I finished reading David Zetland's "End of Abundance: economic solutions to water scarcity" a few weeks ago on the ferry from Victoria to Vancouver, BC. To begin, David provides a comprehensive overview of the many facets and issues that are being discussed today in the world of water. What's most fascinating about this book is how economics, good public policy and institutions (with progressive leaders) can help shift water practices that are inherently inefficient and inequitable to ones that are just and sustainable.
David's core thesis is that the end of abundance (which means increased water scarcity in our world) requires institutions and leaders that are willing to use economic incentives and pricing to radically change the way we use water. His bottom line is that the solutions to our water crisis must be local in nature because what happens in water area is unique to that area.
The book is divided into two parts. Part 1 looks at "personal water choices". This refers to the water we use in our households, on our lawns and for personal use. Part 2 explores "social water choices" which is primarily a discussion of the political and bureaucratic dimensions of water on topics like the environment, infrastructure and climate change, for example. I'll provide a story from part 1 and part 2 that capture the essence of his arguments in these respective sections. Following that, I provide my one critique of the book and a conclusion about why the book is important and why you should read it!
In the first part of the book, David provides us with his insights on what kind of pricing structures we should be using in our cities. He refers to a pricing structure called inclining block rate (IBR). He tells the story of Santa Barbara, California that went through an egregious drought in the 1990s. A number of strategies were utilized in response to this drought including the water agency using rigid IBRs. With the IBR pricing structure, the first block of water delivered to Santa Barbara households was $1.09 (the first block was 375 litres and is essentially enough water to meet basic needs like sanitation and water for cooking). Additional blocks were 200 percent higher at $3.27, $9.81 and $29.43 per unit. The rationale of this pricing structure is simple: as you use more water, you pay much more per unit.
This brought changes in behaviour and aggressive price penalties were fast and significant as gross water consumption dropped 50 percent and median monthly household consumption dropped from 25 to 17 cubic metres per month. When the drought eventually ended, prices were lowered but consumption was still only 60 percent of pre-drought levels. The main message here is that Santa Barbara priced their water based on shortages. The economics is simple, the political will is always the tougher battle which is why many places in North America have not brought about IBR structures yet.
There is so much more to part one including how we can better embrace reclaimed water techniques, how we can re-think our approach to bottled water, the energy-water nexus and how we can create valuable and equitable water markets to allocate water more efficiently. Part 1 also provides numerous graphs that explain his water pricing models in a very accessible and non-esoteric way.
Part 2 is even more intriguing and is hard to capture in one paragraph. Zetland discusses several topics including the importance of good visionary leaders in water management, why building more water infrastructure is not the solution to our problems, water and the environment and the human right to water. All fascinating topics that I won't cover in this post.
I think the compelling message in part 2 is that local water management is perhaps the most useful framework we can use to manage our water and alleviate scarcity. I totally agree with Zetland and argued this in a conference presentation in February. In short, there can be many competing values and interests in a shared watershed. A farmer might be using the water to irrigate his/her crops, a city might be getting a lot of its water supply from it or some other group may be using it for whatever reason. These stakeholders might be fighting with each other claiming that they have historical rights to use their allocated amount of water. How do you reconcile the values of diverse communities on a scale that includes everyone experiencing the costs and benefits?
Part of the answer to the question above is to establish rights in baseline quantities and qualities and then facilitate reallocation of those rights. Consider the example of Michigan, U.S, where there is a law that makes all water users responsible for not impacting a watershed. "Property owners and riparians have a right to use water under or adjacent to their property, but any new use that may cause environmental harm needs to be offset by changes to existing uses. The key to this system is a web-based tool that allows anyone to estimate ecological impacts from a new well. If no impact is predicted, the system approves a permit and the well is registered. If impacts are predicted, then neighbours discuss how to reduce it. In the 25 percent of cases where neighbours cannot agree, a state employee gets involved; they reject only 4 percent of the cases they see" (page 184).
The practice above may sound progressive but it is proving to work in Michigan. It's important because it reconciles the diversity of interests surrounding water and the stakeholders have to think about how they are impacting the environment.
My critique of Zetland's book is his limited discussion of water and climate change adaptation.
This critique may be partially influenced by my internship that looks at this very topic. Chapter 10 is focused on climate change adaptation in the water sector but David only talks about how more robust infrastructure and using insurance to price risky living environments (like floodzones) can help us adapt. I agree with him but more discussion is needed on the incentives that we can use to get people involved in climate change adaptation to make their households and lives more resilient to future impacts (example here). I am critical of this section because I think climate change adaptation deserves more attention and David's ideas can certainly be applied to it! As David says, people do respond to incentives and I think institutions have a role to play in creating such incentives by working with the private sector to bring about technologies that can help us reduce water consumption. More writing on this would have made his arguments more cogent in Chapter 10.
I strongly recommend that anyone interested in earth's most precious resource -- the one that keeps us going everyday, provides a natural beauty to our planet and provides a habitat for millions of species -- read this book! The stories, ideas and insights in this book are so valuable whether you are a water manager or someone interested in conserving water. I enjoyed reading the book very much and continue to enjoy Zetland's blog (Aguanomics). I think it's people like David who take the time to write such books, deliver public lectures and write blog posts on this topic that will help shift the way we manage our water in the 21st century.
For you nerds our there, David has been nice enough to provide sample chapters of his book which you can view here.
Thanks for the book, David, it was quite the adventure and I learned a lot.
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