Weed and Wildfire (and Insurance Law)

Image: Texas Military Forces 

The last two posts on this blog have covered wildfire policy and marijuana regulation, so it seems like a good time to address the convergence of those dynamics.  In the American West, which just happens to host an inordinate amount of high intensity wildfires and marijuana farms, the wildfire season is taking its toll on the marijuana industry.  Other industries are taking a beating as well, but the marijuana industry is particularly vulnerable.  First, because its clandestine history pushed marijuana farming into remote and mountainous locations, otherwise known as the wildland-urban interface, where people and property are most at risk of wildfire damage.  Almost a third of US housing units are located in the wildland-urban interface, but land use laws, zoning ordinances, and building codes can mitigate wildfire risk to some extent.  For the marijuana community, many of whom have long been operating in the shadows, those legal adaptation mechanisms haven't historically been available to reduce risk.

But now that marijuana cultivation is being legalized in many states, the farming community should be more comfortable working with firefighters and fire prevention programs.  That appears to be happening, according to Madeleine Thomas:

Some growers, like Tim McCormack, have been lucky. McCormack serves as CEO of Antoine Creek Farms, one of the largest licensed farms permitted by the state of Washington. The few thousand plants he tends comprise nearly 20,000 square feet of plant canopy. Flames from the Chelan Complex fire, one of the largest wildfires still burning across the state, were about five feet from his farm before firefighters were able to divert their course elsewhere. Had Antoine Creek Farms been caught in the Chelan Complex, McCormack estimates he would have lost several hundred thousand dollars [...] "the courageous firefighters actually did a back-burn on the back third of my property, and they saved us from a third fire."

But the legalizing marijuana industry still has a second hurdle to overcome: the reticence of financial institutions to participate in the market.  In the case of wildfires, farmers don't have access to crop insurance:

Compounding McCormack's worries, the issue of financing in the marijuana trade is a cumbersome one, as many farms and shops continue to find themselves spurned by pessimistic (sometimes moralistic) banks and insurance agencies.

"If I was growing wheat or if I was growing grapes, it wouldn't be that bad because I would file an insurance claim and they would send in an adjuster and they would evaluate what we had and make some appropriate claims based on the loss," McCormack says. "Well, the marijuana industry doesn't yet have crop insurance, so basically if we had burned down we would be out of business. That'd be it for us."

That's not entirely the banks' fault, as the federal government hasn't exactly embraced marijuana financing.  The Obama administration issued marijuana banking guidelines earlier this year, but reserved the right to penalize banks if they reported inaccurate information about marijuana businesses.  At this point the benefits of servicing the marijuana industry don't appear to outweigh the costs:

"There's tremendous risk and little reward," said Rodney K. Brown, president and chief executive of the California Bankers Assn. "The bottom line is it's still against federal law … and you're subject to both prosecution and loss of a bank's charter."

Complaints about the banking issue have so far focused on the security risks of marijuana businesses dealing in large quantities of cash, or the inefficiencies of a cash-only marketplace, but now we can add crop insurance and wildfire vulnerability to the list.

Introducing "Weed and Water Law"

Satellite image of the Island Mountain area and the Eel River.  Taken from Google Maps.

If you've been following this blog you've probably noticed that I've been exploring the environmental impacts of marijuana policy for some time now (see archived blog posts on the topic here).  While so many states have either legalized or are close to legalizing marijuana, almost none of them have created a regulatory framework to address environmental issues.  

Since May I've been working on an article about marijuana and water rights.  Water allocation is regulated at the state level, so there are a number of different water rights systems in the United States.  My article is the first to look at these various rights regimes and consider how they will interact with the marijuana industry.  The full draft of the article is now available here.  Below is the introduction:

In late June of 2015, a convoy of vehicles carrying enforcement officers from four different counties of northern California drove up and into the remote and rugged slopes of Island Mountain. The mountain had been given its name by 18th century settlers who observed that it was nearly surrounded by the waters of the Eel River and its tributaries. Today it represents “the dark green heart of the Emerald Triangle,” a region known for its prolific cultivation of marijuana. The enforcement officers conducted open-field searches on private lands, and by the end of the week-long ‘Operation Emerald Tri-County’ had confiscated 86,578 marijuana plants.

While police raids of marijuana farms is nothing new for the area, this particular operation raised some eyebrows. Unusually for a raid of this magnitude, no federal officials were involved – the raid was a wholly state operation. Since legalizing the medicinal use and cultivation of marijuana in 1996, California has been reticent to allocate state resources towards marijuana enforcement, decriminalizing possession of small amounts state-wide in 2010 and capping civil fines at $100. Also unusual were the lands being targeted by the county officers. Seventy percent of marijuana plants seized by law enforcement are illegally grown on public lands, but this operation went after privately held marijuana grows with some measure of legal protection under the state’s Compassionate Use Act. Until this point, a state raid of private lands was uncommon. The raid thus signaled a shift in the enforcement of marijuana laws, but not because the counties were cracking down on marijuana per se. Marijuana, like every other crop in the state, had fallen victim to water scarcity.

Months earlier, in January of 2014, the Governor of California issued a drought state of emergency in response to ongoing shortfalls in freshwater supplies. The declaration asked state agencies and officials to “take all necessary actions to prepare for these drought conditions.” Since then, the drought in California and across the United States has become a mainstream topic of conversation, dominating headlines and forcing governments to re-examine their water regulations. Water scarcity affects virtually all sectors of economic life, and as an agricultural commodity, marijuana is not immune. There is a paucity of research on marijuana and water supplies, almost certainly due to the covert nature of marijuana production. But in March of 2015, the first credible scientific study of the impacts of cultivation on water resources found that the demand for water to irrigate marijuana plants often outstripped water supplies. Data from the study came from the Eel River watershed.

‘Operation Emerald Tri-County’ is the clearest sign yet that the rapidly evolving forces of marijuana legalization and water scarcity are about to collide. The enforcement officers may not have been joined by federal officials, but they were accompanied by personnel from the state Department of Fish and Wildlife on suspicion of water abuses. Later the four counties claimed the raid itself was motivated by violations of state water regulations, not marijuana cultivation. After finding unpermitted stream bed alterations, diversions, and reservoirs, the officials moved to confiscate the privately grown plants.

In the aftermath of the raid, it became clear that the environmental intentions of the state may not have produced the greenest long-term consequences. Several victims of the raids were members of a political action group working with the counties to draft ordinances that would increase transparency and bring growers into compliance with environmental laws. The group’s director was dismayed that the raid would force growers back into the shadows, away from the state and county’s regulatory framework. A previous effort in 2010 was successful in partnering private growers with county officials to monitor plants and facilitate regulatory compliance, but a federal raid and subpoena of the program’s paperwork shut it down and broke up the partnership.  While states can and should enforce water laws in the marijuana industry, doing so without alienating the regulatory targets will be challenging.

This is especially true when considering the pace and mechanism of marijuana legalization initiatives. Marijuana is already legal for recreational use in Colorado, Washington, Oregon, Alaska, and Washington DC. Between now and election day 2016, an additional 14 states may place marijuana legalization initiatives on their ballots. In addition, 23 states and Washington DC have legalized medical marijuana, with up to seven states pending legislation. The fact that legalization is largely taking place through ballot initiatives suggests that the public won’t be waiting for state governments to get their regulatory ducks in a row. A majority of Americans favor marijuana legalization, raising the likelihood that state water law doctrines will be tested sooner rather than later.

Reconciling marijuana legalization within the structures of water laws and regulations reveals two broad conclusions. First, for many states the legalization of marijuana is likely to strain existing water regulation resources, disrupt water markets, and interfere with water rights. Marijuana is arguably the largest cash crop in the United States, and while the industry has already been using significant water resources, simply enshrining historical uses is not a viable option for many jurisdictions. On the other hand, states must bring marijuana producers into the fold lest the industry continue to operate in the shadows, and doing so will require some accommodations for producers to use water resources.

Second, and conversely, water scarcity will play an increasingly large role in the development of the marijuana industry. The tri-county raid set a precedent that more law enforcement officers and state agencies are likely to follow in order to safeguard precious water supplies. Even well-established water rights in the agricultural sector have been cut and re-negotiated, and marijuana producers joining the regulatory fray will need to navigate the various idiosyncrasies of centuries-old water laws to maximize their allocations. States are likely to place increased scrutiny on producers who choose to grow or irrigate outside of legal channels.

These broad conclusions stem from a systematic analysis that addresses the gap in understanding the relationship between water rights and marijuana legalization. Section II begins by describing status quo marijuana production taking place outside the context of state water law doctrines. While marijuana can be grown sustainably, unregulated production often leads to illegal and destructive water practices affecting downstream rights holders.

Sections III and IV envision a legal marijuana market governed by the predominant doctrines of US water law: prior appropriation and riparianism. Each system presents a unique set of legal and regulatory challenges, and for states like Colorado, these challenges are already evident. In the American West, prior appropriation states will need to adapt to the relatively rigid nature of priority water rights, as well as the federal government’s outsized role in water allocation and marijuana prohibition. States employing riparianism or regulated riparianism will have a slightly easier time incorporating marijuana cultivation into existing systems, as long as the doctrinal or regulated administration of water rights is holistically applied to the legal marijuana industry.

In Section V the theoretical becomes reality. California’s uniquely mixed system of riparian and appropriative rights provides a number of opportunities for marijuana cultivators to come into compliance with water laws. However, the state’s decentralized and haphazard approach to marijuana regulation creates uncertainty in the marijuana industry. That uncertainty bleeds into the administration of water rights despite the intentions of both cultivators and regulators.

Section VI concludes with recommendations for states in the process of legalization. By applying water laws to the emerging legal marijuana industry, this study identifies a number of key trade-offs states must make in reconciling marijuana cultivation with water scarcity. This section considers the costs and benefits of decentralization, restrictive cultivation licensing, and the “no action alternative.” While water laws will occasionally clash with the new marijuana economy, this Article identifies opportunities to smooth the transition.

Wildfire and Causation: Climate Change or Disaster Policy?

Firefighting in Utah.  Photo: US Army.

Wildfires are in the news again after portions of Idaho, Washington, and California were ravaged by high intensity fires this month.  Which means it's time for another reminder that climate change is to blame.  Here's The Guardian's Char Miller:

What [firefighters] have encountered on the firelines in the past few years is evidence that everything has changed as a result of global warming [...] Temperatures that spike above long-held norms, record-breaking low-humidity levels, multi-year droughts, tinder-dry vegetation and fierce winds are among the factors fueling these new, more massive infernos. The sooner that firefighting agencies, public officials, policymakers and citizens acknowledge the impact that climate change is having on the frequency, intensity, duration and behavior of fire, the sooner that they will begin to develop new responses to wildland fire in the US west."

Climate change is one of the factors.  But is it the most significant factor?  Perhaps more importantly, is it the factor that firefighters and land management agencies should be paying the most attention to?  Agencies and policymakers may not need to "develop new responses" if revisiting an old one is available instead.

Last year I wrote an article about disaster law in the US, in which I argued that the climate change debate is obscuring the fact that our current disaster laws - such as wildfire policy - aren't close to providing resilience to begin with (that article was published online this summer, see here).  While the focus today is on climate change, and how it exacerbates wildfire risk, there are other causal factors that wouldn't be as massively challenging to address.   First among those is a predilection for firefighting that, over the past hundred years or so, has been successful in putting out the small, low-intensity fires that were common in North America when the best defense was fire prevention or adaptation.  These small fires would clear vegetative growth and provide breathing room for forests.  After a century of firefighting, our forests are now choked with vegetation, providing the perfect conditions for the large, high-intensity fires we are seeing today.  Take a look at this chart showing trends in wildfires and acres burned:

Chart produced from data provided by the National Inter-Agency Fire Center.

A wildfire policy of firefighting has been successful in reducing fire frequency, but has resulted in an increase in acres burned.  Putting out small fires only builds up the fuel needed to create the big ones that firefighters are helpless to stop.  Firefighting agencies may not be able to solve climate change, but they can adjust their strategic priorities to favor more fire prevention and proscribed burns (policies that have been around for a while) instead of relying on firefighting quite so heavily.  Climate change may make things worse no matter what, but a second look at our disaster laws might show that a basic change in approach might go a long way toward building resilience.  

Wildfire in Yellowstone National Park.  Photo: National Park Service.

Follow the Money: Florida's Land Acquisition Trust Fund

WACISSA RIVER, FLORIDA.  PHOTO: FWC

Constitutional Amendment 1 wasn't controversial when it was on Florida's ballot last November.  Dubbed the Florida Land and Water Conservation Initiative, the amendment passed easily.  Controversy has flared up since then, as interpretations of the amendment vary.  Some say the money raised by the amendment - put into the Land Acquisition Trust Fund - can only be used to acquire conservation land.  Others (including legislative budget proposals) claim the funds can be used to cover existing expenses related to land and water management.  I wrote about this back in May, arguing that the language of the amendment probably leaves room for the Fund to cover existing operations, despite the name of the Fund itself.  I also wrote that acquiring land might not be the only mechanism to achieve sound conservation: 

Amendment supporters might consider focusing the debate on outcomes, not inputs.  Land acquisition might not by itself promote conservation, just as operational spending is not per se  unproductive.  An effective conservation framework in Florida requires lands that are thoughtfully managed to advance conservation goals.  So instead of bemoaning operational expenditures, it might behoove amendment supporters to ask for more detail instead:  Will staff salary allocations make new hires in areas where expertise is lacking or merely cover the existing bureaucracy?  What kind of "technology and information services" will be provided to the Department of Environmental Protection?  Will firefighting equipment purchased by the fund prioritize the protection of conservation areas?  Given that sea level rise presents a monumental challenge to coastal communities, will the fund be used to finance climate change adaptation measures Florida's cities are begging for from the state?

The Vero Communique picked up on my piece, and it looks like they've been doing just that by trying to track down the whereabouts and details of two major state-funded projects.  One of them was an allocation from the Land Acquisition Trust Fund to the St. John's River Water Management District:

Another project we researched is one of the [] projects where $ 2,750,000 was allocated to the St. John’s River Water Management District (SJRWMD).  SJRWMD was kind enough to respond to our inquiry about this project, as follows: “The $2,750,000 referenced in Rep. Mayfield’s column is a state appropriation from the Land Acquisitions Trust Fund. The District has not yet determined how this money will be used, but will be making that decision in the near future.”

This is the first instance I've encountered where a water management district has been given an allotment from the Fund with discretion on how to spend it.  It might imply that legislators are willing to place the burden of interpretation on implementing agencies by giving them both funds and the discretion to spend those funds in compliance with the amendment's terms.  It will be interesting to see how the SJRWMD decides to spend the appropriation in light of that power.

Regulating Marijuana: Water Agencies vs. Law Enforcement

Photo: USFS Region 5

Marijuana legalization is spreading quickly across the United States.  One of the toughest challenges for state governments will be to create a regulatory infrastructure for the marijuana industry that strikes the right balance.  Enact policies that are heavy-handed and the industry will continue to show itself capable of surviving on the black market.  Fail to regulate at all and the legal marijuana market will struggle with uncertainty and negative externalities.  Colorado's nascent marijuana regulations have been relatively well-reviewed, in part because it had the luxury of starting from nothing.  But in California the marijuana industry has been entrenched for decades, while cultivation and consumption for medicinal use has been legal since 1996.  Nonetheless, the state has not prioritized regulation of the industry, nor made any meaningful attempts to innovate or adapt to changing conditions.  I've written in the past about the environmental impacts of excluding the industry from the regulatory framework (see here and here), as well as the difficulties states may have when choosing which of their many administrative agencies will take responsibility for regulation (see here).

Both of those issues are now converging in Northern California, where the state's regional water board is at odds with state and local law enforcement.  Adrian Fernandez Baumann reports on the North Coast Regional Water Quality Control Board's efforts to partner with marijuana farmers to regulate water resources:

The water board reps' basic pitch: Starting this summer, and going fully into effect next spring, the board would regulate cannabis cultivation on the basis of environmental impacts. Growers would be asked to invest time and money in the proper stewardship of the land and in repairing damage that had already been done. In exchange, the board offered, basically, an understanding: the government would give growers time to fix old problems and would provide a them with a framework to diagnose and repair issues. And all of it would be totally, officially, unconcerned with the legality of marijuana.

In principle the system should work, and some growers are enthusiastic.  But this program, and any others promulgated by state or local agencies, will face the same challenge: establishing sufficient (if not exclusive) control over marijuana regulation such that the actions of other agencies don't interfere.  This was a problem for a similar program that was eventually broken up by the federal government.  And considering that marijuana raids as recently as late June targeted private property owners, it may be a problem for the water board's program as well.

For law enforcement, there are strong incentives to ignore the water board's call for cooperation and to just keep raiding. Asset forfeiture laws allow police to seize large amounts of money and assets in pot busts. In 2014, Mendocino County seized $5.2 million in assets, including $3.9 million in cash.The Mendocino District Attorney's Office takes things even further with its "restitution" program, which co-opts a law intended to pay for meth lab clean-ups to extract more money from growers. Basically, the DA approaches busted growers with a deal: Give us some cash for each pound confiscated and you get no jail time. The amount is negotiable. Officially, it's $50 per plant and $500 per pound, but it often ends up in the tens of thousands of dollars. The funds then get divided up between the DA and the arresting agency, creating a revenue stream with little democratic oversight.  

There are advantages to decentralized regulation, among them the innovation and experimentation that local agencies create.  But there are drawbacks as well, and generally speaking, decentralization and fragmentation are not the same thing.  The former shifts power to local governments with local expertise, while the latter spreads overlapping mandates around between agencies and requires extensive coordination and cooperation.  The marijuana industry will implicate many state and local agencies, but to be effective and integrated, the state will need to set some ground rules for how those agencies interact.  If it does not, expect more programs working at cross-purposes.

Introducing "Water Governance in Haiti"

The Trou-du-Nord River in northern Haiti, near its mouth in Caracol Bay.  Photo: Ryan Stoa.

Haitians will go to the polls on Sunday to vote in their national elections, seven months after the Haitian Parliament dissolved and left the executive ruling by decree.  Considering the sorry state of water services in the country, water has been on the political agenda for months.  But the administrative capacities are so low, and the information so scarce, that it's hard to know who the players are in the Haitian water sector, what laws govern them, or how capable those agencies are to carry out their mandates.

I just posted my latest article, titled "Water Governance in Haiti."  It looks at the Haitian water sector to get a clearer picture of the landscape.  The study was funded by the Inter-American Development Bank, and included an analysis of the regulatory capacities of local government agencies in northern Haiti (where foreign governments are funding a large industrial park).  Here is an excerpt:

The first phase of this study collected and analyzed the laws, policies, and institutions involved in water resources management in Haiti.  Results from that phase suggest that the laws and policies affecting water resources create a fragmented and uncoordinated water management framework, in which national ministries have overlapping mandates and rarely coordinate their efforts effectively.  In addition, while the legal framework transfers significant management authorities (and responsibilities) to local governments, there is little else in the way of statutory or regulatory guidance for these governments to rely on.  For that reason, the legal framework creates broad ambiguities regarding how local governments are to be financed, staffed, or otherwise carry out their water management duties.  These uncertainties could, in theory, create the interpretational space needed for local governments to experiment with water management strategies and techniques in ways that foster resilience and increase sustainability.  In practice, it seems more likely that opaque legal mandates would create confusion and leave local governments ill-equipped to tackled the daunting challenges of water management. 

The following case study of institutional capacities in the Trou du Nord watershed in northern Haiti suggests that most agencies and stakeholders have neither the human nor the financial resources in place to fulfill their mandates.  Some, however, such as DINEPA’s local representatives or the University of Limonade, are relatively well-staffed and exhibit the continuity of presence needed to justify targeted capacity building efforts.  Others, such as the sections and communes in the region, may have low levels of capacity in water resources management but merit engagement in order to secure broad participation in water management planning efforts.  The institutional capacity analysis that follows has been conducted with an eye towards informing the final component of the IDB project funding this study: an integrated water resources management plan for the Trou-du-Nord watershed.

The Trou du Nord river is located in the Trou du Nord Arrondissement, a subdivision of the Northeast Department of Haiti.  The Arrondissement contains four communes: Caracol, Saint Suzanne, Terrier-Rouge, and Trou-du-Nord.  These communes comprise the local government bloc of stakeholders most integral to a participatory water management planning strategy, as they represent the core geographic regions of the watershed, while exhibiting a level of regulatory and management activity that lower levels of government (i.e., sections within the communes) lack.  For the most part the four communes do not employ any full-time staff dedicated to water resources, though some activities fall within the broad scope of water management.  More important, perhaps, is the local support and buy-in that would be needed from each commune to effectively carry out a water management plan that modifies the status quo in any meaningful way.

Caracol is a flood-prone coastal commune on Caracol Bay, at the mouth of the Trou-du-Nord river.  It is sparsely populated, but due to the Caracol Industrial Park’s presence, demographics are in flux and electricity is reliable.  The commune reports a total annual budget of less than $195,000, of which over 40% comes from a European Union development project. The 39 staff receive an annual salary of around $4,320, but none are dedicated to water management per se.  A significant portion of commune tasks pertain to waste management, accomplished with wheelbarrows and two motorcycles.  There are no vehicles, nor is there a disposal site in the commune.  While commune staff do not engage in water management themselves, they do work closely with DINEPA staff on water projects when necessary.

On the opposite end of the watershed, the commune of Saint Suzanne sits at the source of the Trou-du-Nord river and comprises a significant portion of the watershed’s catchment area.  The overall budget and staff salaries are similar to those of Caracol, though in practice staff are often not paid on time.  The office has one functioning computer, one motorcycle, and no human or financial resources dedicated to water management.  DINEPA’s presence is minimal, supplemented by periodic wells drilled by international NGOs.  Staff conduct street cleaning, but lack an official disposal site.  Hygiene facilities are minimal to non-existent. 

The communes of Terrier-Rouge and Trou-du-Nord lie between upstream Saint Suzanne and downstream Caracol.  Terrier-Rouge is the eastern commune, sitting directly on the Route Nationale of the northern transportation corridor.  The industrial park has financed new housing projects and reliable electricity in the commune.  A municipal engineer on staff facilitates the issuance of construction permits, and the commune has hired eight staff to conduct reforestation work.  Most other staff are engaged in street cleaning.  The commune lacks a waste disposal site, though plans are in place to build a site capable of serving multiple communes.  DINEPA’s presence, and hygiene facilities, are minimal and supplemented by international NGOs.  The overall budget and staff salaries are similar to those of Caracol, with neither dedicated to water management in any meaningful way.

Finally, the Trou-du-Nord commune forms the western flank of the watershed.  The river flows through the commune before passing by the industrial park.  While no housing projects have been constructed its proximity to the park has enabled reliable electricity throughout the commune.  The commune is relatively well-staffed, with an engineer on hand to issue construction permits, and staff engaged in waste management and small-scale hygiene projects.  However, little infrastructure is available for these purposes, as the commune has only one tricycle and some wheelbarrows, no disposal site, and a dysfunctional water supply system.

The full study is available here.

The Lawlessness of Shipping Goes Mainstream

I've been fascinated by the shipping industry for a while now.  My father was in the merchant marines, and I grew up on the Mississippi River where barges still carry coal, grains, and other goods from Minneapolis to New Orleans.  It was Rose George's Ninety Percent of Everything that really piqued my interest in the lawlessness of the shipping industry.  Using her own journey aboard large container ships as a backdrop, George reveals the surprising truths about shipping: the lawlessness of the high seas, environmental damages, threats from piracy, appalling labor conditions, jurisdictional ambiguities, and suspect financing.   According to George, it's cheaper for Scottish fishermen to ship their fish to and from China to have them filleted than to have them filleted in Scotland.  There are also myriad legal angles to explore, including the difficulties of enforcing crimes on the high seas when no country wants to take jurisdiction of a case.  Almost as curious is how little play the shipping industry gets in mainstream discourse.

But Ian Urbina and his team at the NYT made waves this month when they published a brilliant piece on the topic.  Ian talks about how one repeat offender ship prompted his work:

I had what an author, Rose George, calls “sea blindness”: a myopia common among land dwellers who view the ocean as a brackish blotch over which cross-continental travelers need to fly to get where they are going. Rarely do shipwrecks, or acts of fatal violence at sea, make the evening news. Ms. George is right: If all the stories of boats meeting calamitous ends instead involved airplanes falling from the sky or coal miners getting trapped underground, “we would probably hear about it.”  The Dona Liberta cured me of my sea blindness.

The Dona Liberta works as a case study of the shipping industry as a whole:

As the rusty refrigerator ship moved across two oceans and five seas and among 20 ports, it routinely abused, cheated and abandoned its crew, caused an oil slick nearly 100 miles long, and drew citations from a half-dozen countries for other environmental violations. Creditors chased its owner for millions of dollars in unpaid debts, and maritime watchdog groups listed its parent company as an illegal fishing suspect. Still, the ship operated freely and never lacked for work or laborers.

When wrongdoing occurs, no single agency within a country or specific international organization typically has a sufficient stake in the matter to pursue it. The stowaways on the Dona Liberta, for example, were undocumented immigrants from Tanzania, living in South Africa and brought to shore in Liberia. The ship was owned by a Greek company incorporated in Liberia, crewed primarily by Filipinos, captained by an Italian, flagged to the Bahamas and passing through international waters. 

The NYT has follow-up on the lawlessness of the sea here, here, and here.  My thoughts on lawfare taking place in the South China Sea here.

Image: SkyTruth; NYT.

Pope Francis and Climate Change, Ctd

Photo: European Union 2013 - European Parliament

Fresh off his ground-breaking Encyclical on humanity and the environment two months ago, Pope Francis brought sixty of the world's mayors to the Vatican yesterday to discuss "Modern Slavery and Climate Change: the Commitment of the Cities."  The title of the meeting itself is revealing, as the Pope signals his intent to focus on the interconnected forces of human trafficking and climate change, and the crucial role cities play in combating both.  The climate action movement has struggled to gain widespread acceptance in part because the challenge is so complex and diffuse, which makes the Pope's approach a clever way to portray climate change as both a human and local issue.  The Pope was express in this interpretation, rejecting the public and media's interpretation of his encyclical Laudato si' as a strictly environmental mandate:

Referring to his recently published encyclical “Laudato Si’”, Pope Francis made it quite clear that the document is not an encyclical on the environment.  It’s a social encyclical – he explained -  because the state of the environment is directly and intimately linked to the life and wellbeing of humankind.

Engaging the world's mayors is vital, as cities emit 75% of global GHG emissions, while mayors often enjoy the legal and political powers over transportation, urban planning, and economic development that can make meaningful climate mitigation impacts.  The meeting included US mayors from New York City, San Francisco, Boston, Minneapolis, Seattle, Portland, New Orleans, Boulder, Birmingham, and San Jose.  Many of them are already taking steps to green their cities, but no doubt the Pope's leadership provides political capital to them and others looking to muster support for climate action.  

The conference was interesting as well because it hints at where the Pope will focus the Vatican's efforts amid the many objectives outlined in Laudato si'.  Human trafficking, forced migration, and slavery have not previously played a prominent role in the climate change debate (or vice versa), but Pope Francis is doing his utmost to frame climate change as a social issue with particular impact on the poor and marginalized.  The mayoral declaration coming out of the meeting stated in part:

As mayors we commit ourselves to building, in our cities and urban settlements, the resilience of the poor and those in vulnerable situations and reducing their exposure to climate-related extreme events and other economic, social and environmental shocks and disasters, which foster human trafficking and dangerous forced migration.

Addressing wealth disparities will likely be a huge challenge for negotiators at the Paris Climate Treaty meetings in December, as countries haven't agreed on how much responsibility industrialized countries should take in potential climate deals.  But in focusing on the world's cities and human trafficking, Pope Francis is driving the discussions downward in the governance framework, making sure social and economic inequality is addressed not only on the national and global level, but on the individual and local level as well.

Introducing "Cooperative Federalism in Biscayne National Park"

Stiltsville homes in Biscayne National Park.  Photo: Ryan Stoa.

For the past few months I've been working on an article about Biscayne National Park.  More specifically, I've been looking at the unique relationship between the state and federal government when it comes to fishery management.  With the National Park Service releasing its Final General Management Plan for the park last month, I'll be excited to post my draft on SSRN sometime next week.  In the meantime, here is an early draft of the introduction: 

The National Parks of the United States are nothing if not unique.  Active volcanoes, the world’s longest cave system, geothermal geysers, the largest island of the world’s largest lake, and the tallest trees on Earth can be found in the National Park System, among other natural wonders.  Some parks receive millions of visitors and are international tourist destinations – Grand Canyon National Park receives over 4.5 million visitors each year.    Others are so remote they don’t have park facilities and receive around a thousand visitors monthly.  

Biscayne National Park is neither remote nor highly frequented.  Despite its location within Miami-Dade County (population 2.66 million), the park receives only slightly more than half a million visitors annually.  That’s less than Denali National Park in Alaska, which is serviced by a single gravel access road.  North of Biscayne National Park lies the highly developed barrier islands of Key Biscayne and Miami Beach, as well as the Port of Miami, the world’s largest cruise port.  To the south lie the Florida Keys, and to the west the city of Miami, including a solid waste landfill and nuclear power plant visible from the park.  

Nestled between these bustling coastal developments is Biscayne National Park, the largest marine national park in the United States with 95% of its 173,000 acres located underwater.  The marine nature of the park sets it apart in various ways.  Much of BNP’s waters can only be accessed with a boat; on the other hand, with a boat nearly all of BNP can be accessed.  The park has four distinct ecosystems, including mangrove shorelines, estuarine shallows, barrier islands, and coral reefs.  These ecosystems sustain more than 100 species targeted by recreational and commercial fisheries.  In fact, BNP’s lucrative marine resources are what prompted Congress to protect the area in the first place.  As a result, management of the park and its resources plays an out-sized role in the South Florida tourism and fishing industries.  It also becomes highly controversial.

Aside from its marine character, Biscayne National Park is unique in the National Park System for the way in which its implementing legislation dictates the relationship between the National Park Service and the State of Florida.  With respect to fishing, Congress decreed that “the waters within the park shall continue to be open to fishing in conformity with the laws of the State of Florida.”  In other words, the state retains jurisdiction over fishing regulation and management in the park.  For a park that is mostly underwater and whose primary natural resource is fish, this reservation is a significant concession.  The reserved power notwithstanding, Congress simultaneously authorized the Secretary of the Interior to “designate species for which, areas and times within which, and methods by which fishing is prohibited, limited, or otherwise regulated in the interest of sound conservation to achieve the purposes for which the park was established,” giving the NPS the ability to impose their own fishing regulations in the park.  But, in waters donated by the state after establishment of the park, fishing must be regulated in conformity with state law. 

While these seemingly overlapping and contradictory mandates are confusing, Florida and the NPS have agreed in principle to manage fisheries uniformly within park waters.  That is likely a wise approach, as fishing compliance and enforcement would be challenging for all stakeholders involved if a multitude of marine jurisdictions in close proximity to each other had their own regulatory requirements.  On the other hand, it forces the state and federal government into a unique partnership, with each having arguably equal bargaining power over fisheries management. 

States and the federal government have been engaging in “cooperative federalism” for decades, through state implementation of federally-funded programs or state compliance with minimum federal standards.  In the field of environmental law, cooperative federalism takes place through state-managed compliance with the Clean Air Act and Clean Water Act, or the development of Coastal Zone Management Plans.  Cooperative federalism is less common in natural resources law, which is more place dependent and therefore subject to jurisdictional and territorial divides.  It is especially rare in the National Park System, where responsible park management must include state and local stakeholder involvement, but rarely provides so much legal authority to the state.  Biscayne National Park is therefore unique for both its marine and governance characteristics.

This article explores Biscayne National Park’s federalism contours in order to assess whether its management paradigm provides a workable model for replication in waters (or lands) of the United States and around the world.  Materials supporting this research include implementing legislation, state and federal regulations, management policies, inter-agency documents and communications, and direct stakeholder interviews (including consultations with federal, state, and local officials).  Ultimately there are some clear drawbacks to the BNP cooperative federalism model: namely, that dual control over fisheries management lengthens and increases the cost of the joint policy-making process. However, the synergistic effect of joint management is that NPS planning is more integrated with local legal frameworks, is more responsive to stakeholder needs, and receives the sense of ownership from surrounding communities that is so critical to the long-term sustainability of natural resources management.  Cooperative federalism in BNP has expanded the role and influence of the park beyond its borders, producing an overall positive outcome for stakeholders and the marine environment.  The research suggests that, while BNP may be unique geographically and politically, a similar governance model could produce similar benefits for other public lands, waters, and natural resources.

The Environmental Impacts of Marijuana Prohibition, Ctd

Photo: California National Guard.

A reader sends along an interesting take from Mother Jones on the recent large-scale raids on marijuana properties in northern California.  The report supports my concerns (outlined here) that water-stressed areas might start experiencing an awkward convergence of water and marijuana legal frameworks as states begin focusing their limited enforcement capacities on properties allegedly violating both paradigms:

There were helicopters, SWAT teams, and nearly 100,000 marijuana plants yanked out of the ground, but last week's massive raid in Northern California's rugged Emerald Triangle was not your father's pot bust. Carried out by county law enforcement with no help from the DEA, it targeted private landowners—and not just because they were growing pot, police say, but because they were illegally sucking some 500,000 gallons of water a day from a section of the nearby Eel river that is now stagnant and moss-ridden.  In short, the cops say this was as much a water raid as a pot raid. 

I remain skeptical of using water rights violations as a justification for marijuana raids, largely because marijuana cultivation remains at-best a gray-market activity, making it difficult for growers to comply with state environmental regulations without making themselves vulnerable to federal seizures and arrests.  And as with other regulatory realms, the state will struggle to enforce consistently:

A leading advocate for Northern California pot growers scoffs at the notion that the raid was environmentally motivated. "This isn't about the environment; this is about business as usual," says Hezekiah Allen, director of the Emerald Growers Association [...] "There are 2,200 un-permitted water diversions for wine grapes in the Central Valley," he points out, citing a state report, "so I am curious when we are going to see the sheriff show up and chop down un-permitted vines. If we are agnostic about what the crop is, the same crime should lead to the same activity. That is all we are asking, just to be treated like any other crop."

"Everything is Connected" - Thoughts on the Environmental Encyclical of Pope Francis

Photo: Aleteia.

Laudato si' is the second encyclical of Pope Francis, and the first that is considered entirely his work.  Encyclicals are letters written by the Pope intended to provide authoritative guidance to bishops (or occasionally a wider audience) on a particular question or issue of high importance, considered significant in part for their rarity.  Pope Francis' predecessor, Benedict XVI, wrote three in his eight years of papal service, and before him John Paul II wrote 14 in his 27 years.  Encyclicals are not produced lightly, and signal that the issues addressed are of high priority to the Catholic Church.

That Laudato si' is largely focused on the environment and its degradation is therefore a watershed moment for international environmental lawmaking and the human-natural relationship in general.  So far many (examples here, here, and here) are pigeon-holing the encyclical as a manifesto on climate change, and that's unfortunate.  I've written about the overshadowing effect climate change has on other environmental issues (see here and here), and Laudato si' appears to be falling victim to that dynamic.  In reality the encyclical is much broader, questioning fundamental assumptions about human society and our relationship with the earth - and ourselves.  In particular, Pope Francis expresses skepticism in humanity's collective trust in technological progress, free markets, and utilitarian materialism.  Give the Pope credit for one thing at least: he's not afraid to ruffle some feathers.

Interspersed with these weighty pronouncements are some environmental law and policy positions I find significant in part because Pope Francis eschews the typical platitudes found in many environmental advocacy documents, instead honing in on some very specific prescriptions.  

Take water law for example.  One of the fundamental tensions in water management is a seeming contradiction between privatizing water resources and taking advantage of market fundamentals on the one hand, and the belief that water is a common good and a human right on the other hand.  Jewish and Islamic texts generally perceive water as a common good (Sharia literally means "the way to water").  Here is Pope Francis' position:

Even as the quality of available water is constantly diminishing, in some places there is a growing tendency, despite its scarcity, to privatize this resource, turning it into a commodity subject to the laws of the market. Yet access to safe drinkable water is a basic and universal human right, since it is essential to human survival and, as such, is a condition for the exercise of other human rights.

A human right to water has been advocated for by many in the last decade, pushing back against perceptions (such as the Dublin Declaration in 1992) that water is an economic good.  Unfortunately a human right to a finite natural resource is easier to pronounce than operationalize, and few who advocate for a human right to water have come up with a policy that reconciles universal water rights with the realities of water scarcity.  The Pope offers one solution, at once obvious and elusive: wholesale lifestyle change and a rejection of practical relativism.  "A misguided anthropocentrism leads to a misguided lifestyle."  In other words, environmental change can happen only through self-change and a less consumerist way of life.

Contemporary notions of democracy are similarly challenged by the encyclical.  It is the short-term thinking of politicians and their constituents that prevents the long-term thinking prudent natural resources management requires in the first place.  Intergenerational equity is not a new concept, but receives little support from status quo institutions.  Here Laudito si' uses it not only to justify long-term thinking, but also to reject the cost-benefit paradigm that is prevalent in even liberal environmental circles:

Is it realistic to hope that those who are obsessed with maximizing profits will stop to reflect on the environmental damage which they will leave behind for future generations? Where profits alone count, there can be no thinking about the rhythms of nature, its phases of decay and regeneration, or the complexity of ecosystems which may be gravely upset by human intervention. Moreover, biodiversity is considered at most a deposit of economic resources available for exploitation, with no serious thought for the real value of things, their significance for persons and cultures, or the concerns and needs of the poor.

Here I think the Pope gives too little credit to the potential of market forces to internalize externalities.  Valuation of ecosystem services is challenging, to be sure, but methodologies are being improved upon every day.  At the end of the day, is internalizing external costs a more difficult undertaking than adopting wholesale lifestyle changes?  Certainly there is value in having a better understanding of the value ecosystems provide.

Ultimately the encyclical acknowledges the role and need for environmental laws, but remains deeply skeptical of the institutions in place to enforce them:

Whether in the administration of the state, the various levels of civil society, or relationships between individuals themselves, lack of respect for the law is becoming more common. Laws may be well framed yet remain a dead letter. Can we hope, then, that in such cases, legislation and regulations dealing with the environment will really prove effective? We know, for example, that countries which have clear legislation about the protection of forests continue to keep silent as they watch laws repeatedly being broken.

To me that's not a rejection of environmental law as much as an acknowledgement that environmental laws are a necessary but not sufficient condition for a healthy environment.  But the encyclical starts to contradict itself some by promoting the principle of subsidiarity (the idea that governance should be decentralized to take advantage of local knowledge and conditions) while at the same time rejecting policies that may be effective in one jurisdiction or another.  "There are no uniform recipes, because each country or region has its own problems and limitations." Yet the Pope rejects carbon credits because they "may simply become a ploy" for continued degradation.  They may, or they may not.  But it seems to me that local experimentation should be encouraged, and if political actors can compromise on a cap-and-trade program, well, let's see what they can do.  

At the end of the day, Laudito si' is a remarkable document for its scope and ambition.  Not only does it elevate "the environment" to a higher position on political priority lists around the world, it frames a wide variety of seemingly disparate global challenges through the lens of environmental degradation.  Laudito si' is being hailed as a climate change piece, but in his first major encyclical, Pope Francis has done much more than advocate for climate change action.  Laudito si' questions fundamental assumptions about human social order and our relationship with both the earth and ourselves.   

Haiti's Red Cross problem

Photo: IFRC

I'm in Haiti this week, splitting my time between Cap Haitien and Port au Prince.  Haiti has been in the news again lately, this time as a result of the NPR's investigation into the Red Cross' $500 million of disaster relief.  Much of the money has either not been spent, or was spent poorly or non-transparently:

NPR and ProPublica went in search of the nearly $500 million and found a string of poorly managed projects, questionable spending and dubious claims of success, according to a review of hundreds of pages of the charity's internal documents and emails, as well as interviews with a dozen current and former officials.

The Red Cross says it has provided homes to more than 130,000 people, but the number of permanent homes the charity has built is six.

Some of the allegations aren't as severe as they might seem.  Sub-contracting projects to third party organizations is decried as wasteful spending, but remains standard when managing large sums of development aid, for example.  Still, $500 million is a lot of money that should have been accounted for and closely monitored to ensure results were being produced.  In April I wrote a three part series looking at disaster law and displacement in Haiti.  I argued that most shortcomings were the result of three factors: 1) weak building codes and a lack of enforcement; 2) an archaic land tenure scheme; and 3) a multitude of NGOs operating outside the parameters of a guiding legal framework.  The Red Cross controversy is emblematic of all three factors, but especially 2 and 3.  

From the Red Cross' perspective, building homes in Haiti is a vastly more difficult undertaking than one would assume, largely because potential homeowners have a hard time proving ownership over land.  NGOs are hesitant to invest when the beneficiaries are ambiguous.  The NPR report too quickly dismissed land rights:

The original plan was to build 700 new homes with living rooms and bathrooms. The Red Cross says it ran into problems acquiring land rights.  Their internal memos, however, show there were other serious problems, including multiple staffing changes and long bureaucratic delays. And then there was a period of almost a year when the whole project appears to have sat dormant.

Anyone who has worked in international development knows how frustrating it can be to wait for approvals from higher-ups, but acquiring land rights, or at least obtaining documentation sufficient to verify title to property, is more challenging than it's being given credit for.

On the other hand, the absence of a framework capable of governing foreign organizations and their various projects in Haiti meant Haitians were at risk of being misled.  NPR touts the ability of one organization to overcome land tenure schemes by employing mostly Haitians, whereas the Red Cross struggled to build a Haitian-led team.  In other instances, Red Cross staff couldn't speak French or Creole.  And their financial history is vague at best, with most records kept private.  Even the Prime Minister couldn't obtain financial documentation to verify the Red Cross' claims.  A robust legal framework for managing NGOs and other international organizations as they conduct development projects is obtainable, and can provide safeguards such as language requirements or financial transparency laws.  

While not immediately apparent, governance and the rule of law play a large role in development.  One email from the Red Cross suggests they had more money than they knew what to do with:

"We still are holding $20 million of contingency," she writes in an email. "Any ideas on how to spend the rest of this? (Besides the wonderful helicopter idea?) Can we fund Conrad's hospital? Or more to [Partners in Health]? Any more shelter projects?"

My suggestion: invest in public administration and the Haitian justice system.

Links I Liked

Photo: Victortsu

1.  Architects defend the world's most hated buildings.  As compelling a defense of Paris' Tour Montparnasse as I've seen (though it's still an eye sore):

“It’s legendary for being the most hated building in Paris. I want to defend it not because it’s a particularly beautiful tower, but because of the idea it represents. Parisians panicked when they saw it, and when they abandoned the tower they also abandoned the idea of a high-density sustainable city. Because they exiled all future high rises to some far neighborhood like La Défense, they were segregating growth. Parisians reacted aesthetically, as they are wont to do, but they failed to consider the consequences of what it means to be a vital, living city versus a museum city. People sentimentalize their notions of the city, but with the carbon footprint, the waste of resources, our shrinking capacity, we have no choice but to build good high-rise buildings that are affordable. It’s not by coincidence that people are going to London now not just for work but for the available space. No young company can afford Paris. Maybe Tour Montparnasse is not a work of genius, but it signified a notion of what the city of the future will have to be.”

2.  The UN released its proposed Sustainable Development Goals last week.  The list is long, with 17 goals broken down into 169 targets.  Duncan Green has a good round-up of the pros and cons of setting a global agenda with so many objectives.  

3.  Genetically modified organism (GMO) technology is moving beyond plants and into animal applications.  A genetically modified mosquito that promises to eradicate dengue fever is receiving pushback in the Florida Keys, where the Florida Keys Mosquito Control District is waiting for approval from the FDA despite heated opposition from locals that aren't enthusiastic about being lab rats.  My first thought was: what effect will mosquito population control have on the balance of species in the surrounding ecosystems?  Apparently that concern is unfounded.

4.  While John Oliver's campaign against contract farming in the chicken industry is making headway, the avian influenza virus continues to cause staggering death totals for the chickens themselves.  The focus so far has been on the economic losses caused by the virus, but it's worthwhile to question whether the ubiquitous "concentrated animal feeding operation" model is sustainable long-term, and what role it plays in these outbreaks.  The USDA is keeping a running tally of the birds "affected" (i.e., slaughtered):

Regulating the drought in California, Ctd

Groundwater pumping in California.  Photo: General Physics Laboratory.

For the first time in the Public Policy Institute of California's polling history, Californians now list 'water and drought' as the most important issue facing the state, almost twice as important as 'jobs and the economy.'  No wonder, then, that water law reform is developing quickly.  Last week the state Senate passed a bill that would finally make data from well logs (showing well location and depth) a matter of public record.  California had been the only Western state that did not provide public access to well logs.  According to stakeholders, the drought has precipitated rapid shifts in public opinion on water regulation:

This is the third time that Pavley has introduced legislation to make the well logs public. The data have been restricted to the well owner, the Department of Water Resources, and selected state agencies for more than 50 years. The Legislature required well drillers to file the completion reports starting in 1949, but two years later lawmakers, at the request of well drillers who claimed the information was a trade secret, halted public access to the documents.

Times have changed. John Hofer, executive director of the California Groundwater Association, which represents well drilling companies, said the organization will not oppose the bill.  “We’re not going to stand in the way,” Hofer told Circle of Blue. “It’s not an issue for us now. We’re not going to fight it. It’s coming.”

The legislation is a good start, but remains incomplete for two reasons.  First, because while the logs are made public, the actual owners and users of those logs remain confidential.  Public shaming of excessive water users in Silicon Valley led to California tightening public access to water consumption records in the late 1990s.  Public shaming may not be the most effective route towards use reductions, but knowing who is operating and using wells is important for groundwater management.  And that leads to the second concern: California water laws still lack a mechanism to monitor and distribute actual extraction data.  In other words, well users still aren't required to report how much water they're using.  Until then hydrological models will estimate supply and demand, but the legislature still has work to do to make extraction data more accessible.  Still, if public opinion on the drought remains steady, more reforms to California water law are sure to come.  Stay tuned.

Who should have regulatory authority over marijuana?

The Mayor of Seattle signs an ordinance creating a regulatory framework for marijuana in the city.  Photo: Jen Nance.

Recreational use of marijuana is now legal in Colorado, Washington, Oregon, Alaska, and Washington DC.  Between now and election day 2016, an additional 14 states may place marijuana legalization initiatives on their ballots, including: Arizona, Arkansas, California, Georgia, Ohio, Maine, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, and Wyoming.  23 states and Washington DC have legalized medical marijuana, with up to seven states pending legislation.  In 2016 Florida is likely to again consider legalizing medical marijuana; a similar 2014 ballot measure narrowly failed to reach the 60% supermajority required.  

Amid the stampede to legalize marijuana production, distribution, sale, and use, states are experimenting with various regulatory schemes.  A central question in developing a regulatory framework for marijuana is: who should have authority to regulate it?  So far there have been a multitude of approaches.  Some states are proposing to create a new institution devoted to marijuana regulation.  Ohio's 2015 ballot initiative proposes a Marijuana Control Commission.  Pending legislation in California proposes an Office of Medical Marijuana Regulation responsible for creating rules, with local governments in charge of enforcement.  Elsewhere states are placing authority in an existing institution, such as the Oregon Liquor Control Commission or the Washington State Liquor Control Board.  Colorado uses a hybrid model in which local governments and the state legislature share responsibilities.  And some ballot initiatives require the legislature to decide at some future date where authority should lie.

The marijuana legalization movement is developing rapidly, but it's worthwhile for states to think about which of their many institutions is best equipped to handle regulation of the burgeoning marijuana industry.  There remains a great deal of uncertainty in this regard, but at the very least it seems clear there isn't a one-size-fits-all model available.  A relatively small state like Maine might be able to handle a centralized approach, concentrating regulatory authority in a state-level institution.  California, on the other hand, has a diversity of stakeholders with varying degrees of tolerance for marijuana cultivation and use, so a decentralized power-sharing arrangement, where local governments set the terms of engagement, makes sense.  

Regardless of the choice, it will be important for states to understand the limitations of their choice.  Local governments are typically not as well-funded, staffed, or equipped to handle administrative burdens as state-level agencies are.  On the other hand, state agencies tend to be less responsive to local context and might be overwhelmed themselves with state-wide regulation.  

Take California, for example.  A pending Senate proposal would establish a regulatory body - the Office of Medical Marijuana Regulation - that would create regulations and issue licenses.  Local governments would be responsible for enforcement.  The proposal is a poor approach in my view, as state-wide regulations may not be responsive to local conditions, and as a consequence, local governments may not be enthusiastic about their enforcement obligations.  On the other hand, the California Assembly is proposing to establish a regulatory agency that sets the rules, while various state agencies would be responsible for enforcement.  Again, the proposal doesn't maximize local knowledge and sensitivity, and this time, fragments enforcement responsibilities across departments, creating the potential for confusion or diffusion of responsibilities.  A better approach for California, in my view, would create a state-level agency dedicated to marijuana regulation that creates a basic regulatory framework and serves to support local governments in setting specific rules and developing enforcement capabilities by providing technical expertise and financial assistance.  In any case, adoption of any of these proposals is likely better than nothing.  California's lack of marijuana regulation does not bode well for the state's preparation if current polling accurately foretells full blown legalization in 2016.  

Some states are using existing mechanisms - like their liquor control boards - to create a smooth transition.  But marijuana is a unique industry, and may eventually require a more tailored regulatory framework.   The legal marijuana industry is the fastest growing industry in the United States, and may eventually become larger than the entire organic food industry, the NFL, or newspaper publishing.  Estimates of the size of the US black market marijuana industry range from $10 to 120 billion annually.  Slotting marijuana regulation into existing mechanisms might avoid messy transitions for now, but eventually states will have to come up with a more dedicated regulatory plan.  Where states choose to allocate regulatory powers is an issue that will require more attention than it currently receives.  

Regulating the drought in California, Ctd

California cabbage crops.  Photo: Naotake Murayama.

In a sign of how wobbly California's water law regime has become, farmers with long-standing water rights in the Sacramento-San Joaquin Delta made an offer to the state of California late last month in which they promised to cut their water use by 25%, in exchange for a promise from the state that no further reductions would be applied.  It was a shrewd and unprecedented tactic, considering many farmers hold decades or even centuries-old water rights.  Under California's hybrid prior appropriation/riparian system of water law, many farmers obtained their water rights by making use of waterways in the early 20th century.  Because older rights take priority over newer rights, older rights holders are virtually guaranteed their allotment, even in times of scarcity.  But this year's drought is so severe that state regulators are enforcing mandatory cuts on even the most senior water rights holders.  

And that prompted farmers in the Sacramento-San Joaquin Delta to negotiate the 25% reduction settlement, which the state agreed to last week.  The feeling is that while 25% cuts are painful, at least farmers can plan for those reductions with some certainty, and avoid a doomsday 100% reduction scenario.  This farmer sums it up well:

“For me, 25 percent I can handle,” said Gino Celli, who farms 5,000 acres of tomatoes, alfalfa and corn in the delta. “Anything more than that — man, I’m done.”

Said another:

“There is a threat that the state might try the unthinkable and tell us that we cannot use any of the water,” said Dennis Gardemeyer, a delta farmer who helped spur the deal. “I and almost everyone in the delta think that will result in all manner of lawsuits and they will not prevail, but there’s always that threat.”

Now that the framework for agricultural water reductions are in place, farmers will have to choose between a painful but feasible voluntary reduction, or roll the dice with their existing rights and potential litigation.  It seems all but certain that cuts to long-standing rights holders are forthcoming:

Other cuts are virtually inevitable for farmers who don’t participate, said Felicia Marcus, chair of the state Water Resources Control Board. [...] Further cuts will go beyond any that have ever happened before: “Senior [water rights] holders have never been cut as much as they will be this year,” Marcus said. “Lawsuits are inevitable.”

Under the deal farmers in the Sacramento-San Joaquin Delta had until today, June 1, to submit their reduction plans to the state.  It will be interesting to see how many of the region's farmers submit plans and how many of those plans get approved.  It's not clear at this point what the state's criteria will be for evaluating those plans, but a pragmatic approach would favor reductions that can be easily monitored and enforced, like foregoing a crop entirely or fallowing a field.  In some cases cutback orders are being enforced by the honor system, and as little as one fifth of farmers may be complying with mandatory water reductions.  Negotiated water reduction deals are promising, but reducing the monitoring and enforcement pressure on state regulators should be a central component to any lasting water law reform.  

Links I Liked

1. First, Listen to Wikipedia.  (h/t Blattman)
2. While anti-poaching debates weigh the pros and cons of legalization and regulation of the endangered species trade, one organization is injecting rhino horns with drugs that poison humans (but not rhinos).  More here (h/t marginal revolution).  Could the same be done to elephant tusks?  Surprisingly little is known about forest elephants.  
3. Your life on earth - how you and the world have changed since you were born.  (h/t Taylor M)

4. Last but not least, John Oliver slams Big Chicken companies for their heinous contract-farming-style treatment of chicken farmers. Said one farmer: "We need rules, and we need them now."  The House Appropriations Committee is meeting next month and may consider allowing the USDA to enforce already-written rules protecting farmers.

Cuba's New Environment: offshore oil and gas

Photo: United Nations Photo

When Cuba and the United States announced in December 2014 a mutual desire to re-establish and improve diplomatic relations, it was clear the process wouldn't take place overnight.  Members of Congress remain skeptical, while Cuba has a long ways to go to satisfy western standards for human rights and open governance.  But the writing is on the wall, and  governments and foreign investors are lining up for their chance to tap into the Caribbean's largest country (by population and land area) and its vast natural resources.  Last week French President Francois Hollande became the first European leader to visit the island since 1986.  He brought with him a contingent of French business executives, just as diplomats from Japan, the EU, and Russia brought their own private sector leaders in recent visits.  French oil giant Total is now rumored to have struck a deal to explore off-shore oil reserves in Cuba's waters.  More foreign investment agreements are sure to come this year.  

Lifting the Cuban embargo is sure to transform Cuba's economy, and in many ways, the mere anticipation of it already has.  But it will radically transform Cuba's environment as well.  The sectors most likely to see dramatic change implicate environmental laws and regulation that were not designed to absorb rapid changes: transportation, agriculture, tourism, and oil and gas development.  I will be following US-Cuba relations in the coming months with an eye toward what this all means for the environment.  First up: regulation of off-shore oil and gas development.

It would be too simplistic to say that lifting the embargo would be good or bad for the Cuban environment, and that's true of the oil and gas sector in particular as well.  On the one hand, economic isolation has likely depressed oil and gas exploration in Cuban waters, keeping sonar, construction, shipping, and drilling constructions out of marine ecosystems, while keeping fossil fuels in the ground.  The lack of activity means the likelihood of a catastrophic oil spill reaching the shores of Cuba or Florida is low.  On the other hand, a lack of diplomatic relations with Cuba means the US doesn't have a bilateral agreement in place to deal with an oil spill.  The isolation also prevents collaborative research between US and Cuban researchers from looking at ways to improve natural resources management and disaster planning.  Florida state law, for example, prohibits state university researchers from conducting research in Cuba or Cuban waters.  Lifting the embargo may reverse both trends, increasing oil and gas development as well as contingency planning and research.

Cuba understands that its energy status quo is not ideal.  It produces about half of its own oil, mainly for industrial use.  The other half it receives from Venezuela in exchange for healthcare support.  Relying on a single source for half of your energy needs is not ideal under normal circumstances, much less when that source is undergoing political turmoil, so Cuba has an interest in diversifying.  It has plans to increase renewable energy production (98% of electricity comes from fossil fuels), but sees its offshore oil and gas reserves as the path toward energy independence.  Cuba estimates that it's Exclusive Economic Zone (EEZ, waters over which it has oil and gas rights) contains around 20 billion barrels of undiscovered crude oil.  The US Geological Survey has estimated Cuba's EEZ to contain around 5 to 7 billion.  Either way, Cuba intends to find and develop its reserves, and has already partnered with China, Brazil, and Venezuela to develop critical infrastructure.  

There are reasons to doubt an immediate expansion of oil and gas development in Cuba, including low oil prices and new opportunities in Mexico.  But drilling is likely to occur sooner or later, and that's where US-Cuba agreements, regional disaster planning, and US laws are ill-prepared.  An oil spill off the northwestern coast of Cuba would hit Florida within 6 to 8 days.  And yet, Cuba and the United States don't have a bilateral agreement in place to deal with that scenario.  The US and Mexico have a bilateral agreement that regulates oil and gas development in the Gulf of Mexico, establishing safety standards, emergency protocols, and inspection procedures.  A similar agreement is needed to protect the Florida straits.  Domestically, US law impedes oil spill response by limiting the number of licenses issued to companies that are pre-approved to provide oil spill services in Cuban waters.  As mentioned above, it is difficult for researchers to study Cuba's coastal and marine environments without federally-approved licenses and visas.  And if a spill originated in Cuba's EEZ, the Oil Spill Pollution Act wouldn't be able to extract compensation for damages.  The Oil Spill Liability Trust Fund could provide relief, but it lacks meaningful and readily-accessible relief funds.  

Sooner or later Cuba's off-shore oil and gas reserves will be exploited.  Its reliance on Venezuela and a potential increase in demand from economic development and tourism will force it to uncover every rock.  Cuba can help itself by diversifying into renewable energy, particularly as a source of foreign investment.  Negotiations between the US and Cuba should prioritize cooperation over oil and gas development and emergency response, and come up with a treaty that enumerates safety standards, roles, and responsibilities.  Domestically, the US should make it easier for US companies to participate in oil spill response efforts, and ease restrictions on researchers to simulate environmental impacts and collaborate with Cuban universities.  The dominoes are starting to fall, and for the sake of the Caribbean environment and coastal communities in Cuba and Florida, international and domestic laws must be in place to minimize the damage.  

Cuba, the Bahamas, and Florida from space.  Photo: NASA