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Water Wars

Several months ago I predicted a water war in the next decade.

Tens of millions of Americans have or are migrating to the southern and western states,
where there are many areas of chronic water shortages (duh).

Now Governor Bill Richardson has fired the first shot, suggesting a national water policy, which is shorthand for stealing water from the Great Lakes. Rustbelters are outraged, some suggesting we sell Richardson water at $80.00 a barrel.

Vegas, probably the fastest growing area in the country, is sucking as much from the Colorado as it can, and will still have major shortages, perhaps within months.

The Great Lakes are in a low cycle and any diversion would probably be an ecological disaster.

Beyond that, should those in the midwest pay for the bad judgments of many other citizens and public officials?

(Most of the Democrats are refusing to set foot in Michigan because it has an early primary, and ignoring Ohio because of a late primary. Maybe they can get water from New Hampshire.)

Individuals and businesses are welcome to move back to the Great Lakes area, where there is plenty of water, plenty of electricity and inexpensive housing.

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More on water resources and GATS

OMB Watch has posted a notice on something we rarely think about, and take for granted.

The Raw Sewage Overflow Right-to-Know Act (H.R. 2452), introduced by Reps. Tim Bishop (D-NY) and Frank LoBiondo (R-NJ) on May 23, requires sewage treatment facilities to notify the public, public health officials and any other downstream “affected entities” when there is a sewage overflow within 24 hours of the incident. A Senate companion bill (S. 2080) was introduced by Sen. Frank Lautenberg☼ (D-NJ) on Sept. 20.
The long-standing but little-known problem of sewage spillage in waterways is a major cause of illnesses stemming from waterborne contaminants. American Rivers, a national advocacy organization, estimates that over 850 billion gallons of raw sewage are released every year. Rainstorms easily overwhelm sewage systems, and broken or clogged pipes contribute to the 23,000-75,000 raw sewage overflows every year. Federal clean water funding has plummeted under the Bush administration, and the already strained sewage systems further deteriorate every year. EPA estimates between 1.8 million and 3.5 million people become sick due to recreational contact with sewage-contaminated water. With no national requirement for public notification, the majority of states do not have regulations or policies in place, and most Americans have no idea when it is not safe to be in the water.

In the GATS agreements, sewerage is part of an industry that comes under accessible categories for international and national privatization, while purifying drinking water does not. But it is part of the aging infrastructure that is rarely mentioned, and one wonders how much it is worth.

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Reader Dan: Third Post on Water Issues

Reader Dan continues his series on water issues.

Many legal, institutional, and administrative preconditions such as the need for enforcement mechanisms, clear methods of complaint/dispute resolution and administrative transparency, are common to any pricing tool. (my emphasis) However, volume-based, demand management tools require infrastructure capable of volumetric measurement.

Sampath (1992) observes that pricing is dependent on type of physical delivery system suggesting that volumetric pricing is only possible under demand and closed pipe systems as opposed to rotation and continuous flow systems. However Malano and van Hofwegen (1999) take a broader view and describe the classes of service delivery including all the on-request (or arranged) types of delivery. In practice there is a wide range and mix of delivery services and service standard negotiation. The extent to which different service modalities are arranged in such projects as VWRAP, cited above, indicate the complexity of the issue. However. even though there may well be potential for changed patterns of water delivery, volumetric pricing to farmers does not appear suitable on the vast majority of surface irrigation systems in developing countries – including all those where rice is grown. In the case of VWRAP, it is anticipated that at the level of the water user associations, there will be contracts specifying volumetric deliveries, but no volumetric pricing as such. The primary emphasis is on delivering an agreed level of service and building the capacity of the service provider to do so by modernizing management and infrastructure.

Summary
Many social, political, economic, cultural and geographical factors affect pricing and production, highlighting the diversity of irrigation systems in general. Thus, various commentators emphasize the need to take diversity into account when implementing water pricing. Molle (2001) points out that economists could come to face similar criticism to engineers for being too discipline-oriented and unrealistic. Ahmad (2000) emphasizes: ‘There is not a general strategy or model to adopt for a specific water pricing policy of a country. Every country has to develop its own strategy.’ There is a danger of pursuing a ‘one-model-fits-all approach’ because administrators find such an approach easier to implement. Therefore, there needs to be a change of attitude within agencies implementing reforms.

I want to reinforce Bruce Webb’s and MG’s comments as well as my own with this note from my last post. I thought drinking water and agriculture needed separate evaluations aside from the food issues themselves. One is the delivery as a closed pipe system from source to customer as is more common for drinking water systems.

Another for agricultural use that one day might have to be closed pipe like oil as water might be treated as a scarce commodity, but currently is not as open irrigation schemes consider water as a relatively non-scarce commodity.

The difficulties to consider in capitalization of infrastructure with varied market and needs of different locales is complex.

The jurisdictional issues make for a fragmentation that might be necessary instead of something to iron out as in the WTO GATS format. Benefits and costs with a very special need to guarantee proper regulation is a pre-requisite. These are normal preconditions to ANY pricing strategy, and involve negotiation by the parties involved. Current WTO GATS 2000 expansion needs a look.

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Dan’s Second Post on Water

Dan’s First Post on Water

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Dan on "Water Solvable II A trip to the United Kingdom"

Reader Dan sends a second post on water rights.

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A good history of public/private interactions is found here . The conclusion posits it is not strictly market ideology that drove markets but change in technology, changing societal expectations and the like.

Karen Bakker has research on privatization that has focused on England and Wales, where water supply companies were privatized by flotation on the London Stock Exchange in 1989. Just over a decade after privatization, two water supply companies proposed that they be returned to public ownership. Also here.

More recently, Bakker has href=”.(2005) ‘Neoliberalizing nature? Market environmentalism in water suppy in England and Wales’ Annals of the Association of American Geographers. 95(3), 542 – 565”>argued that the water supply industry has been substantially re-regulated, due in part to the failure to convert water supply into an economic good. She speaks to general debates about the economic identity of water.

In regards to Canada, Bakker says to use a public stance with modifications.

Several ideas stood out:

The need for intense capitalization for upgrade and repair could not be done to meet rather severe leakage problems and still satisfy shareholder demand for profit. I realize there are other issues. It was intensive capital need in a basically stagnant market, in that it was a supply of networks or archipelagoes rather than profit from water as a commodity through increased use. The only way to raise enough capital was through increased prices in the UK.

The simple private versus public arguments were not adequate to account for the variability of jurisdictional problems, public health, shareholder versus customer needs, and the fact that water is an intensely local resource and hard to transport compared to other resources.

An analysis of the inadequate response to drought based upon an analysis of corporate structure in each watershed and other issues.

The cancellation of service for non-payment engendered an increasing concern over public health and social welfare issue costs, so needed a way to account for public health and public good, which was adaptable.

In the global market water rights need fixing before establishing markets, as noted before in comments.

US capital investment might look like this. Long term borrowing versus pay-go issues are here.

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