Some of the things we've discussed in this election

As we count the hours to the close of polls, I thought I would put down here some of the things I've discussed with people in the election, either in person or in writing (and much of it can already be found on the campaign website, or with a little more searching at the campaign Facebook page.)

Campaign finance reform is the half-million dollar elephant in the room. I tried to work on this before I had any idea it would be an issue in the campaign but encountered roadblocks with District staff believing it would be extremely expensive. I frankly have doubts about that, and now that the issue has arisen again, you can believe that I'm taking it back up:
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TO: Board of Directors and Staff                           FROM: Brian Schmidt
SUBJECT: Board Member Request to review models for limiting the role of money in future Water
District elections

DATE: October 10, 2014

Given recent news of extremely large amounts of money being spent in elections for the Water District, possibly a state-level record for any water district, I am bringing back an issue I raised before last year of investigating ways to limit the role of money in future Water District elections.

Staff’s previous research concluded that some limitations might require large administrative costs for
the District to ensure compliance. This new request asks staff to look at existing models in Santa Clara County and elsewhere that avoid large administrative costs. One example could be Mountain View’s Voluntary Expenditure Limits combined with partial reimbursement of certain fees paid by candidates to the government as part of the election process. I would request staff consider other options as well.

As we have seen very appropriate criticism and reform of the role of unlimited money in almost all other types of non-special-district elections, this request looks to opportunities for similar reform at the Water District in its future elections.
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In addition, I think local party politics could use some reform. Exactly what to do is less clear, but what is very clear is that my opponent threw a lot of money around in the form of contributions to other political groups and politicians, much more so than in previous years. One trick I'm aware of is "stacking" political clubs with your supporters, so that a well-financed campaign will go out and actively recruit people to join various Democratic Clubs (and in at least one case I understand that included paid staffers joining up). A solution to this is to require a six-month waiting period before new members can vote to change the rules or to endorse local candidates.


Moving on from clean money issues, I've been very clear on my website on water supply issues, which are environmental issues as well. I've referred to lawns as the "fast food" of California landscaping, something that's okay in small amounts only. I believe that cities should prohibit replacing lawns with more lawns in commercial redevelopments, with limited exceptions. Single family residential is the area that lawns are most justified, but even there they don't need to be universal. Where we do have lawns it should be the most water-thrifty types, and possibly using the new underground irrigation techniques.

Something else I've mentioned to people is that while I want to remove concrete from our creeks as much as possible, we have to recognize that a lot of concrete channels are going to stay that way for years to come. In the meantime, we should focus on both the biology and aesthetics of concrete channels - they do have biological value and shouldn't just be 'functional and ugly' but places that the public also enjoys.

Climate change continues to challenge us. I am very interested in community choice aggregation as a way to get greener power, and the possibility of green bonds. I'm interested in anything the District can do to reduce its footprint and be prepared for our changing climate.

More to come, later!

Water District election update - the "man of compass" column

The title above refers to a San Jose newspaper article. It turns out this election is going to be interesting.

What I have been thinking for a while though in this runup to the election is to actually acknowledge that I'm capable of making mistakes, and what they are. I've got one general category of mistakes, and then one specific issue. The general category is dividing my attention on too many things. Here's an incomplete list of the memos I've written:  too many subjects. Obviously we do a lot more work than can be measured by memos, but those memos should usually be priority items. If I had chosen fewer subjects and put more time into them, we could have progressed further. (I'll still defend our progress overall, though.)

The other, specific issue is pretty technical but involves the best approach to resolving legal and environmental issues under both state and federal law for the protection of endangered steelhead salmon. We'd been attempting to get simultaneous state and federal permits but had been held up on the federal level. Some local environmental groups wanted to split the process to speed up actions to help steelhead under state law; our staff resisted this approach. A few months ago, our staff changed their minds. Maybe that could have happened two years ago instead - the split approach was the right one. Now we have to make up for that lost time.

Anyway, I think you can acknowledge mistakes while still doing a good job, and that's what I hope to do in this election. 

And to be a good politician (or less guileless one), I'll also add that help is greatly appreciated.

Climate change, desalination, and astronaut water

As Eli points out, California has a water crisis, and much of the rest of the country needs to be much more water efficient. Water efficiency is the obvious place to start but then the next-step question comes up.

While plenty of people don't live near the ocean, lots do. Oceanside areas with large populations are going to have wastewater treatment plants (in developed countries, anyway).  These places therefore have two potential sources of new water supply:  ocean desalination or potable reuse of recycled wastewater.

Potable reuse of wastewater is nothing new. Almost any city drawing water from a river which has another city upstream is already doing it; the question is can we do it without lying to ourselves. In the case of astronauts and the International Space Station, they can do it outright, but the rest of us have to catch up.

Or not. Ocean desal actually uses the same technologies that potable reuse requires, either distillation or more commonly through reverse osmosis. The difference is that ocean water has a lot more stuff in it (mainly salt) than wastewater which already has to go through some purification before it reaches your reverse-osmosis system. That means a lot more energy and cost is involved in ocean desalination than potable reuse, so we've got a climate change issue.

The other climate change issue is that the lack of water currently stops a lot of unwise sprawl development, but ocean desal could change that, or maybe even mandate it - a very expensive desal system could be built on the expectation that there will be a lot more development to pay for it. I suppose there's some sprawl risk from potable reuse as well, but because it functions best in an existing populated area, starting at the wastewater treatment plan and then spreading from there, the risk is lower.

Many other factors involved of course, but these are the main climate issues. All but one of the factors weigh in favor of potable reuse. The one factor favoring ocean desal is psychology and political acceptance. People hesitate to drink this water, and that hesitation killed an earlier potable reuse project in San Diego (p. 17).

I view desal and portable reuse as being in a race. Money is limited so communities are going to prioritize. As much as I can I've supported potable reuse and opposed desal.

First step for potable reuse is Indirect Potable Reuse, achieving psychological acceptance by making the treated water sit somewhere for a while before reuse, either in a reservoir or underground. It's good but maximum flexibility and less cost require Direct Potable Reuse, shunting the water to your drinking water plants.

At my water district we've set up a reverse osmosis system. Currently it's just to improve the quality of non-potable recycled water which will help with certain types of uses, but the goal is potable, if we can get public acceptance.

Note:  stumbled across this - Los Angeles actually constructed an indirect potable reuse plant in the 1930s, but shut it down when they acquired Colorado River water. Back to the future, like with electric cars.

Also, desalination sometimes refers to desal of brackish water, usually groundwater. This water is much less salty than ocean water so a lot of the energy concerns are reduced with brackish desal. But brackish water and even potable reuse require a fair amount of energy, just nowhere near as much as ocean desal.

Meeting Michelle Obama

Maybe I should clarify it as a very brief "meeting" with Michelle Obama - a handshake, someone told her my first name, she thanked us for what the Water District is doing, we posed for a picture, and then the Water District CEO and I were out the White House door. Interesting and fun experience though. I was honored to represent the Water District and very happy that the District's work has received this recognition.

I also got to wonder beforehand how one addresses the First Lady (as best I could tell in my brief phone googling, it's "Mrs. Obama"). I probably didn't use that knowledge - I have no recollection of what I said to her other than "thank you", hopefully whatever else I said wasn't too incoherent. She had a very warm and sincere demeanor about her though, both in a ten minute speech she gave beforehand about the importance of drinking water and in how she looked at you in the eye and smiled as we had the photo-op.

I've met just a handful of famous people very briefly - Al Gore, John Edwards before he imploded, a few senators - and she was the warmest of them. Interesting in that my remote impression of Barack is that he's not so warm.

OTOH, there are parts of Michelle's job that can't be that controversial, so maybe it's not that hard to be enthusiastic. Maybe she has a leg up expressing enthusiasm with us water people, and in being enthusiastic 20 minutes later when she did a water-focused event with kids out on the White House lawn.

As for why we were there, she's promoting the "Drink Up" campaign to get Americans to drink more water. The tricky part of the campaign is they're focusing solely on the positive message - they're not denigrating other drinks like soda and they're not distinguishing between bottled and tap water. OTOH, this approach lets them get the support of soda and bottled water companies. We were invited because we have joined the effort to encourage water consumption, and our voters taxed themselves two years ago in small part to fund hydration stations in schools so kids can easily refill water bottles. A very nice benefit for us was having the First Lady specifically mention "Santa Clara Valley Water District" and our work in a speech that's now on the White House website. She also made a valid point during her speech, that if we invested the same marketing effort for healthy food that we've been doing for decades for junk food, then we can really make progress.

Two other points - if you're ever invited for that photo-op, apparently it's very bad to try to use your own phone camera. It was fine to do so when she's making her speech, but 10 minutes later I was told extremely urgently to put the phone away when she was doing the photo-ops with others. Now you know.

The other funny thing was that after everything was done outside on the White House lawn, we couldn't figure out how to leave. I suggested the two of us make a run for the fences and jump them, but that didn't happen. Instead we milled around with everyone else until someone who knew what they were doing started to go, and we followed the herd.

I'm told the photos will take a while before release, but in the meantime we have her speech:

Stigma for fossil fuel companies, the reverse for the churches that dump them

Given that the Water District established a climate divestment policy last year following my memo urging it to happen, I'm gratified and very happy to see the faith community do much the same. We were the first water district in the country to enact climate divestment, and it's spreading and growing. The only way it works is by communities working together.

World Council of Churches, Unitarian Universalists, United Church of Christ, and many smaller/regional church denominations and affiliated organizations have established climate divestment policies. Others are percolating - the Methodists are studying their investment policy, the Presbyterians are first going to try to persuade the companies to give up their core business model (good luck with that!)* and then we'll see them and others consider this issue.

People involved in climate divestment and had also been involved in South Africa divestment a generation ago say that climate divestment is moving faster. An Oxford study backs that up (p. 11).

The same study acknowledges limited direct financial impacts of divestment except for coal industry, but then focuses on the stigma issue:

As with individuals, a stigma can produce negative consequences for an organisation. For example, firms heavily criticised in the media suffer from a bad image that scares away suppliers, subcontractors, potential employees, and customers. Governments and politicians prefer to engage with ‘clean’ firms to prevent adverse spill-overs that could taint their reputation  or jeopardise their re-election. Shareholders can demand changes in management or the composition of the board of directors of stigmatised companies. Stigmatised firms may be barred from competing for public tenders, acquiring licences or property rights for business expansion, or be weakened in negotiations with suppliers. Negative consequences of stigma also include cancellation of multibillion-dollar contracts or mergers/ acquisitions. Stigma attached to merely one small area of a large company may threaten sales across the board.

(p. 14, citations removed)

The stigmatization from divestment will have financial consequences. These companies will have to pay more for employees and for other businesses to work with them. Companies with a toe-hold in the fossil fuel sector will find it better for them to get out.

Most important is that stigmatized industries will find it tougher to manipulate the political sector. That's one reason why they disguise their funding, but the disguise is imperfect, and the difficulty gets worse with the stigma.

Two other points. The study acknowledges political restrictions resulting from the climate divestment effort could destroy the perceived value of reserves that end up staying in the ground. When the carbon bubble pops is hard to predict, but any downward pressure increases the possibility of it happening soon.

Second, when companies divested from South Africa they weren't required to physically blow up the businesses they left behind - they sold them. The argument that it had no financial impact was around then, but we see what happened in the end.

*I think there is a business case that fossil fuel companies should 1. stop wasting money exploring for new reserves, 2. sell the reserves they're not going to be allowed to develop before the carbon bubble bursts, 3. play out the remaining and cheapest reserves and 4. either distribute the profits and wind down their companies, or invest in another business model. Not likely to happen, though.

I'm ignoring the complications of when natural gas can substitute for coal. 

Founder Effect

• George Washington 
• Nelson Mandela 
• Nouri al Maliki
• Hamid Karzai

Here following the conclusion of the Fourth of July weekend, I think we can see how crucial it is to have competent and ethical leaders at early stages of a country's history.

See that list above. The American Founding Fathers were not gods - John Adams made that clear in his later years - but truly rotten apples like Aaron Burr were the exception. And while South African democracy is somewhat rocky, it's still a democracy over 20 years later, and Mandela's leadership helped make that happen.

America had rocky initial years like South Africa, ultimately culminating in the Civil War to free the slaves and preserve the Union. Good initial leadership is no guarantee of stability, but it sure helps.

Contrast our experiences to Iraq's and Afghanistan's. While Maliki wasn't the first Iraqi leader after Saddam, he's been the most crucial and most unfortunate one, and Karzai is hardly better.

We Americans are fortunate in our Founder Effect, and can work hard to have good leadership still. Hopefully the same will happen in Iraq and Afghanistan.

Guiding water conservation during a drought

Need to catch up here, so I thought I should post the most important memo I wrote this year on how the Water District should confront our drought. Here it is (Director Lezotte joined my memo as well):

TO:	Board of Directors and Staff		FROM:	Director Brian Schmidt Director Linda J. LeZotte
SUBJECT:		A proactive response to the current drought	DATE:	January 23, 2014

 

Introduction – the need to act.

The statewide drought emergency raises alarms for our region. We have done a far better job than most of California to diversify our water supply between local and out-of-county sources, to store large amounts of water for dry years, to transform wastewater into useable water and to individually conserve tremendous amounts compared to previous usage per person. None of that, however, eliminates the seriousness of the current situation with a record-breaking dry period following two dry winters, a low-rain forecast for the remainder of the rainy season and no idea if next winter or subsequent ones will likewise be dry.

While the drought presents difficulties, it is also a time of opportunity to rise to the challenge. We must take action that ensures we have adequate water, that preserves the way of life here in Silicon Valley, and promotes water sustainability to better position us for future years without droughts and even more so when there are droughts.

History shows that challenge breeds opportunity. The response to the 1987 through 1992 drought created many of the conservation and water supply programs we have today. However difficult those years were, we are now better off facing this drought than we would have been had that drought not occurred and inspired the current programs. We can do the same again – or do it even better this time.

Acting at the societal level, local government level, and at the District itself.

Our region should be proactive in the face of this drought, doing the things that we need to do (and maybe should have done anyway) at the general societal level, at local government levels, and at the level of the District’s water supply. We can help lead at each level.

1.    What everyone should do to conserve water, and how the Water District can help

At the general societal level, everyone – individuals, families, businesses, farms –should be doing what they can to conserve water for no reason other than it’s the right thing to do. To help this, we recommend investigating a doubling of every water conservation rebate given by the District. A doubling, or similar large increase, should be backdated to the publication of this proposal so as to not deter anyone from conserving water immediately. The increase should not exceed the actual cost of the item or service rebated.

Staff should investigate the cost to the District of this proposal. We are well aware of large capital costs in future years and large increases in water rates that are “baked in” to a significant degree. Generally those increases are at the upper edge of what is politically acceptable, but there is one exception. A drought rebate surcharge, for revenues that only pass through the District to provide conservation rebates to the public (minus a small administrative cost), is something that we believe the public could support if it is financially necessary.

These rebates will help families and businesses respond to the drought. In addition, we should pay special attention to farming, which uses about 10% of the water in our County. Our farmers pay far less than farmers elsewhere for water, a benefit intended to help stop sprawl. We can’t, however, ignore conservation. The District should investigate restarting previous cooperation with the Farm Bureau on special water conservation training programs for farmers. If participation in the program is inadequate, we can consider other incentives such as whether the agricultural water price rate should be tied to conservation.

2.    How local governments can lead with our assistance

On the level of local governments, they should act on their own as stewards of the public’s environment, but the Water District can help identify and promote the best water conservation ordinances and practices to raise every local government to a “best in class” standard on conservation. For example, one of us (Director Schmidt) had the opportunity to attend a public workshop in Mountain View to develop a “Precise Plan” for the El Camino Real corridor. These plans and associated ordinances ought to recognize that lawns on commercial business property landscapes, at least for new development, should be a thing of the past. New multi-family development should only have high-water-use landscaping on intensively-used areas, and single family homes should be incentivized to make lawns no more than part of the yard, and not the majority of it.

Other steps like graywater recycling and low-water usage fixtures should be standard construction. Ordinances dealing with rationing, which we have no expectation of needing this year but might in some future year, should account for whether the properties are already using little water instead of imposing the same percentage reduction on water conservers and water wasters. Other savings may also be possible.

These steps need not be mandatory – if landowners and businesses can demonstrate an alternative water supply, they should be able to use it flexibly. The community-provided water supply, on the other hand, should be used in recognition of the environment where we live.

The Water District can help anyone – city staff, concerned citizens, Parks and Planning Commissions, City Councils and council candidates – understand what is available out there, what other cities have done and what possibilities they have. Rather than every city being the same, each city can investigate what others have done well and then innovate in their own way.

3.    Accelerating Water District programs for drought resiliency

Finally, at the level of the Water District itself, everything we have been doing and planning for the future helps our resiliency to drought. The steps described above at the societal and local government level will have the effect of accelerating our currently planned conservation program. The other major step we can take is to accelerate our potable reuse timetable. We should work toward direct potable reuse of recycled wastewater within five years. There is no technological or public health barrier to this goal, it is merely a matter of gaining public acceptance. Silicon Valley has a sophisticated, well-educated, and environmentally-conscious public that can understand why this is the right step. If, and it is an important “if”, we can get the acceptance and support of our partner government agencies and community leaders, we can then obtain a brand new water source to provide drought resilience.

Conclusion

Some might object that these steps (and other conservations steps that others may suggest) could take too long to address our current drought problem. The sad fact is that this current drought could continue for multiple years. Even if we escape future dry years, the probability is there will be others. We can be ready for them – we have the will, the technology, and the resources to be ready, and the steps outlined above can make us ready. 

Notes from the Seattle Divestment Forum today and yesterday

(Yet another cross-post from Rabett Run.)

I got my five minutes at the press conference, starting about 10 minutes into the video below:


(Link here for Oct. 17 video - no idea why the freeze frame is on my blathering mug instead the mayor's....)


The main takeaway from the conference - two thirds of fossil fuel reserves represented on world capital stock exchanges have to stay in the ground to stay within the 2C temp rise goal. The valuation of the rest is a carbon bubble.
     My note - I suppose it could be that the carbon returns to the ground instead of the fossil fuel stays, although CCS hasn't done well.

Seattle Mayor Mike McGinn:  we're the first generation to experience climate change, and the last to be able to stop it.
     My note - a bit of an overstatement and understatement - we can't stop it, and even a business as usual scenario for X years in the future would be disastrous but not a reason to do nothing starting X years in the future.

A contract-and-grow strategy works for fossil fuel companies - e.g., an oil company that stops throwing away profits on finding new fossil reserves and increases dividends instead will be worth more and serve its owners better than a typical oil company that spends money finding reserves it will never burn.

Lots of discussion on fiduciary duty, something used as an excuse to not divest. Bob Massie calls it a Harry Potter spell - "Fiduciarydutyparalyis!" Given the risks from companies that say they don't care about the future, the fiduciary duty could actually support divestment - what does that say about the quality of the management?

One speaker presented two portfolios, one with fossil fuel companies and one without. The one without had a larger carbon footprint. Climate divestment can get tricky.
       My note - I expect that most of the time, this would not be the usual outcome. Perfect v good issue.

Talking to financial people, it sounds like the recognition of financial exposure that you see in the insurance sector is starting to happen in the financial sector.

A number of professionals showed backcast simulations of divested portfolios v. typical portfolios. Overall it seemed to not diverge all that much.

One person asked a question I had - would recognizing the carbon bubble create a race by companies to get the fuel burnt first, before we hit the ceiling? Response said no, projects are currently being cancelled. YMMV.

Investor engagement/shareholder activism - speakers acknowledged this can be a viable alternative in some circumstances, but argued that if a problem with a business is its core business strategy, then shareholder activism won't work. One speaker made a slightly contrary argument - they're going to engage directly with fossil fuel companies to get them to drop the $100b most expensive new fossil fuel projects in planning stages, setting the stage for shareholder lawsuits if they don't drop them and then the projects crash and burn metaphorically.

Someone raised the slippery slope issue that climate divestment is only one issue and that it opens the door to still other ways to reduce the investment universe. I can understand the reasoning - I think a reasonable response might be that you can consider multiple causes, up to whatever line you choose to draw on restricting your investment universe. Then cage match the causes against each other. The speaker said you also have to look at the investor's mission and the cost of a screen - e.g., divesting from Russia-investing companies would be much more difficult than divesting from top 200 fossil fuels.

On a personal note, I ran into a guy who I used to work with on Burma human-rights issues 18 years ago, and saw him today for the first time since then. Small world.

We did our divestment

(Another cross-post from Rabett Run in August.)

The Water District board voted 7-0 last night to enact our climate divestment policy - no new investments in the top 200 fossil fuel companies, get rid of what we currently have by 2016, and send letters to the state agency managing our pension funds, a state water agency association, and our local government counterparts encouraging them to do the same. Also yesterday, we cut our own compensation by just under 10%, reverting it back to what the board received in 2008.

There was some reasonable discussion of whether we should distinguish the best fossil fuel companies from the rest. We decided to go ahead with the simple divestment from all of them, and consider at a future time whether we should amend the policy in favor of the better companies.

Like I said earlier, this should make us the first water district and third government agency of any kind to complete this step. 350.org has a press release here. The San Jose Mercury News published an article, and to make it interesting I'll just copy below mostly just the critical parts:

In the 1980s, hundreds of American cities, states and universities sold their investments in South African companies as part of a protest against that country's former apartheid government.

Now, environmental groups are trying to duplicate that effort, but with global warming polluters in the role of villain. And, just as with South African divestment a generation ago, the Bay Area is at the head of the parade again, prompting cheers from environmentalists and jeers from skeptics who say the whole effort amounts to little more than empty symbolism.... 

"It is unfortunate some people seem to feel supplying consumers with reliable and affordable energy is somehow comparable to apartheid," said Tupper Hull, a spokesman for the Western States Petroleum Association, in Sacramento.

"Petroleum energy provides billions of people worldwide with mobility, comfort, security and economic prosperity, he said."

Hull said that many oil companies "understand the desire to develop new alternative energy sources and reduce our collective carbon footprint" and that many fossil fuel companies are working on renewable energy projects.

Jeremy Carl, an energy expert and research fellow at Stanford's Hoover Institution who has been critical of the tactics of the environmental movement, said that climate change is occurring and is a problem. But rather than divestment, activists should work with companies and governments to promote issues like tax credits to encourage renewable energy research, or a carbon tax that would be offset by tax refunds to the public.

"We've seen people saying the fossil fuel companies are awful, and then driving home in their car and turning on their natural gas-powered electricity," he said. "I find it totally a distasteful and hypocritical way of looking at a serious situation. It trivializes an important issue."

I don't find that very persuasive, somehow. I have no interest in the flack from WSPA but I wonder if it's worth talking to Jeremy Carl, who's only a 15 minute drive away from me in my fossil-fueled car.

Per my previous post, I think the primary effect of these actions are cultural/political and not directly economic. OTOH, there's an economic cost to cultural disfavor - I bet tobacco companies have to pay a premium to hire and retain employees who might otherwise prefer to not kill people for a living. Could work the same way here as another form of cultural tax on carbon.

Video below of every fascinating moment of the discussion, assuming the video works (discussion begins about a minute into the video). It's Item 9.1 if you want to read it as well.

Good chance we'll be the first water district in the country to divest from fossil fuels, starting August 27th

(Cross-posted from Rabett Run post in August.)

I'm guessing we're first on the planet too, but who knows. I previously wrote a memo suggesting we drop investments in fossil fuel companies (the big push by 350.org), and we directed staff to return to us with a proposal. It's now available (to RTFD, click here for the policy and scroll to Attachment 5 to get to the memo and discussion). It's pretty simple - no investments in the top 200 fossil fuel companies, relying primarily but not exclusively on third-party documentation of what constitutes the top 200 companies. Our district doesn't control pension funds, so I'll ask that we also include a letter to the state CalPERS board urging them to take the same step that we're doing.

Along with being the first water district in the solar system to have a climate divestment policy after the August 27 meeting (assuming I'm not counting my chickens too early), I think we might also be the third government agency to do it. Reading through the 350.org list of twenty cities, Seattle and Santa Monica are the only cities with a controlling policy in place. A handful of others have passed advisory measures but don't mandate the change, some aren't currently invested in fossil fuel companies but don't have a policy, and the rest are still investigating the idea.

I think there are a fair number of water districts like ours with significant climate awareness and political responsiveness, so I hope this will spread. As for its actual impact on those companies, even if it spreads widely, that's less clear. The pool of money available to be invested in those companies would have to shrink a lot before the companies are forced to pay a premium in dividends or interest rates in order to get investments. I suppose it could happen, but I think the primary effect is cultural, creating an awareness that they are basically little different from tobacco companies and the apartheid-era South African investments.

There is a difference from South Africa in that it wouldn't be good if we halted all fossil fuel use immediately, but somehow I'm not too worried about that outcome.