I’ve tried three times to write this up nicely. I remembered Hilzoy’s saintly patience. I thought about vinegar and honey. I want to be part of a constructive dialogue on water policy with bright people who listen with respect. But apparently I’m going to be the flamethrowing part of the constructive dialog, because this op-ed brings up all my old frustrations about economists. That piece shouldn’t be as bad as it is. The dude seems like he does a ton of bright, interesting research. I’d love to listen to him discuss his own research. I’m sure I would learn a lot. But he does not know what is going on in Californian water today. The guy make two mistakes that are instant give-aways.
Dr. Carson writes both:
water rationing should never be any part of an intelligent water policy.
San Diego needs an increasing block rate structure with more blocks and higher prices for those using the most water.
The only way someone could write both those things is that he or she took a surface level read of newspaper stories and didn’t do more. I know this because every single agency that instituted a rationing program this year did it by instituting an increasing block rate schedule (or threatening fines, which is about the same). That rate structure is what the newspapers called rationing this year.
The rationing would be achieved by adopting “shortage-year rates” to encourage conservation by altering the billing method used by the DWP.
But barring a deluge of rain between now and March, the 90,000 people who depend on the district could be forced to cut water use by more than one-third, or pay steep fines.
In Folsom, first-time violators get a warning. A second violation within one month could result in the customer getting their water shut off. A third violation within six months brings fines.
Now water retailers and the county’s 15 cities and towns must translate this vote into specific actions, like watering the lawn only on specific days, or increasing water rates if customers use more than a set amount. The district is asking municipalities to pass ordinances containing these types of measures.
I can understand that if you see the word “rationing”, you think it means rationing like in the former Soviet Union where you can only buy two loaves of bread. But if you know what happens in the real world of California water, you know that never happens. Districts NEVER physically restrict the amount of water someone can buy*. If they go to “rationing”, it works by making the next chunk of water more expensive (by rate structure or by fines). Which is what Dr. Carson recommends!
That’s the first way I know that the economist isn’t knowledgable about what is actually happening in California water this year. The second way is that he says the three magic words:
low-value agriculture growing like alfalfa, cotton and rice in places like the San Joaquin and Imperial Valleys
Whenever you see those exact three things, “alfalfa, cotton and rice”, you can stop listening to that person. That person got his or her opinion from Reisner and hasn’t kept up since. If you read Reisner, you know what that person will say. I can tell you straight up that his prediction, that San Diego or MWD will buy water from those sources, WILL NOT HAPPEN soon.
Why? Long time readers here already know.
MWD will not buy water from fallowed cotton because there is almost no cotton left in California. The decline has been going on for several years now. People who are willing to opine in the paper should already know this.
San Diego will not buy water from fallowed rice because rice is getting good prices these days. It isn’t a low-value crop right now and rice farmers don’t want to sell. Even if rice farmers would sell, neither the state nor the feds have spare capacity to move non-project water across the Delta these days, and buyers aren’t tempted to buy water that might not get delivered.
Alfalfa’s another story, and here Dr. Carson might be right. Last year alfalfa prices were high, because the drought hit pastures so hard that dairies and beef cattle had to buy supplemental feed. This year they thinned their herds, so demand for alfalfa may go down. There are close to a million acres of alfalfa in California; some of that might be retired to sell water to MWD and San Diego.
But I’d be very surprised if the guy who made a blanket statement about “low value crops” did any of that thinking. So far as I can tell, his thinking on water policy stops at the boundaries of economic theory and some old Reisner**. That’s fine. But it isn’t helpful in a debate where informed people already know conventional economic theory and old Reisner. I’ve seen it before, that economists think that knowing economics deeply makes them qualified to speak on other subjects. But it turns out that other subjects are complex and surface level knowledge of the subject plus deep knowledge of economics doesn’t offer anything new. It frustrates the people who are looking for useful suggestions for improving water management in the real world.
*OK, I have heard ONE story about a district putting a flow restrictor on someone’s line. At the height of the ’87-’92 Drought, a super rich guy in Montecito refused to cut back from using thousands of gallons a day. Goleta WD put a flow restrictor on his line, and he responded by trucking in one of those fancy bottled water services to buy water for his lawn. Kept it green the entire year. He wasn’t even living at the house that year. When we’re talking about that kind of money, sending price signals through rate structures or fines doesn’t mean a whole lot.
**When you look at his research, you see that, in fact, he hasn’t written anything on water in several years. He’s looking at oil spills and groundwater pollution prevention. Some air quality stuff. I’d take his expertise on any of those over mine any day.