1. The state Climate Action Team has a new draft report.
2. Price Impact on the Demand for Water and Energy in California Residences [PDF]

I took a quick look at each, and — in danger of offending my advisers (Howitt and Hanemann) — here are my thoughts:

1. Howitt, Lund, Medellin-Azuara, et al. use simulations to estimate the impact of climate change on California’s economy. Since their CALVIN model assumes perfect, frictionless markets (anyone seen those recently?), their estimates of the impact of climate change on water supplies and the economy are VERY low, i.e., about $160 million/year (basically nothing compared to the State’s $1.6 trillion economy). Since the lower bound of an impact is basically zero anyway, this estimate is not very helpful.
2. Hanemann et al. estimate water demand elasticity of -0.20, which is much less than the economic consensus of -0.38 to -0.64. Since their estimate uses data from one area, I think it overly bold to conclude that “price is a less effective policy tool for managing water use than commonly thought.” I’d prefer for them to conclude “we find limited elasticity with our data and model, neither of which may be replicated elsewhere.” Oh well.

Bottom Line: Entire forests are dying on publications trying to quantify noisy things far in the future and complicated things in the recent past. Why can’t we just build more flexibility into our water systems and let people get on with mitigation/adoption? (People do that quite well, you know. Just look at how we all coped with $4 gal/gas…)