Spitting In The Ocean
Policy Palooza
March 29th, in Cambridge, Maryland at the site of the old state mental hospital, about 150 people gathered to discuss Chesapeake Bay policy and sundry tangents. Policy, in this context, ranged from descriptions of current practice for determining what has to be done and by whom under the Chesapeake Bay TMDL, to very abstract analysis of the politics of Bay restoration. For anyone who wants to understand how what is being done to restore the Bay is supposed to work, the presenters covered a lot of interesting ground.
A common thread through the presentations was the question, how will we pay for the redoubled effort demanded by the TMDL? The economists seemed to be in consensus that current and future budget deficits will limit the resources that the public sector is going to be able to throw at the problem. I kept hoping that this might lead someone to suggest that these fiscal constraints might provide a lever to ensure that we are getting the best possible value for what we are spending, but it didn't really come up in a substantial way.
In an interesting teaming, Rich Batiuk (Bay Program) gave a description of how the TMDL was developed and how pollution loading caps (read: reduction requirements) were allocated among the source jurisdictions; and then Carl Hershner (Bay Program Partner) described some of the uncertainties attending what Rich had presented. Rather than just leave it at "we can't say for sure", Carl made the useful point that we have the means to track our performance, and, in so doing, learn by our successes and failures. Unfortunately, there was only one state legislator in the audience and I am not sure how effectively that point will disseminate. No one suggested a way to infect the state or federal agencies with adaptive management.
Ted McConnell (UMD) addressed a question that provides insight into why our universities still grant tenure. He asked, if cleaning the Bay is going to be as difficult as all this (and more), when might the taxpayers (or their representatives) decide that the Bay is clean enough? Because the clean water act makes this question practically irrelevant, I hadn't expected to like this presentation. But it provided a lot of useful information and interesting ways of looking at the problem, even if it missed the opportunity to develop the point - but we could get better value for our tax dollars than we are getting now.
The presentation that I had the highest hopes for, "Incentivizing Pollution Control in Agriculture", danced around the issue of economic efficiency at about 5,000 feet. So it is not clear that the audience got a complete sense of just how wasteful current policies are, with respect to cleaning up the Chesapeake Bay. Marc Ribaudo (USDA), the presenter, pointed out that the federal legislation that authorizes much of the funding for reducing agricultural pollution loads specifically disallows paying farmers on the basis of the usefulness of the practice. But, he did not try to suggest how much that silly rule is costing us in foregone pollution reduction.
Michelle Perez (Private-not-for-profit) brought the discussion back down to a more road-side view, describing research on the various ways in which states have attempted to impose nutrient planning on farmers. She was in the right place at the right time to assess this effort in three different states and was able to show what worked in the short-term but not in the longer term and vice versa. Hers was one of two empirical talks that the day.
I also had high hopes for James Shortle's (PSU) discussion of ways that we might improve the efficiency of agro-environmental policies, but here again the discussion took place at somewhat stratospheric heights and no detail was given on what is being foregone in our current policies, compared to what could be achieved with more efficient policies. One can't take issue with the technical validity of what was said, but, watching the audience, it's was not clear that the non-economists (I guess they would be the "policy-makers") were really following it.
Len Shabman (RFF) then gave the other empirical talk of the day and for those who stuck with him it was revealing. The big point was that ten years and $7 million later, maybe they have created a viable water quality trading scheme in south Florida. There was a lot more to it than that, but that alone would have been a good take home for all the policy-makers who think that water quality trading is already here in the Chesapeake Bay drainage, saving the day.
The final presentation was an odd thing that addressed the allocation of pollution load reduction obligations among the states as if it had not already happened. The presenter, Anthony Kwasnica (PSU) made the point early on that economics provides a way of identifying a fair and efficient allocation of reduction obligations, but then he sped on to why politics prevents that sort of solution to the problem. He might have described in detail why the economic standard for allocating pollution load reductions is fair and efficient and laid the groundwork for overcoming some of those political constraints. But he opted instead for the rational expectations stuff1.
So, for all the policy-makers who did not attend the conference (and that includes all the signatories of the Bay Action Plan), that's it in a nutshell. Nobody suggested inserting a requirement into Bay restoration efforts that economic efficiency be a goal, so the status quo is safe for a while. The conference joins the ghosts of the psychiatric patients who wander the grounds there at the Hyatt, as something that already happened and is finished now. Except there is supposed to be a more complete write-up of the conference in CHOICES magazine.
1Definition: A professor and a graduate student are walking across the quadrangle. Graduate student says, "Wow, look. There's a $20 bill." Professor won't look but says, "Nonsense. There's no more likelihood of a $20 bill being there than anywhere else on the quadrangle and if it was there somebody would have already picked it up."