I recently finished reading David Zetland’s book The End of Abundance and it was fantastic. First things first: I was given a sample of the book for review purposes, so take all of my comments with however much salt you think necessary.
That being said, I have a “Quick Review”, and a “Longer Review” below…
The End of Abundance (TEoA) should be required reading for any person interested in the field of water resources. Engineers, economists, environmentalists, utility managers, venture capitalists, city council members, students, professors, and water scientists.
Likewise, anyone who has any interest in figuring out how to equitably and efficiently allocate the world’s freshwater resources will be intellectually richer from having read this book. The most important dimension that Zetland illustrates in TEoA is the importance of incorporating markets into the allocation of water management. Though it is fashionable in many circles to avoid anything that sniffs of privatization or markets with regard to natural resources, Zetland makes a convincing and compelling argument for replacing/retrofitting failed, outdated institutions for dynamic institutions that are capable of meeting the challenges of scarcity. I will be recommending this book to all of my colleagues in the water resources field.
Also, here is the Table of Contents for TEoA so that you can get a flavor of what to expect:
- The beginning of the end
- Part 1: Personal water choices
- Water from the tap
- Dirty water
- The liquid lifestyle
- Water for profit
- Food and water
- Water for power for water
- Part 2: Social water choices
- Managers and politicians
- Dams, pipes and pumps
- Water and the environment
- Weather and climate change
- A human right to water
- Water wars
- Afterword: What you can do
- Notes to the text
- Works cited
- Praise for the book
*Note: Quotations are cited with their relative Kindle location, since I have the page-less electronic version of TEoA. If I get a paper copy at some point, I will update this review with the actual page-numbers. OVERALL MESSAGE The overall message was this (my summary, not Zetland’s):
Conventional water management institutions that were designed to govern water resources during times of surplus are now failing, and because water is becoming increasingly scarce, management must shift towards methods that efficiently and equitably allocate water – namely methods employed by markets which excel at allocating scarce resources to their highest and best use.
I won’t try and summarize every part of the book, since that defeats the purpose of your reading the book. However, I will elaborate on some of the key strengths that I took from this book. THE KEY STRENGTHS ARE:
- ACADEMIC RESOURCE
- CHALLENGES CONVENTIONAL IDEAS
- NEW IDEAS
- ACCESSIBLE TO ALL
KEY STRENGTH #1: ACADEMIC RESOURCE
As a recent graduate student, and now owner of my own water-related consulting company, this book could serve as an unmatched book for a graduate course in water management. The book would be at home in an economics, engineering, policy, operations & management, or an overview/survey course.
The academic strength of this book is the useful definitions and distinctions provided for different aspects of water management. For example, Zetland on institutions:
“Institutions can be classified in four layers. The deepest layer includes culture and other informal norms of behavior that evolve over centuries. The next layer includes basic rules such as constitutions that are fixed for decades or change very slowly. The third layer contains rules and regulations that may last for years but are often the subject of political and regulatory modification. The fourth layer is barely fixed; it consists of our choices of how to allocate resources in markets or organizations.” (Location 110)
Also, at times the book reads like a “how to guide” which is incredibly valuable to folks going into the water management field. Many of my cohort in graduate school went on to work for water management institutions (Seattle Public Utilities, the Army Corps of Engineers, etc.) and this book would have provided an information-dense guide to take with them to their jobs, for example:
“Do not sell water below cost; raise prices in scarcity. Those solutions will create excess revenues or profits, but those profits can be refunded to customers once the shortage is avoided to ensure that profits stay close to zero or a targeted return.” (Location 298)
Finally, the focus on how economic instruments can be brought to bear in water management is the centerpiece in this book. And, all too often economic instruments are absent from water management education (having experienced it directly). Though there are nearly no equations in this book, there are many graphs clearly explaining the economics concepts that underlie the incorporation of economic tools into water management.
KEY STRENGTH #2: CHALLENGES CONVENTIONAL IDEAS
As usual, I enjoy reading books that challenge my own preconceived notions (such as: Stewart Brand’s “Whole Earth Discipline”, Fred Pearce’s “The Coming Population Crash”, and Nina Fedoroff’s “Mendel in the Kitchen”).
Zetland, via suggesting that markets can deliver equitable allocation where government bureaucracies & monopolies fail, stirs the hornet’s nest in the environmental community. I like this. If we’re not uncomfortable, it often means we’re complacent, so my discomfort reading this book is a good sign. The key success of Zetland in this area is that he doesn’t come off as an ‘industry apologist’ as some might label him. He argues with “ruthless logic” (his words), which lends his arguments a strength that others rarely seem to acquire. For example,
“In fact, it’s not public or private that matters. It’s monopoly. A monopoly delivers water to whom it wants, when it wants, at a price and quality it wants. Water utilities’ monopoly power comes from two sources… Water distribution is a “natural monopoly” because it’s hard for a new company to enter the business in competition with an incumbent company that’s already installed the network of pipes for delivering water… Competition is the answer The real problem with a monopoly is not that we don’t know what it’s doing or don’t know how to make it change what it’s doing… The real problem is that competition doesn’t force monopolies to concentrate on customer service and value for money.” (Location 1318-1356)
Another thing Zetland does is NOT tow a party line (industry, environmentalist, or otherwise). Though I think Zetland ultimately values a functioning biosphere and hydrosphere, he does not let popular arguments and rhetoric cloud his assessment of water management. For example:
“In the late 1990s, the 1 million residents of Cochabamba, Bolivia, had bad water service. The local public agency, SEMAPA, was delivering poor quality water to a fraction of the local population. The World Bank was willing to provide loans to improve the system, but only if SEMAPA was replaced. A 40-year contract was signed with Aguas del Tunari (AdT), a private consortium of four foreign and two Bolivian companies. Activists opposed AdT from the start, but AdT’s clumsy price increases and attempts to control local water supplies (claiming to own the rain, for example) led to mass protests in 2000. AdT was kicked out in 2006, and SEMAPA was put back in charge. Victory for the masses, right? No. Three years later, a left-wing observer wrote: SEMAPA has failed to address its two biggest problems. In a valley still deeply thirsty for water, SEMAPA loses about 55 percent of the water it has to leaks in the pipes and to clandestine hookups. And despite a steady flow of financial support from international donors and lenders, including the Japanese government and the IDB [Inter-American Development Bank], the company still doesn’t have a sustainable financing plan in place. One water expert familiar with SEMAPA’s internal workings blames the problems on mismanagement. “It is an organization that is completely dysfunctional. They don’t generate enough income to cover their costs and they are letting the system deteriorate.” (Location 1428)
Finally, somebody answers my question of whether water service has been improved in Cochabamba post-protest; an example that is always touted as an example of how “the people won”, and yet I’ve always missed the follow-up. Thanks for filling in the information gap David.
Another topic is Zetland’s rebuttal to reports of mass Indian farmer suicides resulting from policies related to genetically modified crop production:
“…In the past few years, some people have claimed that Indian farmers are committing suicide because their genetically modified BT cotton crops have failed. While it’s true that Indian farmers do commit suicide, the reasons are home grown. Government subsidies for groundwater pumping mean that a monsoon failure leads to crop failure for poor farmers who cannot afford the deep wells and big pumps necessary to access the lower water table. Some of these farmers cannot repay debts to moneylenders, and they commit suicide. Don’t blame BT-cotton for crop and income losses; blame government policies that destroy farmers’ traditional insurance policy against drought.” (Location 1841)
I do not think that tragedies such as Indian suicides should just be explained away, or that the competing motivations driving decisions such as suicide can be easily disentangled. I do, however, think that Zetland deserves some credit for trying to examine the root causes of suicide occurrence in BT-cotton farmers in India, and that local/regional groundwater mismanagement is as complicit in the deaths of the farmers. Finally, Zetland discusses “Peak water”:
“Some people say that we are close to “peak water,” but that analogy is wrong. First, water is a renewable resource that flows from place to place in seasonal cycles; these flows may shift but they do not reduce the fixed stock of water that rests mostly in oceans. Second, most water does not have a scarcity price attached to it, so there’s little understanding of relative supply or demand. Third, water is a local good that’s managed in different ways in different places.” (Location 1874)
Likewise, here’s his perspective on the “energy water nexus”
“There’s no inherent need to study the water-energy nexus, like there’s no need to study the coffee-doughnut nexus. These pairs of complementary goods are connected by interlinked supply and demand, such that the demand for one increases the demand for the other. The clearest way to signal the resulting change in scarcity is with changes in prices, not a memorandum from the Office of Energy-Water Relations. We don’t have coffee or doughnut shortages because these goods are priced in markets that reflect present conditions and future predictions. The same could be true for water and energy.” (Location 2023)
I think this challenge to ideas of peak water and the energy-water nexus is useful because it suggests that our fundamental assumptions about how water supplies are managed, are in fact incorrect. Both by clarifying the assumptions of how water is managed, and that we are using economic terms to describe phenomena that are not managed using economic instruments, Zetland succeeds in convincing the reader (well, me at least) that there is enough water to go around if it is managed properly. Good management is ultimately more scarce that water supplies.
KEY STRENGTH #3: NEW IDEAS
A major contribution of this text is the new ideas that he provides, namely the novel market mechanisms that could more equitably and efficiently allocate water resources, without undesirable consequences and distorting subsides. First great idea is the “All-in-Auction”, here’s his outline:
“The most efficient market for quickly settling many trades is an auction. Here’s how all-in-auctions work. Assume that 50 farmers have different land, crops and quantities of water rights. They jointly control a cooperative irrigation system. These farmers received 250 units of water in the past, but now they have only 60 percent of that amount (150 units of water). They all have equal priority to that water. How should it be allocated? … An all-in-auction has several attractive features. First, it ensures that the maximum amount of water is traded. Second, it allows any farmer to “buy back” his water at zero cost, neutralizing any objections of being forced to sell; Alex paid nothing to keep his three units. Third, it makes each farmer think about how much water he really wants.…Note that AiA can also be used inside of other big organizations (regional water distributors or government irrigation projects, for example) where historical rights are not very well matched to current demands.” (Location 1721 – 1761)
Great idea, right? I think there is definitely room for improvement, but the All-in-Auction (AiA) becomes a major contribution of this book and in the long-run might be an important legacy for future water management efforts.
The second great idea is how to reconcile “human right to water” with reality, for example:
“….Access to water (let alone access to clean water) requires more than rights; it requires money and a functioning government… Maybe we can use markets and property rights to deliver water — in the same way that markets deliver bottles of refreshing Coca-Cola pretty much everywhere in the world and mobile phone service to two-thirds of the world’s poor. The first step is to give each citizen a property right in his nation’s water wealth….Property rights are different from human rights in two important ways: property rights can be alienated, but human rights cannot; governments must protect property rights, but they must deliver human rights. As our discussion shifts from a human right to water to a property right in water, we need to understand whether water can be owned as property and (if so) whether such commodification is harmful to others.” (Location 3018-3103)
Outstanding. I have long struggled with the idea of water as a human right because of the fact that a “right to water” is not something that is protected (like free speech), but instead must be delivered (like electricity). Zetland operationalizes the human right to water, by creating a mechanism (citizen-based property rights for water) that in turn would guarantee every citizen both a lifeline volume of water that cannot be taken away, and a flexible volume that can be sold to generate wealth for each citizen. Now, the implementation will be much tougher, but at least we now have a starting point.
KEY STRENGTH #4: ACCESSIBLE TO ALL
A key asset of this book is that it remains both intellectually challenging while being supremely accessible. There is no need to have a Masters in water resources, or a PhD in economics to understand this book. A challenge for a book like this is to be relevant for the broad range of potential readers while remaining detailed enough to engage specialists. It appears that Zetland has achieved this by incorporating many new (and/or innovative) ideas into the text that serve to both introduce the issues to a novice while deepening and challenging conventionally held wisdom of experts.
Since starting the book, I have had the opportunity to travel for water-related work to the Middle East (Israel/Jordan/Palestine/Egyptian Sinai), the Western United States (Washington/Montana/Colorado), the Eastern United States (New York), Southeast Asia (Vietnam), and Europe (Netherlands/Germany). Reading this book while traveling for water work illustrated the enormous challenges of managing water throughout the world, where different cultural attitudes & beliefs exist, where people have wildly varying trust in government institutions, and widely divergent trust in private markets to deliver goods and services.
Importantly, however, I think this book can usefully translate across cultural, linguistic, and political boundaries to move water management to a more sustainable and equitable path.
So, stop reading this blog and read the dang book already! 🙂