I received this from friend and fellow 25/8 WaterWonk Elaine Hebard from the Land of Enchantment. There was no link provided to the text so I do not know whence it came; I suspect it is from Global Water Intelligence. Babbitt made the comments at GWI's American Water Summit, held a few weeks ago in the Washington, DC, area (Dulles Airport).
You can view videos of the Summit's sessions, but you will have to pay for some videos.
So here is the story reporting what Bruce Babbitt said:
Speaking in the 'Water Policy Futures' session Bruce Babbitt argues that the Leninist dogma is rife and peculiar to the American water industry. "How is it that the USA, the historic manifestation of market economies, the ultimate stronghold of capitalism, has the most public, least privatised water systems on the planet?" The US government, he explains, created a vast centralised infrastructure "sold in an environment which says, 'water is something that should be free and delivered by government in unlimited quantities at virtually no cost'. Now, is that a market model or a Leninist model?" The effects of this, Babbitt argues, have been quite predictable - the creation of an unlimited demand, most graphically demonstrated by peoples' commitment to open-air lifestyles in places like Los Angeles, where 50% of consumption is used outdoors.
When Governor of Arizona, where he set up new legislation enabling the Central Arizona Water Project, Babbitt admits to being in the throes of the Leninist tradition, forcing water prices down by diverting revenue from the Hoover Dam's electrical power generation and using it to pay for the water project, and also shifting the burden from water users by raising the state-wide property tax base.
However, Babbitt expects the recent election to be a 'transformational moment', away from public sector provision. "As this political shift takes place we're going to see a renewed discussion of the relative balance and allocations of functions between public financing and public systems at all levels, and the appropriate role of private financing and enterprise participation in the water market."
He agrees with Robert Kennedy Jr., who gives the introductory speech to this session, that water is a public, common resource, but stresses that this doesn't answer the question about how we allocate the economics and the equities of developing and distributing this resource. Until there is a consensus that purchasers of water should pay the true price, he argues, then the playing field cannot be levelled, and efficiency and cost-effective solutions cannot be achieved.
Stripping out the hidden subsidies in both public and private sectors means that water can be priced for its real value, and along the way improve conservation and efficiency. The finance field must also be levelled, Babbitt argues: "We have a huge infrastructure deficit and we will be going to financial markets, some mix of public and private, but right now, the deck is stacked in favour of subsidised public financing." The Build America Bond is the first example of this, designed to drive down the cost of infrastructure financing. "It's a hidden subsidy which says to water users that water's free." The Water Quality Revolving Fund, financing waste water treatment plants, and the Private Activity Bonds are further examples of hidden subsidies that need to be dismantled in order to achieve transparency and realistic pricing.
Other speakers in the session are Anne Castle, Assistant Secretary for Water and Science at the US Department of the Interior, and George Hawkins, General Manager of the DC Water and Sewer Authority, introduced by Bill Bertera, Executive Director of the Water Environment Federation (WEF).
In a sense I agree with Babbitt. I suspect he used the word 'Leninism' to attract attention and provide some 'red meat' for his audience - likely mostly folks from private industry. I don't have a problem with municipalities building and operating water and wastewater systems nor do I have a probelm with private systems doing so. I do have a real problem when the water is practically given away, as it is now - especially when politicians don't have the backbone to raise rates to where they need to be.
Interesting that Babbitt makes these comments now; he's not running for political office and I don't know who signs his paycheck these days - he used to work with Latham & Watkins, where he received some grief from enviros and others for some of the cases he worked on. He is Director Emeritus of the World Wildlife Fund , where he is listed as President of Raintree Ventures, a DC investment firm. So he is in private industry.
When he was Governor of Arizona he bought into the 'Cadillac Desert' model of water development lock, stock, and barrel so his state could grow...and grow....He was unwilling to fend off the developers, agribusiness interests, and others who wanted plentiful, cheap water in a state that is arid to semi-arid.
But a man can change, can't he?
“Not to be a republican at twenty is proof of want of heart; to be one at thirty is proof of want of head.” -- François Pierre Guillaume Guizot (1787-1874)
“When you're finished changing, you're finished." -- Benjamin Franklin
BRUCE BABBITT ... "can a leopard change its spots" ... frankly I don't know. Part of me wants to give Babbitt the benefit of the doubt & believe that honest change is possible.
But as a member of the Board of Directors of the Arizona Snowbowl - private operators of the ski resort near Flagstaff, Ar - he continues to speak out of both sides of his mouth.
On the one hand he claims to be "friend" to the Native Americans ... but votes to put sewage effluent on their sacred mountain which is the site of his ski resort ...
I'm just not sure i trust Bruce to be honest ... he's an attorney ... need I say more ...
Posted by: PAUL F MILLER | Tuesday, 30 November 2010 at 09:55 AM
I agree that he seems to be coming 'round a little late, but it's better to hear this from him (than some punk like me :) if people are going to pay more attention.
I'd be happy to supply him with more material :)
Oh, and I agree that public and private should face the same financing charges...
Posted by: David Zetland | Monday, 29 November 2010 at 04:49 AM