many more!

Check out the activity and download the Calendar (for free) here.

You can buy Living with Water Scarcity (or download it for free) here.

9 Apr 2015

I'm doing an AMA on Reddit TODAY

I did AMAs (ask me anythings) about water in July and November last year.

The onslaught of news and interest in drought in California, shortage in Sao Paulo, rising sea levels in Florida, and other water-related issues prompts me to go in again.


If you're looking for more, check out these posts on California, politics and economics:
And... how messy laws and fierce lawyers block and complicate change
As usual, I recommend prices in cities and markets for farms as the means of reducing demand and allocating limited supply, respectively. California's dire situation may not leave enough time for those actions, so I described more interventionist actions here.

Bottom Line: I'm glad to see more economics in these discussions. Now we only need politicians who can understand and explain how economics can minimize losses from drought and prevent shortages. Here's a handy book that will get you (and them!) started.

* Ironically, I think that OTPR's suggestion may be useful in its "come to Jesus" imposition of $millions in losses on farmers who are basically playing chicken with the government (i.e., "we planted these trees and will lose huge if they do not get water EVERY year.") I think it's time to show that they are driving a Yugo into the freight train of reality.
H/Ts to BB, CD, GH, RM and RM

8 Apr 2015

Speed blogging

Send this to your local water manager (source [pdf] via here)
  1. My "some for free, pay for more" idea in practice:
    Santa Cruz officials say their City Council will vote April 14 on whether to reinstate a rationing program that cut water use by a quarter last year by providing every home 10 units of water for about $4 per unit -- and basically charging $50 per unit above that.
    Although I now prefer higher uniform pricing (rather than a $4 to $50 jump) and worry about residents per home, I can see the value of this plan when people are already down to 50 gallons each per day and there's a need to protect basic provision

  2. I'm quoted in a quote about pricing and markets in Newsweek and a good reprise of my 2011 post on why the poor have phones but not toilets

  3. Whoops. Looks like water fluoridation is turning into a bad idea

  4. Not April Fools: Legalize marijuana to preserve California rivers. April Fools: Texans take over S. America's Guarani aquifer

  5. Egypt's government is allowing its oases to die... perhaps as part of a larger "Pharaonic trend" of wasteful projects

  6. Wave energy technology is improving and California's marine protected areas are slowly recovering from over-use
H/Ts to RH, RM and SJ

7 Apr 2015

The benefits of free speech exceeds the costs

Two Bangladeshi bloggers have been murdered in the past month by "defenders of Islam" who think critics should be killed.

This New Yorker post recounts their plight in context:
In Putin’s Russia, as in Narendra Modi’s India and Recep Tayyip Erdo─čan’s Turkey, majorities are on the side of silent conformity, and respect for dissent is disappearing under waves of nationalism. In India, books are frequently withdrawn after publication because of dubious legal cases brought on behalf of supposedly aggrieved groups...

The problem with free speech is that it’s hard, and self-censorship is the path of least resistance. But, once you learn to keep yourself from voicing unwelcome thoughts, you forget how to think them—how to think freely at all—and ideas perish at conception.
The whole point of free speech is NOT that people will not say stupid things, but that all people should say what they want in the course of learning, forming opinions and interacting. The fact that some speech will always offend somebody does not imply that it is good or agreeable but the alternative -- say nothing that might offend someone -- is far worse.

Governments, religions and businesses that want to shut down free speech in favor of censored thought are not interested in what's right for society but in maintaining their power in an atmosphere of ignorance, fear and paranoia. Free speech threatens them, just as it serves the people -- by bringing important matters up for discussion.

Sadly, it is hard for those who speak out for all of us because they are targeted. That's why the US government has imprisoned Chelsea Manning, why Edward Snowden is stuck in a Moscow airport, why Putin keeps murdering critics, and why China, Iran, Eritrea and other countries have imprisoned hundreds of journalists in record numbers. Those journalists (but also bloggers, comedians and others) are working for us, and we should support them. The easiest way to do so is to strengthen their voices by also speaking out.

Top down or bottom up?

I gave a TEDx talk a few years ago about "push vs pull" models of water management in developing countries, arguing that many politicians and water managers tell people what they need rather than serving them. This email reminded me that work needs to be done:
Today, a high-level delegation of global sanitation and hygiene experts arrived in Madagascar for the biannual Steering Committee meeting of the Water Supply and Sanitation Collaborative Council (WSSCC), a United Nations body devoted solely to the sanitation and hygiene needs of vulnerable and marginalized people around the world. During the visit, the Steering Committee will see WSSCC’s Global Sanitation Fund (GSF) programme in Madagascar, locally known as the Fonds d’Appui pour l’Assainissement (FAA), in action. Developed and guided strategically by a diverse group of national stakeholders, the FAA is facilitated by Medical Care Development International (MCDI) and implemented by 30 sub-grantee organisations. It has evolved into a driving force in the national movement to end open defecation, which adversely affects the health, livelihood and educational opportunities for 10 million people in Madagascar and some 1 billion worldwide.

The five-day Steering Committee visit is dedicated to reinforcing the country’s top-level political commitment to a new “National Road Map” for the water, sanitation and hygiene sector that aims to end open defecation (ODF) in Madagascar by 2019. Madagascar’s most senior politicians, including President Hery Rajaonarimampianina, Prime Minister Jean Ravelonarivo, the President of the National Assembly, and Dr. Johanita Ndahimananjara, Minister of Water, Sanitation and Hygiene, have committed their support to achieving ODF status.

The visit also coincides with heightened global awareness of sanitation in 2015. The United Nations Secretary General and Deputy-Secretary General have launched a Call to Action on Sanitation, encouraging global institutions, governments, households, the private sector, NGOs, and Parliamentarians, to eradicate the practice of open defecation. Ever since President Rajaonarimampianina’s government came into power in January 2014, sanitation has received special attention, and the need for achieving an open-defecation free Madagascar has been considered inevitable by the highest political leadership of the nation.

More information can be found here
If you go to that link, you will see a lovely English webpage.

People in Madagascar speak French and Malagasy.

6 Apr 2015

Monday funnies

This is why I blog daily, to restrict supply :)

H/T to SJ

Anything but water

  1. A libertarian journalist asks "what would it take to convince you that climate change is happening?." Related: It is important to direct some resources towards conservation (of biospheres) rather than ignore them when/if tackling climate change. Want an easy win? Stop subsidizing deforestation in Brazil and Indonesia

  2. Pricing US road freight for externalities would reduce freight by a little (the combination of reduced shipping and shifting to rail). Those estimate imply that trucking lobbyists are more hype than useful. Speaking of lobbyists, watch John Oliver's monologue on the manipulative US sugar lobby

  3. "Moore's curse" afflicts those who expect "transistor rates of improvement" (doubling efficiency every 18 months) on other areas of life, e.g., energy efficiency. Related: students taking notes by hand have higher comprehension than those using laptops (I don't allow them in class)

  4. Shadow government bodies (bureaucrats, NSA, et al.) are undermining US democracy

  5. An economist (and new dad) reflects on women's rights, the (weak) US medical system, migration and collective action. Related: A Reddit thread on US vacation time had this insightful comment:
    I think a lot of people in the younger generations in America, as well as the older, are realizing that there's more to the American dream than working for success, it's about how fully you live life and the legacy you leave. This is a fairly new concept post 1950s America.

    It's the beginning, but there are some chinks in the armor of the american work-industrial complex. Most newer businesses, traditional and new-tech, are building in awesome benefits packages: unlimited vacation days, paid vacations, charitable giving matches, free gym memberships, free beer in the office, and a bunch of other really person-centric options.

    Have to put it out there as a semi-younger (late twenties/early thirties) American, this is one of driving factors in the entrepreneurial boom in our generation, at least in my opinion. Besides the typical factors of business opportunity, natural business instincts, etc. a lot of my friends and business acquaintances, even if not for their main job, have tried to start little side gigs for extra money and to explore making that a full-time gig. They want to live a more comfortable life, doing things on their time.

    I have quite a few friends who were very accomplished in school (a few law school grads) who have chosen to completely abandon their profession and work on a ranch in Wyoming or somewhere else in the west. All because they want to explore what life has to offer and they feel like the working world is just a trap that you cannot escape. I sat down and talked with one of these guys at a reunion once, and his take on life and his bright and positive energy and attitude were really obvious.

3 Apr 2015

Friday party!

A nice, highly stylized (i.e., unreal) view of Burning Man

Can vegetarians save us?

I was a vegetarian for around 15 years, so this email from Michael Feinstein got my attention:
Dear fellow vegetarian/vegan/water policy friends and activists

I am coming to you for your help in making the connections between diet and water use in California, particularly as it relates to municipal water policy.

I recently started a weekly column in the Santa Monica Daily Press about local politics but also looking at the larger connections on higher levels of government to local issues

Water conservation and water rate increases have been very controversial in Santa Monica, as they have been in other places. But mostly absent from our municipal discussion has been the relationship between diet and water supply in our state of California.

I am going to write my March 2nd column [still not online!] on this relationship, and am seeking any source documents and/or main points you think need to be made.

Most of us are familiar with how much water goes into 'producing' animals human consumption. But after I make those points, to make what I am saying completely relevant, I also need to show how that would actually affect choices on municipal levels like Santa Monica.

In other words, if we ate lower on the food chain in California, what specific water sources would be freed up for other uses, and how would that actually affect water supply to cities?
In reply I wrote (slightly edited here):
While it's true that a non-meat diet means less water used for THAT kind of food, there are several factors that make this a "non-solution"
  1. Other people eating more meat (e.g., Chinese)
  2. "Excess water" being used to grow more food for export (e.g., California almonds)
  3. Local water issues are not necessarily affected by local habits, e.g., vegetarians in Santa Monica affect water supplies in TX or CO but not California...
My general comment is to avoid "silver bullet" solutions directed at a single "worst" use. Instead, it would be better to tackle water scarcity from all uses, which can occur through a combination of "awareness" (jargon: reducing demand) and higher prices (jargon: reducing quantity demanded -- both explained in my book). Higher prices would lead some to take shorter showers while others would let their lawns die.

With non-urban, bulk water, I'd protect environmental flows before maximizing the benefits of agricultural use (through greater use of markets). I just gave a webinar on this topic ("Farms and Rivers: Balancing between Food Production and the Environment" PDF slides and 1h 2m MP4) for the AWRA.

So... go ahead with the op/ed. I'm guessing that it will make vegatarians feel good and do little more. To have a bigger impact, I suggest that SM and other cities lobby for reduced irrigation (meat prices would go up, unless farm bill subsidies keep them low) and local (SoCal) increases in water prices.

2 Apr 2015

Speed blogging

  1. UNESCO-IHE (NL), The University for Peace (CR) and Oregon State U (US) have a new Master's programme in Water Cooperation and Peace

  2. Lund and Moyle point out that it's better to sell environmental water in drought (assuming the ecosystem can handle it) than (not)allocate in a political mechanism that can shift quickly away from environmental flows. Prices improve transparency

  3. This 2003 paper ("Cost benefit analysis and flood damage mitigation in the Netherlands" [pdf]) provides a nice overview to Dutch thinking. It also clarifies the importance of public benefits, unlike the equivalent US Army Corps of Engineer CBA manual

  4. The first auction of Ohio River Basin pollution-load credits is happening on April 16

  5. Academic writing:

Memo #2 for Governor Brown: compensating farmers

In my haste to push for action yesterday, I forgot to elaborate on how to re-allocate water from farmers to cities.

The quickest move is to seize the water -- the property of the People of California -- under eminent domain, but that process would lead to lawsuits.

Given that almond crops produce a profit of $1,500/acre with the consumption of 4 acre feet of water,* it seems reasonable to pay $375/af of water, but let's be generous and say $1,000/af. I'm pretty sure that that offer would probably get so many volunteers that the Gov wouldn't even need to condemn the water.

How would this action undermine California agriculture ("one of the world's great food producers")? I don't know, but I bet that plenty of farmers -- the ones happy to export crops all over the world for profit -- would jump at the huge profits from "farming water."

It's been done before and it will work again.

Go ahead, Gov, try it.

* That statistic is from this article, which is worth a read in its own right. The title? "How Growers Gamed California's Drought" for fat profits...

H/T to MF

1 Apr 2015

Hey Jerry! Put down the bong and listen!

Even far over here, amidst rainstorms, I am hearing about California's water shortage and the Governor's "order" to reduce use by 25 percent.

Sadly, his orders appear to mix up agricultural (80%) with urban (20%) use, i.e., he talks about lawns and urban prices (two worthy targets!) while "missing" the role of agriculture.

Let me help: farmers use 80 percent of "developed" water... and more if you consider groundwater. Therefore, I suggest that Brown shut down irrigation and pay off farmers [for surface water], so there's more water for cities people. Here are further, useful details.

Bottom Line: BIG ANNOUNCEMENTS should target BIG USERS of water, not people in cities.

H/Ts to EF, RM and VZ

Hipster Business Models -- the review

[Not an April Fools post!] 

I bought this book (subtitled "how to make a living in the modern world") because (1) I like reading business case studies (I know... awesome -- right?) and (2) I wanted to learn more about these hipster business models.

On the first, I was not disappointed to see that people sometimes succeed with crazy ideas (jellyfish aquaria!?!). The book's ~20 chapters (of varying quality) cover one case at a time. The details on how they tried one thing, then another before getting lucky are sometimes amusing, sometimes face-palming, but the overall impression is of hard work and vision leading to success.

Which leads me to reason #2: the business models, which are not always present or useful. I scanned for "fail(ure)" in the book and came up with nothing. The main idea behind a business model, of course, is that someone else can read it and use it for their own business.* Although there are some models in this book (e.g., food trucks vs restaurants, phish, verynice, etc.), it seems that many success boil down to:
  1. Unusual personality
  2. Kooky, can't-be-real idea
  3. ???
  4. Profit!
.... where ??? is often "massive media coverage." That's not a model. That's hope.

Speaking of hope, the stories really do convey passion and hope -- feelings that hipsters know a lot more about than spreadsheet-obsessed, strategically-networked, wannabe-millionaire MBA grads.

Bottom Line: I give this book THREE STARS for being entertaining and potentially educational, but an entrepreneur's time is better spent on the well-worn path to business success, i.e., work hard, look for value, listen to customers, dump failing ideas, and diversify your bets so you don't starve on the path of success failure life.

Perhaps they should have called it Hipster Business Adventures?