interviews
Water and the American West
by Richard Frank
October 25, 2021
This interview with Richard Frank, professor of environmental practice at the UC Davis School of Law and Director of the California Environmental Law and Policy Center, was conducted and condensed by franknews.
frank | Can you tell me a little bit about the story of water and how it's tied to the West, and to California in particular?
Richard | A friend of mine who's a Court of Appeals Justice here in California wrote an opinion on a water law dispute and started it with the quote, "the history of California is written on its waters." And I think that the point is true of the entire American West.
Water policy and legal issues are inextricably tied to the development of the Western United States; water is the limiting factor in so many ways to settlement, to economic development, to prosperity, and to the environment and environmental preservation.
Can you talk about the difference between groundwater and surface water– and the policies that regulate each?
There are really two types of water when it comes to human consumption. There's surface water: that is the water that is transmitted by lakes, rivers, and streams. Then there is groundwater, and a substantial amount of water that Americans and the American West rely on is groundwater. That is water that is stored in groundwater aquifers, which are naturally occurring groundwater basins. Both groundwater and surface water are critical to the American West and its economy and its culture.
Traditionally a couple of things are important to note, first of all, water is finite. Second, water gets allocated in the Western United States generally at the state level. There's a limited federal role. Primarily, policy decisions about who gets how much water for what purpose are made state by state.
I think allocation is really interesting in that it's more state-level than federal. How was water and the allocation of water in California designed? Is it a public-private combination? What goes on in terms of the infrastructure of water?
Another very good question. The answer is it depends. Most of our water infrastructure is public in nature.
Again, in the American West, the regulation of water rights is generally done at the state level, but the federal government, historically, has a major water footprint in the American West because it has been federal dollars and federal design and management that really controlled much of the major water infrastructure in the American West — you know, Hoover Dam, and the complex system of dams and reservoirs on the Colorado River in California, with the Central Valley Project that was built and managed by the federal government with Shasta Dam on the upper Sacramento River as the centerpiece of that project. But we also have a California State Water Project, the key facility being the Oroville Dam and reservoir on the Southern River that is managed by state water managers. If we were starting over, that kind of parallel system would make no particular engineering or operational sense.
But, we are captive to our history.
And then you have these massive systems of aqueducts and canals that move water from one place to another throughout the American West. They are particularly responsible for moving water from surface water storage facilities to population centers. In the last 50 to 75 years, these population centers have really expanded dramatically, so you need massive infrastructure to deliver water from those storage facilities, the dams, and reservoirs, which generally are located in remote areas to the population centers. So it takes a lot of time and energy to transport the water, from where it is captured and stored to where it is needed for human use.
California has faced continuous drought – what measures is the state taking now to manage water?
Just to frame the issue a little bit — we have, as I mentioned, a growing population in the American Southwest at a time when the amount of available water is shrinking due to drought and due to the impacts of climate change. We have growing human demand for residential and commercial purposes and at the same time, we have a shrinking water supply. That is a huge looming crisis.
And it is beginning to play out in real-time. You see that playing out in real-time. For example, several different states and Mexico rely on Colorado River flows based on an allocation system that was created in the 1920s, which is overly optimistic about the amount of available water. From the 1920s until now, that water supply has decreased, and decreased, and decreased. Now you have interstate agreements, and in the case of Mexico, international agreements that allocate the finite Colorado river water supplies based on faulty, now obsolete, information. It is a real problem.
What measures do you take now, knowing this information?
If you look at the US Drought Monitor, it is obvious the problem is not limited to the Colorado River. We are in a mega-drought, so cutbacks are being imposed by federal and state water agencies to encourage agricultural, urban, and commercial water users to cut their water use and, and stretch finite supplies as much as possible through conservation efforts.
In California, we have the State Water Resources Control Board, the state water regulator in California, and they have issued curtailment orders. Meaning, they have told water rights holders, many of whom have had those water rights for over a hundred years, that, for the first time, the water that they feel they are entitled to, is not available. Local water districts are also issuing water conservation mandates; the San Francisco water department is doing that, in Los Angeles, the metropolitan water district, is urging urban users to curtail their efforts.
And then agriculture. Agricultural users — farmers and ranchers — have had to get water rights in many cases through the federal government, as the federal government is the operator of these water projects. They have contracts with water users, individual farmers, ranchers, or districts, and they are now issuing curtailment orders. They're saying, we know you contracted for X amount of water for this calendar year, but we are telling you because of the drought shortages we don't have that water to supply. Our reservoirs are low at Lake Shasta or at the Oroville Dam.
When you drive from San Francisco to LA on the five, you see a lot of signage from the agricultural farming community about water. There's apparently some frustration about this. What are the other options for them?
About 80% of all human consumed water goes to agriculture. That is by far the biggest component of water use, as opposed to 20% used for urban and commercial, and industrial purposes.
Over the years, ranchers and farmers, and agricultural water districts assumed that the water would always be there — as we all do.
And the farmers and ranchers have, in hindsight, exacerbated the problem by bringing more and more land into production. You see on those drives between San Francisco and Los Angeles, particularly in the San Joaquin Valley, all these orchards are being planted. Orchards are more lucrative crops than row crops — cotton, alfalfa, and rice. But, if you are growing a row crop, you can leave the land fallow in times of drought.
We don't have to plant. If the water stopped there, or if it's too expensive to get, it may make economic sense, but if you have an orchard or a vineyard it's a high value, those are high value crops, you don't have that operational flexibility and they need to be irrigated in wet years and in dry years. Now, you see these orchards, which were only planted a few years ago, are now being uprooted because the farmers realized that they don't have the water necessary to keep those vineyards and orchards alive. For ranchers, the same thing is true with their herds. They don’t have enough water for their livestock.
The water shortage has never been drier than it is right now. Farmers and ranchers are being deprived of water that they traditionally believed was theirs and they're very understandably, very unhappy about it. They see it as a threat to their livelihood and to the livelihood of the folks who work for them. Their anger and frustration are to be expected, but it's nobody's fault.
To say, as some farmers do, that it is mismanagement by state and federal government officials, I think is overly simplistic and misplaced in the face of a mega-drought. Everybody's going to have to sacrifice. Everybody's going to have to be more efficient in how they use water. All sectors are going to need to be more efficient with the water that does exist.
Looking at this percentage breakdown of water use – is it actually important for individual users to change their water habits?
Well, every little bit helps. When you're talking about homeowners, about 70% of urban water use is for outdoor irrigation. So we're talking parks and cemeteries and golf courses and folks' yards. You know, that used to be considered part of that American dream and the California dream — you would have a big lawn in front of your house and behind your house. Truth be told, that has never made much sense in an arid environment. That's where the water savings in urban areas is critical in the way it really involves aesthetics rather than critical human needs, like water for drinking and bathing and sanitation purposes. There is a growing movement away from big lawns, and away from the type of landscaping that you see in the Eastern US — there is no drought in the Eastern United States. As Hurricane Ida and other recent storms have shown, the problem is too much water, or rather than too little in most of the Eastern United States. So it really is a tale of two countries.
We just need to recognize that the American West is an arid region. It has always been an arid region, we can't make the desert bloom with water that doesn't exist. We need to be more efficient in how we allocate those water supplies. And it seems to me in an urban area, the best way to conserve and most effective way is to reduce urban landscaping, which is the major component of urban water use.
You also write about water markets and making them better – for those who don’t know, what is the water market?
Water markets, that is, the voluntary transfer of water between water users, is more robust in some other Western states. Again Arizona and New Mexico come to mind. California somewhat surprisingly is behind the curve. We are in the dark ages compared to other states. Water markets are kind of anecdotal. There is not much of a statewide system. It is done at the local level, through individual transactions without much oversight and without much transparency. And I have concerns about all of those things.
I believe conceptually watermarks are a way to stretch scarce, finite water resources to make water use more efficient. I can, for example, allow farmers or ranchers to sell water to urban uses or commercial usage or factories in times of drought.
Farmers sometimes can make more money by farming water, than they can by farming crops.
There are efficiencies to be gained here.
The problem in my view is really one of transparency. The water markets are not publicly regulated, and some of the people who are engaging in water transactions like it that way, frankly, they want to operate under the radar.
In my opinion, water markets need to be overseen by a public entity rather than private or nonprofit entities. We need oversight and transparency, so that folks like you and myself can follow the markets to see who's selling water to whom, for what purpose, and make sure that those water transfers serve the public interests and not just the private interests.
There have been a number of stories in the New York Times and the Wall Street Journal and the Salt Lake City Tribune about efforts in some parts to privatize water transfer. Hedge fund managers are buying and selling water, as a means of profiting. And it strikes me that when you're talking about an essential public resource — and in California, it is embedded in the law that public water is an inherently public resource, that water is owned by the public and it can be used for private purposes, but it is an inherently public resource — the idea of commoditizing water through the private, opaque markets is very troublesome to me. I think it represents a very dangerous trend and one that needs to be corrected and avoided.
Why is California so behind?
There's no good reason for it. It's largely inexplicable that since the state was created on September 9th, 1860, we've been fighting over water. In the 19th century, it was miners versus farmers ranchers. In the 20th century, with the growth of urban communities, the evolution of California into one of the most populous states with 40 million Californians, it has been a struggle between urban and agricultural uses of water.
In the second half of the 20th century, there was a recognition that some component of water had to be left in streams to protect ecosystems, landscape, and wildlife, including the threatened and endangered wildlife. That suggestion has made agricultural users in California angry. You will see those signs that allude to the idea that food and farming are more important than environmental values. I don't happen to believe that's true. I believe both are critically important to our society. But the advocates for the environment have a proverbial seat at the water table. So that's another demand for water allocation that exists.
Do you maintain optimism?
Yes. I think it's human nature to look on the bright side. I try to do that through research scholarships and teaching. There are models for how we can do this better in the United States. Israel and Saudi Arabia and Singapore are far more efficient with their water policies and efforts. Australia went through a severe megadrought. They came out of it a few years ago, but they used that opportunity to dramatically reform their water allocation systems. That's an additional model. I think most people would agree in hindsight that their previous system was antiquated, and not able to meet the challenges of climate change and the growing water shortage in some parts of the world.
Here in the United States, we can learn from those efforts. There are also some ways to expand the water supply. Desalination for one. Again, Singapore and Saudi Arabia have led the world in terms of removing the salt content from ocean water and increasing water supply that way. In Carlsbad, California, north of San Diego, we have the biggest desalination plant in the United States right now, and that is currently satisfying a significant component of the San Diego metropolitan areas’ water needs. It's more expensive than other water supplies, but the technology is getting more refined, so the cost of desalinated water is coming down at a time when other water supplies, due to shortages and the workings of the free market are going up.
At some point, they're going to meet or get closer. Unlike some of my environmental colleagues, I think desalination is an important part of the equation.
In a proposal that came up in the recall election, one of the candidates was talking about how we just need to build a canal from the Mississippi River to California to take care of all our problems. That ignores political problems associated with that effort, as well as the massive infrastructure costs that would be required to build and maintain a major aqueduct for 2000 miles from the Mississippi to California. That's just not going to happen. Some of those pie in the sky thoughts of how we expand the water supply, I think, are unrealistic.
interviews
Saving the Media
by Julia Cage
July 6, 2021
This interview with Julia Cage, a French economist specializing in development economics, political economy, and economic history, was conducted and condensed by franknews.
frank | Can you give us background on yourself — what do you study and how did you get interested in this line of work?
Julia | I am an Associate Professor of Economics in the Department of Economics at Sciences Po Paris, and a Research Fellow at the Center for Economic Policy Research (CEPR). I am also co-director of the Laboratory for Interdisciplinary Evaluation of Public Policies (LIEPP)’s “Evaluation of Democracy” research group and a Board member of the Agence France Presse, the third-largest international news agency in the world.
I completed my Ph.D. at Harvard University in 2014 on the economics of information. I am indeed particularly interested in media economics, political participation, and political attitudes, and have already authored three books on the subject: Saving the Media. Capitalism, Crowdfunding and Democracy, L’Information à tout prix, and L'information est un bien public: Refonder la propriété des médias.
In my academic research on the media, I try to understand the consequences of increasing media competition, not only on news consumption but also on news production, meaning not only on the way people consume news but also on the quality of the news that is produced and that they can consume.
Many news nonprofits and long-running newspapers are turning to philanthropy to sustain themselves. Do you see a concern in news being philanthropically funded?
A lot of people believe that philanthropically funded journalism is "the" solution to the media crisis. I think they are wrong. The main issue with philanthropy is the one of the governance of the media; if you look at the bylaws of new media outlets funded by out-of-market billionaires, you see that journalism independence is often not protected. Too often, media bylaws are ignored; media governance is key.
I think it will be much better to have a system of publicly funded journalism where all the citizens can fund the media outlet(s) of their choice. It's why I think we should introduce media vouchers.
What are media vouchers? What is the difference between citizen vouchers and government subsidies?
I think government subsidies should be reformed and take the form in the future of citizen vouchers. This is a proposal I first developed with J. Gans, E. Goodman, B. Knight, A. Prat, G. Rolnik and A. Schiffrin as part of the ”Protecting Journalism in the Age of Digital Platforms” report, and that I also defend – and assess – in the French context in my new book, Information Is a Public Good (2021).
The idea is to give each adult a media voucher worth x euros per year from the Treasury, to donate to her favored media outlet(s) (50$ in the US context). It is in the spirit of the “democracy vouchers” first proposed by Larry Lessig in 2015 in the US, and that I defend in the Price of Democracy under the form of “democratic equality vouchers”. Concretely, every year, when filling her tax returns, each citizen will indicate to the tax administration the media outlet(s) to which she wants to allocate her media voucher. To preserve anonymity, each citizen will be provided with a token and the allocation choices won’t be linked to the addresses of the token holders (using protocols of anonymous voting on blockchain-based networks).
The main advantage of this model is to make sure to have public funding without government intervention. Hence there will be no risk for media independence!
What is the difference between how the government finances news in Europe versus the US?
There is nearly no public funding of private media in the US, and public media are underfunded. I am not claiming that France or the UK have a perfect model, but at least private media outlets do receive much more public support than in the US, and France Télévisions & Radio France / the BBC are well funded, which allow those media to produce high-quality information and reach a large share of the population.
In your book, you describe a new model of funding - an NMO. Can you describe what that is and what issues you think this model solves?
The type of nonprofit media organization I am proposing combines the virtues of different legal types. It enjoys the advantages of a foundation (stability of financing and ability to focus on information as a public good rather than on profit maximization at the expense of quality) and those of a joint-stock company (diversified ownership, replenishment of leadership ranks, and democratic decision making provided that the power of the largest shareholders is appropriately limited). The NMO I am proposing is a hybrid model. It is inspired in part by the model of the great international universities, which combine commercial and noncommercial activities.
The NMO model falls between the two extremes of a foundation and a joint-stock company. Like a foundation, it can accept unlimited gifts. In my model, such gifts are to be tax-deductible, as gifts to foundations currently are. Yet they are also to be compensated by voting rights in the firm: a gift to an NMO is a contribution to its capital and therefore brings "political" rights like any other investment.
The NMO model offers numerous advantages. It combines the benefits of the nonprofit model with democratized governance, bringing in more small shareholders while also allowing for the large investments that are often needed. Big investors give up some of their decision-making power but in return receive millions in tax breaks.
Tax relief in exchange for democratization and capital stabilization: this system resolves the inherent contradictions involved in giving subsidies to media owned by large profit-making corporations or in allowing the press to be controlled by individuals with deep pockets. The solution I am proposing may seem radical. But this new legal entity of an NMO is not all or nothing. Drastic simplification of the existing system of press subsidies in France, a more accommodating legal and fiscal framework for the media in the United States, extension of the VAT reduction to online newspapers in Europe (where the tax break is currently available only to print newspapers), and, more generally, granting media companies everywhere easier access to foundation status and the benefits of private contributions-all of these measures would help.
You looked at how the decline in local news results in a decrease in split-ticket voting in elections. Can you describe your findings?
In my research paper with Charles Angelucci and Michael Sinkinson, Media Competition and News Diets, we investigate how local newspapers adjust their provision of local news when the market for national news becomes more competitive. We then study whether the resulting changes in the amount of local versus national news that individuals are exposed to affect voting behaviour, particularly voters’ propensity to engage in straight-ticket voting across elections.
We use historical data to examine how the entry of television affected local newspapers and media consumption in the US from 1944 to 1964. Technological constraints at the time meant that television stations offered mostly national news and general entertainment programming, whereas virtually all newspapers bundled original local reporting with syndicated national news.
We find that the entry of television led to a 3.1% decrease in circulation and a 3.3% decrease in subscription price for newspapers in markets exposed to television. This suggests consumer substitution away from newspapers following the introduction of broadcast television. The entry of television was also a shock to the advertising side of the industry: it led to a 2% decrease in newspaper advertising rates and a 3.9% decrease in newspapers’ national advertising quantity.
Next, we investigate the extent to which the entry of television changed newspaper content and, in particular, the provision of local news. We find that following the entry of television, the total number of stories published decreased by 6.6%. The decrease in the number of stories is driven mainly by a 10.1% drop in original local news stories. By contrast, the drop in the number of (wire) national news is small and not statistically significant.
Taken together, the introduction of television with its primarily national focus in news, the fall in local newspapers’ readership, and the lower production of local news by newspapers point to a strong shift towards more national news diets.
We examine ‘ticket splitting’ in congressional and presidential elections by collecting county-level election data for the period 1932–1964. We document that the entry of television and the crowding out of local information led to less split-ticket voting, implying the nationalization of local politics.
And why does this all matter? In your opinion, why is it important to save the news?
When people live in news deserts, they are uninformed, they do not vote, there is much more corruption at the local level.