Aguanomics

Weekend Discussion: Showers!

dzetland@gmail.com (David Zetland) — Sun, 12 Jul 2009 22:49:00 +0000

NOTE: This post will stay here until Sunday night. Posts for Saturday and Sunday morning go below this post.

Dear Aguanauts,

Discussion posts allow you to discuss a topic among yourselves -- exchanging views, learning and teaching. (I only read the comments.)

If you are interested, take a moment to check out (and add to!) last week's discussion on water and soul. After that, please give us your thoughts on...

Describe the best/worst/weirdest shower you ever used. Why is your home shower different?

Higher Prices, Problems Fixed? NOT!

dzetland@gmail.com (David Zetland) — Sun, 12 Jul 2009 10:51:00 +0000

I've seen 50+ headlines of higher prices for residential water service in the western US. Are these headlines the sign of sound aguanomic policies to restrict demand? No, unfortunately, they are the result of break-even accounting at water agencies that are selling less water.

What do I mean by that? Here's the long version, but the short version is this:

Water agencies recover costs in the price per unit of water. When they sell less water their costs do not fall as fast as their revenues, so they have to charge more for each unit sold to cover their costs.

For the economists/math geeks:

Given the constraint that TR-TC = 0 and simplification that P=AC (i.e., P>VC), a fall in volume (from Q* to Q') produces TR = PQ' < PQ* = TC and thus a loss. So P must rise to cover costs.

This explanation of what's happening may seem simple and perhaps insulting, but note the result: Higher prices are NOT fixing the water shortage.

Bottom Line: A shortage exists when demand exceeds supply. There's no more supply, so demand must fall. The easiest way to reduce demand is through higher prices -- much higher (+200%) prices.

Atlanta Update, Part 1

dzetland@gmail.com (David Zetland) — Sat, 11 Jul 2009 10:43:00 +0000

A guest post from Derekj (signified@gmail.com):

I thought you might be interested in a little water allocation drama that has been playing out in Georgia/Florida/Alabama for almost 20 years. Atlanta, as I understand it, is one of the largest metropolitan areas in the country with no natural growth boundaries (i.e. a coastline like LA or a mountain range like Denver), save for the capacity of the watershed.

Residents have been getting their drinking water from an Army Corps lake (Lake Lanier) that was built in the 50s and is already pushing its capacity, particularly in light of a multi-year drought. Add in a dose of mind-numbingly incompetent/corrupt/short-sighted legislators (what else is new?) and we face the prospect of being one of the first major cities (ever?) to literally run out of drinking water (but Bubba Purdue, our Governor, sees fit to give water restriction exemptions to people who want to put in new landscaping, though not the water-resistant kind). This may well be the first real test of 21st century water politics.

You can argue that the south west, has been in the grips of it for 50 years but at least they are cognizant of their problems. Here in the bible belt, people think there is no such thing as a water shortage problem and blame "liburules who want to save snails and frogs downstream" instead of letting god-fearing Americans wash their pick-up trucks and hose down their sidewalks (all true). Yet at the height of the drought about a year ago, the lake level was less than 10 feet from being below the water intake pipes.

Here is background, criticism of USACE, and the question of Atlanta's "rights."

Luckily, our Governor is not a "do nothing" kind of guy - his response to the drought (and water allocation problem)? PRAYER. (I wish I were kidding)

It gets worse when you factor in the literal give-away of water resources to industry in the region. "Short sighted" doesn't even begin to describe the water management issues here.*

DZ's Bottom Line: When a system goes out of equilibrium, the readjustment can be messy and slow.

* PS: The entire southeast sits on top of an enormous aquafer, however there is an equally enormous "cloud" of radioactive waste from the Savannah River Nuclear Weapons Facility (Akin SC/Agusta GA) that is seeping down through the earth and will eventually mix with the aquafer (see the stunning documentery "Building Bombs" for more details) so it is unlikely that will be a long term solution either.

Atlanta Update, Part 2

dzetland@gmail.com (David Zetland) — Sat, 11 Jul 2009 10:11:00 +0000

Since the post above has material from two months ago, I asked Derekj for an update, and here's what he sent. He also apologized (a bit) for bubba-bashing, but someone's gotta SAY it!

[begin Derekj:] Here are some recent articles that give a glimpse of how the issue is unfolding here. Feel free to review and decide which news updates work well to support the perspective you are trying to put out there.

I'm sure you will not be surprised to discover that a lot of this is politically driven, but whereas in the south west water politics are actual politics, here in the south east, water politics are just a convenient whipping boy for the greater goal of anti-government rhetoric and pandering to Christian fundamentalists (hard to believe but true - the Governor's stunt to "pray for rain" was not so much an actual attempt to make it rain as it was red meat tossed to the fundamentalist population that is so easily convinced to vote against their own self-interest).

Some recent news...

Winter weather saw more rainfall than we have had in years, which obviously means (A) we have no more problems, and/or (B) God heard our prayers and blessed us, so that we might water our cars and pressure-wash our houses and sidewalks (yes - pressure washing sidewalks, concrete driveways, and houses, is a God-given right in the South).

And since it rained and the lakes are filling up again, it's back to "business as usual" - because of course, natural resources are here for us to do as we please with little concern for future generations (they can pray themselves when the time comes ;-)

Of course, economic incentives to conserve are only a revenue source, not an actual tool to modify behavior (because the Gub'ment has no business telling us that we can't waste the most critical natural resource we have)

By springtime, the drought is "declared over", and most water restrictions (except 'odd/even' watering days) are lifted, because the concept of "planning for the future" is anathema to mindless "get the government out of my life" rhetoric.*

Two weeks later our fearless leaders acknowledge that claiming the "drought is over" is a little wishful.... but that they trust us not to just return to our profligate ways (why, I don't know - Southerners are a lot of things, but forward-thinking is not one of them). They grossly mismanaged the water infrastructure for decades, then - when we're backed into a corner, they use the emergency to raise a bunch of money - only some of which will likely go to improving water infrastructure (Atlanta is the home of Muller Water Products, BTW - one of the oldest water infrastructure companies in the US). But wielding the power of elected leadership to help modify our wasteful ways is, of course, something only Godless Liberal Democrats would consider. God-fearing Christian Republicans know that the water is ours to hose off streets and irrigate putting greens (and make bottled soft drinks - for essentially the same, if not discounted rates, than we pay for home consumption). You may think I'm just a ranting anti-establishment gadfly referencing Christian politics here but let me assure you that it is a very real part of the political vision (or at least the vote-pandering political rhetoric) here in the South.

And in case there were any thought that our politicians were progressive enough to use economic incentives to promote conservation, that goes out the window a mere five days later when State authorities vote to - what? - use the situation to raise a bunch of money to do things that should have been done a generation ago. Not to modify behavior to plan for the future, but to raise a bunch of cash that can be spent on massive expensive good ol'boy-enriching construction projects

I'm also attaching a map [click to enlarge] that shows water use from the Chattahoochee watershed. This is important because it shows how much of the water actually gets taken for industrial uses such as beverage bottling (it is appalling how many gallons of water are used to produce a gallon of soft drink - 16 gallons per 12 oz can); pulp and paper mills (the lifeblood of south Georgia); and power plants.

This last one is very critical because where the map says that most of the water power plants withdraw gets returned to the river, but the truth is that it is returned to the river super-heated and de-oxygenated, making it very detrimental to the downstream ecosystem. Meanwhile, the US government (Army Corps) REQUIRES us to release a certain amount of water from the lake reservoirs to support the downstream ecosystem, particularly the estuary where the river meets the Gulf of Mexico. The industrial use (particularly the powerplants) compromise the quality, making that required release all the more important. But of course, the reactionary politicians and their uneducated reactionary constituents push the ridiculous story that the reason there is a water crisis with the reservoirs is not because of the drought (though that does make it worse), but rather is because the (again) Godless Liberal Democrats are making us use that water for turtles and snails and fish. Never mind that (A) by the time the water gets to that estuary along the Gulf of Mexico there are THREE states that have a legitimate claim to it (FL, AL, and GA) even though GA is using most of it, and (B) it is negatively impacting the multi-billion dollar oyster and crab industry in that part of the gulf (an actual capitalist reason, but of course the irony of that argument is completely lost).

Lastly - some GA politicians have discovered a 190 year old surveying error with the Tennessee border that they would like to "fix" so that we can exploit another water resource - the Tennessee River - instead of actually changing our habits and/or the economic model around water.

Though I suppose lawyers, in the long run, are cheaper than their other solution which is to build desalination plants along the GA coast and pump that water UPHILL to Atlanta. Would you like to guess how expensive THAT might be? (in a part of the country where raising taxes is about as popular as pedophelia).**

DZ's Bottom Line: Politicians get more attention chasing crises (sometimes of their own making) than sustainability! When their positions change with the weather, nothing gets done.

* Remember - Georgia is one of only two states that exempts pick-up truck owners from them new-fangled seatbelt laws because the GA Speaker of the House of Representatives at the time (Tom Murphey - the longest serving state speaker in the country at the time he stepped down) was from a rural county and his constituents don't like being told to wear their seatbelts in their truck. I assume this is because it makes it messier to spit their chewing tobacco out the window as they are driving around.

** There is a fascinating documentary called "Building Bombs" which was produced in the late 80's and is all about the mind-bogglingly toxic/polluting Savannah River Power Plant on the Georgia/South Carolina state line - home to one of the few nuclear weapons producing reactor complexes in the US (is not used for domestic electricity production). I haven't seen it since it came out (and can't find it on youtube), but I distinctly remember one segment of the film that talks about a massive cloud of radioactive contamination that is seeping down through the ground at the Savannah River Site (a 1200 square mile complex) and there is basically nothing anyone can do about it. That would be bad enough, except that the site sits on the edge of the Florida Aquifer - the largest fresh water aquifer in the south eastern US - and it will eventually contaminate the Aquifer. On the upside, I understand that clean water is a byproduct of nuclear fusion (if we ever figure that out)

Watching the Train Wreck

dzetland@gmail.com (David Zetland) — Fri, 10 Jul 2009 10:39:00 +0000

This article discusses how overpumping of groundwater in California's Central Valley is causing land elevations to fall, and how (unevenly) falling land levels are putting surface water canals at risk of cracking, etc.

It seems that the Department of Water Resources (which operates the California Aqueduct, although I bet the federal Central Valley Project is also at risk) is sitting on its hands as local farmers cause $ millions in damages to save crops worth $ thousands.

Does anyone agree that this slow motion train wreck is about the silliest, most pathetic example of bureaucratic incompetence ever? No, wait -- perhaps it's political incompetence? Hell, I don't know. What I do know is that the people who are SUPPOSED to be in charge of water policy, etc. in California are failing BIG time to take on vested interests that are making things more and more broke.

Who's going to pay? Us. The citizens. Farmers will pump their water. Infrastructure will be damaged. The bills for repair ("emergency") will go to the general fund instead of users ("we didn't USE more water!"). What a cock-up.

Bottom Line: Seriously, this is just too stupid. Where are the people in the State government who are SECURING OUR WATER SUPPLY? I'm just baffled. Really.

Addendum: After reading Fleck's comment on this ("oh, the irony") and taking a walk, I came up with a few more thoughts. This "more water here reduces water there" is not just ironic, it's pathetic. Where are our water managers when we need them? SWRCB and DWR say its not their job to regulate groundwater. They say ask the politicians. I say that they should ASK -- even demand -- the authority to regulate groundwater. It's like putting the army in charge of defending the country and then giving them neither money nor weapons to do so; they would DEMAND their guns!

If our state bureaucrats are lacking tools to do their job, I sure would hope that they would have the wit to know what they are missing and courage to ask it. Unfortunately, it's blindingly obvious that DWR knows what it's missing and lacks the leadership to go get it. Although it may appear that I've been hard on DWR in the past, I am thinking that I've been too kind. Perhaps we should just shut the whole thing down and start again -- with a group of people who are INTERESTED in promoting the sustainable use of the ~~State's~~ People's water resources. (Oh, and who came up with the stupid-ass idea of putting Lester Snow -- the director of DWR -- in charge of California's drought response? Arnie, "manager" of the biggest financial blackhole ever to hit the State. Damn.)

This little example is but a microcosm of how screwed up things are. Let me tell you, "screwed up" and "California" are NOT supposed to be in the same sentence, but here they are. Is this result inevitable? No, water (and finance!) is competently managed in many parts of the world -- I'm in Amsterdam now -- and THAT fact makes this all the worse to think about. ARG! I want heads. To. Roll.

Rural Residents Fight Vegas over Water Transfer

dzetland@gmail.com (David Zetland) — Thu, 09 Jul 2009 07:39:00 +0000

A guest post by Leanndra Copeland and Maura Bradbury*

Seemingly perpetual Western water contentions arose again in Snake Valley, which straddles the border of Nevada and Utah. Snake Valley runs in a north/south orientation and contains the towns of Baker, Garrison, Eskdale, Callao, and a few more small towns. In a modern version of a David vs. Goliath battle, the small community in Snake Valley, home to ranchers, farmers, multifunction business owners, and rural residents, is hardly a financial match to Las Vegas’ economy, which depends on rapid and arguably unsustainable growth.

In one of the most fragile and arid ecosystems in the country, the Southern Nevada Water Authority (SNWA) proposes to transfer 50,000 AFY (acre-feet per year) to support future Las Vegas growth. Rural residents in Snake Valley believe that if water is transferred, the delicate balance of the high desert environment will be upset, and this will put their livelihood at risk.

Urban water advocates argue that rural water use is less productive than urban water use, and therefore, under the premise of free market operations, water rights should go to the most productive use. However, this interpretation fails to consider the potential ecological effects and equity considerations to rural residents.

If the water transfer does occur, Snake Valley residents fear depreciation of property values, a decrease in tourism from national park visitors, hunters, anglers, astronomers, geologists, and other tourists, and most importantly, loss of their way of life. An important source of economic activity comes from the ± 70,000 yearly visitors to the Great Basin National Park, located in Snake Valley. Baker, NV has been declared one of the clearest skies in the 48 continental United States and brings in amateur and professional astronomers from the Western region. A water withdrawal will likely cause a drop in the water table and dustier skies as a result.

Just having the water applications filed by SNWA has slowed potential economic growth. Gary Perea, a White Pine County Commissioner and Snake Valley businessman, has witnessed rejection of three applications for new water wells because SNWA would not approve them. According to Nevada law, the water applicant must approve any new water use until a decision is made upon the fate of this irreplaceable resource.

Plans to partially desiccate this part of the Great Basin may leave a barren landscape desirous to few plants and animals. Examples of the impacts of pumping are already observed in Snake Valley where developing irrigation via ground water use has lowered the water table, dried up springs, and dropped flowing surface waters. Residents realize these effects and have legitimate concerns for pumping on a massive scale (50,000 AFY). Moreover, with the Great Salt Lake Desert at the Northern end of the Snake Valley desertification is plausible.

Another way the SNWA applications have affected the Valley is a temporary increase in value of properties with attached water rights. In an interview with Dean Baker, a major rancher in the area, Mr. Baker stated that ranching property values have been inflated because of the idea of a motivated buyer of water rights. This has increased prices beyond what the average rancher can afford to pay. Ranchers that are borderline profitable are particularly susceptible to temptations to sell.

The SNWA proposal has galvanized the residents in Snake Valley. In an effort to stem off the water transfer, the Border Inn, a central business in Snake Valley, is hosting a fundraiser in Border, Utah. The Snake Valley festival will take place July 24-26. Proceeds will be donated to pay for legal services to stop the water grab. More information can be found here.

Bottom Line: Snake Valley residents will never agree to a plan that is neither equitable nor efficient. However, to the benefit of SNWA, they don’t have to; the only opinion that matters is that of the State Engineer, who has already approved the withdrawal of a similar amount in Spring Valley, the next valley west.

* Recent graduates of the University of Nevada, Reno who are now interns for the Great Basin Water Network. Copeland has a degree in natural resource and environmental economics; Bradbury has a degree in agricultural economics.

The Great Recession Conspiracy

dzetland@gmail.com (David Zetland) — Thu, 09 Jul 2009 07:16:00 +0000

JW Taylor, a frequent commenter and contributor to this blog, has written a book about the market meltdown that we are currently experiencing. (As a kindness to our discussions on the topic, he has made me coauthor.)

In an experiment of marketing and sales, we have allowed Scribd to set the price (currently $4.95) and number of pages available for free preview; see below.

The thesis of the book is that Wall Street caused the meltdown and is controlling the "recovery," but that recovery is not likely to happen because the policies going into place are pushing against a business cycle that really needs to happen.

The Great Recession Conspiracy

Bottom Line: Read this book if you want a short, concise summary of what happened, who did it and how they are doing it wrong... [no review, since I am an author :)]

Rivers of Gold -- The Review

dzetland@gmail.com (David Zetland) — Wed, 08 Jul 2009 08:49:00 +0000

I just read Rivers of Gold: Designing Markets to Allocate Water in California, a book that Brent Haddad wrote in 2000. The book is well written with eight chapters and four appendices.

Note this book is about long-term trades, not short-term trades. Although I can see some advantages to long-term trades, I favor short-term trades because they lower uncertainty on both sides -- producing more equitable and efficient results. (This is why I think long-term markets are currently still-born.)

The first chapter outlines many themes familiar to readers of this blog (competing interests, the need to manage demand as well as supply, the importance of property rights, etc.) and gives a brief overview of the water situation in other western states. The second chapter discusses the interplay of markets as institutions, government and the complications of treating water as a commodity for sale. Chapter three outlines the different themes in water rights and markets -- public trust, area-of-origin, beneficial use, groundwater rights, sustainability, etc. Haddad also discusses how the erosion of property rights in water has perhaps limited the efficiency with which we allocate it (the tragedy of the anti-commons; also see the second item in the post below.). Chapter four discusses short-term water "markets" in Westlands and the Drought Water Bank of 1991-1992. The DWB failed (as it did in 2009) because DWR applied too many bureaucratic controls. It's hard to apply lessons from Westlands' more-or-less efficient market because it's limited to Westlands.

Chapters 5-7 discuss the IID-MWD deal of 1988, the 1992-1994 PVID-MWD fallowing deal that laid the groundwork for their current, successful fallowing agreement) (ironically BurRec spilled MWD's "saved" water when it ran out of storage in 1997), and the Devil's Den-Castaic deal that involved a land-purchase and merger of rights. Each of these deals was "long term" in terms of transfer duration, but they also took ages to negotiate and relied a lot more on faith than robust market institutions.

In the final chapter, Haddad discusses the absence of markets in California and gives twelve recommendations on how to make markets work:

Consider the scope and direction of water reallocation to be matters of public policy.
Design regional water markets around natural and engineering watersheds.
Emphasize flexibility in contracting.
Retain one-to-one negotiations until a preliminary agreement is reached. [This limits the confusion of trying to be all things to all people BEFORE a basic agreement is in place.]
Allow irrigation districts to be full participants in transfers involving their own water. [This refers to the problem of farmers trying to make deals without permission of neighbors who can veto the deal.]
Hold parties to a proposed water transfer accountable to other parties in the state.
Require a land plan for each long-term rural-to-urban transfer.
Provide interested parties with access to water-transfer information.
Limit new powers granted to holders of water rights.
Return leased water to its original permitted or recognized use.
Ensure the neutrality and effectiveness of oversight institutions. [This refers to DWR's favoritism towards SWP contractors.]
Manage the market mechanism as if it were a program.

Although these ideas sound anodyne, they reflect a reality where many interests can use political tools to interfere with decisions that "seem" merely economic.

Perhaps the most depressing section in the book comes in Appendix I, where Haddad recounts the mid-90s enthusiasm of economists and public policy makers who saw markets as a "sure thing." Fifteen years later, they are still far from happening. I think that markets are missing for several reasons:

Some water rights holders (e.g., IID) are dysfunctional, reducing the supply of willing sellers.
Environmental groups are trying to get water with political instead of economic tools, diverting attention from markets.
Urban areas have preferred to build supply (e.g., desalination) rather than buy it, decreasing the pressure to make markets work.
Conveyance is hard to access for political (e.g., Delta) or economic (e.g., Colorado River Aqueduct) reasons, increasing the cost of transfers.

Taken together, these reasons (and some I probably missed) have impeded the market-reallocation of water, and I don't think we are going to get such reallocations until the political pain of inefficiency grows large enough to overcome the inconvenience of reforming dysfunctional institutions. (Haddad discusses this need -- without specific suggestions -- in Appendix III.)

Bottom Line: This book is worth reading for a case-study, historical discussion of the failure of water markets in California. It gives useful checklists of what to look for, but it provides no silver bullet. Water markets are only going to happen when the force of political (and economic) will exceeds the resistance from entrenched supporters of the status quo. For the general reader, I give this 2 stars because it's more about case studies in California than "making markets." For the true water geek, I give it 4 stars for its useful and clear discussion of the many issues that may arise in the quest for markets.

Speed Blogging

dzetland@gmail.com (David Zetland) — Wed, 08 Jul 2009 08:16:00 +0000

"Six challenges to the continued management of riverine flood risk are (1) many property owners don't buy flood insurance, (2) people underestimate flood risk, (3) we need better flood maps, (4) we have a "love affair" with levees, (5) flood risk is increasing over time, and (6) we take deep pride in rebuilding after a disaster. long-term flood insurance contracts tied to long-term loans for risk-mitigating activities [can overcome] the six challenges."
"Even though most commodity markets respond rapidly to price differentials and reduce those differentials over time, water transfers out of agriculture into higher value uses are not occurring very rapidly. The existence of multiple rights of exclusion unbundled from the rights of use under the prior appropriation doctrine in the American West creates an anticommons that has impeded water transactions." Put differently, trades don't happen because so many interests can block them; see also review above.
"Committee: A group of men who individually can do nothing, but as a group can decide nothing can be done." -- Fred Allen
Two steps forward, one step back: "New laws in Colorado will allow many people to collect rainwater legally... [but] the state created a system of fines for rain catchers without a permit." It only applies to people with wells. Better to toss out all laws restricting capture of rainwater and concentrate on streams, lakes and groundwater.
"In this paper [gated] we consider how the dental industry responded to the addition of fluoride to public drinking water. We take advantage of the staggered introduction of fluoridation throughout the country to analyze the changes in numbers of within-county dentists relative to physicians in the years surrounding the change in fluoridation status... Our estimates imply that the 8 percentage point change in exposure to water fluoridation from 1974 to 1992 may have led to the loss of as many as 0.6 percent of dental establishments and 2.1 percent of dental employees, suggesting a substantial net impact of this public good on the dental profession since its inception."
Believe it or not, the EU's biofuel policy is worse than the American's ethanol policy! Why? Because they are IMPORTING biofuels grown on land where rainforests have been cut down. We are merely displacing one crop for another. Both sets of policies could be tossed if we just implemented a simple carbon tax...

hattip to JWT

Climate Change -- Theory vs. Reality

dzetland@gmail.com (David Zetland) — Tue, 07 Jul 2009 08:15:00 +0000

Independent science journalist (!) Julie Rehmeyer wrote a summary report [doc] on the workshop on games and climate change that I helped organize in Berkeley.

Her report has details on all presentations, but I only excerpt her description of my session below. (If you want to see just how academics went from theory to bribery in the session, you can watch the video.)

[begin write-up:] Theories are all well and good, but real life doesn’t always behave. Since David Zetland, an economist at UC Berkeley, does most of his work in the muck and hubbub of the real world, he wanted to ground the discussion in reality by performing an experiment. The conference participants negotiated Kyoto II on the spot.

Zetland assigned the participants to four groups, A, B, C and D. The treaty was bilateral, to be negotiated between America (the A group) and China (the C group). The bureaucrats formed the B group, and they gathered information and administered agreements. The D group was “da rest of the world,” who were mere observers but could lobby freely.

China presented the first proposal: a global cap-and-trade system, with emissions permits allocated according to population. In addition, China wanted to receive permits for projects done in other parts of the world with clean technology it develops.

America responded with its own proposal, a global carbon tax. Ideally, the US said, revenues from the tax would go entirely to the US, but since it recognized that not everyone would see the manifest virtues of such an arrangement, dividing the revenues according to gross domestic product would be acceptable. In addition, a fraction of the global revenue should go into research and development (which would take place primarily in the United States). Countries who participate in the tax would receive discounts on the technology produced, while those who didn’t would be subject to trade sanctions. As a further stick, the US pointed out that it had hostages, in the form of China’s money (in treasury bonds) and people (its graduate students at American universities).

The rest of the world said it was willing to negotiate. It wanted to get money to do nothing. They held a non-binding vote and supported the China proposal, six-to-two.

America came back with a counter-proposal: Cap-and-trade was acceptable, as long as the permits were allocated according to GDP. China objected that America’s history of carbon production needed to be taken into account. Then the two sides retreated to consider their strategies.

In the interim, the bureaucrats (whom Zetland himself led) decided on a change of rules. The bureaucrats and the rest of the world would vote on the proposals, and the members of the winning delegation would be rewarded with being first in line to get wine during the reception afterward.

China proposed cap-and-trade with permits allocated by both population and GDP: 80 percent by population, 20 percent by GDP. The bureaucrats jumped in and said they’d support any proposal in which they managed the funds (with appropriate fees, of course). America responded by accepting cap-and-trade, but having the proportions switched: 80 percent by GDP, 20 percent by population. Over 50 years, though, the proportions could gradually move to China’s proposal of 80 percent by population and 20 percent by GDP. Administration would be by the bureaucrats. In addition, the Americans offered a bribe to five of the eight countries constitutingthe rest of the world for the purposes of the experiment: annual international aid of 30 percent of their GDP. The bureaucrats calculated that this would cost the US 10 trillion dollars annually, or 2/3 of US GDP.

China said that the US proposal was fine, with one change: the transition in the allocation scheme of the permits should take place over 20 years rather than 50. The US counter-proposed 40 years, and insisted that China take the burden of half the cost of the bribe. The Chinese didn’t agree, so it went to a vote.

Bottom Line: Bribery worked. The US won.

While the game was played with tongue in cheek, Zetland had a serious purpose, which turned out to be beautifully illustrated by the game’s unexpected conclusion. Human beings behave in unpredictable ways. To be useful guides, mathematical models have to allow for human uncertainty.

Monday Morning Smile

dzetland@gmail.com (David Zetland) — Mon, 06 Jul 2009 19:46:00 +0000

When in doubt, go for slapstick....

Meanwhile, these guys clarify the difference between what's expected and not when "the front falls off"...

Addendum: Front fell off is one of the BEST EVER satires on business/political denial of pollution -- in 2 minutes. Watch it!

Stimulus

noreply@blogger.com (Damian) — Mon, 06 Jul 2009 19:20:00 +0000

Oxnard, CA, in order to increase supply and accomodate growth, plans to build a recycling plant and desal plant, part of which is already done. A couple things irk me.

"The city originally estimated the cost of the project at $55 million, but now says it will probably be closer to $100 million when the cost of pipelines, consultants and other expenses are factored in."

Back in 2001, the city was thinking it would indeed be much cheaper. I don't understand how pipelines, consultants, etc. were not factored in from the beginning. Anyone know details of how something like this happens?

And of course, they are bypassing a chance to use prices to deal with increased growth. I guess there is no stimulus in changing the rate structure. Currently, using 150 gallons per day is within the first tier, but the additional cost of using more is only slightly more--the prices jump from $.0027 to $.0030 per gallon, a marginal increase of 3 hundredths of a cent per gallon that likely has no deterrent effect.

"Rep. Lois Capps, a Santa Barbara Democrat who worked for more than five years to win federal approval for the project, said Oxnard’s water expansion is “a perfect use” of the stimulus funds. The project “creates jobs quickly, meets an important immediate need and encourages long-term economic growth in our area."

Looks like this project is already partially done/under construction, so I fail to see how it creates any jobs. And besides that, is this the best use of federal resources? The users aren't paying the full costs of construction and the water made available (more expensive than current supply) is averaged into their rates, indicating that this water project, like so many before it, is heavily subsidized.

Bottom Line: Despite what Congress says, has there been a good stimulus project yet?

What Does per Capita Daily Use Really Mean?

noreply@blogger.com (Damian) — Mon, 06 Jul 2009 17:53:00 +0000

A guest post from Shahram Javey*

In February 2008, Governor Schwarzenegger announced California’s 7-point Strategic Plan [pdf] for improving water transfer in the Delta. The first point was a plan to achieve a 20 percent reduction in per capita water use statewide by 2020; see this post for David's view on that.

I've been intrigued with this goal, specifically the per capita daily use calculation. With this background I investigated what per capita daily water use really means.

In the water world the acronym GPCD - Gallons Per Capita Daily - is often used to refer to per capita daily water use. GPCD can be used for estimating future water use demand (more on this later), but it is also an important tool for tracking conservation goals, since it provides a baseline for households and individuals to track & compare their own conservation efforts.

The GPCD metric is conceptually easy to understand and it allows for meaningful comparisons between one’s own use of water with others’ in the country, state, county and the community level.

Water usage comparison is the cornerstone of any conservation effort. Education, outreach, emergency responses to water shortages can all result in temporary reduction in water use, but when people can compare their usage with their friends and community, changes in behavior will occur. A metric is needed to provide a basis for comparison, and as such GPCD is as good an any.

HOW IS GPCD CALCULATED?

According to USGS, per capita water use is calculated by dividing the total amount of water withdrawn from all water suppliers by the population. That seems simple enough. What makes this difficult is agreeing on water sources & what kind of uses to include. At USGS, water used for domestic, commercial, industrial, and thermoelectric power, including water used for fire fighting, street washing, parks and swimming pool is included. So, what water is not included? The answer: water used for irrigation and agriculture (including commercial and urban residential irrigation). In California agricultural water accounts for 80% of the total amount of water used in the state. See this summary report [PDF] on per capita water use in Florida.

The Water Resource division of the U.S. Geological Survey (USGS) publishes the Estimated Use of Water in the United States every five years. This report has detailed per capita water usage on a state by state and county by county basis. It takes almost five years to generate this report, e.g., the 2005 report is scheduled to be released in late 2009.

[Photo]According to the latest available USGS 2000 report, California’s Kern county has the highest per capita use of water at 274 GPCD, and Mariposa county has the lowest at 67 GPCD. Santa Clara county is at 171 GPCD and San Diego county is at 156 GPCD. Sacramento & Fresno counties don’t have a lot of meters and consequently they use more water at 265 GPCD and 246 GPCD, respectively; see chart on right [click for larger size].

Kern county is the California's top oil-producing county, and has large borate and gold mines. So given that industrial water use is factored in, it does makes sense that Kern county GPCD is the highest in the State. Mariposa county, on the other hand does not appear to have any industry. It has a population of 17,000 and has the distinction of having no permanent traffic lights anywhere in the county. Perhaps 67 GPCD is the realistic GPCD if you just measure the residential water use.

At home in Santa Clara county, we are a family of five with a 43 GPCD (we have no irrigation system and we manually water the plants for a few minutes a few days a week on average. My neighbor has an extensive outdoor irrigation system and his water usage is very close to the USGS Santa Clara county average of 170 GPCD.

Per capita water use method belongs to a class of statistical water use estimation method called coefficient methods (PDF), where water use is estimated by multiplying the number of people by a water use coefficient such as gallons per person. This method is useful for estimating future demand. First, based on historic data, calculate gallons used per-person (so-called the coefficient) and assume a linear correlation between population and water use. In this approach all other explanatory variables, e.g., demographics, price of water, weather, etc., are ignored. Other methods take more of these variables into account, e.g., land-use based model that are favored by water districts as they yield better estimates. With the land-use method, the cities in a given service area are asked to provide their projected land use (commercial, residential, ...) and the agencies overlay historic meter consumption data with land use polygons, normalize the data and use this model to project demand.

WHAT CALIFORNIA AND OTHER STATES ARE DOING?

A number of states including Kansas, Arizona, Texas, Florida, and New Mexico [pdf] are implementing or have implemented standardized GPCD. All of these states use slightly different techniques, e.g. New Mexico has defined three different GPCD related metrics to measure usage: Residential GPCD = total residential billed / residential population. Total System GPCD = total production / (residential + multifamily population) System losses = Total System GPCD - Residential GPCDCalifornia has not yet defined a standard method for calculating GPCD. Indeed, a call to a number of my local water agencies (San Jose Water, Santa Clara Water District and East Bay MUD) confirmed that GPCD is not calculated or tracked primarily since it is not used as a method to estimate future demand.

Bottom Line: To help measure and track conservation, California needs to define and mandate a standard method for calculating residential and total GPCD at the state, county and service area levels.

*Founder & CEO, Aquacue Inc.

Weekend Discussion: Aqua Vita

dzetland@gmail.com (David Zetland) — Sun, 05 Jul 2009 23:59:00 +0000

NOTE: This post will stay here until Sunday night. Posts for Saturday and Sunday morning go below this post.

Dear Aguanauts,

Discussion posts allow you to discuss a topic among yourselves -- exchanging views, learning and teaching. (I only read the comments.)

If you are interested, take a moment to check out (and add to!) last week's discussion on home. After that, please give us your thoughts on...

Water and spirit, soul and life. We don't just need it for thirst; we need it (flowing, splashing, tumbling) for balance and serenity. How do YOU need it?

Notes from the EAERE

dzetland@gmail.com (David Zetland) — Sun, 05 Jul 2009 10:09:00 +0000

I just attended an excellent conference of the European Association of Environmental and Resource Economists. There were over 600 papers presented, so I only had time to hear a few. I highlight some of them below.

BTW, as much as I bitch about the "unreality" of academic research, I do value the thoughtful debate that academics conduct on so many different ways of looking at ideas. It is THIS debate -- not necessarily the publications that eventually emerge -- that helps me understand problems and their possible solutions. If the academic reward system was enlarged from "publish or perish" to include teaching the public, policy-makers and practitioners, then I'd be very happy (and perhaps successful) as an academic. As of now, teaching and blogging "do not count" so I wonder if I will be able to continue working in this area. Stay tuned!

So, here are the papers:

Climate change will help NAFTA countries with capital-intensive production -- relative to other countries. Ironically, SUV production may be helping Detroit become more competitive in the long run.
Not surprisingly, domestic efforts to reduce outputs that lead to climate change can interfere (reinforce OR contradict) international efforts to reduce the same inputs. This result is more-likely with the command and control nature of these efforts. Prices (e.g., carbon taxes) would not create this kind of confusion.
What do company managers do when nobody is watching? They spend more time and money on the "sustainable" bottom line. Why is that? First, because profit-maximization -- after years of struggle -- is hard to accomplish. Second, because they have the option of doing what they want, and being "sustainable" is more fun...
Environmental taxes reduce growth. Thus, it appears that they are just like any other taxes. This is an important counterpoint to those who claim that "green" regulations and taxes will make us rich. They will not; innovation will make us rich.
When the price of irrigation water rises from 0 to 0.05 EUR/m^3, use on low value crops drops by 26 percent but only by 2 percent for high value crops. Low value use drops by 95 percent when prices go to 0.15/m^3, and farmers switch to rainfed crops.
Metering water use (vs. not metering) leads more people to use high efficiency water devices than "green" labels do. Another example of how price motivates that majority, i.e., the 20/80 rule.
In a survey of households in Chongqing, China, average monthly household income is 1,200 RMB ($175) and spending on water is 1.1 percent of income. Although only 23 percent of customers are satisfied with their water supplies, nearly nobody wants to pay more to get higher quality -- a justification for regulation on quality.
Organized crime: The more expensive the restrictions on waste disposal, the more likely that firms will try to avoid that expense. The Italian mafia have stepped in to offer a new service to their existing business line -- illegal waste dumping. In 2008, about 20 percent of waste "disappeared" from the monitored waste stream.
People given the choice to join a "pro-social" group (company or community) cooperate more than people who choose NOT to join that group. Although, the pro-social group has higher taxes -- thus lower personal wealth -- higher cooperation among members results in greater TOTAL social welfare. These results are important to people interested in intentional communities, CSR, non-profits, etc.
Energy star rebates reduce carbon at a cost of $1,740/ton, a number that's 50-100 times higher than the current "price" of carbon in permit markets and implies that rebates are a waste of money. Regulatory requirements (i.e., mandatory implementation of efficiently standards) may thus be more efficient than rebates. This result does no invalidate the utility of carbon taxes; it merely indicates that rebates do not affect consumer behavior.
In the presence of complex physical dynamics and agents (e.g., farmers) with different characteristics, it is still possible to maximize the efficiency of aquifer management with a simple tax based on groundwater level. This tax is just as efficient as more complex regulatory schemes and does not create the distortions (inefficiency) of schemes that treat agents as identical or aquifers as simple "bathtubs." This paper supports a tool I have advocated in the past: a tax that increases as groundwater levels fall.

Flashback: 28 June - 4 July 2008

dzetland@gmail.com (David Zetland) — Sat, 04 Jul 2009 09:17:00 +0000

These posts are STILL relevant, so please comment (I'll approve them ASAP.)

Happy 4th of July: We have a drought, but your lawn must be green. Those same nutty Californians appear to think that we can address climate change at no additional cost.

How to Fix the Delta -- yes, I was trying even a year ago. It's a property rights solution (not a bureaucratic solution).

Drip versus Flood -- flood irrigation CAN be better.

Sustainability Means Modesty -- that means less stuff for you but not for some water managers or bankers funding new infrastructure. Wal-mart, OTOH, knows how to do sustainable.

Peace Sharing and Public Goods

dzetland@gmail.com (David Zetland) — Fri, 03 Jul 2009 09:30:00 +0000

I was sitting on the beach with my cousin, and she was telling me how nice it was to "share the air, to breathe together with others." That got me to thinking about other situations where people feel good about enjoying a resource together (yes, I lapsed into economic jargon). Air is still a public good -- I can use it without needing permission, and my use does not deny air to you. The beach and sea are also public goods -- we can all run into the waves and bounce about, enjoying together the magic of motion, buoyancy, cool and salt. So with both air and sea, we can be together, a community in peace, all enjoying those resources...

In the (perhaps romanticized) past, water and land were public goods -- there was plenty around for everyone -- we could roam from place to place, using the "endless" supply of land and water to make our existence better, to be happy. Eventually, there were enough people that things got crowded, and other people who said (in Rousseau's famous phrase), "this is mine" and property rights began to matter. For most economists, property rights are essential to the efficient use of a resource, but they also created conflict and inequality -- things that many people dislike.

Thus, we went from an idyllic past of "plenty for everyone" to a harsh present of "this is mine, go get your own." The resulting friction over property has driven politics, war and unhappiness ever since.

Few people like the present scheme, but the alternative (no property rights) is even worse. It seems that the only thing to do is to acknowledge the rights that exist (sometimes the result of unfair actions), and use politics, charity and markets to reallocate the wealth flowing from those who own to those who do not. Without these forms of "sharing," we are likely to resort to conflict and anger -- and that's no fun.

Bottom Line: Although we all want to return to an era of "take what you want," that's often impossible. Property rights are the least-worst "solution" in a world where demand for resources exceeds supply. Let's embrace them, and then go down to the beach to enjoy a little bit of endless wealth.

Bay Area Water Rates and Consumption

dzetland@gmail.com (David Zetland) — Thu, 02 Jul 2009 10:51:00 +0000

The FY2007-08 Annual Survey [PDf] by the Bay Area Water Supply and Conservation Agency (BAWSCA) is full of interesting facts. BAWSCA has 27 members, and they get 2/3rds of their water from the Hetch Hetchy reservoir/aqueduct that San Francisco owns and operates. This report will be a prize to anyone who loves good data, but the survey's information on consumption (page 63) and rates (page 67) is quite interesting. By my calculations, there is a 0.75 positive correlation between the two. For those of you who are quick at math, this appears to "defy" the law of demand (there should be a negative correlation between price and consumption), but the real explanation for this positive relationship is that it is NOT about demand as much as supply.

Here's how it works: Most of these agencies get their water from the same source, so they face similar costs. Those that face stronger (per capita) demands for water will charge their customers higher bills. This positive relationship between price and quantity reflects the SUPPLY curve, which slopes upward, not the numerous demand curves that are passing through each of these points. Thus, we can compare a supplier with high demand (Hillsborough with 317 gallons/capita/day and average bill of $142) to one with low-demand (San Jose, with 97gcd and $25).

If any one of these districts increased its rates, it would NOT see a reduction in demand as much as a reduction in the quantity demanded. That's because (pedantic, academic point here), our demand for an item depends on tastes, substitutes, etc., but -- once that "demand schedule" is known -- the amount we demand depends on the price we face. As price rises, we move along the demand curve, demanding a lower quantity. That's what we call the "law of demand."

Bottom Line: The laws of supply and demand work, and we can use them to understand (and affect) behavior.

Delta view from the Dutch

noreply@blogger.com (Damian) — Thu, 02 Jul 2009 07:03:00 +0000

This article describes a Dutch expert's take on our delta and its infrastructure. He had some interesting things to say about the layers of governance and the financing of our levees, but his advice in the last paragraph particularly struck me.

Sit together, talk about it. Confront people if they don't want to look into interests of other stakeholders. You really have to work together because it's too big an issue to think you can tackle it in the Delta alone or in the Bay Area alone. It's an issue of all California.

This is what CALFED promised--California water users would "get better together." But after millions of dollars flushed down the drain, it seemed clear that attending to every stakeholder was foolish. This is what Hanak/Lund/Howitt/Mount/Moyle said in their PPIC report, and so I am surprised that the Dutch expert would offer simplistic comments like this. It reminds me of my post last week regarding the simplistic finger-pointing of the Merced editorial staff.

Bottom Line: The delta can get boring, and so bringing in a Dutch expert to spice things up may not help, but at least they can remind us what we are doing wrong.

Economic Research Output

noreply@blogger.com (Damian) — Thu, 02 Jul 2009 06:54:00 +0000

How much value do people get from economic research? The government supports a lot of it, but is the production of academic economic papers really a public good? My research on water rights and water transfers is of course included. I thought of this again after reading this.

Bottom Line: I like the way economists think, but I am not sure if it is in the public interest to subsidize their output.

Robbing Peter to Pay... Arnie

dzetland@gmail.com (David Zetland) — Wed, 01 Jul 2009 10:23:00 +0000

The Gov'nor has announced one of the stupidest things I've ever heard -- a raid on water agencies' property tax revenues to cover the State's deficit:

Gov. Arnold Schwarzenegger wants to use the money to help close California's $24.3 billion budget gap. Under Prop. 1A, passed in 2004, the state can borrow 8 percent from all agencies and must repay the funds, with interest, within three years.

But the state's legislative analyst has suggested taking more than 25 percent from water and wastewater districts because they can raise rates to recoup the money.

This is a classic case of the badly-managed central office getting subsidized by the profitable branch office.

If I was god, I'd fire Arnie and replace him with a water manager who would know ONE thing -- how to balance a budget!

Bottom Line: Those who balance their budgets by stealing from others are not leaders -- they are thieves!

UK Cannot Feed Itself with Organics

dzetland@gmail.com (David Zetland) — Wed, 01 Jul 2009 10:13:00 +0000

In the UK, "wholly organic agriculture would produce around 60% of current conventional cereals production and self-sufficiency would fall from around 100% to nearer 60%."

The report (via FCRN) attracted these comments:

[begin quote] I’ve had a number of comments back on the report from FCRN members and have passed some of them by the Soil Asssociation, at the SA’s request, so that they can reply, as well as the report’s author, Philip Jones. I’m copying here the comments, followed by the SA and Reading responses (note that they haven’t responded to comment 1 as it’s only just come in and I don’t want to get stuck in an endless round of email forwardings...

Anonymous comment

The problem with the Reading University study is that it only compares Business As Usual with Organic systems. Organic-certified systems have given us a lot of lessons learnt, as they are a radical alternative to conventional agriculture. The world continues to benefit from this living experiment; however, for developing policy on how we should change land-use practices as a reaction to climate change the study may be confusing as it misses out the approach that is most practical at generating change. My reasons are as follows:

Organic or Bio or Biological farming is based on a code that is Exclusionist. In other words it is based on beliefs that certain things should be excluded from the agricultural system. Especially synthetic agrochemicals and fertilizers, but also GM crops and human waste are not allowed. So its starting point is to empty the agricultural tool-box; this throws out a lot of bad stuff but also a lot of good opportunities go too; it also eliminates the potential to modify technologies so that they are used in a safe way.

The main non-Organic approach towards sustainable agriculture might be described as Integrationist which looks at how to adapt mainstream agriculture rather than designing a radical alternative. Since the days of ‘Silent Spring’ this approach in the UK, largely driven by regulation arising from public concern (e.g. on pesticide use) and through codes of practice (driven often by markets). This has resulted in widespread changes to farming practice, far greater across 95% of agriculture which is mainstream than those achieved by organic systems. This is not to say that we are near having a sustainable food and farming system. However, whatever the approach the urgency to speed up progress towards moving mainstream agriculture is now rising.

FCRN shows us that the World is now waking up to the fact that we are running out of time and that we need huge changes to land-use practice Worldwide. The main drivers for change are:
- Climate change (which means we have to change land management to reduce GHG emissions from land and the whole food chain; but we we also have to sequester as much carbon into farmland, and forests; and ideally need to free surplus land from food production for off-farm carbon sequestration and bio-energy production). We are told we have to reduce food chain GHG emissions by 70-80%!
- Rising population (which means we have to be able to feed 6-9 billion people; in a World where the resource base – soil and water resources – is increasingly compromised.
- In addition we also have to try to maintain the other environmental services we expect from the World’s land (biodiversity, water catchment, landscape, sea defence etc).
  
  An integrationist approach is one that uses a variety of tools to internalise the negative costs of social and environmental impacts. This should be seeking to develop a mainstream framework for best achieving the seemingly impossible task set by these three drivers. For example possible elements of a programme for change within such a framework to achieve 70% reduction might be:
- Incentives and regulation to recycle all bio-waste (including human waste) to put back on the land as an agricultural input (obviously this needs to be done with investment in treatment and guidlines to protect human and animal health and prevent contamination by industrial waste).
- Setting up a fair mechanism to ensure farmers are paid for carbon sequestration from soil and woodland and perennial crops (as well as punished for carbon losses).
- Setting up a system such that all products are carbon foot-printed with a unified international standard – this would allow differentiation within the markets of the food value chain between high GHG and low GHG emitting sources of any commodity.
- We need to change dietry habits aware from ‘meat and grease’; so we might expect a programme to educate people to adopt healthier eating habits and to promote subsitutes– possibly with the aim of reducing meat and dairy consumption to 50% of current levels.
- A good economist would almost certaintly recommend a universal carbon tax (this would create pressure to reduce carbon-wasteful agricultural inputs such as nitrogen fertilizer and cardboard packaging; this would also drive the demand for developing high yielding synthetic-fertilizer free cropping systems ).
In my view a programme of these measures in a integrationist framework would bring us close to a sustainable end-point far quicker and more efficiently than the exclusionist approach of Organic-certified systems. One big advantage is that this evidence-based integrationist approach is that it keeps the tool-box full; allowing, for example, the possibility of using GM (under careful regulation). For example, it may be that we can transfer blight resistant genes from resistant potato varieties to susceptible varieties with GM; and if we can do this we should as this may also help the environment. The integrationist approach means that we can use synthetic chemicals where there is a clear net environmental benefit. Most importantly of all we can make sure that all bio-waste is recycled, in a safe way, without having to give in to the squeamishness of organic consumers.

Organic certification codes emphasise practices such as improved animal welfare and other ethical standards. It also favours on-farm nutrient recycling, rotations. But these are not unique to Organic systems and studies from academic institutions and international agencies should be therefore careful not to label these as Organic methods. They are in the tool-box of agriculture generally.

The rise in demand for Organic-certified food does not mean that it is becoming more desirable for society (the rising sales of 4x4 cars in the 1990s does not make them the best choice for the planet). University academics and international agencies that do studies comparing Organic farming with conventional agriculture - may do good work with good methodologies - but they should be very careful to draw conclusions about future policies to promote organic, as their conclusions may be misleading. They should be aware that Organic systems are a great living-experiment but probably a poor model for shifting mainstream agriculture in the way we need it to shift. The paper Can Britain Feed Itself (Land 4 Winter 2007-8 / circulated by FCRN) is to my mind a more interesting study as it takes a broader perspective and looks at a range of different systems – not just setting out to check if Organic is OK or not.

(NB: you can read the Can Britain Feed Itself paper by Simon Fairlie here: http://www.fcrn.org.uk/researchLib/researchlib.php?id=2#4_15 )
Anonymous comment

Have had a look at the report and am mystified by the model the researchers have used to "weight" organic production by region. For example, table 7 arrives at an modelled organic wheat yield of 5.2 t/ha in Yorks/Humber. Compare this with Farm Business Survey own crop summary from 2007:

(http://www.fbspartnership.co.uk/documents/2007_08/Crop_report_Summary07_08.pdf)

Summary

"Driven by a 60 per cent rise in average sale price to £140 per tonne, the improved winter wheat gross margin of £809 per hectare (£488 in 2006) was the main contributor to improved farm profitability in 2007, despite a nine per cent reduction in yield to 7.7 tonnes per hectare, and seven per cent increase in seed, fertiliser and spray costs. Winter wheat set a pattern of reduced yield, higher sale price and higher growing cost that was replicated for every combinable crop....
The year proved to be a difficult one for organic producers. The increased price of organic winter wheat failed to compensate for the 30 per cent reduction in yield to 3.4 tonnes per hectare. The organic winter wheat gross margin of £854 was only £45 per hectare higher than its conventional equivalent."

This reality on the ground (at a macro- i.e. regional level) shows organic wheat achieving 44% of the yield achieved by conventional production on a per hectare basis (not the 67% achieved by using the research model). It might be worth road testing the modelled figures for other commodities in the same way by way of a control.
From Pete Ritchie, pete@whitmuirorganics.co.uk

Although Peter Melchett's introduction paints a great picture, the Soil Association/University of Reading organic agriculture report holds few surprises. Under organic management, cereal yields would be lower: home-produced less intensive eggs, chicken and pork would be more expensive so we would eat less or buy from abroad, and there would be more grass for cows and sheep (as well as probably more woodland and forest when the cows and sheep come down the hill). The report is also slightly disingenuous in relation to dairy since organic dairy farming also relies heavily on imported (organic) soya

The question 'how much food could be produced in England and Wales?' is the wrong one - not just because it leaves out Scotland, but because it leaves out the rest of the world. In a globalised agricultural system, there is a reasonable case for the organic movement to answer: if organic farming can't decently feed the whole world how can we decently recommend it as a moral system? So a coherent global analysis would be helpful - and would echo the climate change argument that it's doable - but our intake of meat and dairy products needs to contract and converge and we would have to be much less wasteful.

I start from the position that organic farming as currently practised in the UK yields benefits in terms of public goods, including animal welfare, (probably) reduced greenhouse gas emissions, biodiversity, soil carbon sequestration and a more thoughtful approach to food. It would be better if there were more organic farms, as a stronger sector would generate more research on nutrient use efficient crops, pest and disease management, breeding for resilience etc as well as more opportunities for co-operation between producers.

So for me there were more interesting UK questions to ask, such as: what would the impact of carbon taxation/carbon trading be on the balance between organic and conventional farming? and conversely: without carbon taxation, since the oil and wheat prices are linked, what combinations of oil price and organic premium and government incentive would be needed for most cereal farmers to convert to organic?
Anonymous comment:

I have read the 'organic' issues with interest, as I have had a close association with both organic farmers and organic certification organisations over the past 30 years, although my involvement has significanltly reduced because I now have an entirely different job which doesn't leave any time to maintain an involvement.

I have always been intrigued by the notion that 'organic is better'. My view of the world is not so simple. I believe that organic farming is a legitimate farming system as is conventional and minimal till etc. Consumers purchase organic product for many different reasons, some of which are based on perceptions and ideology (perceptions are as good as reality in this life I have found).

So, the question - "Can organics feed the world?" is a very legitimate question as long as the organic movement continues to present itself as the only alternative to conventional farming, rather than another legitimate farming system which can live side by side with all the other mechanisms of producing food.

If the organic movement considered itself as a legitimate farming system alongside other legitimate farming systems, then we would no longer need to be asking the question - "Can organics feed the world?" But as this is not so,

I attach a link to an article which provides some information on this question - http://www.sfiar.ch/documents/recommend_dubock_field_crops_research.pdf and another link which you are probably also aware of - http://www.un.org/apps/news/story.asp?NewsID=24987&Cr=food&Cr1

As I am not as involved with the organic industry as I once was, I would prefer to remain anonymous, as I can then choose to be involved in any further discussion or not, depending on what time I have available.
Anonymous comment

The last time we had proper organic production is in Victorian times when soil phosphate indices (for example) were much lower generally than now. No accident that oats (which require less fertile soils) were then, and are now, a major crop on organic farms.

Much of today's expanded organic production is milking the fat of previous decades of inorganic phosphate, potash and agrochemical applications (a few years transition from conventional to organic does not "cleanse" the land of all this inorganic heritage - which is why organic is more about consumer perception than technical reality).

The real test will be to what extent organic production levels can be sustained over the longer term as soils become slowly more nutritionally depleted and weed seed bank rebuilds. As organic volumes increase, farmgate prices go down. Will lower returns/ha mean less long term investment in field drainage (which would impact on total crop land available - which is also shrinking anyway due to other building pressures etc.)?

Response by Peter Melchett, Soil Association

Pete Ritchie rightly says that 'if organic can't decently feed the whole world, how can we decently recommend it as a moral system?'. This is not the sum of our moral obligations though - we also have to feed the world decently without destroying the planet, so in ways that drastically reduce greenhouse gas emissions from farming, and that recognise the restrictions on the use of non-renewable resources that will face farmers in future. The leading European organic research centre FiBL in Switzerland has recently looked at this question on behalf of the United Nations Food & Agriculture Organisation. We have to find a system that can feed everyone decently while reducing global greenhouse gas emissions from agriculture - the legal target for all ghg emissions in the UK is 80% by 2050, and the US climate bill that has just passed the House of Representatives sets a target of 82% by 2050. In addition, we face rapidly declining availability of natural gas used in the manufacture of artificial Nitrogen fertiliser, and an optimistic estimate of global phosphate supplies now running at about 60 years. Morality starts with the recognition that any proposed system of feeding people must do so within massively increased constraints on the resources available for industrialised, non-organic farming compared to the last 60 years.

Pete also says that a more interesting question would be to look at the impact of the cost of carbon on farming. He suggests carbon taxation or trading, but if the price of oil continues to rise faster than inflation over the next two or three decades, non-organic farming may prove to be the more expensive way of producing food, and organic, using renewable energy from the sun to fix Nitrogen via legumes, the cheaper option. Last year, the Soil Association asked the farm business consultants, Andersons, to look at the impact of the price of oil on typical organic and non-organic systems, and their report is available from us.

So, to respond to 'Anonymous' who was involved in organic certification for 30 years, I think the nature of the question we need to ask about the future of farming in the UK has changed drastically since last Autumn, when it was decided that the 80% cuts in greenhouse gases should include farming's two main emissions, Methane and Nitrous Oxide. Of course current organic systems do not provide all the answers, and whatever happens over the next few decades, we are going to see dramatic changes in diets, including substantially less meat consumption in developed and some developing countries.

Farming in Victorian times does not compare to modern organic farming - crop varieties have developed, the power and efficiency of agricultural machinery has increased dramatically, as has our scientific understanding of soils and Nitrogen conservation, and much else. It is true that in the UK over the last sixty years we have seen virtually no research aimed to help organic systems, but there has been more research in many other European countries. We desperately new crop breeding aimed at low input systems, for example.

As for the legacy from non-organic farming, many weed problems, particularly major arable weeds like blackgrass and wild oats, decline on conversion to organic - control in lower fertility systems through crop rotations and sometimes limited mechanical and hand weeding are generally effective. There is no evidence to support the notion that organic farming relies on fertility built up by non-organic farming. On the contrary, experience suggests that organic fertility builds the longer land is farmed organically. Of course, organic systems are not closed, and we need to do more in future to recycle nutrients, in particular phosphates in human waste. But organic systems are already far less reliant on external inputs than non-organic systems.

Comment on wheat yields by report author Philip Jones

The organic yields estimated in Table 7 were not ‘modelled’ in the sense implied above, but were calculated, as explained in the text, by dividing total regional output volume (for each commodity in each region) by the total area (of each commodity in each region) under organic production. The data used in the calculations were taken from the organic sub-sample of the Farm Business Survey (176 farms) for the year 2006. The FBS data provides a coding structure that allows the organic status of not just the farm to be identified, but also individual enterprises on the farm. Care was taken, when generating these calculations, to scrutinize these codes and enterprises that were not at least in conversion were excluded. Using the case of wheat for illustration, it should be pointed out that the organic yields given in Table 7 of my report are based on 2006, while the average yield given in the text quoted by the anonymous reviewer (ie 3.4 t/ha) is based on the performance of organic agriculture in the year 2007 when, as the author (Ben Lang) points out, there was adverse weather which depressed organic wheat yields by 30%. If you discount for this 30% yield reduction, the assumed organic wheat yield is near 5 t/ha – which is pretty close to the average value of 5.4 t/ha implied in my own calculations for England and Wales for 2006. It should also be pointed out that the adverse weather in 2007 had markedly different effects on conventional and organic wheat yields, with conventional being depressed by just 9% and organic by 30%. In view of the atypical weather (and differential yield response) it is probably not sensible to use data taken from this particular year alone as an indicator of the differential between organic and conventional wheat yields.[end quote]

Working with the Water We’ve Got

dzetland@gmail.com (David Zetland) — Tue, 30 Jun 2009 10:05:00 +0000

A guest post by Chandler Mazour*

Growing up on a dryland corn, sorghum and wheat farm in Lawrence, Neb., my family realized the importance of water to our livelihood. Our area, in south-central Nebraska, receives 25 inches of rain annually, just enough for our sorghum and wheat, but a bit shy for the amount needed for corn on our clay soils. Timely rains made for happy harvests, while stretches of dryness and even drought felt like we were kicked in the gut. Thousands of farmers in Nebraska—and millions around the world—experience those emotions yearly.

Recently, I’ve accepted a new responsibility in Monsanto that will try to help farmers stay on the happier side of the spectrum: I’m the site lead for Monsanto’s Water Utilization Learning Center in Gothenburg, Neb., which opened on June 16. The facility studies cropping systems comprised of world-class seed genetics, agronomic practices and biotech traits, including water-use efficiency technologies such as drought-tolerant cropping systems. At Gothenburg, Monsanto hopes to provide some insight on how crops can utilize water more efficiently.

Gothenburg provides a prime location for water research on crop production because it is near the transition zone between dryland and irrigated cropland. The area receives roughly 22 inches of precipitation each year. For every 25 miles east that you travel from the town to the eastern Nebraska border, rainfall increases one inch; for every 25 miles west to the western Nebraska border, rainfall decreases one inch. In fact, Nebraska alone has more biomes than the area from eastern Nebraska to the Atlantic Ocean. With a wide range of annual rainfall (a 20-inch difference from east to west) and two different agronomic systems (dryland and irrigated), there are plenty of options to simulate different crop production and water use in Nebraska.

At Gothenburg, Monsanto is taking a “systems approach” to telling the story of water use in crops. On the 155-acre farm, we have broken down each part of the farming system (genetics, biotechnology and agronomic practices, such as weed control, irrigation management and tillage) into 80 demonstration plots that help to inform farmers and visitors how each part plays an integral role in producing more while using fewer inputs. For example, we have plots to simulate residue cover for conversation tillage at no corn residue coverage, 40 percent coverage and 100 percent coverage. At each of those plots, we are controlling for water use, either letting the plot receive a natural rainfall or irrigation to supplement rainfall. Also in those plots, we have various corn hybrids to showcase which seeds may work best under the various conditions.

The side-by-side comparisons and test plots provide an educational experience and represent real life challenges for the farmer and empower him to make the best decisions for his farm.

But the key factor that we’re looking at in all of this is water’s role in crop development and growth. At some point during the growing season, millions of acres of cropland undergo some drought stress. According to the University of Nebraska-Lincoln, annual losses from drought have been estimated at $6-8 billion in the United States. In addition, there are many farmers who are overwatering their crops in irrigated operations. At Gothenburg, we have the ability to control water use in various cropping systems—whether it’s simulating drought conditions or overwatering a plot to simulate a high-than-average annual rainfall. These capabilities enable Monsanto to provide an opportunity for growers to find the best water management practices for their farm and, ultimately, increase yields using fewer key inputs.

Bottom Line: Agriculture accounts for more than 70 percent of global freshwater use. If the industry reduces its water footprint by 1 percent, we save as much freshwater as five-and-a-half Lake Superiors. With centers like Gothenburg, we may be able to do that faster than imagined and help farmers make adjustments to their farming operation to grow higher yields with fewer inputs.

* Manager of Monsanto’s Water Utilization Learning Center

Speed Blogging

dzetland@gmail.com (David Zetland) — Tue, 30 Jun 2009 10:04:00 +0000

Chronicle of a Death [of a River] Foretold (here one year ago): "Last October, Chinese engineers finished construction of the Xiaowan dam on the upper reaches of the River Mekong... the hydroelectric dam will for the first time catch the great Mekong flood that rushes out of the Himalayan mountains, and then gathers monsoon rains and snowmelt as it surges through the steep gorges of Yunnan. The reservoir will eventually be 105 miles long. The first electricity will be generated next year and help keep the lights on as far away as Shanghai, more than 1,200 miles to the east...The Mekong is destined to become China’s new water tower and electrical powerhouse."
Bombs Not Bottles: "A plane passenger was able to take a six-inch serrated knife past airport security but was stopped before boarding for carrying a bottle of water." [Insert TSA horror story here...]
"Until the world’s population stops growing, there will be no end to the need to squeeze individuals’ consumption of fossil fuels and other natural resources... Population growth constantly pushes the consequences of any level of individual consumption to a higher plateau, and reductions in individual consumption can always be overwhelmed by increases in population. The simple reality is that acting on both, consistently and simultaneously, is the key to long-term environmental sustainability. The sustainability benefits of level or falling human numbers are too powerful to ignore for long."
"Swedish authorities recommend citizens to reduce their meat and rice consumption as a way of reducing greenhouse gas emissions. The first of their kind, the guidelines are now being sent out for reactions and inspiration from other EU countries. ‘Meat – beef, lamb, pork and chicken – is the food group that has the greatest impact on the environment...'"
As I said here, water fraud (at Nevada Irrigation District) was NOT the work of a "few bad apples" but a systemic fraud to increase supplies by over-estimating "use it or lose it" use.

Monday Morning Smile

dzetland@gmail.com (David Zetland) — Mon, 29 Jun 2009 10:44:00 +0000

[This story is funny but is not strictly true wrt inevitable or rockets...]

The US standard railroad gauge (distance between the rails) is 4 feet, 8.5 inches. That's an exceedingly odd number.

Why was that gauge used? Because that's the way they built them in England, and English expatriates built the US railroads.

Why did the English build them like that? Because the first rail lines were built by the same people who built the pre-railroad tramways, and that's the gauge they used.

Why did 'they' use that gauge then? Because the people who built the tramways used the same jigs and tools that they used for building wagons, which used that wheel spacing.

Why did the wagons have that particular odd wheel spacing? Well, if they tried to use any other spacing, the wagon wheels would break on some of the old, long distance roads in England, because that's the spacing of the wheel ruts.

So who built those old rutted roads? Imperial Rome built the first long distance roads in Europe (and England) for their legions. The roads have been used ever since.

And the ruts in the roads? Roman war chariots formed the initial ruts, which everyone else had to match for fear of destroying their wagon wheels. Since the chariots were made for Imperial Rome, they were all alike in the matter of wheel spacing.

Therefore the United States standard railroad gauge of 4 feet, 8.5 inches is derived from the original specifications for an Imperial Roman war chariot.

Bureaucracies live forever.

So the next time you are handed a specification/procedure/process and wonder 'What horse's ass came up with it?', you may be exactly right. Imperial Roman army chariots were made just wide enough to accommodate the rear ends of two war horses. (Two horse's asses.)

Now, the twist to the story: When you see a Space Shuttle sitting on its launch pad, there are two big booster rockets attached to the sides of the main fuel tank. These are solid rocket boosters, or SRB's. The SRB's are made by Thiokol at their factory in Utah. The engineers who designed the SRB's would have preferred to make them a bit fatter, but the SRB's had to be shipped by train from the factory to the launch site. The railroad line from the factory happens to run through a tunnel in the mountains, and the SRB's had to fit through that tunnel. The tunnel is slightly wider than the railroad track, and the railroad track, as you now know, is about as wide as two horses' behinds.

So, a major Space Shuttle design feature of what is arguably the world's most advanced transportation system was determined over two thousand years ago by the width of a horse's ass.

And you thought being a horse's ass wasn't important?

Bottom Line: Ancient horses' asses control almost everything... and current horses asses are controlling everything else.

hattip to jwt