Yearly Archives: 2015

California’s Water Conservation Regulations and the Law of Unintended Consequences Part 2—Economic Impacts

What are the unintended economic impacts of California’s water conservation regulations?

One must only watch the evening news to surmise that unintended consequences are frequently economic in nature. The prices of oil (and therefore, gasoline), coffee or any other tradeable commodity rises and falls according to policy implementation and political decisions.[1] The water industry recently saw this affect when the Cadiz Inc. stock price plunged following a controversial decision by the Bureau of Land Management declaring that the proposed use of a railroad right-of-way for the Cadiz Water Project “does not derive from or further a railroad purpose.”

When it comes to California’s state-imposed conservation, the unintended economic impacts are those things that affect the pocketbooks of residents and businesses and the viability and vibrancy of communities.

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Shopping for Bottled Water: Do you know where it comes from?

After Thanksgiving wrapped up last week, Americans headed out to a time-honored tradition – “Black Friday” shopping. As unfortunately is usual for this season, some shoppers got a bit rowdy as they fought over flat screen TVs, electronics and other on-sale items. Video footage from stores in Texas and Kentucky showed a few unruly store patrons throwing fists over discounted electronics and items on their holiday wish lists. So what do brawls over Black Friday deals and a water blog have in common? In this post, I will discuss an item that you may buy every week, but is in some areas fought over – bottled water. The impacts of the drought have put an increased focus on the uses for our limited water supplies, and the bottled water industry has not been immune to the discussions over whether bottling water in drought-stricken areas is appropriate. I will discuss the sometimes surprising places where bottled water comes from, provide a few examples of communities where there is debate over the appropriateness of bottling water from municipal sources, and potential policy implications for the industry going forward. Continue reading →

Inefficient Markets, Perverse Incentives and Regulatory Hurdles Part II: The Potential Cures to California’s Water System

For the last few winters, forecasters have seen promising El Niño conditions form in the Pacific, only for the conditions to fizzle in 2013 (jokingly referred to as “la nada”) and again in 2014. For this winter, scientists now have no doubt that El Niño conditions will remain in the Pacific – the only questions are when the rains will begin and how severe they will be. According to the latest NOAA readings, current average temperatures in the Southern Pacific (dubbed “Region 3.4”) are 3.0 degrees centigrade above normal, which is higher than the 2.8 degrees above normal that the 1997-98 El Niño pattern saw at its peak during the week of November 26, 1997. The strength of the current El Niño conditions have led some scientists to dub the pattern as “Godzilla,” and some scientists predict that the conditions could bring a wave of very strong storms to the Western United States this winter. Continue reading →

Why Inefficient Markets, Perverse Incentives and Regulatory Hurdles are Causing Deeper Strains on California’s Water System

In the midst of California’s fourth year of drought, cities and water districts are starting to get tougher on both individual water wasters and cities that are not reaching state-mandated water reduction targets. In late October, the East Bay Municipal Utilities District outside of San Francisco released the names and data of the top-100 water wasters in the District. The list includes venture capitalists, business executives and even former and current baseball and basketball stars. The top water waster identified was Chevron executive George Kirkland, who used an average of 12,579 gallons per day. Extrapolating that water usage to a monthly basis (assuming 30 days in a month), Kirkland was on pace to use more than one acre-foot per month, more than an average California household uses in an entire year! Continue reading →