The Price is Right: the Storm Water Version


I had posted about this before, but now it's on the front page of the paper: "Could Be Gold, or Big Trouble, in Storm Water." If you want to advocate that the way to go green is to get the price right, which I do, you have to believe that people will change their behavior in responsive to the more accurate price signals, which I do. So it was heartening to see that the article, while covering the requisite "there will be winners and losers from this change, and let's get a couple of quotes of losers who are now cranky," also noted significant things that property owners are doing to lower their bills by reducing stormwater runoff: the Schuylkill Center for Environmental Education already has a plan that includes a green roof and two rainwater cisterns, while auto part manufacturer Cardone Industries is going to construct a naturalized retention basin to manage 20 acres of runoff.

To be sure, change can be hard to deal with, especially if your water bill quintuples or you go from paying nothing to paying something. But remember that this is an adjustment to rectify the wrong prices from before; so rather than getting screwed, losers were actually getting a free ride before. And before you wonder if that's all well and good but the proposed rates are too arbitrary and capricious, the article notes that "while real estate assessments can be squishy, storm water is science . . . a set amount of rainfall creates a specific volume of storm water at a certain size facility." And now that the cost of treating is more accurately accounted for, people are responding appropriately. That, to me, is how a city goes green.

Comments

Daniel Nairn said…
After a brief look at this policy, it looks like it's very well-conceived. It's essentially internalizing the costs of managing stormwater to those who produce it. Let the market sort the solution out.

They've got the calculation for costs right: adding gross area to impervious area. Virginia proposed a policy last year that charged based on the percentage of area that is impervious impervious, but doing so mistakenly rewards really sparsely used parcels. This encourages sprawl. They're trying to fix this, but it's getting more and more complicated with each bandage they slap on. Philadelphia seems to have the simple solution from the outset.
Eric Orozco said…
Nice! Part of the beauty for me here is that placing the price tag also balances the stake between public and private agents. One way to tackle problems is to simply build up the infrastructure, an all in one basket approach that Joel Garreau calls the "Concrete Nirvana". But he posits a more useful conceptual scenario for the future cities that he calls "Intelligent Design". He states:

"The way we get to 'Intelligent Design' may be by recalling that, historically, the infrastructure solutions that work best are public-private partnerships. Think private passenger planes landing on public runways, or private cars traveling on public roads. All-private solutions, such as investor-owned toll roads, and all-public ones, such as subways, have their place. But they are specialized tools."

All-in-one basket tools may have their usefulness in their context, but 'intelligent design' creates a more balanced stake. It introduces incentives, awareness (e.g. the price) and technologies/practices to introduce solutions at the source of the problem.

Great layers of insight in your post, LH. Policy too can be "intelligent design". Here policy let's the market balance things. It is rare when that happens, but when policy does that, it is beauty.
LH said…
Eric, thanks for this.

Economists are big proponents of "getting the price right" because millions of people making decisions is better than just one or two (or 538) picking winners and losers; and, as noted in my post, storm water management is actually something you can calculate, rather than having to take a wild stab at how to adjust its price and then ratchet up or down over time.

I'll have to check out the Garreau link.
LH said…
Daniel, thanks for the VA example. It just goes to show you how difficult - and important - it is to set the rules right, or else you get all sorts of unintended consequences. Hopefully, we'll get this right in Philly.

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