Why nationalising the water industry is a stupid idea

Firstly here's Sky News' business editor:

The nadir came when, during the drought of 1976, millions of people in Yorkshire, Wales, the Midlands, East Anglia, Devon and Cornwall had their household water supply cut off due to shortages and were forced instead to queue in the street for water from standpipes.

Privatisation enabled investment. More than £130bn has been ploughed into the industry since 1989 - a sum unimaginable under state ownership - and standards have shot up.

There have been plenty of long, hot summers since but, thanks to investment in new reservoirs and pipes, households have not had to endure their supply being cut off as they did in 1976.

That's the deal folks. Some people made some profits and in exchange we got £130bn invested in our water supplies, sewerage, clean beaches, unpolluted rivers and a pile of other services. That's £130bn that the government didn't have to borrow and you didn't have to pay taxes for.

Next, let's look at what happens when government runs the water supply:

According to a class-action lawsuit, the state Department of Environmental Quality was not treating the Flint River water with an anti-corrosive agent, in violation of federal law. The river water was found to be 19 times more corrosive than water from Detroit, which was from Lake Huron, according to a study by Virginia Tech.

Since the water wasn't properly treated, lead from aging service lines to homes began leaching into the Flint water supply after the city tapped into the Flint River as its main water source.

Health effects of lead exposure in children include impaired cognition, behavioral disorders, hearing problems and delayed puberty. In pregnant women, lead is associated with reduced fetal growth. In everyone, lead consumption can affect the heart, kidneys and nerves. Although there are medications that may reduce the amount of lead in the blood, treatments for the adverse health effects of lead have yet to be developed.

Nationalising Britain's water services is a really stupid idea.

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Why nationalising the water industry is a bad idea....

It will surprise people to learn that most the the USA's water infrastructure is publicly-owned and managed. And it's not just high profile disasters (poisonings if you prefer) that are the issue, it's that keeping consumers - who vote - happy leads to under-investment in that infrastructure:

Yet there clearly are major infrastructure repair needs in America. We have not been properly maintaining the assets we have built. Levee failures notoriously caused much of the flooding in New Orleans after Hurricane Katrina, but America has yet to address the neglect of its dam and levee systems. For example, the recent possibility of an overflow or collapse at the Oroville Dam in California forced 180,000 people to be evacuated. Many dams, levees, and locks on our inland waterway system are in need of repair, often at significant cost. Examples include Locks 52 and 53 on the Ohio River. Built in 1929, their replacement cost is $2.9 billion. As the New York Times reported, this replacement has been botched, and it was originally supposed to cost only $775 million—still a lot of money.

As is reported recently, the UK is not without these water management challenges but they are largely in parts of the system outside the control of the industry. All this means we pay more for our water than the average American but it also means we have a water supply and sewage system that works.

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Why Australia doesn't have California's problems with water - free markets

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Lots of angry lefties tweet that slightly crass quote about water rights from the boss of Nestlé. They do this because they care about people having the water they need, something we can all agree with. However, the transfer of this concern from rhetoric into public policy is a problem. Quite simply because, as Californians have discovered, the supply of water is a really big deal. And it's down to the weather (you can all argue the toss about whether it's climate change or not if you like but that won't change a thing):

California has a history of droughts lasting as long as 200 years.  You can dam every canyon in California and line the coast with desalination plants, and you won’t solve the water shortage in a 200-year drought, or even a ten-year drought.  Under the current allocation and pricing system, California will simply consume every new drop of water produced. We will have a water shortage all the same. 

So the question is what to do to ensure that the need for water in the Sunshine State is met. And most solutions offered are either stupid (ban the extraction of water for bottling) or totalitarian (rationing the supply of water). The right approach is (and this is why the Nestlé chap has a point) about ownership of the source and pricing.

By way of contrast, Australia - just as dry and drought-prone as California - doesn't have the same supply problems:

Water markets equipped Australia to endure the 1995-2009 Millennium Drought. This was the worst Australian drought since European settlement. Total water stored declined to just 27 percent of capacity. Yet water trading allowed Australian cities to avoid the most severe water restrictions. It protected agricultural businesses, and it ensured that the country’s endangered habitats and species received adequate water.

Remarkably, in an end-of-drought survey, over 90 percent of Australian farmers reported that water markets were important to their businesses’ survival. There are many lessons for California here. A key one is that the tension between water users is completely the creation of policy. There is no need for the tensions between the agricultural industry and California’s cities, between growers and endangered fish, between Hillsborough and Westborough, between neighbors. Water markets can balance competing uses in a way that benefits all.

To work, markets need something to trade. The basis for trade in a functioning water market is exclusive access to a share of water from a specific body. Australian water laws provide this. California’s water laws do not.

Sadly the article concludes that politicians in California are unlikely to be liberalising water markets. Just goes to show how stupid us politicians are really.

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In 2013 I'd just like it to stop raining

So 2012 has been something of a washout. It seems that, for the last several months we've lived a closed existence. We scuttle from one cooped-up place to another cooped-up place via the medium of a cooped-up car. And, all the while, we watch the rain fall and feel like Rob McKenna:

“And as he drove on, the rainclouds dragged down the sky after him, for, though he did not know it, Rob McKenna was a Rain God. All he knew was that his working days were miserable and he had a succession of lousy holidays. All the clouds knew was that they loved him and wanted to be near him, to cherish him, and to water him.” 

We could coin a thousand different names for this precipitation - not just the prosaic sounding "rain", "heavy rain", "light rain" and so forth but other more creative terms. "It's a soft morning," we might cry as we peer through the mist at the road before us. Or, on speaking to the neighbour, we observe; "a bit damp again today" while torrents of raindrops bounce off ever surface and dribble into every nook and cranny, discovering the weaknesses of sheds, garages and even the houses we live in. Words like drizzle, smattering, bucketloads and, of course the seminal, "pissing it down" all battle with stair rods, lashing and downpour.

And the rain never stops.

Out in the garden, on the rare occasions when needs must have driven us up the path, all is mud, puddle and morass. The pond merges into the lawn which, in its turn, becomes a sodden border - more water margin that herbaceous. Even the cats and foxes tiptoe gingerly across the lawn - a swathe of grass that, were I to walk across a few times, would soon revert to its original sticky boulder clay.

And still it rains.

One wonder at the limits to the capacity of the soil to hold this water. A thought that's stressed by the rivers flowing down the gulleys into the middle of the village. Every drive, each field edge and even the gutters of the terraces pour more water into the streams. Looking over the walls to the real streams there are deep, churning, brown waters that have replaced the sparkling little delights that once filled these valleys.

But no let up to the rain.

So we sit, fractious, annoyed and grumpy in our little coops - watching the world, as if in Ballard's dystopia, get ever damper. And we row, we pass coughs, colds and headaches from one to another unable to take those germs out into a clear, bright world and let them die in the fresh air. And because we have to go out sometimes, everything is damp. Boots, socks, coats our very souls - all not quite drying out from the persistent rain.

But no end to the torrents of rain.

Rain is good, it brings the growth, the green - the beauty of England is mostly down to the rain and the work of the water it brings. But just as with chocolate and pork pie, it's just about possible for us to have too much of that good thing. For a time to arrive when you wish it to stop, when you've had enough. That time is now.

In 2013 I'd like it to stop raining.

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The lake in Winter

Maybe the tree fell, perhaps it grew that way out across the lake where there was more room, more light than on the tangled, crowed banks. But now, like a gnarled finger, it points across the wintry lake.

Part of me - the little boy part, I guess - wants to clamber out along the tree, to see how it feels perched at the end. Probably like sitting on a branch looking out at a lake but somehow, in an undefinable way, it would be better than that.

The lake would be mine, a kingdom of chilly waters enclosed within the hills, their rocks and their wooded banks beside the waters. I could command it, sweep my arm across and see it respond to my presence. I would be its master.

But that isn't to be, I left that magic behind with my nine-year-old self. Now a different spell is cast, I am instead struck by its beauty, the stark appeal of a soft winter scene beside the lake.

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