Saturday, March 21, 2015

Drought? What water policy?

Normally a flooded arm of the Liyu Reservoir in Miaoli

Yeh Chieh-ting of Ketagalan Media passed around this piece on the water shortage from Storm. It describes things quite succinctly: this is the worst drought in 67 years. In the last three years we've had only two typhoons, which we depend on to fill our reservoirs -- the usual figure is that 80% of our water arrives in the summer typhoons -- but it hasn't been arriving. Two weeks ago when I went down to Laochijia in Pingtung I was appalled and terrified to see the rivers running in trickles or dry completely. A friend of mine who took her family to Sun Moon Lake told me that the lake looks like it is surrounded by beaches as the reservoir exposes its banks. On Facebook people are passing around scary pictures of empty reservoirs.

Fortunately, the government has a comprehensive, well thought out water policy in response to this amazing drought, which is:


That's right, we've got a whole lot of nothing going on. I'd love to describe and comment on the government's policy, but there isn't one. The only move has been to lower the water pressure in certain cities. Meanwhile Taiwan's extravagant use of water continues unabated -- the government has a water conservation campaign out to curb use from 270 liters per person/day to 250. To put that in perspective, water consumption in Germany was 121 liters per person/day (Wiki) in 2010, in the UK, 150 (link). Water use in water rich US and Japan is rather more extravagant, and much higher than Taiwan levels, though published numbers vary widely. The government has threatened actual physical rationing of water in April if things don't improve... UPDATE: some tinkering around the edges, with early arrival of rationing: here and here.

Unfortunately water consumption is under the Ministry of Economic Affairs, which means that it is controlled by the construction-industrial state and the whole idea of conservation and ecologically-based management is ignored, except at private firms where there is conservation and recycling because water costs money. Taiwan should be going the way of other industrialized countries, installing toilets that conserve water, fixing its pipes, and putting in new water infrastructure for delivery and storage, as well as regenerating its aquifers and caring for its rivers and riverine ecologies. But just the opposite has occurred -- Taiwan's haphazard, exploitative depletion and destruction of its water ecology and water resources is just one of the many ways the construction-industrial state has reduced Taiwan's living standards and imperiled its future.

Plentiful cheap water is one of Taiwan's key resources and the foundation of its industrial and agricultural might -- almost all industrial processes require water in some way, as a solvent, a coolant, a raw material, or in waste handling. Moreover, unlike many countries, such as Iraq with the Euphrates or Vietnam with the Mekong, Taiwan is in complete control of the entire length of its rivers and thus of its water policy. Much could be done...

Sadly, nothing fundamental has changed as Taiwan lurches toward water armageddon. The basic problem is that the price of water is too low:
The average Taiwanese person uses 350 liters of water per day, while the average person in the US or Europe uses 150 liters per day. The price of one unit of water in the US and Europe is NT$40, while in Taipei City it is NT$7, and for Taiwan overall, NT$9.

Taiwan prides itself on being a developed country with a GDP of more than US$14,000. Water usage, however, stands at twice that of the US and Europe, and the price of water is equal to that of third-world developing countries. Even prices in China are twice as high as in Taiwan. Not everyone may know that the development cost for a new water reservoir currently stands at NT$22 for one unit of water, while the cost for sea water desalinization is NT$40. This comparison makes it even more obvious that Taiwan's water prices are unreasonable. The Water Resources Agency has on several occasions suggested to the Cabinet that water prices should be adjusted upwards, but all such suggestions have been waved off. The fact is that a reasonable rise in the cost of water would not be much of a burden for the general public.
As any first year econ major could tell you, if you want to change behavior, you must change cost. And the government for years has refused to change the cost of water use. Moreover, since prices are low, revenues are low. The local water company lacks the money to upgrade Taiwan's absurdly leaky pipe system and other urgently needed infrastructure. With the election coming up soon, nothing is likely to happen. Wouldn't it be great if both parties got together and issued a joint pledge to raise water prices no matter who won the election?

Meanwhile my neighbor, like hundreds of thousands of Taiwanese, was out washing his car today. The thousands of car washes, shrimp fishing ponds, and other extravagant businesses continue without restriction. Massive pumping of groundwater goes on unabated. We're due for a water reckoning, and the government is doing nothing to change the long term outcome.


Also see: Jens Kastner reviews some of Taiwan's water problems in AmCham last month. And my old post on drought.


Mike Fagan said...

More and better use of domestic greywater recycling and filtration would make a big difference.

The difficulty with raising prices is calculating an optimal price which (a) deters people from things like washing their cars during droughts, but (b) does not needlessly hurt those of us who can't afford to have a car to wash in the first place and who just want to wash our dishes. Would my neighbour who washes his Benz every weekend be deterred from doing so by a water bill of NT$2,000 instead of NT$300 or NT$400 every month? Maybe, maybe not. But a 500% price rise would have a disproportionate effect on my other (elderly) neighbours who are pottering around on a 30 year old scooter which they never wash, or the young people further up the stream who rent tiny apartments with space for scooter parking on the ground floor. In that sense, it could be argued that a more efficient policy would be having residents pay for water through a progressive "water tax" implemented during the dry months whereby those with high incomes pay more for a litre of water than those with low incomes. That would be a more efficient system than a simplistic across-the-board residential water price rise. But it's a tax, and taxes are the preserve of control-freaks.

Providing the Water Bureau with larger budgets is an obvious step to take. Pipeline repairs are necessary, but there are so many pipes and they are so large that you never have enough labour to repair them all at once and they are therefore a constant drag on any budget. There are also smaller savings to be had from pumping water that seeps into riverbanks. But these are small. New reservoirs will save enormous amounts of water, but are extremely expensive and bring other costs including land expropriation.

Better use of domestic greywater recycling and filtration would be ideal but the problem is incentives. Why incur a substantial cost to save water in your house when water bills are already so cheap? So you could introduce subsidy schemes for their installation and so on. But subsidies bring other perverse incentives with them.

On the other hand, the drought is worse in some areas than in others; Taipei and Taoyuan obviously. But then that is yet another incentive (on top of high rents) for people to leave those places and move elsewhere. Tainan may be the best place to be during droughts (at least on the west coast) because it has by far the greatest water resources of any of Taiwan's counties. On the other hand Yunlin county doesn't have anything like the crowding that Taipei (and even Tainan) does and has just acquired an enormous new reservoir that should come online later this year.

Michael Turton said...

The disproportionate effect on fixed and low income people is a problem. But relative to income, we all waste water.

Yes, subsidies for water recovery facilities might induce perverse incentives. That's still better than pumping the island dry.

Something also has to be done about agriculture -- crop diversification, rational water pricing strategies, better management of ecologies, repair of streams, etc.

But price is bottom line -- Taipei urgently needs higher prices -- the whole nation subsidizes its prices.


Mike Fagan said...

Doesn't agriculture suffer a demographic problem in that the farmers are all either dead, old or getting old and there aren't enough young people willing to take over? Or is that wrong?

If so, it should follow that agricultural use of water is in decline. Evidence for this is the fact that branch sections of the chianan irrigation canal network are often "turned off" (i.e. the water gates are closed at the trunk canals). I once asked about this at the chianan hq and was told it wasn't for water conservation per se (though that would have been a side effect), but simply because the farmers require rest periods - presumably because there aren't many of them, they're old and their work is labour intensive.

Anonymous said...

Before I came here, I just saw an article about Taiwan's drought and the possibility of water rationing in April. It seems this is another example where Taiwan enjoys something for an extremely low price, like healthcare, but which in the long run causes negative effects like wastage and a lack of budget for infrastructure. You are right water prices should be higher especially in cities like Taipei. It is a pity Taiwannese always want everything to be cheap and never seem to make sacrifices.

CP said...

Are people in Taipei thirstier than people in the rest of Taiwan? Possibly, because it's so stuffy here, but probably not. If the stats say otherwise, prove me wrong, but I think the majority of water waste here is by institutions like universities and restaurants. I was just at the gym watching a staff member hose way more to clean the stalls than he needed to for example. So you could have a progressive water price that gradually scales up based on how much you use and would hit institutions the hardest. Or you could raise everyone's prices to keep it simple and then send low-income individuals a monthly check to make up for it. The political problem with doing this is, you guessed it, the institutions based in Taipei are the KMT's support base.

Michael Turton said...

Yes, taipei has the island's lowest water prices, the KMT takes care of its own!!

Mike Fagan said...

Another thing about farmers. It's often said that the main reason young people are reluctant to go into agriculture in Taiwan is because there is no money in it. So that should mean that existing farmers would be keen to sell surplus resources when they have them (e.g. water) assuming transaction costs can be minimized. What we want is for the city water managers to be buying water from the farmers during the summer for storage and use during the dry season. It may be that some farmers could make more money from simply selling their water flow to the city than from using it to grow crops. In return our residential water bills would rise to enable the purchase of surplus water from farms.

Anonymous said...

Rice is one of the most water intensive crops to grow. This, coupled with the industries Taiwan is trying to maintain, are the culprits of much of Taiwan's water consumption. Another culprit is in concrete production and installation.

Mike Fagan said...

There are no "culprits". Water consumption is a good thing, not a bad thing.

What is needed is not a lump reduction in consumption, but more efficient consumption of water resources across the wet and dry seasons so as to cope better with shortages.

David Zetland has argued for the creation of "All-In-Auctions" as a mechanism for a more efficient market-based allocation of water resources, and there is a lot of sense to it.

Marc said...

Interesting to note: All the reservoirs in Taiwan are said to be below 50% capacity, except one: the Feitsui Reservoir which feeds Xinbei - Taiwan's most populated area. It'll be interesting to see if Chu's constituency has to experience rationing anytime soon compared to those 'green' locations

Michael Turton said...


It's typical market fundy nonsense under which the world outside humans exists only to supply humans with needed goods. Doesn't take into account externalities, the future, etc. Your religious beliefs are cute on paper, but like all religious beliefs, they don't work in the real world, which is why no one uses them.

Brian Castle said...

Mr. Fagan is making a lot of non-libertarian points for a change, and when he briefly mentions one article that takes a libertarian view you accuse him of having economic "religious beliefs"? I think you're being a bit too harsh.

But anyway, in this case a good dose of libertarianism is needed, but not too fast. California is facing the same water shortages and for the same reasons. The government stepped in long ago to make sure favored groups got a lot of water at a cheap price, creating inefficiencies that, with continued government subsidies, persist today. The answer clearly has to involve charging people a water price determined almost entirely by market conditions. If you can work out a way to help poor people with their costs that's fine. But everyone else needs to pay a real price.

The longer the government subsidizes a limited resource (which fresh water is in places like Taiwan and California) the worse it will get.

Brian Castle said...

Supply and Demand: it may not be a good idea, but it's the law.

Michael Turton said...

Brian, you're coming late to almost every conversation, and this is hardly the first example. Perhaps you should wait this stuff out. Fagan's economic religious commitment is well known in Taiwan. Search for his name in Taipei Times. Or on this blog.


Brian Castle said...

I would like to be able to devote more time to responding to blogs, but work and family frequently interfere. I've often considered quitting my job and responding to blogs full time, but I'm afraid my wife - who has many times threatened to kill me for this or that minor offense - would follow through on her threats if I did.

Brian Castle said...

I've seen Mr. Fagan's many libertarian posts, but on this thread he has made many suggestions for how the government could regulate the market and even the link he provided included much government regulation in it's attempt to bring the benefits of a free market to water distribution.

There are many people who seem to hold religious convictions about libertarianism, based on Mr. Fagan's comments on The View From Taiwan, I don't think he is one of them.

It would, however, to require a religious belief in the ability of government to overcome real complexity for a person to deny the many benefits that free markets bring. There are some problems that come with free markets, and some cases where free markets don't actually fit.

So the question in some cases is how to get the benefits while mitigating the problems. Other times the problem may be how to get the free market to fit while still mitigating the problems that come from it. Mr. Fagan's link seems to be trying to do the second of those.

Brian Castle said...

Perhaps my signal to sarcasm ratio was a little too high.

I can read The View From Taiwan at work, but I can't post there. So I have to find time at home which, when the rest of the family is using the computer, needing help with homework, wanting help with writing emails, etc., can be hard to do. I often would like to respond right away but just don't get a chance.

There is also the fact that I'm in America while you're in Taiwan so my posting doesn't sync with your moderating. While you can have several iterations during the day of post-moderate-response, when I post something it usually doesn't show up for a long time.

Michael Turton said...


No, it's a just a bog-standard freshmen econ libertarian religious nut spouting nonsense. If you write on water policy and water markets, and don't talk about the ecology and (innumerable) other externalities, you're just engaging in ideological masturbation.

I only moderate the blog once or twice a day. Sometimes I don't open it for two days. Sorry about tardy modding, it's just that I'm uber busy.


Brian Castle said...

I'm not complaining about tardy moderating and there is no reason to apologize. I was just saying that I tend to be asleep when you're awake and vice-versa.

Ralph Jennings said...

Got any documentation on Taiwan's use of low-flush toilets and low-flow shower equipment compared to other countries? Good post, BTW.

Michael Turton said...

Don't have that data, Ralph, would love to see it. Lots of modern buildings have low-flush toilets, but on the whole they are not common.


Spring Wild said...

Even as the government is planning to implement 2-day water stoppage in the entire city of Kaohsiung, the 24/7 car washes have a booming business, the city is spraying the streets with water trucks to keep down the dust levels, the public and private swimming pools continue operating normally and the decorative water fountains in many of the apartment and commercial buildings continue to spurting precious water into the air.
I called the city complaint line and asked why there was no water restrictions in place. I was told (沒有辦法) that there was nothing the city officials could do. I think he was telling me it was out of their control...
Interesting how the left hand doesn't know what the right hand is doing....or maybe...just doesn't really care...

Geert Anthonis said...

There is so much interesting stuff here and I did not have enough time to read all of it.

Mike, Farmers no longer need to farm to make money. The biggest problem facing Taiwan in the future will be keeping enough arable land. Drive around in rural Tainan, Kaohsiung and Pingdong and all you see are signs for land for sale. There is and never really was money in farming through out history. And of things are bad farmers were the first to suffer. In Taiwan at least they can sell their land, make a nice profit and retire.

As for water it is waste everywhere. The private pool I go to has already prepared enough water to help it through the 2 days the water will be turned off. There are several reasons why Taiwanese are not very ecologically conscious. The KMT government had too much work trying to keep everyone in line and brainwashing them in the political arena there is/was little place for ecology.

You would think that raising water prices would indeed have some people stop wasting more water and at least increase the revenue of the ever loss-making water company so it could budget more for repairs.

Furthermore I read a lot about grey water treatment and water trucks spraying the roads. As far as I know the water trucks do not use drinking water, unlike the building sites which pump up and dump ground water but then use tap water to spray the trucks leaving the site. Now that is waste. It also seems some of you have missed all the work going on all over Kaohsiung city, but I guess everywhere else in Taiwan as well. For 3 years Kaohsiung has been splitting the sewer system so that rainwater drains into the traditional sewer drains but afluent from homes is collected and treated before it is dumped.

If any of you were here in 1987-88 you would remember that the Love river could be smelled up to two blocks away. Or that creek next too the road to the airport that was just black and stank. Both now have fish living in then. This all because al the efforts already done. In Kaohsiung at least the government has been working its way up both these waterways and bit by bit they are getting cleaner as more water gets treated.

It may take another generation before people here get the message that conserving water and other resources is actually better for all. In the sort term, unless we get a bit more typhoons the situation is going to get worse before it gets batter.