As my longtime readers know, I'm very interested in water issues in Taiwan. The Taipei Times hosted a commentary on land subsidence in Yunlin county today. You might recall that back in April there was a minor flap over the possibility of subsidence affecting the HSR. The commentary set the problem in the context of the total lack of government enforcement of underground water usage laws. As so often is the case in Taiwan, the laws are sensible, but ignored....Under this irrigation system, there are two crop periods each year. Considering the available water resources, rice cultivation in Yunlin County should be confined to the second crop. Since that crop coincides with the rainy season, there should be no water shortage. Why, then, do we still have this problem of excessive groundwater extraction? The trouble is that, in order to make more money, farmers plant rice in the first crop period, from February to June. Since there is no surface water available at that time, the only way farmers can irrigate their paddy fields is by using groundwater drawn from wells that they bore themselves.This is illustrated by the debate over the subsidence issue and the HSR. One simulation estimated that only 60 wells need be shut down to reduce the problem to non-worrisome levels. Nevertheless....
..................
Turning to the third point, there are more than 100,000 wells in Yunlin County, more than 90 percent of which were dug without confirming water rights or applying for permission to build hydraulic facilities, as required by the Irrigation Act. If things were run in accordance with the law, the authorities would clamp down and stop illegal extraction of groundwater.
The current reality, however, is that out of consideration for farmers’ livelihoods and to avoid clashes, illegal wells can only be dealt with when complementary measures are in place....
The ground where the elevated railway passes over Provincial Expressway No. 78 has sunk 55cm over the past seven years, according to data from the line’s operator, Taiwan High Speed Rail Corp (THSRC), raising potential safety concerns.Note that the law is made by the Central government but enforcement is handled at the local level. This means that local politicians would have to shut down their neighbors' -- and voters -- wells. Like that will ever happen.
The Water Resources Agency (WRA) issued a directive recently to seal off 1,115 shallow wells near the problematic areas to limit subsidence, but it was rejected by the Yunlin County Government, which said it would hurt farmers’ interests.
Yunlin County Commissioner Su Chih-fen (蘇治芬), who refused to follow the WRA’s directive without suitable complementary measures, said the measure would do little to mitigate the problem because the subsidence was mainly caused by deep wells that had all been sealed off years ago.
Chinese Nationalist Party (KMT) Legislator Lin Hong-chi (林鴻池) agreed, saying that well closings and high-speed railway safety involve many complex issues that require the collaboration of various government agencies.
How subsidence occurs is described in this piece about a similar problem in the Philippines:
How excess groundwater use causes land subsidence has been known for a long time (Terzaghi, 1925; Tolman and Poland, 1940), and the theory is summarised admirably by Galloway et al. (2001). In river deltas, groundwater is stored in and recovered from sandy and gravelly aquifer (‘water bearer’) layers. Aquifers are contained by interbedded aquitards, layers of clayey sediment that are much more porous and contain significantly more water, but, being of a very fine grain, have a great deal of grain surface to offer frictional resistance and retard the through-flow of water—hence their name.The reference I append at the end has a nice picture of the aquifers underlying the Choshui River's alluvial fan -- four in all, interlaced with aquitards. The Choshui is the large river bordering Yunlin on the north.
Deltaic sediment columns are supported in part by the fluid pressure of their pore waters. When water is extracted from an aquifer, support is transferred from its fluid pressure to the sediment grains comprising its granular skeleton, which is somewhat compressed, commonly causing the ground to subside a few centimetres. If groundwater extraction is not excessive, that compression and subsidence may be fully reversed when precipitation recharges the aquifer.
In addition to the farming practices outlined in the TT commentary above, many sources identify water withdrawn for fish farming as a major source of subsidence. As Taiwan Review noted in an excellent article on fish farming last year, at its peak in the 1990s the aquaculture industry covered 1.5% of the island's land area. It exports plenty of lucrative high value fish, but the staple export is the drab Tilapia (wu guo yu). This study in fact finds that salinization of the shallow aquifer along the coast in Yunlin is due to sea water used in fish ponds seeping back into the aquifer....
The determined local hydrogeologic setting suggests that the shallow aquifer may be connected to the sea water, resulting in salt water intrusion as a large amount of shallow ground water is withdrawn. The percent contributions of sea water intrusion, percolation through wells, and infiltration of water from fish ponds, to the salinization of the shallow aquifer at Ko-Hu in the Yun-Lin coastal area are approximately 27 percent, less than 1 percent and 73 percent, respectively. The results suggest that the vertical infiltration of salt water from fish ponds is the major cause of shallow ground water salinization in the coastal area of Yun-Lin.This report identifies Tuku as the center of the "basin-like" subsidence and says that compaction is greatest at depths greater than 200 m. Deep wells -- thousands of them -- are sprinkled throughout the area.
How is the Yunlin government dealing with the issue? The central government ordered a halt to pumping around the HSR but as noted above that is not a realistic possibility. Instead the county government has proposed a PV industrial district for the affected area:
Of course, this all only a proposal at the moment. And we've seen in the Central Taiwan Science Park land cases how compensation is often miserly and poorly handled....The plan was put forward in an attempt to override the decision made by the Water Resource Agency of the Ministry of Economic Affairs to designate the subsidence area on the intersection of the rail lines by No. 78 highway as a model district subject to a ban on pumping underground water to irrigate the land.
The county government contended that the decision would take a serious toll on living of farmers depending on this piece of land, which is now a rice paddy. The county government suggests PV manufacturers on the planned industrial zone pay land owners NT$26,000 per hectare as monthly rental. Total rental for the 385-hectare land is estimated at NT$92.4 million (US$2.8 million at US$1:NT$32) a year, much higher than the NT$100,000 (US$3,125) average that Taiwan's rice farmers earn a year on each hectare.
It is understood that many PV manufacturers and the ministry have voiced support for the industrial park plan.
REF: Charts, cores, maps in this scholarly article on clay and subsidence in Yunlin.
_______________________
[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums!
It's properly understood as an economic problem, not a political problem. The appropriate questions are not administrative but entrepreneurial.
ReplyDeleteYour sense of humor is so rich.
ReplyDeleteI don't understand. Would you really prefer to watch demand for water forced down to match supply, instead of supply increased to match demand?
ReplyDeleteHow does that help anyone except a bunch of thieving mandarins in local government?
Why yes, I expect demand for water to be forced down to match supply, since obviously you can't use more water than is supplied. Especially given the problems of subsidence, etc. You can handle it many ways, incentives, strict enforcement of laws, etc. But groundwater pumping has to stop.
ReplyDeleteMike, even as an economic problem there are requisite administrative issues.
ReplyDeleteThe cost (to farmers) of groundwater pumping does not include the eventual cost of the effects of subsidence. Markets seem to be piss poor at including the costs of long-term, difficult to calculate costs. Look at climate change, and even environmental problems.
These imbalances can only be rectified by administrative acts such as environmental laws and (enforced) water laws. As the supply diminishes, water costs increase, and entrepreneurs can work to find alternatives that are cost-effective at the higher prices.
(and it would diminish the number of farmers planting in phase 1).
Turton, the whole point is to increase supply of water for irrigation so as to obviate the need for pumping groundwater and hence, regulation.
ReplyDelete"Markets seem to be piss poor at including the costs of long-term, difficult to calculate costs."
That’s like saying meterologists “seem to be piss poor” at predicting the weather two weeks from now. Pricing risk is always difficult – you deal with it as best you can; it’s what the futures market is there for.
”As the supply diminishes, water costs increase, and entrepreneurs can work to find alternatives that are cost-effective at the higher prices.”
Assuming they did not first work on the problem of increasing the supply of water itself – which is my whole point. Even without knowing the ins and outs of the financial aspect of any such enterprise, it is nonetheless conceivable that savings elsewhere from the use of better water harvesting and recycling equipment could feed the farmers’ demand for water during the first crop period.
Turton, the whole point is to increase supply of water for irrigation so as to obviate the need for pumping groundwater and hence, regulation.
ReplyDeleteNo Mike, then you simply fuck up some other ecology somewhere else. That's the current move, to build the Huashan Dam to alleviate the "supply problem". Further, by building the dam/increasing supply you don't permit scarcity to correct the problem, instead you teach the farmers that whatever they do, the government will continue to provide water. The reason there is a problem is that the water is essentially free water, and if a good is free, basically, demand will be infinite. The "shortage" problem is caused by too many individuals chasing a free good of limited supply. A shortage is a sign that the market is out of whack, in this case, by government intervention (deliberate non-enforcement of the law along with subsidized irrigation infrastructure etc) to keep the price low.
The correct move is for government and farmers to work together to reduce demand for water by mandating/incentivizing better tech (as you note), changes in crops and land use, raising the price of water, and so on.
From the standpoint of the economy as a whole, farming is bad use of water but good use of land. Water would have much higher value if it were directed toward manufacturing something. But green land has so many social and environmental positives.
Michael
I’ll allow that the Huashan Dam is a stupid way of thinking about this problem (as opposed to the use of better rain harvesting and water recycling technologies) but I still disagree with your view; the correct move for the government is to get out of the business of supplying water to farmers (and of subsidising farmers for political gain in the first place). If additional water cannot be supplied to farmers for the first crop period at prices competetive with the costs of pumping groundwater (i.e. including subsidence externalities), then the farmers may have to tech up, or pack up and sell to whomever can put the land to more productive use. Time for ecotourists to figure out how to turn an honest dollar if they can...
ReplyDelete“But green land has so many social and environmental positives.”
Granted, but the two pertinent questions are these: positives for whom and at whose expense? You don’t want dirty factories there? Fine, then you and your friends pay the farmers not to sell but don’t ask the government to force everyone else to foot your bill. The drive from Tainan to Taichung is grey enough as it is without adding yet more factories to the horizon, but I am happy enough with the green land in and around the mountains of the South.
But, Mike the problem is that the government isn't *supplying water* to the farmers. The problem is that it isn't regulating the farmers obtaining of water on their own, with the result that the farmers are causing subsidence for themselves and everyone else. Markets generally fail in this situation, as Robert noted above, which is why we have governments.
ReplyDelete"But, Mike the problem is that the government isn't *supplying water* to the farmers."
ReplyDeleteWho is responsible for river management of the Dahukou, Huwei and Zhuoshui rivers? Where is the money coming from to fund the construction of the Huashan Dam and who will eventually be responsible for its management?
"Markets generally fail in this situation, as Robert noted above, which is why we have governments."
Rubbish. The government has a monopoly, via the Taiwan Water Corporation, over the supply of water for agricultural use. There is no market to speak of for the supply of irrigation water in Yunlin - such a market doesn't even exist Turton.
Who is responsible for river management of the Dahukou, Huwei and Zhuoshui rivers? Where is the money coming from to fund the construction of the Huashan Dam and who will eventually be responsible for its management?
ReplyDeleteThe issue isn't that supply but the underground water supply, Mike.
Rubbish. The government has a monopoly, via the Taiwan Water Corporation, over the supply of water for agricultural use. There is no market to speak of for the supply of irrigation water in Yunlin - such a market doesn't even exist Turton.
Again we're talking about taking a "free" good, underground water.
But it isn't free is it? The land subsidence externality is going to be very expensive in some cases. Who pays?
ReplyDeleteI think we're just talking about the same thing from two different angles. The farmers are businessmen; their goal is to externalize their costs and internalize their profits. So the cost of subsidence will be passed on to others to the extent possible. The only way to stop this is comprehensive action by a sovereign power that can oversee the entire region. Is that what you are arguing here?
ReplyDelete"The farmers are businessmen; their goal is to externalize their costs and internalize their profits."
ReplyDeleteCome on, you're not getting away with that; the formal goal of a business is to produce stuff other people want and in doing so, maximize profits. Some of its costs can either be "externalized" or dealt with by the business itself, particularly if, given market competition, there is pressure from consumer demand to do so. Unfortunately, governments tend to substitute themselves for consumer pressure with regulatory demands upon *some* companies (to varying degrees and at the exclusion of some politically favoured companies) not to externalize costs anyway.
"So the cost of subsidence will be passed on to others to the extent possible. The only way to stop this is comprehensive action by a sovereign power that can oversee the entire region."
It's one way to stop it sure, one with its own, rather large, externalities... like fighting fire with an inferno. Consider just these three aspects; the bill to the taxpayer for all this "comprehensive" action by various government departments and agencies; the loss of opportunity to other business who could have replaced some of the farmers ruined by having to pay for the subsidence they themselves caused; the further restrictions for market supply of water tech caused by having a single buyer (the government) as well as the incentives toward cost-inflation that brings (a cost inflation, which, naturally will be passed on to taxpayers).
Alternatives?
Under conditions of strictly limited government and a strict stipulation of the tort law system to private property rights, externality cases such as these could be dealt with - imperfectly perhaps, but without having to pass on all the subsequent engineering costs to the taxpayer; without bailing out uncompetitive farms and instead allowing more productive enterprises to replace them; and without introducing further distortions and disincentives to the market for a more competitive supply of better water tech.
The land subsidence externality is going to be very expensive in some cases. Who pays?
ReplyDeleteExactly.
And only the state can force the farmers to pay for externalities. We need the state bureaucracy to measure and calculate externalities.
We need a legal framework to provide the proper basis for the payment of externalities.
And finally, we need a police force (or other agents of the state) to force compliance with the above. (we would be hopelessly naive to assume that our goals could be achieved through voluntary compliance)
ReplyDeleteCome on, you're not getting away with that; the formal goal of a business is to produce stuff other people want and in doing so, maximize profits.
Yes, and part of that art is externalizing costs to the extent possible. An economy regulated by consumer pressure would a remarkably inefficient one which would over time kill most of its members. Regulation by designated sovereign agencies is far more efficient, which is why it is universally used.
You can't handle externalities through tort law because tort law has no positive 4-D planning function, only negative retribution functions. You'd simply end up with a society that destroyed its environment over time.
"And only the state can force the farmers to pay for externalities. We need the state bureaucracy to measure and calculate externalities. We need a legal framework to provide the proper basis for the payment of externalities."
ReplyDeleteWhat’s the matter with you? I wasn't arguing against that view per se (although I do consider requests), I was arguing against the government monopoly over the water supply.
"An economy regulated by consumer pressure would a remarkably inefficient one which would over time kill most of its members."
No it wouldn't - you're playing fast and loose with the terms of my assertion by slipping in two assumptions of your own; first, that consumer pressure would replace litigation on the private property principle (it would complement it, not replace), and second that consumer pressure is inherently time inefficient (it isn't - consumer demand can itself give birth to regulatory businesses which minimize the time burden on consumers - UL is an example of this viz the safety of consumer electronics goods).
"Regulation by designated sovereign agencies is far more efficient, which is why it is universally used."
No and no. Regulation by State agencies is far more inefficient for two reasons. First, it passes along its own costs as externalities to be picked up by a country's denizens in the form of tax (or eventual inflation) and more significantly in terms of restricted or even lost commercial opportunities (see parenthetical note above). Second, the possibility for creative destruction of non-productive businesses by State regulation is often cancelled out by the democratic pressure for State subsidies, price controls, tax exemptions (and other more indirect benefits) to the benefit of these same businesses.
As to why State regulation is universally used – concern for efficient use of my own time restrains me.
"You can't handle externalities through tort law because tort law has no positive 4-D planning function, only negative retribution functions. You'd simply end up with a society that destroyed its environment over time."
That assertion presumes far too much in the way of human values for any honest person to assent to it carte-blanche. Argue your case if you have so much confidence in it.
That assertion presumes far too much in the way of human values for any honest person to assent to it carte-blanche. Argue your case if you have so much confidence in it.
ReplyDeleteDon't be silly. Tort action cannot perform socially complex acts such as integrated water basin ecological planning. At best, it can simply provide compensation for damage -- but the damage is permanent. Moreover many affected individuals/organisms have no recompense from tort action -- everyone in the future, for example.
The obviously destructiveness and pro-corporate nature of your position is why it is espoused by corporate America.
Regulation by government is clearly more efficient. No single person can master all the skills and knowledge necessary to regulate their interactions with consumer society. I can't master food, electronics, automobile safety, etc. Regulation by expertise enables people to reap the gains of specialization -- I can pay a tiny tax and gain the advantages of expert knowledge in assessing threats to me.
While private business regulation is nice, it has no sovereign authority to force change. UL cannot order companies to make safe equipment. This lack of sovereign authority is again, the reason corporations constantly seek for business to regulate itself.
Hence the need for government involvement. Hence the decision by all rational societies to turn to regulation by government.
It's not difficult, Mike.
Michael
I will have to divide this comment into sections...
ReplyDelete“Tort action cannot perform socially complex acts such as integrated water basin ecological planning.”
My charge of presumption was against your conclusion of a “society that destroyed its environment over time”, not that tort action could of itself result in planning.
But let’s take a look at your ecological planning.
The significant problem in laying out such plans is long term economic calculation, because of course, the goal of such planning is to integrate the value of environmental sustainability with some measure of human activity, e.g. farming, residence, tourism (assuming of course that the planners are not mandated to make no room for human economic activity at all – which is the lunatic fringe position).
The essential problem with such state agency planning is the extreme difficulty of economic calculation, the destructive consequences of which have both economic and ecological aspects. This problem is likely to get worse the longer the “long term” planning is and the firmer it is institutionalized.
Economic calculation is extremely difficult because, unlike ecology, it is an art, not a science and it is fraught throughout with uncertainty an order of magnitude greater than that of analyzing the surrounding ecology, for it depends on observing, attempting to understand and taking risks on movements in the prices of relevant goods and services over time – all of which depends on the decisions of so many individuals. For this reason, any attempt at grand-scale, long term planning merely exposes the planners and their grand-scale planning further to unforeseen dangers.
For example, say that certain areas of land are set aside within a water basin for rice farming with regulations specifying terms of use and tolerance ranges for the drawing of groundwater and laying out appropriate punishment mechanisms.
First question: how do the planners decide how much land to set aside for rice farming? Presumably the parameters are set by assigning priority to calculations pertaining to the long term ecology of the water basin, rather than wild guesses about how unkown changes in long term market demand for rice may affect future demand for rice paddies in this area (given, of course, time-variable transport costs and the possible rise and fall of competition from other areas). The problem this creates is that the land set aside for rice farming will almost certainly be either too much or too little – i.e. land is either wasted by being unused (or used by rice farmers unprofitably – which is also a waste), or it is wasted by being unused (when it could be put to productive use).
Now you might dismiss my “wasted” pejorative and claim unused land as an ecological good, which is fine, but you then have to admit that such planning is only “efficient” in ecological terms and that in the economic dimension, it is wholly inefficient. But even in ecological terms, there is a further problem…
ReplyDeleteSuppose further that the planners set aside a certain area of land within the basin for residential development. We can even assume regulatory imposition of wastewater recycling technologies for every building and so on if you like to help maintain the ecological integrity of the water basin.
So, the second question: how do the planners decide how much land to set aside for residential areas? Or to phrase it the other way around, how much land to designate as “off-limits” for residential development? Again, presumably the decision is made with reference to ecological calculations of carrying capacity, since the causal density for population growth trends more generally and subsequent market demand for residential space more specifically may be such that both long-term and short term predictions are so hedged with disclaimers as to be almost worthless. So again what will happen will be that either too much or too little land is set aside for residential areas, resulting in waste.
If the land set aside for residential areas is too little, then market demand to build residences on land set aside for rice cultivation – whether used or unused, profitable or unprofitable may well soar to intolerable heights. Allowing residential buildings to be constructed on land set aside for rice paddies will surely destroy the ecological integrity of grand plan. The planners could simply outlaw such construction with appropriate enforcement mechanisms, but if they do that, they are going to give themselves several new headaches. One possible consequence is that the market finds innovative ways to try to meet demand for residence (e.g. the apartment-sharing common in Hong Kong) which result in the area exceeding its ecological carrying capacity – if not through excessive wastewater (though probably – even allowing for the earlier assumption), then in other externalities consequent to mere human overpopulation. And then there is another possible consequence – which is that demand for residential buidlings simply exceeds all possible supply provided for by the planning framework, which in turn will create pressure on the planners to further corrupt their ecoligical planning and allow residential buildings in ecologically sensitive areas – this may be controlled somewhat at first, but clearly, given the temptations to political corruption the planners will be subject to, the problem would already be on the verge of getting out of hand. The longer they refuse to sanction residential expansion into ecologically sensitive areas, the more ecological damage (to say nothing of adverse human consequences) is going to be done elsewhere as a result of ecological carrying capacity being exceeded.
So much for planning “efficiency”. I could go on… but you made other comments.
“The obviously destructiveness and pro-corporate nature of your position is why it is espoused by corporate America.”
ReplyDeleteCorporate America! Put your comics away Turton. The free-market position is in actual fact, nowhere near as amenable to all big business interests as you scare yourself silly about. Certainly some businesses would do far better under a free market system (e.g. nuclear energy) than others (e.g. petrochemicals and renewables) but many very large and powerful companies today would very quickly become uncompetetive without State subsidy and artificially cheap interest rates in return for political support.
“No single person can master all the skills and knowledge necessary to regulate their interactions with consumer society.”
You pitiable fool - no single person needs to master “all the skills and knowledge” because they are not in fact necessary to making good decisions in the market. Quite apart from any government regulation, the mechanic who fixes your car has a very powerful reason to make sure your new brake pads are attached properly and the woman who sells you ice cream has a very powerful reason not to poison you. And you know what that reason is – the pretence that you need the government to force them to behave this way is a gross insult to your fellow human beings and a willful misreading of the nature and purpose of market exchange of values.
“While private business regulation is nice, it has no sovereign authority to force change. UL cannot order companies to make safe equipment..”
UL doesn’t need to order companies to make safe equipment – those companies want their equipment to be safe out of concern for their own self-interest under conditions of market competition, and in fact, UL’s development of safety standards actually preceded government regulation of the safety of consumer electronics goods – and necessarily so, because government almost never develops safety standards; safety standards are almost always developed for a profit.
Did the third section get lost somehow, or did you take umbrage at me having a dig at you? Resubmit...
ReplyDelete“The obviously destructiveness and pro-corporate nature of your position is why it is espoused by corporate America.”
Corporate America! Put your comics away Turton. The free-market position is in actual fact, nowhere near as amenable to all big business interests as you scare yourself silly about. Certainly some businesses would do far better under a free market system (e.g. nuclear energy) than others (e.g. petrochemicals and renewables) but many very large and powerful companies today would very quickly become uncompetetive without State subsidy and artificially cheap interest rates in return for political support.
“No single person can master all the skills and knowledge necessary to regulate their interactions with consumer society.”
Gobsmacked - no single person needs to master “all the skills and knowledge” because they are not in fact necessary to making good decisions in the market. Quite apart from any government regulation, the mechanic who fixes your car has a very powerful reason to make sure your new brake pads are attached properly and the woman who sells you ice cream has a very powerful reason not to poison you. And you know what that reason is – the pretence that you need the government to force them to behave this way is a gross insult to your fellow human beings and a willful misreading of the nature and purpose of market exchange of values.
“While private business regulation is nice, it has no sovereign authority to force change. UL cannot order companies to make safe equipment..”
UL doesn’t need to order companies to make safe equipment – those companies want their equipment to be safe out of concern for their own self-interest under conditions of market competition, and in fact, UL’s development of safety standards actually preceded government regulation of the safety of consumer electronics goods – and necessarily so, because government almost never develops safety standards; safety standards are almost always developed for a profit.
actually, when you put in the third comment, Blogger stuck it in spam.
ReplyDeletewell you've got two now.. it would surely make sense to trash one of them...
ReplyDeleteHey dude, it's "subsistence farming," not "subsidence farming."
ReplyDeleteAnon of Apr 9, it's a play on words /wink/
ReplyDelete