Category Archives: Drought

Worried

I’m reading a lot about Australia’s drought these past couple days.  Two things.  First, it looks exactly like an accelerated version of my dystopic version of how California agriculture will respond to climate change.  I’m always relieved at validation, because I thought through that post from first principles, not from copying a drought scenario.

But, one real bad thing is that one of the sidenotes in my old post is pretty prominent in these articles about Australian drought.  Farmers kill themselves a lot.  I guess the identification with their land and way of life is overwhelming.  Maybe people at the Department of Public Health know more about that, but I don’t think many water managers think of responding to that as part of their job.  Also, the first and worst victims of California’s water scarcity are and will be farm workers, but I don’t see mention of suicide in any of the newspaper stories about them.  Why do farmers kill themselves but the more destitute farmworkers not?  (Catholicism?  Different sort of self-identification?  Sampling and reporting error?)   What’s going on here and how does it become part of drought response?

Later: Relevant. And another article mentioning drought and suicide.

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What does the drought cost?

I got to wondering whether the drought will necessarily cost us money.  The numbers for ag are clear:

Richard Howitt, professor of resource economics at UC Davis, last week offered sobering numbers to the state Board of Food and Agriculture.

Using computer economic models and DWR water data, Howitt estimates 40,000 jobs will be lost, along with $1.15 billion in income.

But this is just the first splash of trouble, because Howitt’s estimate applies only to areas of the Central Valley south of the Delta, and only in the farm sector.

They get quoted all the time, but I can tell you for sure that the reason they get cited so much is that his study is quite literally the only study we have. People want to quantify the effects of the drought, so they give the only numerical data we have. That’s understandable, although people confuse “the only thing we know” with “the whole story”.

However, this drought has also been a huge spur for urban conservation. If the premise behind conservation is true, that measures like fixing leaks and lawn removal and fixture replacement are pure efficiency gains, then presumably most of the urban drought measures will have some payback rate. Districts could have gotten those returns at any point, but it took a drought and someone else’s money to get them moving. I’m also seeing stuff like this, where the drought has brought enough pressure to get institutional realignments. I don’t know anything about that one in particular, but presumably the participants think there are gains from it. If so, and if the infrastructure and behavior changes stick around after the drought, racheting down inefficiencies in urban use could plausibly have a positive payback within a few years.

I don’t know that to be the case, and I don’t know how it will compare to ag losses. But it that is the kind of contrarianism that drives traffic to blogs and gets an econ grad student big press. So I’m hoping that some econ grad student takes it up. I’m sure Howitt’s study is fine for what it is, but I’d like to see more of the picture.

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What drought means to most Californian urban users.

The people I’m generalizing about in this post are residential water users who grew up in a modern urban water system, with a district providing them with flawless water reliability.  I know that’s not the case for most of the world, but I want to make a point about my peers.)

Drought, for most urban users in California, is not about water. Furthermore, residential users in California do not care how much water they use.  People in California are not emotionally attached to using a certain number of gallons per day; no one wakes up and ponders, ‘do I want to use 135 or 145 gpd today?  I need a little pick-me-up.  145 it is!’.  People can be trained, through their water bill, to start thinking of gallons per day, but no one feels better just for using any amount of water.  Rather, residential users want a number of aesthetic experiences for which they need some water.  My guess is that they appreciate, from most utils to least utils, a shower with water pressure*, drinking water, washing dishes with the water running, growing some houseplants, having a green landscape, washing driveways.  They also use water in ways that they derive no satisfaction from.  Carrying human waste away, leaking from faucets, overwatering plants, washing clothes in it.   The results of those things are nice, neutral or annoying, but if the nice things could be achieved with something besides water, it would make no difference to people.

Because most urban Californians will never experience an interruption of water service, nor rations small enough to threaten their bodily uses of water, what drought really means to most people is that they have to pay attention.   What they really want is a few daily experiences (that don’t have to take much actual wet water) and that they don’t have to think about it.  In a society as rich as ours, a drought starts the moment casual users have to think about it.  The marker of the start of a drought is completely independent of snowpack or precip.  For most people, a drought starts when they get a bill insert or see something about it in the news. At that point, the privilege of living in such a wealthy society that you don’t have to fix your broken sprinkler is gone**.  That is what drought will mean to most people.

Water managers focus on meteorology and absolute amounts of water, but the way to alleviate the experience of drought for most Californians is to reassure them that they can keep the water experiences they value and to make giving up the other ones trivially easy.

This is not a particularly focused prescription, and it is the real effect of most of the conservation measures that cities and districts are employing.  (Put a nozzle on your hose when you wash your car, don’t serve water unless it is requested.)  It also suggests that scaring people about drought is itself the drought for most people, but I don’t mean to argue that they shouldn’t be aware of it***.  My point here is that what is important to people is their subjective experience.  That is as true for their uses of water as it is for their perception of drought.  We have to manage water, but it might be more important to manage the casual user’s experience of drought****.

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Why districts are slow to charge market rates for water.

Why don’t districts pass the marginal costs of water on to their constituents?

HAH! Do you see what I did there? Constituents? Not customers, constituents. That’s the first reason districts don’t want to raise rates and pass the marginal costs of supplying water to users.

Districts are public institutions.
Districts are not companies. They have no profit function. They do not, for themselves, want to capture the full willingness to pay for water. That is not what they are for. In fact, their mission is some variant on “cheaply and reliably deliver water”. Because that is why local citizens organized and incorporated a district. Charging any more for water than it costs to get, treat and deliver is failing their mission. It is often also violating their bylaws, charter or the state laws that give them authority.

From the district side of things, they don’t want to make water expensive. Once O&M is covered, they have no incentive. What would they do with the money? Gold plate their pumps? They don’t have shareholders to distribute it to.

This neglects the ‘price signal’ aspect to charging lots for water (show the public it is valuable! no wasting!). There’s a lot to be said for that, so why don’t districts raise rates for that purpose and, um, give any revenues above operations and maintenance to an orphanage?

Board members are publicly elected
The people who set rates for a district are the board members, who are publicly elected by people in the district. They are not strongly motivated to increase rates for abstract considerations like “send a price signal”. First, they’d be increasing rates on their very own water. Second, they are answerable to the people in the district at the very next election. If you go back to those stories on raising rates, did you notice the part about how people are pissed? And organizing? Those are the friends and neighbors of board members, and also the people who will yank them out of office at the next election if rates go up (long digression on the opposition to rate increases in a post below).

But maybe a district really does need to raise rates, to pass along higher costs of getting new water or in this drought year, to encourage conservation. A standard technique is to charge very little for some small amount of health and safety water, and then high prices for frivolous extra water like elaborate water fountains in your tropical rainforest garden, Richy Rich. Economists are all, this is SO OBVIOUS. Do this already. Yeah, well, until last October, it was illegal. This is why economists need to pay closer attention to the law side of things.

Motherfucking Howard Jarvis.
There is an elaborate legal backstory, but basically, one side effect of Proposition 218, put forth by the Howard Jarvis Taxpayers Association, was that it became illegal to charge any household more than the costs of conveyance to that parcel. It was illegal to charge punitive rates to send a price signal to wasteful users. The last year of drought made this such a problem that the legislature corrected it.

So you have all these economists telling districts they could solve their shortages by charging more for excessive use, and districts saying, we’ll get sued. It was illegal until six months ago. I went to a number of different agency meetings, where everyone talked about how conservation pricing was such a great tool, and I kept saying, it is illegal. I think we should stop recommending illegal measures to the public. (Or, if we don’t care about legality, I think we should get far more imaginative.) People didn’t believe me because it evolved over three court cases, but then I’d explain Prop 218 and the court cases, and they’d realize that was a huge problem. Fortunately, Assemblymember Wolk solved it.

So when people say, ‘why haven’t districts instituted conservation pricing already when it is the obvious solution’, one answer is, ‘because there have only been three board meetings since it became legal to do that?’ Then my question is, did you know that? Did you realize that there are legal and institutional barriers that slow districts down? Do you know what they are? It isn’t necessarily ignorance or backwardness on the part of the district. The world that districts operate in is far more complex than the world of economic theory.

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Why it isn’t simple to charge market rates for water. Background.

I see this stuff all the time (sometimes, I see double!): an oversimplistic assessment that raising rates for water would end shortages. I am, actually, in favor of charging by unit of water (so you pay more when you buy more, a concept so straightforward that it is embarrassing to have to say it explicitly, but not always the norm for water pricing). I am also in favor of charging a rough marginal rate for water. These days the cheap chunks of water are thoroughly exploited and the next source costs more to collect, treat and deliver. I’m fine with water users seeing that cost for what it is. So it isn’t that I’m opposed to the concept of raising rates on water. But I do get frustrated when people act as if that is straightforward and obvious and the full solution. Districts aren’t dumb. There are reasons they have the pricing structures they do.

Some things to get out of the way:
1. No utility sells water. Water is free. What they sell is capacity and distribution. You are renting a length of pipe as water moves through it. The way to tell how much you bought is by measuring the amount of water, and that’s how they charge you. For your billing and behavior, this is just like charging you for water, so this is a minor technicality that makes no difference. It just bugs me to hear people saying to charge more for water, because I am hopelessly pedantic and literal minded.

2. It isn’t coincidence that the people you hear saying that pricing water is the bulk of the solution are all economists. A lot of the reasons pricing structures change slowly are over on the legal and institutional side; economists dismiss those as trivial, malleable impediments, but lawyers understand that they give districts a different set of incentives.

3. Rates ARE going up. Fast and hard this year.

4. The word “shortage” is doing some work that gets skipped over a lot. When everyone says “drought” and “shortage”, what we basically mean is “less then we’re used to”. We don’t mean, and won’t in the foreseeable future, “not enough to drink and bathe”. So far we’re not even close to that range. What we do mean is “not enough to use it like we’ve always been able to”, on lawns and embedded in our meat supply and on wasteful appliances and by deferring maintenance on leaky pipes.

Now here’s the thing. When laypeople hear No More Shortages, they think, ‘there’s plenty, I can continue hosing down my driveway just like I always have.’ When economists say No More Shortages, they mean charging so much for water that people cut out the uses they don’t want to pay for. Then supply curve intersects demand curve, and the economic definition of No Shortage is met! Yay! In real life, high price signals that cut out less-intensely-wanted uses means no lawns, fewer burgers, switching out appliances and replacing leaky pipes. That is what laypeople thought was a shortage! It is not the careless plenty they grew up with.

I am personally fine with this. I don’t have any emotional attachment to careless water management or lawns. I do want to point out, however, that when economists say No More Shortage, they are talking about what the broad public considers a shortage (less than I’m used to and I have to pay attention).

5. One of the standard critiques of markets is that since wealth is distributed unevenly, the marginal value of a dollar is different between rich and poor people. The rich will be able to afford their swampy lawns while the poor scrimp to drink. You can create pricing structures to alleviate this (a very low rate for the initial chunk of water, or refunds to low-income users), if environmental and social justice are important to you. Those are worth explicit consideration and decision.

All that out of the way, lets get to the good part. Why don’t districts pass the marginal costs of water on to their constituents?

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Fix California’s water system!!!

My main take-away from this meeting on a California Constitutional Convention? I didn’t expect to hear so much about water. The first speaker, from the Bay Area Council, listed water as the second most important crisis the state has to solve, after resolving budget procedures. The next speaker, Walters from the SacBee, mentioned it alternately first or second every time, water and the budget. It came up a couple more times, always as an important function of government that California was failing at.

Huh. I pay a lot of attention to water, but I don’t personally consider it a scarier problem than climate change, converting our energy sources and distribution to renewables, densifying cities, matching up our population to a quality of life. I’m pretty scared of the way we imprison people, actually. That strikes me as a real nasty feedback loop. I mean, yeah. Our water system poses some hard problems, but I wouldn’t have picked it as one of the two top problems in the state1. I wonder how much that public perception has to do with being in the third year of a drought.

Anyway, all that talk of the government failing at water made me wonder what the state could actually do for water systems, in a beautiful world of very good governance. These people who want the state to fix the water problems, what can they expect?

I know what they want. They want to keep using water they way they do now, not pay much more for it, and have so much faith that it will always be there when they open the taps that they never think about it again. That’s the standard they’re used to. Heh. A perfectly functioning state government couldn’t provide that. We will have less water overall, spread over more people, and the best Constitution in the world will not make it rain.2 Water will be scarcer and more expensive.

What, then, could the laws of our state actually enable? Three things: reliability, certainty and allocation. This is not the same as more water. Our old strategy was to have so much that even with sloppy management sloshing water all over, reliability, certainty and allocation were largely met. (Unless you were a salmon or smelt.) Now, though, we’re going to have to focus on what people really want.

The way to support reliability is through the budget process. Paying for O&M on our existing plumbing, putting in cross-ties and canals so that regions are served by multiple systems, instead of one that can fail and leave them stranded, reconstructing and getting rid of existing bottlenecks. Our current projects could be optimized and better controlled. Better reliability could be bought by a state government that could budget for it.

Certainty and allocation come from distribution rules, and this is where overhauling the state codes or Constitution can actually have some effect. I have opinions about what that should look like, but it is more important that people realize that this is the field of play. “Fixing water in California” does not mean “perpetuating what we’re used to”. It means making rules for who gets how much of what little water arrives and why. It means deciding who gets the shaft when flood or drought arrives, and whether there will be compensation. It means that Silicon Valley execs can know that they’ll get all of what they need nearly all the time for a lot of money. It means that growers who commit to accepting flood waters know they’ll get paid back from a community fund, so they can exist as farms the year after. It means that cities can plan for expected populations and know they’ll have a smaller but reliable amount of water for all the households they serve.

That’s what new rules could do. That’s the best a new Constitution could do. It won’t “fix the water system” in the sense of making more water exist so we can live like we have. “Fixing the water system” means meeting the underlying needs (reliability, certainty, allocation) so that people can adapt and choose.

 

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Everyone laughed at my merry wit, but I was only sixty percent kidding.

I was chatting with some people from my agency about how to talk to the press about this drought. (This is not a problem for me, mind you. The press does not contact me.) Reporters keep wanting to know whether we can attribute this drought to climate change. There are a bunch of answers to that, mostly variations on “we don’t know.” One answer is, ‘we’ll know in retrospect’; reporters apparently don’t want to wait a couple decades to know what to call this drought. The problem with attributing this drought to climate change is that Californian hydrology has always had a ton of variance. This is the third worst two-year drought since we’ve been keeping records, but we are still within historical variance. (Shoot. For that matter, historical variance goes way outside the bounds we’re used to. Here’s a write-up of a neat tree ring study that shows paleodroughts that lasted for centuries.) In one sense that is kinda handy. At a talk I went to last summer, the guy from PG&E said that because they had to build their hydropower generation facilities to handle such a wide range of flows, they don’t expect to have to replace their hydropower facilities for about a decade. Even though they’re seeing more high flows, and believe they’ll see floods more often as spring snow turns to spring rains, they’ll still be within the range of flows they designed for. But it does mean that we can’t say for certain that this unusual drought event is from climate change.

The conversation turned to what to say about the concept of “the new normal”. The Planning and Conservation League is promoting the concept that this drought will be “the new normal” under climate change, and what should we say about that? That’s a little rough too. The climate will change steadily for at least a century; we don’t know where it will stabilize. For as long as we can realistically foresee, normal will be continuous change. So when reporters ask if this drought will be the new normal at the end of that? I suggested “Dear god. We hope so.”, but I didn’t see that in the papers this morning. This is why my work doesn’t let me out in public.

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