31 Aug 2015

Monday funnies

It seems that Kafka has moved to Russia, where they are destroying frozen-criminal-Hungarian geese:

Video deleted

Woo hoo! A prize for Living with Water Scarcity!

It's "honorable mention," but I'll take it!

Don't forget that the book is free to download (and only $10/$5 to buy in paperback/Kindle).

Have you read it?
  • If no, then why not start now?
  • If yes, then why not review it AND recommend it to friends, family, colleagues and your local water managers?

25 Aug 2015

Tuesday funnies

How many fails can you count?

24 Aug 2015

Meta-tweet: Carbon tax vs Cap and Trade

One week ago, I tweeted that the Pope (!) should push for carbon taxes instead of cap and trade. In response, John Whitehead (a busy environmental economist and blogger) said "why taxes?" The following tweet exchanges were neither satisfactory nor complete, so here's a post.

Cap (total emissions) and trade (of permits to make those emissions) has a few useful characteristics:
  • Emissions are limited to a "known" quantity
  • Prices are "found" in the market
  • Trade among emitters (even around the world) rewards those who can reduce emissions at low cost
Prototypical example: a Norwegian firm facing a cost of $100/ton CO2e(quivalent) buys an emissions permit from a Chinese firm that reduces CO2e at a cost of $5. The trade price will be between $5 and $100, but emissions are capped.

The problems with cap and trade are well-known:
  1. Hard to know who's emitting what, where (fraud is also a problem)
  2. Too many or too few national permits distort international markets
  3. Political problems with sending "our money" to "them"
    Carbon taxes have different characteristics:
    • Emissions are NOT limited to a "known" quantity
    • Instead, there's a KNOWN price signal for emitting CO2e
    • Revenue goes to local / national governments
    Prototypical example: Dutch car drivers pay a gasoline tax that funds the Dutch government. In 2015, this was EUR 0.77/liter ($3.20/gallon, vs the US gas tax of $0.49/gal)

    Carbon taxes are:
    1. Easy to assess (charged at source/point of entry)
    2. Predictable and adjustable
    3. Sources of revenue to the national treasury (or refunds to citizens)
    One of my students wrote a bachelors thesis on tax vs cap and trade. The results that stood out were BIG emissions reductions from cap and trade (see #1 below) and a BIG revenues from carbon taxes.

    So why do so many politicians like cap and trade over carbon taxes? They can:
    1. Claim big reductions based on (imaginary) baselines that have been capped.
    2. Give permits to favored industries (attracting corruption).
    3. Say that industry is doing something without spending money.
    Carbon taxes are harder to manipulate or dodge.

    But what about driving international improvements in efficiency, etc? Well, I think that theoretical promise has failed due to (1) terrible accounting for permits (e.g., failure of the "clean development mechanism") as well as (2) lots of anger over sending money abroad to get few useful results.

    Thus, I have doubled down in my support for carbon taxes (many prior posts) because they can be...
    • Imposed within nations
    • Used to fund national projects (or given back to citizens)
    • Increased when other countries put them into place
    • Easily integrated into business and personal decisions affecting emissions
    Bottom Line: Let's get real. Carbon taxes can reduce emissions, cheaply ($0.40/gallon!), under real political constraints.

    22 Aug 2015

    19 Aug 2015

    Thanks for the donations! Give more?

    I have hit my "target" (400 minimum) with 400.60 in donations in my name for my ALS swim from Rogier Bleys, Joppe Brieffies, Diederik van den Burger, Cornelia Dinca, Todd Jarvis, Robert Morrow, Stefanie Stubbe, Graham Symmonds, Edwin van der Werf, Eric Wink, Edwin Woerdman.

    They deserve a big thanks... THANKS!

    If you still want to donate in support of ALS-research, then you can donate in my name, but that's not "as efficient" as helping out my neighbor, Caroline Britt, an Australian with a fierce love of swimming (and running and biking)! Just go here and follow the instructions (in Dutch but straightforward). She's raised 150 so far, so additional donations will help her "cross the line"!

    I'll post photos after the event (6 Sep)

    17 Aug 2015

    Monday funnies

    A friend who works on self-driving cars didn't think this was as funny as I do...

    16 Aug 2015

    Meta-tweet on LA's balls and water scarcity

    NB: I had to write this post in response to a twitter "conversation" that was too tangled to resolve in 140 character chunks. I'm guessing this won't be the first time. Life is complex.

    Last week the Guardian showed photos from an Los Angeles Department of Water and Power (LADWP) media event (lots of cameras in the pix) where LADWP claimed they were using 96 million black plastic balls on its Sylmar Reservoir to "stop 300m gallons of water evaporating each year." I did some quick calculations (36 cents each, 10 year life span) and tweeted:
    Several people (including LADWP) replied to my tweet with observations that (1) the balls were more about UV protection to keep (treated) water from biodegrading into undrinkable water and that (2) the balls were cheaper than a $300 million rubber tarp and (3) longer lasting than 10 years (25 in fact).
    1. I knew 6 years ago that the balls were NOT about reducing evaporation. 
    2. $300 million is also a lot, but what about revenue neutral or saving ideas like LADWP ending its "more cheap water for lawns in summer" policy (or worse)?
    3. $3.7k/af goes to $1,500/af, which is still a lot of money
    All I was responding to was the article's spin (LADWP's spin?) that it was using balls to save water (check out all these articles!). I would have said nothing if the story had said "LADWP is required to spend this money on balls. The good news is that it also saves some water," but that's not what they said (this story is better), and I was tweeting to deflate their "we're conserving water" spin.

    Indeed, if you think the balls are ONLY about evaporation, then you will see them on non-treated water reservoirs, but... no sign of that.

    Bottom Line: Water managers need to be clearer about why and when they are spending ratepayer money. Even better, they should implement both demand reducing and supply augmenting policies in times of water scarcity (or all the time).

    H/Ts to SC, DP, LS and DV

    14 Aug 2015

    Birthday time! Again!

    What's not to like live?
    Today is not just Friday but my 46th birthday, so I have an excuse for a little (extra) narcissism and reflection.

    Some cliches are deep: "You only get one chance in life" or "it ain't over 'til it's over," for example, refer to each of our unique trails. These trails cannot always be seen, planned or changed, but they can be often be enjoyed, accepted or learned from.

    In recent months, I've added to my feeling that it's good to take chances. It's clearer to me that one should not worry about (inevitable) failures or (regrettable) criticisms. Yes, it's important to listen to others and learn from failure -- just as it's important to look at a map before wondering off in a new city. But important doesn't mean paralyzed or diverted. Each of us needs to make choices and take chances on exciting ideas if we hope to live a worthy life.

    (Yes, I am a white, middle-aged male with a PhD, two passports, savings and a secure job, but I started off with much less. Everything I have today can be linked to parents who cared for me and an education that allowed me -- and pushed me -- to think. Focus on the basics, and the rest will follow be easier.)

    But "worthy" means different things to some. Older me thinks it is more about enjoying what I can do and have accomplished than having the "impact" younger me thought he deserved.

    In present terms, this means that I am excited about teaching lots of clever students (i.e., encouraging them to run after setting down the scissors) at the same time as I am slightly depressed about big bad topics (climate change is far more dangerous than local political failure, which can be escaped).

    In other (birthday-thinking-summary-prognostication) news, I am happy to be in good health (spending on pool + bike gives huge returns) and enjoy the gifts of my girlfriend Cornelia, dad Hugh, and family/friends located all over the planet. I've got an excellent "day job" with fun colleagues and a "hobby job" talking about water and other social-political-economic diversions with passionate people engaging through blogs, twitter, facebook, etc. And then there's Amsterdam and the Dutch: a city and a nation that is so deep, functional and charming (not always in that order) that I sometimes have to pinch myself. (Seriously, I took last Sunday off after an overwhelming Saturday!) What about the future? More of the same -- I hope -- without knowing exactly how that will work out.

    Oh, and one final update: On my last birthday, I announced that I was giving away the PDF of my book, Living with Water Scarcity. Since then, I estimate that it has been downloaded roughly 40,000 times (not including roughly 1,500 downloads for the free Spanish edition). Please do help people find these books. The greatest birthday gift I could receive would be good water management for everyone.

    11 Aug 2015

    The Thing Itself -- the review

    Folks in Havana should read this book
    Mike Munger is funny, smart and sharp. In this collection of essays (subtitle: "on Academics and the State"), he describes how "the thing" -- the word Hume used in 1756 to describe a State that turned against the Men it was meant to govern -- is constantly underestimated in its presence and damage.

    These essays, in other words, are meant to caution those who feel that the State (or any governing group) should be allowed to rule over us "for our own good," as that hope is often misplaced.

    He then describes how that failure in conception turns into a rationalization for further action:
    1. X is a problem. We should do something
    2. Y is something.
    3. Therefore, we should do Y.
    4. If Y does not solve X, it must mean we didn’t do enough Y, and we need to do more.
    It should not be hard for you to remember some version of this process affecting your life, where "flogging a dead horse" did not make it pull any faster.

    Munger cautions that there are many opportunities for a slip 'tween cup and lip -- a caution that far too few people acknowledge, as they pretend that the State will implement Policy X according to its stated goals and in an efficient manner. Munger suggests, rather, that we substitute "politicians we know" for the State, as an realistic means of thinking about how Policy X will actually be implemented. This type of thinking tends to reinforce economist's reputation as "dismal scientists" but I'd rather be in that group (calling attention to problems) than a group of hopeful Pollyannas condemned to endless disappointment. For example:
    If someone says, "The State should be able to choose subsidies and taxes to change the incentives people face in deciding what energy sources to use," ask them to remove "The State" and replace it with "Senators from states that rely on coal, oil, or corn- ethanol for income." Still sound like a good idea?
    This though, ironically, leads to one of Munger's silver-lining observations, i.e., the need for a mindless bureaucracy that cannot deviate from the plan due to the danger that such autonomy would allow bureaucrats to choose how to wield their power, to the detriment of those they disliked. This is a useful observation at the same time as it explains how American bureaucracy is so tied up in rules as to be ineffective or Russian bureaucracy is so overladen with rules as to allow the bureaucrat to choose which they prefer to enforce.* (Dutch bureaucracy is rigid in following reasonably clear and fair rules, making it rather useful.)

    Munger's suggested solution -- fewer laws, more community discretion -- might scare some, but we're taking costs and benefits in a murky world. Who would you trust when it comes to choosing a doctor or plumber -- the certificate on the wall or your neighbor's recommendation?

    These are the major themes in the essays (many of them published in the past), but it is sometimes hard to see them, or see how they interweave, when the essays were not written to accumulate evidence or energy towards a point.

    This brings me to the (predictable) weakness of this book: three chapters on The State and five chapters on Education (or the university environment). Although all relate to "the thing," it may not be easy (or interesting) for readers who would prefer general or broader discussions. By the same measure, they may be VERY interesting to, say, academics (and students!) who want to think more about political correctness, academic freedom, etc. I enjoyed these chapters, but I am not sure that everyone attracted by this theme will.

    Moving along, my favorite chapter had a "you won't believe how bad this gets" description of how Santiago, Chile, replaced a reasonably efficient private transportation system with a disastrously dysfunctional public one. The rationalization was safety and less pollution, which were achieved by, more or less, making it too hard to get to work. (See this blog post and EconTalk for more.)

    Munger then tells a few tales of upside-down incentives in Cuba (a favorite for economists interested in crazy) before moving to Education. In these chapters, Munger pleads for the open debate and common sense empirics that we (academics) are supposed to uphold, rather than the narrow, rationalized gobbledygook steering young minds to embrace sacred cows. He summarizes it thus:
    I'm worried about the folks who get it right. Our educational system is failing the students on the left . They aren't being challenged, and they don't learn to think. Students on the left, rather than the right, ought to sue our universities for breach of contract. We promise to educate them, and then all we do is pat them on the head for memorizing the "correct" answer!


    The academic left needs to see itself as being outrĂ©, oppressed, and the “other” in the society in which it lives. If the left started to think of itself as conventional and established, two things would happen: First, they would actually be responsible for the problems and inadequacies of American university education, rather than the rebels trying to make things better against overwhelming odds. The second is that many people on the left (not all, maybe not even most, but many) require a sense of “otherness” to be able to survive psychologically. Intellectual laziness and moral bankruptcy are not very attractive; much better to see yourself as beaten down and discriminated against by “the man.”


    Many students want more and suspect that there is more. They want to hear the best argument from the other side. It's more interesting to play against the first team. Conservative students are already challenged. We might wish that things were a bit different, but by and large, a committed conservative student comes out of a place like Duke with a real education.
    Munger concludes the book with a warning and a plea:
    Saluting the collective wisdom is simply a way to hold other citizens down whilst we steal their purses or pack their children off to war.


    [G]roups cannot be thought to have preferences in the same way that individuals do. To put it another way, it is perfectly possible, and legitimate, for reasonable people to disagree. The role of democracy is not to banish disagreement but rather to prevent political disagreements from devolving into armed conflict.

    Bottom Line: I give this book FOUR STARS for its entertaining and thoughtful essays on "the thing" -- the misplaced certainty and power that keeps us from stumbling and groaping towards ideas and solutions suitable for our countries, communities and universities.

    * Munger gives the example of American police targeting poor blacks because they are associated with crime, thereby ensuring they are branded criminals (black v white drug arrests and convictions). For an example of selective enforcement of laws as a means of abusing citizens, see Ferguson.

    10 Aug 2015

    Monday funnies

    Steven Colbert and Jon Stewart have retired, leaving me with no reality check from the US.

    Take a moment to watch the genius Stewart created: a show that put a mirror to the liars and to ourselves.

    Jon's first post-9/11 show is a model of hope (or quiet desperation). Sadly, his "we've already won" was contradicted by government failure.

    Stewart says goodbye to the Fox lie machine and defines "three types of bullshit"

    Stephen Colbert goes off script to thank Jon for creating something special:

    Thank you, Jon Stewart (and crew!)

    I've rewritten "Water Metering in England & Wales"

    If you want to read it, then go here.

    I've submitted it to a journal, but there's still time for comments/corrections.

    Abstract: Water meters are necessary for tracking leaks, using prices to encourage conservation, and allocating costs in proportion to use. They are not necessary when water is abundant or costs are covered by taxes or transfers. This paper discusses the move to residential water metering in England and Wales. The basic impacts of the move --- lower metered demand and higher charges for heavy water users --- are predictable, but other impacts are controversial. An increase in "water poverty" among poorer families has attracted criticism and half-hearted solutions. Incomplete information on abstractions and leakage has cast doubt on environmental benefits. The paper ends with recommendations for improvement.

    7 Aug 2015

    Friday party!

    T-Mobile sells phone services, but I think this advertisement (on gay pride day in Amsterdam) provides a genius way for people to "marry a friend" because #sharelove. This is not about gays, as much as showing your love to the world (even via selfie!) without asking for approval under some government's definition of whom you can love or marry.

    (As an economist, I cannot stand the "restraint of trade or contract" implied by narrowly-defined marriage laws. Let people contract bind love with whomever they want.)

    Anyway, check these thoughts and photos :)

    6 Aug 2015

    Please support my swim for ALS

    First training swim was 1.5km in 30 min (no visibility!)
    In one month, I will swim 2km in Amsterdam's canals* as (1) a novel thing to do and (2) a means of raising money to fund research into ALS (Lou Gehrig's disease).

    Amyotrophic lateral sclerosis causes muscle wasting that will incapacitate, and eventually kill you. Its causes are not known. Anyone can get it. ALS is a rare disease in terms of death but the most common motor-degenerative disorder. (Stephen Hawking has it.)

    As part of my swim, I have pledged to raise €400 ($450). Some people have already donated €100+ in my name (yay!)

    If you would like to donate towards ALS research, then there are a few ways to go:
    1. You can donate directly through this Dutch-language portal. (They take credit cards, and the process is pretty clear.)
    2. You can send money to me via PayPal (dzetland@gmail.com) or Bitcoin (1JWQBHcPqubgik38oqLt2D9YrViY1YNLzp), which I will deposit under your name.
    3. You can hire me as a consultant (or guest speaker) on any water issues of interest. The "ALS Special" is half price ($50-150) for one hour, max.
    Act now! The race is coming up soon!

    Bottom Line: Forget the bucket challenge. I'm swimming to raise money for ALS!

    * Here's a video of the course, with beats:

    5 Aug 2015

    Now this is customer engagement!

    ERSAR, the Portuguese water regulator, has released an app (in Portuguese but with some English titles) from which "you can access to key information about water and waste services in each of the 278 Portuguese mainland municipalities. You may find information about the quality of service, news, tips and advices on how to use the services, among other features of this application."

    top: water, sanitation, and waste. bottom: safe, treated and recovered

    Do you know of other regulators that provide this information in usable form to the public?

    4 Aug 2015

    If water was like bitcoin

    It's a joke -- there are no physical bitcoins :)
    I've been playing around with Bitcoin, a protocol for creating and exchanging bitcoin (BTC). BTC are a fully digital currency that similar to gold, i.e., as a store of value and means of exchange. BTC are far easier to transfer over long distances and cheaper than paypal. Transfers are slower than, say, sending an email, but not if you take Bitcoin security into account.

    NB: The following description reflects my understanding. It's definitely oversimplified. Tell me if it's wrong.

    Bitcoin security has two dimensions: the location and transfer of BTC. Both of these are recorded in the "blockchain" -- a register of transactions that records a BTC's "birth" location and all transfers that have brought it to its current location. The blockchain is actually the genius of Bitcoin because it ensures that BTC -- unlike digital files -- cannot be copied or spent again. The blockchain is protected from fraud and inaccuracy because it is distributed --- in thousands of copies --- among many computers.* Nobody can change the blockchain (e.g., to give themselves lots of BTC) without getting 51 percent of the other copies of the blockchain to make the same change.**

    Why are people keeping copies of the blockchain around? They are "mining" bitcoins by updating the blockchain by "hashing," i.e., trying to solve a complex math problem that includes data on transfers.

    Every 10 minutes, one of the miners is rewarded with 25 bitcoins (birth!) as a result of hashing more quickly than others. Thus, miners have an incentive (coins!) to maintain the blockchain that everyone needs for proving BTC ownership and trading BTC.***

    One more thing: the supply of BTC is increasing at a rate (now 25 BTC/10 min) that is slowing, until the blockchain reaches its final supply of 21 million BTC in 2040. At that point, miners will have to be directly paid for maintaining the blockchain.

    So that's a little description of Bitcoin, and I am surely hoping that more people use it as a means of saving money (looking at you, Argentina, Venezuela and Greece), transferring money (killing Paypal and Western Union), and spending money (bye bye MC and Visa). Read this for an excellent description of how software really CAN disrupt entire swathes of industry (the Uber example).

    But how does this description apply to water? Let me count the ways.

    If water was more like bitcoin, then:
    1. We would know where the water was
    2. Nobody could steal your water
    3. Supply would be known and reliable
    4. Transfers would be easy and harmless to others
    5. The government couldn't take your water for "its needs"
    Now you may not agree with all of these "advantages," but you'd probably have to agree that water, in this world, would be subject to clear rules and incentives rather than the random disappearances, improper uses, and strange locations it ends up in today.**** Think about it.

    Bottom Line: The key to good water management (like good money management) is good accounting with reliable units.

    * Bitcoin is therefore robust and beyond government control in the same way that torrents and other peer-to-peer digital exchanges are.
    ** Many have been trying to hack Bitcoin. None have succeeded so far, so the only "real" threat to Bitcoin (as a protocol) seems to be this "51 percent attack." The funny thing is that this attack would not work. First, other miners would have a huge incentive to bring more processing power online to keep an attacker's power below 51 percent. Second, everyone would abandon Bitcoin if someone took over 51 percent (why trade BTC with someone who stole it), thereby sending the BTC value to zero.
    *** ALL Bitcoin security breaches have been the result of sloppy wallet control, not of faults in the system. The hacking of Mt Gox (which could also have been an inside job) harmed lots of people who had trusted their BTC to Gox's (incompetent or corrupt) admins. Good wallet control means 0 percent chance of theft.
    **** Chile's 100 percent private water rights system is farther along on these (2 and 5) but needs work on 4. #3 is pretty hard when you've got a hydrological cycle :)

    Addendum: The rise of Bitcoin in Argentina, on the back of government incompetence and theft.