Home › Forums › Financial Markets/Economics › UCSD econ roundtable (drought/infrastructure)
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April 18, 2016 at 10:03 PM #21945May 3, 2016 at 4:47 PM #797247phasterParticipant
Extra! Extra! Read All About It!
[quote=SANDIEGOUNIONTRIB.COM]
State taking greater control over groundwaterAmid the state’s historic drought, reliance on groundwater has skyrocketed. It now accounts for roughly 60 percent of all human water use in the state, up from about 38 percent in years with normal precipitation, according to the Department of Water Resources.
In some areas, overpumping has caused land to sink at a rate of more than a foot a year. This can cause millions in damages to homes, roads, bridges and other public infrastructure like irrigation canals.
http://www.sandiegouniontribune.com/news/2016/apr/30/state-groundwater-regulations/
[/quote][quote=DROUGHTMONITOR.UNL.EDU]
Estimated Population in Drought Affected Areas: 34,225,100
http://droughtmonitor.unl.edu/Home/StateDroughtMonitor.aspx?CA
[/quote]lastly just a personal observation,… the “typical” literacy/interest of issues that truly affect the systems wellbeing (like the drought and unfunded public pensions) by the majority of politicians and the majority of the public, is…
(cue the crickets…)
May 3, 2016 at 5:35 PM #797249creechrrParticipantI’m greatly concerned about the situation but, I’m not sure what else I can do. We’ve done all we can to reduce water usage around the house. The lawns; front and rear are gone. The remaining plants are on a drip system.
Unfortunately, I rarely find anyone that even acknowledges that there is a drought. The few that understand there is a problem don’t seem to do anything positive for the situation. Most seem to believe that it’s all a management problem and there will always be more water.
If follow global news events this isn’t a local problem at all. No where to run.
May 4, 2016 at 5:23 AM #797257The-ShovelerParticipantI was just at Lake Powell, they are expecting to be at 70% capacity from the Colorado higher than normal snowpack by the end of summer.
I Imagine Lake mead will be about the same by the end of summer.
May 4, 2016 at 7:50 PM #797304EconProfParticipantCA sends lots of fresh water out to the Pacific in order to save the endangered four-inch long Delta Smelt. That water could go to people if we chose to let the Delta Smelt die a natural death and disappear (like many other species do regularly).
May 14, 2016 at 8:27 AM #797565phasterParticipant[quote=EconProf]CA sends lots of fresh water out to the Pacific in order to save the endangered four-inch long Delta Smelt. That water could go to people if we chose to let the Delta Smelt die a natural death and disappear (like many other species do regularly).[/quote]
huh, don’t economist study data and statistics in order to spot trends?
if we expand the DATA set to natural AND un-natural death(s) of organisms and organized collectives, history shows…
saber tooth tiger
wooly mammoth
original people/society on easter island
flightless dodo
so what’s next?
the delta smelt??
the republican party???
NEXT we take at face value the standard “dogma” of economist which is, markets work!
AND if we apply the standard prospectus DISCLAIMER (which describe market returns)… Past Performance is Not Necessarily Indicative of Future Results!
as a scientist looking at the all the DATA, seems the inescapable bottom line logic is…
as for timeframe
[quote=creechrr]
… Most seem to believe that it’s all a management problem and there will always be more water.
[/quote]with current economic, environmental and political mis-management combined with public apathy/ADD/ADHD toward issues that could crash the system, the more likely scenario for “the end” seems to be much sooner rather than much later
just sayin’
May 15, 2016 at 7:24 PM #797587svelteParticipant[quote=phaster]
so wondering if anyone else here knows that the region around California has a long history of drought(s) and that the period around the 1910’s – 1920’s (when the treaty of the colorado “river” compact was studied/signed) was an abnormally wet period (WRT the long term historical “climate” record)
[/quote]Yes and I have mentioned this to people often. They look at me like I’m from Mars and must be saying that because I’m an ultra-conservative looking to deny man-made global warming.
But what you say is exactly right – and the last 100 years have been abnormally wet, actually, so it makes sense that things are going to return to normal.
Finally – there is not water shortage. 71% of the earth’s surface is covered with water, for Christ’s sake. What is becoming more scarce is cheap access to potable water. We could take water from that ocean to our heart’s content – as long as we are willing to pay for desalinization.
May 15, 2016 at 10:48 PM #797590anParticipant[quote=svelte][quote=phaster]
so wondering if anyone else here knows that the region around California has a long history of drought(s) and that the period around the 1910’s – 1920’s (when the treaty of the colorado “river” compact was studied/signed) was an abnormally wet period (WRT the long term historical “climate” record)
[/quote]Yes and I have mentioned this to people often. They look at me like I’m from Mars and must be saying that because I’m an ultra-conservative looking to deny man-made global warming.
But what you say is exactly right – and the last 100 years have been abnormally wet, actually, so it makes sense that things are going to return to normal.
Finally – there is not water shortage. 71% of the earth’s surface is covered with water, for Christ’s sake. What is becoming more scarce is cheap access to potable water. We could take water from that ocean to our heart’s content – as long as we are willing to pay for desalinization.[/quote]I never understand the logic of water shortage either. People who think so should just look at their water bill vs their gas bill. We can easily solve our water “problem” buy building 100 desalination plants like the one in Carlsbad. Couple that with toilet to tap and rain water run off and you’ll have our water “problem” solved. I would totally pay 2-5x more than I’m paying today for water. We can also build a water pipeline from Alaska to CA and that would help solve our water “problem” as well.
May 20, 2016 at 5:49 PM #797816phasterParticipant[quote=AN]I never understand the logic of water shortage either. People who think so should just look at their water bill vs their gas bill. We can easily solve our water “problem” buy building 100 desalination plants like the one in Carlsbad. Couple that with toilet to tap and rain water run off and you’ll have our water “problem” solved. I would totally pay 2-5x more than I’m paying today for water. We can also build a water pipeline from Alaska to CA and that would help solve our water “problem” as well.[/quote]
a water pipeline from alaska to california makes as much logical (cost/benefit) sense as trump’s rhetoric to build a big beautiful wall…
[quote=TRUMP]
“When Mexico sends its people, they’re not sending their best. They’re not sending you. They’re not sending you. They’re sending people that have lots of problems, and they’re bringing those problems with us. They’re bringing drugs. They’re bringing crime. They’re rapists. And some, I assume, are good people.”
http://www.wsj.com/articles/the-mythical-connection-between-immigrants-and-crime-1436916798
[/quote]
if diminished precipitation trends continue, the water shortfall will become very apparent (not just to farmers in the San Joaquin Valley), so desperate times might nudge the idea of a water pipeline to gain wide spread public support in urban areas, at which point pretty sure there would be a vocal group of taxpayers that would want to buy the concrete and steel from the lowest cost producer
http://www.globalcement.com/news/item/4533-has-china-s-cement-production-peaked
FYI this would mean more jobs and pollution created in china (NOTE pollution does not just stay in one region)
http://blogs.ei.columbia.edu/2012/05/09/emissions-from-the-cement-industry/
but even before a project enters the design stage, we first need to consider all the EIRs (Environmental Impact Reports), for a route that crosses an internation border and two other states before delivering much needed water to CA
NEXT we would then need to also take into account the all on going energy requirements to pump the water because its a known fact that “nearly a fifth of all the power generated in California — as well as huge quantities of natural gas and diesel fuel consumed in the state — goes into water-related uses”
http://blogs.kqed.org/climatewatch/2012/06/10/19-percent-californias-great-water-power-wake-up-call/
so from these aspects alone, I’d say its a NO GO to even start the multi-year EIR process for a water pipeline
BUT lets say, to hell w/ the EIRs lets just pull out the wallet and pay for the water pipeline and be done with it!
little problem, which is the wallet is empty except for maxed out credit cards AND there is basically NO MONEY saved up in the bank!!
get another credit card then charge it you say (which is the business as usual approach), uhhhhhhhh problem there is CREDIT (i.e. who has it to give and is credit worthy themselves)
Looking at the real world, as it stands this state is on the hook to the federal government for various items like…
[quote=www.sacbee.com]
California still owes feds $8 billion for unemployment insurance
California borrowed $10 billion from the federal government to shore up its recession-battered Unemployment Insurance Fund. Even though the state’s economy is now booming, it still owes the feds about $8 billion.
California is paying interest on the loan, an estimated $174.5 million this year, according to a new report from the state Employment Development Department, and the balance is shrinking only because in lieu of direct payments, the Department of Labor has raised taxes on employers.
http://www.sacbee.com/news/politics-government/capitol-alert/article23027604.html#storylink=cpy
[/quote]no problem since this forum is based in SD city/county why not build more desalination plants (for locals use ONLY) like the one in Carlsbad
for the population of SD city/county a conservative estimate would require 15 to 20 times the existing capacity (of Carlsbad) to meet the local demand (along with some head room for future growth) and given the one billion dollar cost (of the brand new Carlsbad setup), that would mean we would need around 20+ billion in today’s dollars
any ideas how a BIG TICKET ITEM like desalination plants, gets paid for?? when idiots (in charge) can’t even grasp middle school math which is the key to understanding the existing mis-managed pension problem, AND is a reported order of magnitude less in cost
[quote=phaster]
now back to the serious topic at hand since this is an economics message board where it clearly states at the bottom of the page… In God we trust. Everyone Else Bring Data!BUT before looking at data, it might be useful to recall lessons taught in middle school, specifically the topic about “compound interest” and basic money management skills (which is key to surviving/thriving day to day in the modern day world)
if you have a mortgage, then perhaps you might have heard that you can pay off a loan much faster, by “annually” making an extra — 13th — mortgage payment,… what an extra mortgage payment does is directly reduces the principal balance on the loan by the amount of the payment (and the observed effect is exponentially decreasing the payback period)
NOW lets (re)examine ACTUAL “historic” published documents/text (i.e. Data!)
City pensioners get ’13th check’ bonus
More than $6.1 million has been distributed to retired San Diego city employees in the form of a “13th check” — beyond their usual 12 monthly payments — making this year’s holiday bonus the largest such payout in the history of the three-decade-old practice.
But it’s become a source of conflict as the city’s pension system faces a $2 billion shortfall in promised payments, which remains a taxpayer burden and has led to budget crises in the past at City Hall.
http://www.sandiegouniontribune.com/news/2015/dec/18/13th-check/
Though SDCERS investments were earning well above the 8 percent rate of return estimated by the system actuaries, under normal conditions investments surpluses are required to make up for below-average returns in other years to achieve the average rate of return. Therefore, unless the actuaries’ estimates are grossly incorrect, in the long run true “surplus earnings” are impossible. The use of surplus earnings for the purposes other than maintaining the pension system, such as to expand existing benefits should be viewed as a loan from the system THAT WILL REQUIRE REPAYMENT IN THE FUTURE.
The concept of surplus earnings is easily misunderstood, so sometimes these earnings are used inappropriately.
page 286
Handbook of Frauds, Scams, and Swindles: Failures of Ethics in Leadership edited by Serge Matulich, David M. Currie
anyone able to grasp the power/implications of “compound interest” then reading the published reports should be very disturbed at the mis-management/incompetence/corruption since the PRIMARY CAUSE as to why the “magnitude” of the SD public pension “unfunded” problem exists is due to a simple math concept that was suppose to be learned in middle school…
as-reported for the past three decades the “surplus earnings” (aka 13th payment) was diverted to Gubment-Pensioner(s) every holiday season INSTEAD OF being used for the original goal of trying to make sure the long term average return of the portfolio was achieved (about about 8% as per actuaries’ design-estimates)
if anyone is able to think critically about “compound interest” then they will see that making an annual extra mortgage payment and making an extra payment to Gubment-Pensioner(s) every holiday are two side of the same coin; one side allows a mortgage debt to be paid “down” much sooner, the other side makes the debt to pile “up” exponentially over decades!
(bearishgurl) since you have taken the blue pill – its apparent you believe whatever you want to believe!
for all other(s) who dared take the red pill, the BOTTOM LINE seems to be as long as the “surplus earnings” (aka 13th payment) is siphoned off every holiday season for Gubment-Pensioner(s) INSTEAD OF being used to maintain the pension system designed target return rate, the SD pension system as currently structured/operated AND using nothing more than “honest” common sense and middle school math tells us, that the un-funded DEBT issue will basically ALWAYS grow!
http://www.doughroller.net/investing/power-of-compounding-interest/%5B/quote%5D
so is it realistic to believe politicians/lawyers have the brains to understand let alone fix the water infrastructure that needs to be built to address the various issues related to the on going drought, given these same self-absorbed corrupt idiots cannot even solve much smaller financial operations and mis-management practice issues???
[quote=www.centralvalleybusinesstimes.com]
State Auditor blasts Bar AssociationState Auditor Elaine Howle has more than a few bones to pick with the State Bar of California’s financial operations and management practices.
In a scathing report, Ms. Howle says the State Bar’s financial reports have contained errors and lacked transparency, limiting the ability of stakeholders to fully understand its financial operations and the Legislature’s ability to set appropriate State Bar fees.
http://www.centralvalleybusinesstimes.com/stories/001/?ID=30520
[/quote]just sayin’ short term thinking along with business as usual politics has created a “delusional idiocracy” system, dominated by simple minded affirmations or political slogans like “make america great again” which cannot explain how to solve problems that are based on a complex and corrupt reality…
bottom line… is it no wonder by not understanding the big picture problem (i.e. economic/scientific data) and doing the same things over and over again and expecting issues to get better, that what is actually happening is more akin to jumping out of the frying pan and into the fire!
May 20, 2016 at 11:49 PM #797831anParticipantphaster, all I see from you is rants. I never said anything about doing the same thing over ad over again and expecting better result. I actually stated solutions. What are your solutions?
Where did you get $20B desalination plant needed for SD come from? The Carlsbad plant supposed to provide 7-15% of our water need. So we only need ~10 of those. That’s assuming we do nothing else. How about water recycling (toilet to tap)? How about brown water system? How about improve storm water run off and build more dams for storage? We have been haven’t water problem for years and have you seen most of CA doing anything?
Whether you think the politician is capable of fixing the problem or not is irrelevant, since they have a monopoly. for our sake, I hope they get their act together and fix the problem. If we can have Tesla, SpaceX, Google, Apple, etc in CA, I’m pretty sure we can fix the water problem.
And removing all the lawn isn’t going to solve the problem, unless you want to also kick out 1/2 of the Californian too.
May 21, 2016 at 7:17 AM #797832phasterParticipant[quote=AN]phaster, all I see from you is rants. I never said anything about doing the same thing over ad over again and expecting better result. I actually stated solutions. What are your solutions?
Where did you get $20B desalination plant needed for SD come from? The Carlsbad plant supposed to provide 7-15% of our water need. So we only need ~10 of those. That’s assuming we do nothing else. How about water recycling (toilet to tap)? How about brown water system? How about improve storm water run off and build more dams for storage? We have been haven’t water problem for years and have you seen most of CA doing anything?
Whether you think the politician is capable of fixing the problem or not is irrelevant, since they have a monopoly. for our sake, I hope they get their act together and fix the problem. If we can have Tesla, SpaceX, Google, Apple, etc in CA, I’m pretty sure we can fix the water problem.
And removing all the lawn isn’t going to solve the problem, unless you want to also kick out 1/2 of the Californian too.[/quote]
[quote=KPBS]
(Drinking Water Starts Flowing From Carlsbad Desalination Plant)KPBS report @ 0:04
“the billion dollar project…”KPBS report @ 0:47
“this facility will produce 7 to 10 percent of the regions water enough for 400,000 house holds…”KPBS report @ 2:42
“at the same time poseidon is throwing its arms up in victory claiming to provide up to 10 percent of our regional water needs…”
[/quote]knowing the history of failed desalination plant projects, the conservative risk analysis approach is to use the lowest published figure of seven percent (and IMHO that might be still too “optimistic”), never the less:
(20 “similar size Carlsbad plants”)(7%) = 140 % “of reported current water use”
now re-read exactly what was stated in my so-called “rant”…
“for the population of SD city/county a conservative estimate would require 15 to 20 times the existing capacity (of Carlsbad) to meet the local demand (along with some head room for future growth) and given the one billion dollar cost (of the brand new Carlsbad setup), that would mean we would need around 20+ billion in today’s dollars”
QED
FYI the price comparison of the number of Carlsbad desalination plant(s) needed vs. the reported unfunded public pension, was stated to illustrate not only the magnitude of money @ economic risk, but also to point out the long history of various mis-management public resource(s) that have the potential to crash the system
what you might find surprising is the actual data showing the dominance of AG WATER USE vs. URBAN WATER USE
basically lawns like too many ag crops being cultivated (for the export market), in the grand scheme of things is a shit for brains design selection and looking at resource trends, pretty sure suburban lawns w/ in a decade are going to join the list of the…
saber tooth tiger
wooly mammoth
original people/society on easter island
flightless dodoas for solutions to the drought, sadly don’t see any that are cost effective or politically palatable THEREFORE most likely outcome is, one way or another society will have to adjust to a limited resource world (i.e there will be a lower standard of living for most and just like the 2007 sub-prime crisis, fall out from the “drought” is going to take the general public by surprise!)
May 21, 2016 at 7:31 AM #797833scaredyclassicParticipantA nice water related day trip is DIAMOND VALLEY RESERVOIR by Hemet.
There’s a,21 mile trail circling the largest freshwater reservoir in southern California. It’s unusually gorgeous.
Check it out while there’s still water. Bring a bike or rent one there.
May 21, 2016 at 8:28 AM #797834anParticipantphaster, again, you’re assuming that desalination as the only source of water. Toilet to tap was estimated to provide ~30% of our water need. So, it’s not necessary to have desalination as the only solution. Then there’s the improvement of storm water run off so that the rain we do get doesn’t go into the ocean. Then build a lot more storage so that when we have wet years, we can bank those water for the dry years. We can also not dump a big chunk of fresh water to save the damn smelt. They can go the way of the flightless dodo too.
However, even if we have to build 20 more desalination, why not? If we can spend almost $100B on the damn bullet train, I’m sure we can spend $200B on desalination plants. As I stated, I wouldn’t mind paying 5X more water, if that mean we can make the water police go the way of the dodo bird.
Your “solution” isn’t really solution at all. Your “solution” is to do nothing at all. Which is what you were railing against. Also, why do we have to restrict ourselves to solution that can provide us with cheap water instead of just providing us water?
May 21, 2016 at 8:48 AM #797838no_such_realityParticipantChart 2 is informative.
http://www.arb.ca.gov/fuels/lcfs/workgroups/lcfssustain/hanson.pdf
This is a wet year were the majority of our developed supply is. What are we doing? Literally running it down the drain to the ocean because we’re worried about melt over capacity.
May 23, 2016 at 8:08 PM #797946phasterParticipant[quote=AN]phaster, again, you’re assuming that desalination as the only source of water. Toilet to tap was estimated to provide ~30% of our water need. So, it’s not necessary to have desalination as the only solution. Then there’s the improvement of storm water run off so that the rain we do get doesn’t go into the ocean. Then build a lot more storage so that when we have wet years, we can bank those water for the dry years. We can also not dump a big chunk of fresh water to save the damn smelt. They can go the way of the flightless dodo too.
However, even if we have to build 20 more desalination, why not? If we can spend almost $100B on the damn bullet train, I’m sure we can spend $200B on desalination plants. As I stated, I wouldn’t mind paying 5X more water, if that mean we can make the water police go the way of the dodo bird.
Your “solution” isn’t really solution at all. Your “solution” is to do nothing at all. Which is what you were railing against. Also, why do we have to restrict ourselves to solution that can provide us with cheap water instead of just providing us water?[/quote]
picture a kid in kindergarten
now imagine if the kindergarten teacher asked the kid what 1+1 is…
obviously as grown ups we would not think the right answer would be if the kid finger painted a car and an airplane (but to a kid they might not know OR care about “math” they just want to draw a car or an airplane because its “sexy” and “fun”)
point being, a “solution” is only possible when the problem is fully understood and there is no bias toward some preconceived outcome!! FURTHERMORE any “solution” to a real world problem must take into account the limited resources of: time, money, and labor
also its important to note sometimes there are “problems” w/ out “solutions”
http://mathworld.wolfram.com/UnsolvedProblems.html
WRT drought “solutions” you might be (for example) target fixated and buy into say a big beautiful pipeline from alaska to california (which has to cross CANADA which is a foreign country last I checked, as well as the states of WA and OR, which is a hell of long way, before water reaches CA…) so did you ever stop and think what an up hill political “bull shit” battle that would be?
like wise IN THE ADULT WORLD COSTS DO MATTER
consider while some kids might want their mom/dad to drive a ferrari to take them to kindergarten, parents have to worry about details like how much is a ferrari going to cost, what is the insurance, how much will it cost to fix, etc. AND that basically explains why in the real world there are lines of SUVs dropping kids off @ kindergarten (as oppose to a line of ferarri’s)… both are basically just a means of transportation, but the cost and practically between a “ferarri” and a POS “kia” SUV are worlds apart!
same idea of analysis WRT cost and practically is applicable to the problem of securing water supplies (whether its via a pipeline, desalination plant(s), buying water rights from farmers, building more reservoir capacity, etc. etc. etc.)!!!
when I was an undergrad one thing I stumbled upon was a seminar project class w/ the dude who actually started UCSD (about a year before he died)
https://revelle.ucsd.edu/about/roger-revelle.html
the idea of the class was to point out to students the real world value of understanding the role of science as it relates to evaluating/making policy
what was cool about the class was 1:1 access to world class scientists who set aside time to interact w/ knucklehead students (figured if the offer was out there, I’d take advantage of the opportunity to ask some questions and hopefully learn something – NOTE google/siri kinda accomplish the same thing today, my how times have changed)
at the time the fed’s wanted SD to upgrade its sewage water treatment to a “secondary” level because of something to do w/ the clean water act
anyway one thing I kinda looked into was the cost/benefit of “secondary” water treatment at the point loma plant before treated water was basically sent a few miles off shore and released into the ocean
local officials were seeking a waver of federal law which mandated “secondary” water treatment, because studies indicated marine wild life would not benefit if the release of regions sewage was upgraded to “secondary” @ point loma
basically “primary” treatment @ point loma was all that was needed, because given the “unique” circumstance of geography of SD, the treated sewage was being released in the pacific ocean and not in a river
long story short, “SCIENCE” indicated it was unnecessary to spend money to upgrade equipment at point loma to clean water to a level that las vegas had to do (because cities like LA and san diego were down stream)
actually toilet to tap has been happening for years (as I learned back in the day) since SD is down stream las vegas which has to have its own sewage treated to “primary” as well as to a “secondary” level before being released back into the colorado river
also at the time pondered the cost/benefits of treating the water of the point loma plant to a secondary level and building a pipeline to the san vicente reservoir (so that water could basically go from toilet to tap w/ in the SD region), but that would have required building a pipeline and associated infrastructure from point loma all the way out to the reservoir, so “treated water” could sit a while then be re-used as a “supply”
if memory serves there was an effort (which failed) to get “toilet to tap” actually working in this region
because to the general public “toilet to tap” wasn’t appealing or necessary to reuse treated sewage (as another supply for this region) the reaction to try and close the deal was a rebranding effort w/ the tag line “showers to flowers”
also about that time period, personally started looking at climate change “data” and had a strong gut feeling (back in the day) it was inevitable that weather patterns were going to change and lessen the precipitation in the region (which has since come true)
so personally have always been in favor or building more reservoir capacity, building lots more desalination plants, upgrading the treatment of sewage for reuse (in this region), tripling if not more the cost of water to the end users to send the economic signal that “water” is a resources that should be treasured and used in the most efficient way possible, BUT sadly very very very few, feel the same way or look and try and understand the big picture
we all learn and pick up stuff over the years and FWIW here are three key object lessons I’ve learned (that seem applicable to the matter @ hand)
1st – its important to remember that shit has its costs which eventually must be paid for… and sometime well intended laws (to protect the environment) makes no scientific sense!
2nd – reality is… it takes a real long time to get shit done, when problems are big, complex and co$tly to implement
[quote=KPBS]
(i.e. Drinking Water Starts Flowing From Carlsbad Desalination Plant)KPBS report @ 0:24
“the roots of this facility really date back 25 years…”
[/quote]3rd – AND last object lesson learned is… sometimes SHIT HAPPENS and “cannot be avoided” (i.e. when the system is very politically corrupt and financially mismanage, conditions change for say 100 years and mother-nature does not provide enough precipitation in a region to meet demand, etc. etc. etc.) so figure if this is the case, the best approach is “head on” and hope to live through the bad situation…
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