Hen's Social Studies Portfolio

Reflection on Economics of Water

1) Standard Met:
» 12.1.1 - Examine casual relationship between scarcity and need for choices.
» 12.1.4 - Evaluate the role of private property as an incentive in conserving and improving scarce resources, including renewable and non-renewable natural resources.

2) Objective:
» The point of the Bolivian water assignment was to understand scarcity and to understand public vs. private. We were also to understand the idea of social wealth.

3) Steps Taken:
» Read articles and watched videos about Bolivia and Bechtal
» Applied earlier concepts of cost/benefit analysis. We looked at the pros and cons of public and private ownership of water.

4) Writing Prompt:
» Propose a solution to Bolivia’s water crisis. Do you propose public, private or a combo of the two?

5) Conclusion:
» What did you learn? I learned how they charge for water and the difference between having your water public or private. I also learned that scarcity can also mean that a resource has more then one use.

» What did you think? I thought it was pretty interesting. Who knew a toliet uses that much water when you flush it? I think people here probably take water for granted since it seems like there's an endless supply. But in other parts of the world it's not like that.

Economics of Water

I am aware of the water situation in Cochabamba and have come up with this proposal on how the water system can remain public.

Funding:
First off, funding is probably one of the biggest problems. They can try to solve this by selling gold to other countries. They can also set tariffs on imported goods so that people will buy products made in the country instead of foreign ones. President Chavez could help by asking countries who share the same political views for help. It might be worth it to ask the World Bank or the US for a loan however if they push for privatization, President Chavez should refuse and forget about asking for a loan.

Standards and Oversight:
One of the most important standards they would have to set is the water quality. It has to be clean enough to be drinkable. Unfiltered water can cause illnesses and that would cost the country more money because then they would have to find money for clean water as well as medicine. The amount of water should be equal for everyone and if someone is using too much they should pay more to cover for the extra amount. They should first try to extend the service to 1/3 of the 600,000 people without water and expand from there until they are able to provide water to everyone.

Managers will run the system but should report to an oversight group made up of people who represent the public. That way the oversight group will be able to tell the manager what’s going on in the public and will be able to suggest new ideas or tell them of problems. The managers will have to report to the oversight group how much water they’re able to provide, how much people they are serving, how much more people they’re going to try to extend the service to, how clean the water is, how much they’re charging and how much they made as well as what the money is going towards. This will prevent corruption in the system. There will also have to be minimum wages for the workers and well as safe working conditions. Workers should be provided with breaks and reasonable hours.

Incentives/Penalties:
We want the managers to be dedicated to serving the public. To encourage this they can offer bonus’s for extra people they are able to serve. For example, for every 10,000 more people they are able to provide water with they can get a bonus in their wage. We also want to encourage the public to be conservative with the water. We can do this by offering rebates or “rollover water”. For example: any water you don’t use below the baseline will be added to your baseline amount next month. Say the baseline is 3 units and you only use 2 units this month. Then next month you will have a baseline of 4 units instead of 3. Or we can give a free unit of water for every 5 units they save.

Managers caught accepting bribes or doing other dishonest acts will be penalized by either a fine or jail time (amount and time is dependant on the crime). They want the system to be fair so the managers can’t be corrupt. To discourage the public from wasting water or polluting the water, they can set laws where wasting or polluting water will result also in a fine or jail time.

Price Rationing/Unit Pricing/Subsidies:
The baseline amount of water a household can get a month can be 3 units. If a household were to use more then 3 units then they would pay an extra 5% for every additional 3 units and the 5% gets added. So the first 3 units over would be 5% more but the second 3 units over (so after 6 units) would be 10%, then 15% more and so on. This will encourage people NOT to go over the baseline amount.

No one should get water for free because that would make it too unfair to those who pay. However they can offer a discount to the poor. To prove that you qualify for a discount a person will have to show that they have low or no income. Certain neighborhoods that are extremely poor can automatically receive a subsidy. To make up for the lost in discounts the rich and middle class can pay a tax to subsidize the poor. So for every one and a half units they use they can pay a 1% tax.

Education:
Finally the public should be educated on water management. They should be taught how to save as much water as possible by doing things like turning off the sink when brushing your teeth, soaping your hands, or washing the dishes. Don’t pour extra water down the sink. Turn off the water when soaping yourself in the shower. The public should also be taught how the system is managed so that they know how they’re getting their water and so that they also know that they are getting clean water. They should also be told how much funding the system needs so that they will understand the need for taxes and raises in prices.



	Reflection on Economics of Water 1) Standard Met: » 12.1.1 - Examine casual relationship between scarcity and need for choices. » 12.1.4 - Evaluate the role of private property as an incentive in conserving and improving scarce resources, including renewable and non-renewable natural resources. 2) Objective: » The point of the Bolivian water assignment was to understand scarcity and to understand public vs. private. We were also to understand the idea of social wealth. 3) Steps Taken: » Read articles and watched videos about Bolivia and Bechtal » Applied earlier concepts of cost/benefit analysis. We looked at the pros and cons of public and private ownership of water. 4) Writing Prompt: » Propose a solution to Bolivia’s water crisis. Do you propose public, private or a combo of the two? 5) Conclusion: » What did you learn? I learned how they charge for water and the difference between having your water public or private. I also learned that scarcity can also mean that a resource has more then one use. » What did you think? I thought it was pretty interesting. Who knew a toliet uses that much water when you flush it? I think people here probably take water for granted since it seems like there's an endless supply. But in other parts of the world it's not like that. Economics of Water I am aware of the water situation in Cochabamba and have come up with this proposal on how the water system can remain public. Funding: First off, funding is probably one of the biggest problems. They can try to solve this by selling gold to other countries. They can also set tariffs on imported goods so that people will buy products made in the country instead of foreign ones. President Chavez could help by asking countries who share the same political views for help. It might be worth it to ask the World Bank or the US for a loan however if they push for privatization, President Chavez should refuse and forget about asking for a loan. Standards and Oversight: One of the most important standards they would have to set is the water quality. It has to be clean enough to be drinkable. Unfiltered water can cause illnesses and that would cost the country more money because then they would have to find money for clean water as well as medicine. The amount of water should be equal for everyone and if someone is using too much they should pay more to cover for the extra amount. They should first try to extend the service to 1/3 of the 600,000 people without water and expand from there until they are able to provide water to everyone. Managers will run the system but should report to an oversight group made up of people who represent the public. That way the oversight group will be able to tell the manager what’s going on in the public and will be able to suggest new ideas or tell them of problems. The managers will have to report to the oversight group how much water they’re able to provide, how much people they are serving, how much more people they’re going to try to extend the service to, how clean the water is, how much they’re charging and how much they made as well as what the money is going towards. This will prevent corruption in the system. There will also have to be minimum wages for the workers and well as safe working conditions. Workers should be provided with breaks and reasonable hours. Incentives/Penalties: We want the managers to be dedicated to serving the public. To encourage this they can offer bonus’s for extra people they are able to serve. For example, for every 10,000 more people they are able to provide water with they can get a bonus in their wage. We also want to encourage the public to be conservative with the water. We can do this by offering rebates or “rollover water”. For example: any water you don’t use below the baseline will be added to your baseline amount next month. Say the baseline is 3 units and you only use 2 units this month. Then next month you will have a baseline of 4 units instead of 3. Or we can give a free unit of water for every 5 units they save. Managers caught accepting bribes or doing other dishonest acts will be penalized by either a fine or jail time (amount and time is dependant on the crime). They want the system to be fair so the managers can’t be corrupt. To discourage the public from wasting water or polluting the water, they can set laws where wasting or polluting water will result also in a fine or jail time. Price Rationing/Unit Pricing/Subsidies: The baseline amount of water a household can get a month can be 3 units. If a household were to use more then 3 units then they would pay an extra 5% for every additional 3 units and the 5% gets added. So the first 3 units over would be 5% more but the second 3 units over (so after 6 units) would be 10%, then 15% more and so on. This will encourage people NOT to go over the baseline amount. No one should get water for free because that would make it too unfair to those who pay. However they can offer a discount to the poor. To prove that you qualify for a discount a person will have to show that they have low or no income. Certain neighborhoods that are extremely poor can automatically receive a subsidy. To make up for the lost in discounts the rich and middle class can pay a tax to subsidize the poor. So for every one and a half units they use they can pay a 1% tax. Education: Finally the public should be educated on water management. They should be taught how to save as much water as possible by doing things like turning off the sink when brushing your teeth, soaping your hands, or washing the dishes. Don’t pour extra water down the sink. Turn off the water when soaping yourself in the shower. The public should also be taught how the system is managed so that they know how they’re getting their water and so that they also know that they are getting clean water. They should also be told how much funding the system needs so that they will understand the need for taxes and raises in prices.