Stories
Slash Boxes
Comments

SoylentNews is people

posted by martyb on Friday March 27 2015, @07:07PM   Printer-friendly [Skip to comment(s)]
from the price-versus-cost dept.

Bill Davidow and Michael S. Malone write in The Wall Street Journal that recent rains have barely made a dent in California's enduring drought, now in its fourth year so it's time to solve the state’s water problem with radical solutions, and they can begin with “virtual water.” This concept describes water that is used to produce food or other commodities, such as cotton. According to Davidow and Malone, when those commodities are shipped out of state, virtual water is exported. Today California exports about six trillion gallons of virtual water, or about 500 gallons per resident a day. How can this happen amid drought? The problem is mis-pricing. If water were priced properly, it is a safe bet that farmers would waste far less of it, and the effects of California’s drought—its worst in recorded history—would not be so severe. "A free market would raise the price of water, reflecting its scarcity, and lead to a reduction in the export of virtual water," say Davidow and Malone. "A long history of local politics, complicated regulation and seemingly arbitrary controls on distribution have led to gross inefficiency."

For example, producing almonds is highly profitable when water is cheap but almond trees are thirsty, and almond production uses about 10% of California’s total water supply. The thing is, nuts use a whole lot of water: it takes about a gallon of water to grow one almond, and nearly five gallons to produce a walnut. "Suppose an almond farmer could sell real water to any buyer, regardless of county boundaries, at market prices—many hundreds of dollars per acre-foot—if he agreed to cut his usage in half, say, by drawing only two acre-feet, instead of four, from his wells," say the authors. "He might have to curtail all or part of his almond orchard and grow more water-efficient crops. But he also might make enough money selling his water to make that decision worthwhile." Using a similar strategy across its agricultural industry, California might be able to reverse the economic logic that has driven farmers to plant more water-intensive crops. "This would take creative thinking, something California is known for, and trust in the power of free markets," conclude the authors adding that "almost anything would be better, and fairer, than the current contradictory and self-defeating regulations."

This discussion has been archived. No new comments can be posted.
Display Options Threshold/Breakthrough Mark All as Read Mark All as Unread
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
  • (Score: 0) by Anonymous Coward on Friday March 27 2015, @07:09PM

    by Anonymous Coward on Friday March 27 2015, @07:09PM (#163290)

    Ah yes more derivative markets will sure make the situation in Cali much more enjoyable.

    • (Score: 2) by M. Baranczak on Friday March 27 2015, @07:14PM

      by M. Baranczak (1673) on Friday March 27 2015, @07:14PM (#163291)

      Somewhere in there, there's a joke about underwater mortgages, but I can't seem to find it.

      it takes about a gallon of water to grow one almond, and nearly five gallons to produce a walnut

      So let's grow them in the desert! What could possibly go wrong?

      • (Score: 3, Funny) by AnonTechie on Friday March 27 2015, @08:02PM

        by AnonTechie (2275) on Friday March 27 2015, @08:02PM (#163305) Journal

        Anything to do with sub-prime water ??

        --
        Albert Einstein - "Only two things are infinite, the universe and human stupidity, and I'm not sure about the former."
        • (Score: 4, Funny) by Jeremiah Cornelius on Friday March 27 2015, @08:48PM

          by Jeremiah Cornelius (2785) on Friday March 27 2015, @08:48PM (#163325) Journal

          I think all that virtual water might be just enough to wash the filth away from the invisible hand...

          --
          You're betting on the pantomime horse...
    • (Score: 3, Insightful) by dyingtolive on Friday March 27 2015, @07:16PM

      by dyingtolive (952) on Friday March 27 2015, @07:16PM (#163292)

      I think the story is nuts.

      --
      Don't blame me, I voted for moose wang!
    • (Score: 4, Insightful) by ikanreed on Friday March 27 2015, @07:48PM

      by ikanreed (3164) on Friday March 27 2015, @07:48PM (#163301) Journal

      And no one seems to remember how they tried this with power a decade ago, or how that ended [wikipedia.org]

      • (Score: 2) by Reziac on Saturday March 28 2015, @02:17AM

        by Reziac (2489) on Saturday March 28 2015, @02:17AM (#163391) Homepage

        I remember that my power bill went from under $20/mo. to over $80/mo. in less than a year, even tho I reduced my consumption by 30%.

    • (Score: 2) by mhajicek on Friday March 27 2015, @08:54PM

      by mhajicek (51) on Friday March 27 2015, @08:54PM (#163328)

      Fractional reserve irrigation?

  • (Score: 2, Interesting) by Ethanol-fueled on Friday March 27 2015, @07:35PM

    by Ethanol-fueled (2792) on Friday March 27 2015, @07:35PM (#163296) Homepage

    It's an interesting idea, but I'm from California and we all know that the state (heh) of much of Mid and Southern California -- subdivisions upon subdivisions of neatly manicured bright green lawns and pockets of lush vegetation -- is totally unnatural without man-made irrigation.

    This place should be looking more like the outskirts of the Imperial Valley -- like a barren desert with tumbleweeds blowing across Ocotillo and Yucca plants.

    I have a magical three-step solution to solving all of California's water problems:
    (1) Stop letting assholes move here. We have enough assholes of our own, we don't need any more.
    (1.a) Complete dismantlement of any tourist-related industries
    (2) Embrace responsible water use. Plant native succulents in your front yards instead of grasses (thankfully this is catching on)
    (3) Maybe there's no problem at all, and there's an agenda behind this. I remember living here and hearing the exact same damn thing when I was 10 years old, except that the mayor and major-league ball players were still using more water in a day than you and I did in a month.

    (Hidden 4th option:) There is more than enough water, but much of it is being diverted to the new secret NSA facility built here.

    • (Score: 3, Funny) by M. Baranczak on Friday March 27 2015, @08:00PM

      by M. Baranczak (1673) on Friday March 27 2015, @08:00PM (#163303)

      We have enough assholes of our own, we don't need any more.

      Straight from the horse's mouth.

    • (Score: 2, Informative) by Anonymous Coward on Friday March 27 2015, @08:43PM

      by Anonymous Coward on Friday March 27 2015, @08:43PM (#163322)

      In cities, simply use all water a 2nd time.
      The city of Fountain Valley in Orange County has been doing it for decades. [latimes.com]
      The water treatment plant there has been using its output to water Mile Square Park since 1992.
      While using "drinking water" to water golf courses is stupid, this is slightly less stupid.

      ...and, of course, after they've treated the water, it's indistinguishable from the water that originally came out of Suzy Homemaker's kitchen tap.
      Every drop of water that exists has been through the kidney of some creature.
      If it wasn't for the ewww factor, that water could go right back into the drinking water supply.
      ...and, at the rate we're going, we won't be able afford that kind of squeamishness much longer.

      .
      I've also mentioned before how the rivers in SoCal have been paved with concrete and how rainwater goes rushing out to sea.
      If, decades ago, those river areas had been made into greenbelts and the water allowed to soak into the Earth, the region would have more recreational areas and would be less of a heat island--in addition to improving the ground water situation.

      Not even having enough reservoirs to hold the free water from downpours is just dumb.

      -- gewg_

    • (Score: 1, Insightful) by Anonymous Coward on Friday March 27 2015, @09:03PM

      by Anonymous Coward on Friday March 27 2015, @09:03PM (#163329)

      Since agriculture uses around 80% of the water in California, why are you attacking the other 20%?

      The real solution is to stop trying to force a desert to be the most productive agricultural region in America. If one quarter of the agriculture was eliminated, California could double its population without any change in water habits for those people.

      Of course, since the rest of North America relies so much on California's agriculture, this would have a serious impact on everyone else - that agriculture has to be replace elsewhere... but where?

      • (Score: 2) by Adamsjas on Friday March 27 2015, @10:29PM

        by Adamsjas (4507) on Friday March 27 2015, @10:29PM (#163349)

        Quote the AC: " The real solution is to stop trying to force a desert to be the most productive agricultural region in America. . "

        The almonds do not grow in the desert, and desert soil does not make the most productive agricultural region in America.
        The farming portions of California are very fertile. Probably nothing comes close, except IOWA, and it's brutal winters prevent a lot of food cropping. If the Midwest winters get more mild it may become the food crop region of the US.

        • (Score: 2) by Reziac on Saturday March 28 2015, @02:21AM

          by Reziac (2489) on Saturday March 28 2015, @02:21AM (#163394) Homepage

          Also, a great deal of what's now cropland was swampy back in the era when it was left to its own devices. Much of the ag land around Sacramento is behind dykes.

      • (Score: 3, Informative) by Magic Oddball on Saturday March 28 2015, @11:05AM

        by Magic Oddball (3847) on Saturday March 28 2015, @11:05AM (#163500) Journal

        If one quarter of the agriculture was eliminated, California could double its population without any change in water habits for those people.

        No — you're viewing the state's water supply as one central source, when most of NorCal's communities rely on local lakes & rivers and only a few send water to Central/SoCal. For example, my county relies entirely on Lake Sonoma & Lake Mendocino, which wouldn't be all that affected by the drought if it wasn't for the fact that the land is being over-developed at high speed, causing water usage to skyrocket; they've imposed increasingly draconian rules & rate tiers on residents, but that doesn't affect the shopping centers or casinos using up a ton of it.

    • (Score: 3, Interesting) by frojack on Friday March 27 2015, @09:09PM

      by frojack (1554) Subscriber Badge on Friday March 27 2015, @09:09PM (#163330) Journal

      You can't simply stop watering nut trees and expect them to survive until the drought is over. Cutting back nut production might make sense, (there have been large surpluses over the last several seasons). But trees aren't something you can turn off and on like a lawn sprinkler. Alternative crops can take years to prepare for, leaving the farmers no income for the intervening years.

      Continuing to build huge subdivisions implies significant population growth, which implies significant job growth. Maybe it's time to stop offering all those tax breaks to companies locating there?

      Big ocean. Lots of sun. Where is all that high-tech know how when you need it?

      --
      No, you are mistaken. I've always had this sig.
    • (Score: 3, Informative) by fadrian on Friday March 27 2015, @10:21PM

      by fadrian (3194) on Friday March 27 2015, @10:21PM (#163346) Homepage

      Household water use (lawns, bathing, washing, etc.) amounts to only 14% of all water use in California. Your suggestions would be a literal drop in that bucket. Want to do something that actually alleviates the problem? Look at Industry and Agriculture. They consume 83%.

      Where's the other 3%, you ask? Sitting in wetlands, but my point stands. You want to change water usage? Hit the biggies - it's cheaper because you've got to talk to and monitor less of them.

      --
      That is all.
      • (Score: 0) by Anonymous Coward on Saturday March 28 2015, @07:39AM

        by Anonymous Coward on Saturday March 28 2015, @07:39AM (#163470)

        Actually, hitting the big wasters is most expensive; just try it and watch your reelection fund.

  • (Score: 2) by wantkitteh on Friday March 27 2015, @07:42PM

    by wantkitteh (3362) on Friday March 27 2015, @07:42PM (#163300) Homepage Journal

    It wouldn't surprise me one little bit if some farmers somewhere had been giving brown paper envelopes full of money to someone to ensure this unsustainable situation is preserved, protecting their profits as long as possible. The questions that arise are: 1) Who have they been giving this money to? 2) Have any laws been broken? 3) Will Californians stomach another utility being screwed around with under the guide of free market enterprise, however justifiable it may be, after what happened with Enron and the electricity market?

  • (Score: 3, Informative) by mendax on Friday March 27 2015, @08:04PM

    by mendax (2840) on Friday March 27 2015, @08:04PM (#163306)

    One of the problems with agriculture in California is that they receive subsidized water. My housemate and I practice water conservation. As a result, we use about 3000 gallons of water a month and pay maybe about $15/month (I'm guessing; I don't have my bill in front of me) plus fees associated with sewer service and being hooked up to the water system in the first place. I wonder how much would an almond grower pay for his water if he paid what I paid for water per gallon? Maybe we ought to find out.

    --
    It's really quite a simple choice: Life, Death, or Los Angeles.
    • (Score: 2) by Adamsjas on Friday March 27 2015, @10:24PM

      by Adamsjas (4507) on Friday March 27 2015, @10:24PM (#163347)

      Different situation.

      Almonds don't net potable water. Almonds don't need sewage treatment plants.
      All they need is raw water, and they might even be in the market for your gray water.

      What the trees don't consume soaks into the ground or is evaporated. (I can't speak to almonds in particular, but most hot climate farming has made significant progress in preventing loss to evaporation, watering under ground or directly to the plants).

    • (Score: 2) by Entropy on Friday March 27 2015, @11:07PM

      by Entropy (4228) on Friday March 27 2015, @11:07PM (#163354)

      Yeah...because california needs to be less competitive in the American market. Ok, let them go and tax farmers and completely obliterate farming in california. Since their budgets are all in surplus this shouldn't be a problem for the economy, right?

      • (Score: 2, Insightful) by Anonymous Coward on Saturday March 28 2015, @02:10AM

        by Anonymous Coward on Saturday March 28 2015, @02:10AM (#163390)

        The fact that farming is possible at all in an arid region with some of the highest costs of living in the country shows that there is something wrong with the monetary imbalance. Any farmer anywhere should be able to outcompete one from Cali on price alone, yet it does not happen. There are dramatic hidden factors in there somewhere (like paying illegals a tiny fraction of what is ethical and legal).

  • (Score: -1, Troll) by Anonymous Coward on Friday March 27 2015, @08:19PM

    by Anonymous Coward on Friday March 27 2015, @08:19PM (#163310)

    See how well carbon futures have been working out?
    Take the idea of water futures trading and shove it up your ass.

    • (Score: 4, Insightful) by Nobuddy on Friday March 27 2015, @08:33PM

      by Nobuddy (1626) on Friday March 27 2015, @08:33PM (#163318)

      They are not proposing water shares be tradeable. They are talking about forcing the growers to use water efficiently by removing the subsidies that make that water cheap for them, as well as removing the laws that give them priority on that water.

      The goal was to improve the ag industry, but the result was just to make them wasteful and complacent. It takes 5 gallons per walnut the way they currently do it. It can be a tiny fraction of that, but there is no incentive to change with the current setup.

      A homeowner gets fined for overwatering their lawn. A farmer does not get a fine, nor even have to pay for the extra water used.

    • (Score: 0) by Anonymous Coward on Friday March 27 2015, @08:50PM

      by Anonymous Coward on Friday March 27 2015, @08:50PM (#163326)

      Sure, kick out residents, stop new ones, blame the NSA.

      However, agriculture seems to use 4 times as much water as "urban" users (google "water use in california 2014" and use the images to find pretty pictures you can digest, scientific papers you can ignore, and cartoons worth skipping).

      Any percentage improvement you can make to ag use will tend to be 4x urban use. Of course, the devil is in the details, and the lobbyist's, and whose ox is getting gored (hint, urban areas have fewer oxen).

      It does make sense to start with broad ag reductions (which this is), instead of broad urban reductions(which yours are).
      But starting is not finishing.
      So go ahead, cut your Disneyland nose off to spite your provincial face.

  • (Score: 1, Interesting) by Anonymous Coward on Friday March 27 2015, @09:29PM

    by Anonymous Coward on Friday March 27 2015, @09:29PM (#163335)

    If you stop growing stuff which you can start over again the following year without missing a beat, that's one thing.
    Artichokes, [wikipedia.org] garlic, [wikipedia.org] broccoli, [wikipedia.org] carrots, [wikipedia.org] lettuce? [wikipedia.org]
    Going without water for 1 year? Not such a big deal.

    Stuff that grows on trees like dates, [wikipedia.org] almonds, walnuts, kiwis, olives, peaches, and plums, [wikipedia.org] and more plums to turn into prunes [wikipedia.org]
    as well as stuff that grows on vines like grapes for raisins [wikipedia.org] and, of course, grapes for wine? [google.com]
    You stop watering -those- for a year and it will be a generation or more before you're back where you were.

    ...and if California doesn't grow that stuff, where are you going to get it?
    ...and how much are you going to pay for it?

    -- gewg_

    • (Score: 2) by tangomargarine on Saturday March 28 2015, @04:09AM

      by tangomargarine (667) on Saturday March 28 2015, @04:09AM (#163431)

      If you stop growing stuff which you can start over again the following year without missing a beat, that's one thing.

      Erm...surely you mean start growing yearly stuff?

      --
      "Is that really true?" "I just spent the last hour telling you to think for yourself! Didn't you hear anything I said?"
      • (Score: 0) by Anonymous Coward on Saturday March 28 2015, @05:43AM

        by Anonymous Coward on Saturday March 28 2015, @05:43AM (#163445)

        No. I mean put no seeds in the ground and expend no water.
        Come back in a year and hope the wind hasn't blown away all your topsoil and put seeds in the ground at that time and start consuming water again.

        OTOH, a tree or vine will die if left unwatered and you will take much longer than a year to get back to a productive operation.

        -- gewg_

    • (Score: 2) by LancePodstrong on Sunday March 29 2015, @02:58PM

      by LancePodstrong (5029) on Sunday March 29 2015, @02:58PM (#163812)

      All of those things can be grown in the humid east (among other places) where enough water falls from the sky to sustain them and the water table underneath. Spreading out America's agriculture to be closer to the intended consumers would also cut down on transportation costs and improve food quality due to less time between harvest and market. Right now our most fertile farmland in the Midwest is used to grow soybeans and corn for cars and cattle. If even a small proportion of these farmers switched to growing high value produce, Cali would be shut down. One problem is that California is able to outcompete with nearly free water in a region with nearly unlimited sunlight, a year-round growing season enabled by this water, and underpaid immigrant labor. Another problem is that corn and soybeans are heavily subsidized by the government, making it less economical to grow other food crops in the Midwest and Plains states. If we could get the government to stop funneling water from public lands to California farmers for pennies on the dollar, and to stop subsidizing corn, soybeans, and ethanol (among other things), I suspect this agricultural shift would take place on its own.

  • (Score: 3, Insightful) by Natales on Friday March 27 2015, @10:54PM

    by Natales (2163) on Friday March 27 2015, @10:54PM (#163351)

    OK, let me see, 75% of the planet is covered with water. California is a coastal state. Why the FUCK nobody is seriously talking about desalination? all efforts are focused on conservation, not even bringing up the topic of treating this as an engineering problem.

    In my view, the excuse of "oh, it's too expensive" or "too energy intensive" is just pure laziness. The failure is in human ingenuity. The baseline technology is already there. It's just a matter of having the proper economic and regulatory incentives. The state can pour serious money in private industry and university R&D efforts to make the process more efficient and a whole new industry can spur out of this. Heck, the Saudis are doing it [cleantechnica.com], all with solar. Why cannot we?

    • (Score: 2) by rts008 on Friday March 27 2015, @11:19PM

      by rts008 (3001) on Friday March 27 2015, @11:19PM (#163357)

      I've been saying similar things for years.

      Line the coast with nuclear powerplants similar to the ones the US Navy uses in the carriers and subs. You get clean power, fresh water, and you can even recover other useful stuff from the left-over 'salt', before returning it to the ocean.

    • (Score: 3, Informative) by captain normal on Saturday March 28 2015, @05:45AM

      by captain normal (2205) on Saturday March 28 2015, @05:45AM (#163446)

      Mainly no real discussion about desal is viable because current technology involves reverse osmosis. RO is very expensive to build and even more expensive to maintain and provide energy to run.
      There are new and promising technologies being developed, but are years away from reality.
      The question is: Are you willing to pay $25 a pound for your almonds? $20 for the cheapest wine? $10 for a head of lettuce?
      I guess if you make 6 to 7 digits or more a year, it's no big deal. But to most people, it may well be a back breaker.

      • (Score: 2) by LancePodstrong on Sunday March 29 2015, @03:01PM

        by LancePodstrong (5029) on Sunday March 29 2015, @03:01PM (#163813)

        We already pay $25 a pound for almonds, but it comes out of our taxes to fund the Colorado river diversion.

    • (Score: 0) by Anonymous Coward on Saturday March 28 2015, @01:08PM

      by Anonymous Coward on Saturday March 28 2015, @01:08PM (#163520)

      This is exactly what the article is trying to tackle. Currently the water is way too cheap, so nobody cares to try come up with anything innovative. The true failure is human greed.

  • (Score: 0) by Anonymous Coward on Friday March 27 2015, @11:36PM

    by Anonymous Coward on Friday March 27 2015, @11:36PM (#163359)

    Ahh I admire their work! I think it was the 60's when the theory of the ecosystem was the major force in the environmental movement. The counter argument was that humans could accept feedback and adapt to the environment.

    Virtual water - who would have thought :)

  • (Score: 2) by kaszz on Saturday March 28 2015, @02:34AM

    by kaszz (4211) on Saturday March 28 2015, @02:34AM (#163396) Journal

    Perhaps the tax income from farmers creates more income for the state than household plebs?
    Other than that one can as others pointed out suspect "donations".

    And some areas are simple not suitable for human activity besides as a temporary illusion until reality comes knocking.

  • (Score: 0) by Anonymous Coward on Saturday March 28 2015, @02:34AM

    by Anonymous Coward on Saturday March 28 2015, @02:34AM (#163397)

    Which is Northern Cali.

  • (Score: 3, Interesting) by MichaelDavidCrawford on Saturday March 28 2015, @05:18AM

    by MichaelDavidCrawford (2339) Subscriber Badge <mdcrawford@gmail.com> on Saturday March 28 2015, @05:18AM (#163443) Homepage Journal

    Uncle Herb was prominent in Orange County Republican Politics, so he was asked to run for office, however at the time the California State Legislature was part-time. He was the VP of Accounting for Boswell Cotton Corporation, a very high-paying job.

    He asked Boswell for a leave of absence. Boswell said "Sure - if you move some legislation for me".

    Uncle Herb chose not to run. He was a good guy.

    --
    Yes I Have No Bananas. [gofundme.com]
  • (Score: 2) by bradley13 on Saturday March 28 2015, @10:46AM

    by bradley13 (3053) Subscriber Badge on Saturday March 28 2015, @10:46AM (#163497) Homepage Journal

    The Southwest of the US (I grew up in New Mexico) has a general shortage of water. Water rights, and the laws surrounding them, are screwed up beyond belief. The best thing that could happen would be to erase it all and start over.

    Just as an example: if you have a common water source (for example, a river), certain groups have historical rights to take water from that common source. These rights often stem from the 19th century, or even earlier, and they are so holy that no one dares to say "nope, don't make no sense no more". At the same time, in some areas you have regulations claiming that you don't have the right to use your own private water sources - for example, prohibitions on collecting and using rainwater that falls on your own property.

    Let the market set the prices - that makes a lot of sense. But first, it is essential to reset the water rights on common resources (rivers, water tables). In many cases, these are hopelessly oversubscribed - there are enough water rights rivers to empty them twice over in dry years, water tables are sinking, etc.. The fact that I have a 100-year-old well on my property doesn't give me the right to empty the water table for my neighbors. One possible solution is to say "water rights give you the right to have water - but not for free". Pay a fair price to the community for every gallon taken from the common resource.

    California is an especially screwed up example. I recall reading an article (sorry, can't find the link) about rice farming in an area that was, by nature, dry. The farmer actually wanted to change to less water-intensive crops, but green lobbyists managed to get the local government to forbid him from doing so. Why? Because migrating geese liked to stop over in his (entirely artifical) swamp, so it qualified as a "wetland", and changing to other crops would destroy this - again, entirely artificial - wetland.

    --
    Everyone is somebody else's weirdo.