How much is water worth ?

In a comments thread, a few weeks ago, regular commentator Observa asked

read somewhere (maybe on the Sydney water supply price hikes for heavy users)that it takes about 7,400L of water to grow a dollars worth of rice compared to a tenth of that volume for fruit and veges and hence we should import our rice. Are those sorts of consumption figures true?

Here’s a a table from an article I published in the Australian Journal of Agricultural and Resource Economics a couple of years ago.

Table 1: Water required for $1 000 gross profit
Commodity Water use, in Ml
Fruit 2.0
Vegetables 4.6
Dairy products 5.0
Cotton 7.6
Rice 18.5
Pasture 27.8
Source: adapted from Hall, Poulter and Curtotti (1994)

Observa’s relativities are right and the number in the table implies 18000 litres for a dollar of profit in rice. Assuming gross profit is around half the value of total output, the number quoted also looks pretty accurate.

Before drawing policy implications, it’s worth noting that irrigating pasture is even more water-inefficient. The quoted number implies that an increase of $40/Ml in the price of water would wipe out all the gross profit from this activity.

So the first big agricultural adjustment is likely to be a shift away from the use of irrigation for pastures. One feature of the table that surprised me is that irrigation for dairy products (which presumably means pastures for dairy cows) is actually quite profitable.

Good news?

The NYT presents this story with an oddly positive spin. The guts of it is a World Bank study estimating that Iraq can only ‘absorb’ $6 billion in reconstruction spending in 2004. To put it another way, given a total cost estimate of $55 billion (which has not been challenged), only about one-tenth of the job will be done by the time the US and presumably (if things are going at all well) Iraqi elections are held next year.

This is ‘good news’, because it seems likely that the total amount available from non-US donors might be a couple of billion, which, as a proportion of $6 billion, can be spun as a successful outcome.

But the unnamed American officials quoted at the end of the story are right to be ‘ unhappy over any suggestion that Iraq cannot “absorb” more than $6 billion in the first year’. As one correctly observes, “You can’t get the country back on its feet until the power is back on.” So, if the World Bank is right, and all the evidence so far suggests that it is, Iraq is not going to be back on its feet for quite a few years to come.

There’s no easy resolution here. The correct policy would have to been to let the UN inspections proceed, relax economic sanctions when no weapons were found and try to deal with the problems of the Middle East as a whole before focusing on Iraq. As it is, the world, and particularly the Coalition of the Willing will have to make the best of a bad job. It’s still not clear exactly what this will mean, but the process of lowering expectations has already begun.

Update Even with lowered expectations, I find this story in The Economist hard to believe. Apparently, thousands of workers from Bangladesh and India have been imported for all the jobs on American bases in Iraq because “Iraqis are a security risk”. Can this be true?

Constitutional change vs convention

One point that hasn’t been noted in the current debate over reform* of the Senate is that there is no need at all for the major parties to secure a constitutional change. If they think that upper houses are too obstructive, they need only agree not to oppose each others’ legislation, whenever this has an appropriate mandate. The minority parties could do nothing to stop the operation of such a convention.

Howard could show his good faith by instructing the Liberals in the Western Australian Upper House to pass legislation for a one-vote, one-value electoral system, something for which the Gallop government has a clear mandate and which is, in any case, a basic requirement of democracy.

Then again, pigs could fly, given wings and an appropriate power-to-weight ratio.

*As always, I use this term to mean “change in form”, not “change for the better”.

Thought for Thursday

My column in today’s Fin (subscription) is on Lomborg and foreign aid. Having tried out the full frontal assault in the blog and found my readers generally unconvinced, I decided to take Lomborg and his backers at face value, at least to begin with.

Lomborg argues that, rather than incur the costs of Kyoto, which he estimates at around $US 200 billion per year, the money should be spent on aid to poor countries such as improvements in health and drinking water. This is more than 1 per cent of the GDP of the developed countries as a group, compared to current aid levels ranging from 0.1 per cent of GDP for the United States to 1 per cent for Denmark, Lomborgâs home country.

If Australia adopted Lomborgâs proposal, foreign aid would need to be quadrupled at least. The cost to the budget would be somewhere between $5 billion and $10 billion per year.

Itâs not surprising that the conservative commentariat has endorsed Lomborgâs opposition to Kyoto – they were against long before anyone had ever heard of Lomborg. Whatâs striking is that, without exception, they have either explicitly endorsed or tacitly accepted the second part of Lomborgâs argument, calling for a massive increase in foreign aid.

The position of the Institute of Public Affairs is particularly interesting …

Regardless of whether Lomborgâs argument is put forward in good faith, or merely as a debating point, it is worth taking seriously. There is no investment the rich countries of the world could make that would yield higher returns, even in terms of our self-interest in a less chaotic world, than $100 billion per year allocated to improved health and sanitation in the worldâs poorest countries.
Fortunately, we do not need to choose between Kyoto and aid. As Lomborg and others, both critics and supporters of Kyoto, have pointed out, implementing Kyoto through global emissions trading would amount to a massive foreign aid program as well as being an important first step towards resolving the problem of climate change.

Intelligence test

For anyone who cared to look at the issue logically, it was obvious that the question of Saddam’s putative weapons of mass destruction would be decided on day one of the war. As I said, the day before the war started,

the “best” time for Saddam to use them is before the US attack commences, which means almost immediately … If, in the face of an invasion aimed at killing him or seizing him for a war crimes trial, Saddam still refrains from using WMDs, only two conclusions are possible:
(a) there were no weapons; or
(b) they were not, even in the most drastic circumstances, a threat to the US

This is clear enough, but still, some reasonable people might have taken a little longer to be convinced, and, as we’ve seen, there’s still the possibility of a leftover test-tube in a fridge somewhere. But after six months, anyone who continues to think that illegal weapons in working order are going to be discovered is revealing more about their own psychology than about the real world. What then, is to be said about the report that Polish troops had discovered four French Roland missiles, manufactured in 2003 and delivered to Iraq at a time when massive US forces were already surrounding the country, and when the capture of such missiles would have utterly discredited the French government?

This story was so unlikely that any rational person would have dismissed it out of hand, especially in the presence of a clear alternative explanation, that the missiles had been delivered before the imposition of sanctions in 1990* , and the Poles just got the dates wrong (as they subsequently admitted). In its combination of wish fulfilment and total implausibility, it was on a par with the various rumours that Jews/Muslims/highly placed Americans had been tipped off before September 11 and stayed away from the World Trade Center.

So, who fell for it? As far as I can tell, a large proportion of warbloggerdom bought the story and hardly any debunked it.

At the top of the list, there’s, Instapundit, LGF, samizdata and Kevin Donahue

Google reveals so many suckers for this story that it’s impossible to list them all, but I estimate the number must be into the hundreds, even excluding those who reproduced the story without comment. A few linked to the subsequent retraction, but mostly in a way that failed to admit that the original report had been completely falsified. For example, Instapundit is still suggesting that the Polish retraction is part of a coverup.

Hat-tip to Roger Ailes whose link to Instapundit I followed.

*That is, in the days when Saddam was “a mass murderer, but our mass murderer”.

Arnie !

There are all sorts of problems with the process that has made Arnold Schwarzenegger governor of California. The numbers needed for a recall seem too small, the mechanics of US elections are chaotic, and the first-past-the-post (plurality) system induces lots of strategic voting.

But the idea of recall is a good one, directly opposed to the notion that governments are entitled to a set term of office, the longer the better, that dominates Australian discussion of issues such as four-year terms. The more democratic checks on government, the better.

As regards the outcome, I can’t say I endorse it, but it’s easy to make the case that, considering the feasible outcomes from the viewpoint of the average Californian, Schwarzenegger looked like the best of a bad bunch. Whatever merits Davis might have had (and they were far from obvious) and whatever the role of adverse circumstances (clearly dominant) his administration had failed, and, in a democratic system, the usual response to failure is to let someone else have a go.

Blair and Brown

Following the recent British Labour Party conference, Chris Sheil suggests that Tony Blair will be gone by Christmas. In these narrow personal terms, I’mnot sure. Most commentary suggests that his position was somewhat strengthened. More importantly, Blairism is gone already. Back in 2001, I argued that, in substantive terms, the Third Way was already dead. After the recent conference this fact is right out in the open. Its most noteworthy feature was not the debate over Iraq, but the fact that Gordon Brown felt free to give a speech in which he mentioned Labour and its traditions 57 times and failed to use the phrase New Labour even once.

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Barbarism

I’m opposed to the death penalty, on the grounds that it does more harm than good in the circumstances of a modern society, but I don’t feel any particular repugnance at the execution of someone who has had a fair trial and is obviously guilty of murder. This, however, seems like something out of the Middle Ages.

Update Some more gruesome details have just emerged about the chemical execution process.

If not Crean, who?

Chris Sheil puts forward a somewhat tentative case for the return of Kim Beazley to the Labor leadership, prompting me to clarify my own views on the subject.

In my view, it’s a mistake to expect an Opposition leader to be a votewinner. There are exceptions, such as Hawke in 1983, but most of the time the best an Opposition can hope for is that the leader should not drag the party down. An illustration is the fact that the incumbent Prime Minister, no matter how unpopular, almost invariably beats the Opposition leader on the question “Who would make the better PM”.

In current circumstances, there’s also not much point in trying to distinguish between alternative leaders on the basis of their beliefs about policy. To the extent that apparent differences have emerged from time to time, they are more about political positioning than anything else. So, for example, Beazley is now attacking Crean and Latham from the left, arguing against tax cuts, but the positions could easily be reversed. Similarly factional allegiances, while they are important in lining up numbers, now have little or nothing to do with policy. The Socialist Left faction, for example, might as well be called the Impressionist Blue faction as far as the significance of the name is concerned.

My view therefore, is that Labor needs someone competent, without substantial negatives, rather than a savior.

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Spies and scandals

I haven’t got around to blogging about the parallel Plame/Kelly/Wilkie scandals, but I didn’t have a well-thought out reason for not doing so either. Nathan Newman supplies the gap (see also here). To restate Nathan’s key points more generically

  • The main purpose of secrecy laws is to protect governments against their own citizens, so breaking these laws isn’t such a big deal
  • Scandals are a distraction from the real issues

I wrote an essay on the spy myth a couple of years ago, concluding as follows

The spy myth clearly served the interests of intelligence agencies, which prospered during the 20th century more than any set of spies before them. The real beneficiaries, however, were the counterintelligence agencies or, to dispense with euphemisms, the secret police, of both Western and Communist countries. The powers granted to them for their struggle against armies of spies were used primarily against domestic dissidents. Terms such as ‘agent of influence’ were used to stigmatise anyone whose activities, however open and above-board, could be represented as helpful to the other side.

The supposed role of the secret police, to keep secrets from opposing governments, was, as we have seen, futile. Secret police, and the associated panoply of security laws, Official Secrets Acts and so forth, were much more successful in protecting their governments’ secrets from potentially embarrassing public scrutiny in their own countries.

As spies and the associated fears have faded in their public mind, their place has been taken by terrorists. In many ways, this is a reversion to the 19th century, when the bomb-throwing anarchist was a focus of popular fears and the subject of novels by such writers as Chesterton and Conrad.

As the attacks of September 11 showed us, the threat posed by terrorists is real. Nevertheless, even if terrorists were to mount attacks ten times as deadly in the future, they would still present the citizens of the Western World with less danger than we accept from our fellow-citizens every time we step into our cars.

If the century of the spy has taught us anything, it is that we need to assess the dangers posed by terrorists coolly and calmly rather than giving way to panic.