Author: Richard Tol

The provision of water services

The Irish Times ran a series on water services in Ireland.

The first article is perhaps the most interesting. It leaks the yet-to-be-published report on the water sector by PWC. PWC will apparently be fairly critical of the current system, which nicely fits with the plans by the Minister for a radical overhaul. There will be more investment in water infrastructure. There will be a water regulator. Word on the street has that the Commission for Energy Regulation will have its mandate extended to water (but not to transport). There will be national water utility. Bord Gais, Bord na Mona and the National Roads Authority are bidding to run Irish Water. Only Bord Gais has experience in mass retail.

The piece discusses the transfer of Shannon water to Dublin, but the Minister disappears from the story at that point. I would think that we first want to promote water conservation and fix the leaks.

The piece is silent on the future role of the county councils in water. If Irish Water runs the show, what will happen to the water infrastructure owned by the county councils? What will happen to the civil servants who run this?

Another article wonders what will happen to the private water schemes. Will they be nationalized? Will households with a private well and a septic tank have to pay the water charges? That would be grossly unfair.

The inspection fees for septic tanks are unfair too. Us city folk poo for free — or rather, waste water services are covered from general tax revenues. That is, septic tank owners pay for urban waste water, but city dwellers do not pay for rural waste water.

The second main piece is on drinking water quality, the problems with which are typically overlooked even though they are serious.

The third main article is on water meters. It is summarized in an editorial, and repeats a number of points I made in August. My main concern is the plan for the centralized roll out of water meters. I think that it makes more sense to have people install their own meters and let these meters use the same communication network as the smart electricity and gas meters. See the discussion here.

Conor Pope cites 1000 euro per household per year. I said that. If we maintain the current spending on water (incl. investment), if we keep the business rates for water as they are, and if we exempt those on private schemes from the water charges, then full cost recovery (as required by EU legislation) implies an annual charge of 500 euro per household per year.

There is no Laffer curve in tourism

The Sunday Times reported on a recent paper by Niamh Callaghan and me.

The paper is on the demand for tourism in Ireland by UK visitors. This is relevant because UK tourists make up about 45% of all visitors to Ireland (and because UK tourists are not that different from other tourists).

The paper starts with descriptive statistics. Irish tourism prices have developed roughly in line with prices elsewhere, except in 2008, when Irish prices rose very sharply, and in 2009, when Irish prices fell as the rest of the world raised their prices.

Ireland roughly maintained its market share in UK tourism. The drop in visitor numbers in Ireland seems to be because people take fewer holidays during a recession, rather than because there is something wrong with Ireland as a tourist destination. Ireland does well in the market for secondary holidays (city visits, fishing trips etc) and people economize on that rather than on the main family holiday.

We then estimate the price elasticity of UK tourism demand — that is, the price elasticity across destinations — using twelve years of micro-data from the International Passengers Survey. We use that to run two simulations, abolishing the travel tax and reverting the VAT cut. The results are qualitatively the same for both scenarios. The tax changes have a small impact on the total cost of the trip. With a price elasticity smaller than one, the impact on visitor numbers is small too. Tax cuts bring additional visitors and additional revenue, but all tourists (including those that would have come anyway) pay less tax. The latter effect is larger, so that there is a net loss to the Irish economy.

Tourism tax breaks are like export subsidies. Foreigners benefit. The tourism sector benefits. The overall economy loses out.

Towards transparent government

DubLinked is a small step, but one in the right direction.

Only two county councils so far and a distinct lack of apps, but let’s say it’s early days.

No Climate Change Bill (yet)

There have been strong reactions to the announcement by the Minister of the Environment that he will not be introducing a Climate Change Bill quite yet. See Irish Times (again, and again).

The Irish Examiner has a response by Friends of the Earth: “With seven billion people on Earth, it is more important than ever that we reduce our carbon emissions. Ireland is never going to be the bread basket of the world and we must recognise the profound impacts that climate change will have on food security.” FoE argues at once that Ireland is too small to have an impact on global food supply and so big that is has an impact on the global climate.

(FoE omits that climate change will increase global food supply, at least according to the IPCC, and that biofuels have a negative impact on food production.)

The Irish Times broke the story. The Review of National Climate Policy has yet to be published, so I won’t discuss its contents. It is worrying that the government releases documents to a select few. They then set the public agenda. By the time the public gets access to the document, the news has moved on.

I agree with Minister Hogan that a Climate Change Bill is not a priority. The government has a lot on its plate, including the Department of the Environment — floods, water charges, septic tanks.

Besides, a Climate Change Bill is not required for climate policy. Ireland has had climate policies for many years now, and there is no sign that these policies will be abandoned.

The two draft Bills (discussed here and here) were primarily about creating new bureaucracy and had little to do with emission reduction or adaptation.

Ireland’s emission reduction targets are set by the EU.

UPDATE: The Review of National Climate Policy was published less than an hour after I posted this. It notes that Ireland will probably miss its 2020 targets with current policies, but does not suggest how policy could be reformed. It does not discuss the Climate Change Bill.

An fliuch mor

Writing in the aftermath of the 2009 floods, I warned that flood and emergency management needed an overhaul lest the waters return. I prefer to be wrong.

The economic damage of the 2011 floods will probably be smaller than in 2009. But this time, two people died. Ciaran Jones was a hero who put himself in harm’s way to help others. Cecilia de Jesus drowned in her home. Why is there no gauge on the Poddle linked to an evacuation alarm?

Flood management is about the prevention of floods. No flood management system is perfect, so emergency management is needed to manage the residual risk. Last Monday, both flood and emergency management failed Dublin.

Ireland is behind schedule to meet its EU obligations to assess flood risks and develop management plans. But why do we need the EU to tell us to protect our property and life? Flood protection design standards are low compared to other countries, and once-in-fifty-year defenses are breached remarkably often. Cities abroad are working hard to create retention basins and drainage channels for storm water. Dublin, a spacious and green city by comparison, has not done so.

Preliminary analysis by Met Eireann shows that the rainfall of the 24th October in Dublin was not unprecedented. More rain fell on 11th June 1963 and on 11th June 1993. A city like Dublin should be robust to events like that.

People have short memories, and politicians even shorter. After each flood, there is a call for better protection. That fades as the waters retract. Priorities change. The recent protest against the Clontarf flood defenses is a good example.

Last Monday also say failures in emergency management. Met Eireann issued a severe weather warning on Saturday. It was not accurate but extreme rainfall is fiendishly hard to predict. The warnings were actually fairly close to what came to pass. But while we have a tried and tested system for real-time weather prediction, we do not have a system that tells us where the water is likely to go once it has hit the ground. In fact, there are few gauges on rivers and streams. For instance, the OPW collection of hydrometric data omits the rivers Dodder, Poddle and Slang, where most of the mayhem was concentrated. The gauges that are there, are not linked to an early warning system.

A gauge on the Poddle would have warned that the water was rising dangerously high. The alarm could have been raised in Harold’s Cross. Celia may have had a chance with a few minutes warning.

A number of county councils now use MapAlerter, a service that sends out email and SMS messages to everybody in a particular area in case of emergency. Dublin does not use this system or any other.

Met Eireann issued a severe weather warning on Saturday. 48 hours later, the keys to flood gates and sand bags were still missing. That is just not good enough. Local flooding occurred to the untrained eye around 5 pm. The weather radar showed more rain coming. The emergency plan was invoked at 9 pm only, less than one-and-a-half hour before high tide. Why so late?

Water moves fast and with force. You have to act before the flood barrier breaks. In 2011, as in 2009, emergency workers followed the water. They did all they could, but there is little that can be done at that stage. Barriers need to be reinforced before they break. People need to be evacuated before the water reaches them.

In Cork and elsewhere, locals have done much to prevent a recurrence of the awful events of 2009. The national government has been less forthcoming. Dublin did not learn from what happened in Cork. The response to the 2009 floods was hampered by the Byzantine structure of flood management at the national level. The 2011 floods were local, and the line of command clear.

And now? Media attention will wane. There will be a few angry debates in the councils and the Dail. We will wonder why a shopping centre was build in a flood plain. We will wring our hands about the lack of accountability in the civil service. A committee will investigate and make sensible recommendations that will be ignored. Instead of waiting for those wise words, it is obvious what needs to done and now is the time to do it.

Early warning systems need to be put in place as a matter of urgency. That is fairly cheap and does not require intrusive intervention to awake the NIMBYs. The government should stop dragging its feet on the catchment flood risk assessment and management programme. Real-time hydrological prediction models must be developed, and not just for fluvial floods.

All this costs money. But Science Foundation Ireland has a large budget, not all of which is spent wisely. Let it fund the best hydrologists in the world to study Ireland. There are harebrained government subsidies in the areas of energy, transport, sport and what not that can be transferred to flood management without any great loss except to the cronies of governments past.

Heavy rains are inevitable. Flood damage is not.