| Review of: | Beyond Chinatown: The Metropolitan Water District, Growth, and the Environment in Southern California by Steven P. Erie |
|---|---|
| Reviewed By: | Ellen Hanak |
| Reviewed in: | Public Administration Review |
| Date accepted online: | 02/11/2007 |
| Published in print: | Volume 67, Issue 2, Pages 343-366 |
Rehabilitating the 800-Pound Gorilla
Stephen P. Erie's
Erie's approach, which draws on archives, interviews, and secondary sources, is part political history, part policy analysis. The book traces the MWD's evolution from its formation in 1928 by a special act of the California legislature to the present. Over these eight decades of Southern California history, much has changed. The MWD was created to build the Colorado River Aqueduct, Southern California's link to the Hoover Dam system. Because the city of Los Angeles was successfully developing its own supplies in the Owens Valley, the MWD's water became the tool for growth in other parts of the region. This role was enshrined in the 1952 Laguna Declaration, which committed the agency to finding a permanent water supply for the region and providing water to anyone within its service territory who requested it. In the 1960s, the MWD was a major partner in the construction of the State Water Project, which channeled northern California water to the south.
The State Water Project was never completed, and some reservoirs and conveyance facilities were left unbuilt. By the 1980s, the MWD, like other water purveyors, had to face the realities of new environmental concerns that significantly curtailed the ability to build new surface storage projects and threatened to return some existing supplies to instream uses. While continuing to explore the potential for expanding imports, MWD transformed itself into a regional water resources coordinator. This meant actively seeking ways to pursue conservation and water marketing-both tools to achieve more efficient use of existing resources-as well as nontraditional new supplies from recycled water, groundwater storage, and desalination. Many of these projects have been undertaken by the various retail water agencies that belong to the MWD family. Through its planning process, the MWD helps to coordinate these activities, and it provides financial incentives, making it, in Erie's words, Southern California's "de facto water policy maker."
As Erie notes, the MWD's leadership in the new era of water planning is not limited to Southern California. The MWD's diverse approach to water resource management, often known as a "portfolio" approach, has become a central tenet of the state of California's own water-planning processes. Other water agencies within and outside the United States draw on the MWD's experiences as they seek to meet the challenges of balancing water supply needs for people and the environment. So where, one might wonder, is the controversy? Erie highlights several: the MWD's role in encouraging "sprawl," the distribution of benefits and payments among the MWD's member agencies, and the MWD's role in the push to develop water markets. Here, I will briefly examine each of these controversies and discuss their broader relevance for water agencies and policy making in the 21st century.
First, did the availability of cheap water from the MWD fuel Southern California's growth machine? The fact that the population in this otherwise dry region has expanded nearly eightfold in the years since the MWD was created might lead one to conclude this is the case. Erie provides new evidence suggesting that the MWD's financing system in the early years was a contributing factor. Before the 1970s, property taxes from existing service areas (particularly Los Angeles) heavily subsidized the MWD's expansion into new territories. Mirroring trends elsewhere in the country (see Altschuler and Goméz-Ibáñez 1993), the agency then switched to a rate-based system to cover new investments in the State Water Project. Population growth was significantly higher in the outlying areas during the earlier period, when development was subsidized through property taxes.
Second, are the MWD's policies fair to its member agencies? Here, Erie focuses on the long-standing rivalry between the two largest members: Los Angeles and San Diego. The conflicts center on core issues: Who has rights to the water, and who should pay for it? As the largest founding member of the MWD, Los Angeles has retained preferential rights to the system's supplies in times of drought, when its other water sources may be unavailable. San Diego, a newer member with a high dependence on MWD supplies, is a lower priority. Los Angeles subsidized the construction of the system in the early decades, but San Diego, as the largest single customer, now pays a much larger share of the system costs. Although San Diego lost its court battle to overturn the preferential rights system, recent reforms in the rate structure may have eased the tension between the older and newer members of this regional network.
Third, is the MWD a force for efficiency, or is it earning its reputation as an 800-pound gorilla in the state's nascent water markets? In other words, does the MWD's sheer size allow it to dictate market outcomes? As Erie shows, the MWD has been at the forefront of the development of water marketing in California, negotiating deals to purchase water from farmers in various regions in order to accommodate water demand growth and to make up for supply cutbacks. But the MWD's involvement has not been free of conflict. It has been accused of overcharging other cities (notably San Diego) that wish to use its conveyance systems to "wheel" water purchased in other deals, just as it has been accused of bullying farm communities into accepting deals that might not be beneficial to all local players. In recent deals, the MWD has experimented with innovative approaches to deal with these "third-party impacts" by providing mitigation funds for communities in source regions, but that has not quelled all dissent.
None of these conflicts is unique to the MWD, although by virtue of its sheer size, it attracts the gorilla's share of attention. In regions experiencing rapid growth, debates about whether water availability is driving growth or merely facilitating growth that would have occurred anyway are legion. Most western states now have laws requiring developers to demonstrate the adequacy of water supplies before they can build. But determining how much is enough-especially given the uncertainties associated with climate change-is an inherently contentious task. In many regions, water markets offer the prospect of accommodating growth in a low-cost, environmentally responsible manner while compensating farmers for the loss of this resource. (These markets make sense because agriculture still uses roughly four-fifths of the water in the western United States, often at subsidized rates, even though its role in the economy has declined significantly.) Yet because these transfers may spur dislocations-even when mitigation funds are provided-not all interested parties will be satisfied.
Finally, although there is little doubt that water regionalism is the wave of the future, crafting approaches that ensure consensus, or at least viable modes of cooperation, is fraught with challenges. Regional water management approaches are becoming increasingly important, not only to capture scale economies in the development of new supplies but also to cope with new water management challenges, such as polluted runoff. As one of the oldest and by far the largest of the regional water agencies, the MWD can clearly offer lessons to others seeking to develop regional approaches. The conflicts among the MWD's members over benefits and contributions are one page in this lesson book. The rise of regionalism also raises the need for states to consider external regulatory mechanisms, given the potential for monopolistic behavior.
Erie's