Resolving the paradoxes of water

Concluding their series, James Workman and Montgomery Simus say virtual urban-water markets within natural monopolies can be unlocked, rewarding frugality, efficiency and innovation. “Greed makes green” and a sustainable path lies beyond virtue.

In April 2001, then-US vice president Dick Cheney trashed the idea of doing more with less: “Conservation may be a sign of personal virtue,” he said, “but it is not a sufficient basis for a sound, comprehensive energy policy.”

It pains us to admit it, but 10 years later it seems he’s right.

To save water and build resilience, cities of the world – in Europe, Africa, Asia and the Americas – need to start tapping into a far deeper human instinct: avarice.

Yes, yes. We know that sounds rather crass, even for us, but follow our logic.

We can agree that climate-change mitigation demands clean energy; likewise climate adaptation demands efficient water use. Building on that, we all know that water and energy conservation remains by far the fairest, fastest, cheapest and cleanest route to global security. It restores a resilient society, a stable climate, an autonomous foreign policy and a robust economy while avoiding political land mines of regulations, carbon taxes or cap-and-trade treaties.

The only drawback to conservation is that it requires sacrifice from the richest and most powerful citizens, businesses and political interest groups. Arguing for more virtue just won’t do the trick, as we have seen for the past few decades (or for that matter, millennia).

But today technology promises to deliver the same result based on a radical form of conservation that leverages their (and, yes, everyone’s) inner greed.

Why? Because in any democracy, urban conservation must reach beyond hybrid, car-pooling, farmers’ market, hemp bag, vegan, sweater-wearing pillars of society. It needs at least 51%. That includes flawed people (including us) who blast air-conditioning and take long, hot showers.

This not-so-moral majority consumes more water and energy than it needs to. It feels vaguely guilty. Still, it could take comfort in a dirty little secret long known by insiders and now more widely recognised by the public: virtue-driven conservation is economically unsustainable.

Wait. As humans save resources, we lower bills, reduce effect and avoid sanctions, right? Not necessarily – thanks to the absolute natural monopoly that is our local water and energy utility.

But as we have seen in the case of urban water, it turns out utilities’ conservation directors showcase programmes touting rebates, but quietly pray like hell that no one will conserve.

Instead, like any enterprise, a utility’s operating income depends on mass consumption. The more combined water and energy people waste, the more money utilities have to work with.

So people cut consumption by half, monopoly utilities must unilaterally double rates per gallon (or litre) or kilowatt-hour to balance operating costs. After a dip, monthly utility bills rise back, higher than ever.

Happily, new information technologies may lead us out of this destructive and dangerous spiral of perverse incentives. The Internet can unlock authentic, sustainable, comprehensive conservation policies that eluded Dick Cheney. How? By borrowing from the !Xaro system of the Kalahari Bushmen; from catch shares programmes in fisheries; and from a US national idea used back in the 1990s to cut acid rain causing sulfur dioxide emissions that were killing lakes and forests: tradable credits.

Here’s how some say it could work to encourage real, meaningful conservation:

• First, encourage monopoly utilities to convert messy physical water or energy into cleanly defined virtual credits.

• Next, allocate equal quantities of these online metered assets – say, 200 gallons (nearly 760 litres) or 20 kilowatt-hours per day — to every residential, commercial and industrial account.

• Then let us trade whatever we don’t consume to those who want more.

These online platforms could unlock virtual urban-water markets within natural monopolies, working to reward voluntary frugality, efficiency and innovation.

The trick is not trying to improve on human nature, or make everyone extra-virtuous, but to leverage innate “sin”. If one person consumed less, he or she could sell unused shares to another, to businesses or to the utility for a cash profit.

Greed makes green. Pride in higher wealth and status would compel us to use even less just to keep up – a benevolent consequence of envy.

This approach unlocks a sustainable path, and does so by going beyond virtue.

Indeed, to unlock a robust water-conservation policy, China’s cities – like cities everywhere – need only tap our inner vice. 

James G Workman and Montgomery F Simus are co-authors of the forthcoming book H2Ownership vs The Three Paradoxes of Water and co-founders of SmartMarkets LLC, an online, utility-based system that they say could unleash a widespread, egalitarian race to conserve water and energy in cities worldwide. Workman is also the author of Heart of Dryness: How the Last Bushmen Can Help Us Endure the Coming Age of Permanent Drought, excerpted by chinadialogue in 2010. The authors can be reached at [email protected] and [email protected]. 

Homepage image from IUCN, D. Huberman