31 Dec 2015

The Economics of Flooding

The central narrative of the recent floods in Ireland and Britain is based on the severe weather. In fact a number of changes have happened that have contributed to the failure of flood defences.

1. Failure to Dredge.

The European Water Framework Directive in 2000 has stopped virtually stopped dredging of rivers and made disposal of spoils extremely expensive by reclassifying it as hazardous waste. The blog of the right-wing think-tank, the Adam Smith Institute, discussed this problem on the 29th. They cite this:
But all this changed with the creation of the Environment Agency in 1997 and when we adopted the European Water Framework Directive in 2000. No longer were the authorities charged with a duty to prevent flooding. Instead, the emphasis shifted, in an astonishing reversal of policy, to a primary obligation to achieve ‘good ecological status’ for our national rivers. This is defined as being as close as possible to ‘undisturbed natural conditions’.
‘Heavily modified waters’, which include rivers dredged or embanked to prevent flooding, cannot, by definition, ever satisfy the terms of the directive.
So, in order to comply with the obligations imposed on us by the EU we had to stop dredging and embanking and allow rivers to ‘re-connect with their floodplains’, as the currently fashionable jargon has it.
The upshot is that rivers now hold less water because they are shallower. This drastically increases the risk of flooding. The failure to dredge is not a new issue.

2. Clearing of Watersheds

The burning and draining of grouse moors upstream from towns in Yorkshire including York and Hebden Bridge. This issue was explored by George Monbiot in the Guardian Newspaper.
In 2002 Walshaw Moor, a 6,500-acre grouse shooting estate upstream of Hebden Bridge, was bought by the retail tycoon Richard Bannister. Satellite images before and after [right] show a transformation of the land: a great intensification of burning and draining. These activities raise the number of grouse, which in turns raises the amount (running into thousands per person per day) people will pay to shoot them.
When one destroys the vegetation on the moors and at the same time improves the drainage, any rain that falls rapidly makes it's way into the major water ways. With the kind of heavy rain that we have been experiencing in the last two weeks this means flash floods as the banks of the rivers are over-topped.

It appears that the government has collaborated in this, or at least not acted to prevent it.
For several years campaigners in Hebden Bridge have been begging the government to stop the drainage and burning of the grouse moors upstream. 

3. Cuts to spending on the construction of flood defences.

Finally as left-wing commentator Owen Jones explains, also in the Guardian, that the government has cut spending on flood defences in order to contribute to "living within our means" as the Chancellor puts it.
As official documents now show, the government’s own advisory board recently pointed out that a lack of funds would leave northern communities at risk of floods. One £180m floods defence project was scrapped in Leeds, for example.
By failing to improve flood defences the government has allowed this crisis to happen. Instead of spending the money on prevention they are now spending it on mitigation. And if they can find it now, then why could they not find it before? Part of the reason is that it shifts the risk to the public sector.

Also the government gets no credit for getting it right. If flood defences work there is no news story. Disasters make the news, disasters averted do not. Thus, rather cynically, the government gets more credit for flood relief than for flood defence, and most of the costs of the disaster are born by insurance companies, whereas only the government contributes to flood defence. Unfortunately people who were flooded last year are now unable to get insurance. So who pays for the damage?

Jones segues into a more general critique of the government's response to climate change. They have cancelled subsidies for green alternatives to energy production and let the contract for building a nuclear power station to the Chinese rather than investing in local businesses.


So yes, we are having extreme weather at the moment. But the government has not taken appropriate action to prevent flooding, indeed it has been negligent and recalcitrant in taking the actions necessary to prevent exactly the kind of disasters that have wrecked this Christmas for many people in the North.

This is the problem with ideologically driven policy. It ignores reality and legislates on the basis of a fantasy world. It's important that we place the blame for the failure of flood defences where it lies - squarely with the government. The previous government are certainly complicit, but the current government have made things considerably worse.

UPDATE 3 Jan 2016

For an alternate view on the best approach to flooding see this article in today's Independent (via ). The approach of a town called Pickering, North Yorkshire adopted an approach to flooding that slowed rain's passage from surface to waterways using a series of "leaky" dams.
They built 167 leaky dams of logs and branches – which let normal flows through but restrict and slow down high ones – in the becks above the town; added 187 lesser obstructions, made of bales of heather and fulfilling the same purpose, in smaller drains and gullies; and planted 29 hectares of woodland. And, after much bureaucratic tangling, they built a bund, to store up to 120,000 cubic metres of floodwater, releasing it slowly through a culvert. 
Note however that the second point above the clearing of grouse moors is still problematic. Pickering partly alleviated their problem by planting vegetation. On the grouse moors the drains are designed to rapidly deliver rain to the larger waterways. Pickering took the opposite approach with their leaky dams, slowing the progress of water so that they avoided the flash floods than inundated other towns in Yorkshire.

What is interesting about this is that it is a much cheaper that modern flood defences which are often in the form of solid barriers, which work well up the point of failure and then fail catastrophically. The system used in Pickering could fail more graciously because less was riding on any one structure - distributing the flood defences upstream rather than focussing efforts on the flood plane itself demonstrates an important principle when it comes to defending against natural processes.

A nuanced discussion of the pros and cons and applicability on a larger scale follow. A rare case of some well researched and presented journalism.

30 Dec 2015

Moralising Tories Exposed as Racists

Interesting to see the news this morning about secret cabinet documents revealing deeply racist attitudes in the Thatcher government.
Oliver Letwin: Minister apologises after newly-released papers reveal 'racist' attitude towards black rioters. Independent.
I'm not sure why the Inde has placed racist in scare quotes. The attitude in the memo is straightforwardly racist.

That the Tories blame everything on "bad character" rather than, say, the effects of colonialism or slavery or just the prejudice and hatred that immigrants experienced in Britain is also telling.

On one hand its an example of the Attribution Fallacy that blames bad behaviour on bad intention or character. Something that social psychologists showed was wrong decades ago. This is part of the baleful legacy of Freud and his Romantic view of humanity - that we are all driven only by internal urges and that our environment does not shape us. This is totally wrong. Environment is at least as important as intention in shaping behaviour. Western Buddhists are also deeply affected by Freud's fallacy, sometimes more so since they seem to gel with our own preoccupations with self (though of course we paradoxically deny the existence of the object of our obsession).

It is also a classic aspect of conservative morality to see the poor and people of colour as basically immoral - no matter that the conservatives helped to make them poor (both now and in the past). That poor people of colour are lower down the scale of the conservative's (1985) value system doesn't really tell us anything new, I suppose, but it does nicely punctuate the point I was making last week about colonialism and attitudes to the colonised and enslaved. Letwin seemed to be saying that at least the poor white English people knew their place and stoically accepted the harsh conditions imposed on them, whereas by fighting back the black residents of London were doing something terrible. The class system requires that the oppressed stay oppressed, that everyone knows their place. And that is one of the major problems with immigrants - they don't understand the class system and so they don't stay in their place. Similarly trades unions were upsetting the balance of power and had to be put back in their place.

The question is, have things really changed in the intervening 30 years? On the surface the politicians seem to have changed their tune, but many of the social problems caused by poverty, lack of affordable housing, jobs and opportunities etc remain, suggesting that they have not been addressed.

The fact that Britain and Europe seem to be leaning to the political right these days is not an encouraging sign of a bright future ahead.

22 Dec 2015

Household Debt is Soaring

The Indepedent is today reporting figures from the Office for Budget Responsibility.
The OBR statistics showed households spent £68.9bn less than they earned in 2009-10. The figure fell to £67bn in 2010-11, £35.7bn in 2011-12 and £27bn in 2012-13. The following year Britain’s families went into the red to the tune of £12.4bn, rising to £29.4bn in 2014-15.

The OBR projects that households will spend £40bn more than they earn this year (2015-16), increasing to £40.4bn in 2016-17, £43.9bn in 2017-18, £48.6bn in 2018-19 and £49.5bn in 2019-20. Total household borrowing is set to reach £222bn over the lifetime of this parliament.
And what this tells us is that present level of GDP growth is unsustainable. We are heading for another balance sheet recession as explained so eloquently by Richard Koo (see video below). What will happen is that at some point consumer spending is going to slow drastically as households switch from spending borrowed money to focussing on paying down debt.

When consumers stop spending then retail will slow drastically. The dominoes will begin to fall. The government is committed to not preventing this. In fact by helping to inflate asset prices, particularly housing, they are contributing to the problem.