Abstract
As the title suggests, this is a case study of the eventual collaboration between the City of New York and the communities in the watershed that has supplied it with clean water for over a century. This collaboration has been suggested as a model for other cities and countries. The book represents the synthesis and culmination of a decade of work by Professor Hoffmann on the New York City Watershed Collaboration. Case studies, especially thorough and detailed ones, are not typical in the economics profession. However, for people who actually want to help solve societal problems rather than just theorize about them, this type of detailed analysis is critical.
The main question of the book is how to build institutions that meet both environmental and economic needs and thus contribute to sustainable development. While there is a wealth of economic literature on environmental policies and policy instruments, they typically ignore the fact that the real world is complex and interdisciplinary and thus provide little guidance to actual decision makers about how to design policies. The collaboration described in the book does not represent an optimal solution, but rather a cooperative solution that was workable and effective.
The book begins with an overview of general water quality, quantity, and timing issues. Water issues will become increasingly important due to climate change. Chapter 1 briefly summarizes the water quality issue but focuses primarily on the reasons why cooperation is needed for complex environmental problems. There are a variety of market failures associated with water, but issues such as nonpoint source pollution, uncertainty, and the interaction between the environment and the economy mean that policies typically recommended by economists will not work. Throughout the book, Hoffmann stresses that inequity between residents of the watershed and those of New York City was a fundamental characteristic of the problem that needed to be addressed. It meant that residents of the watershed were not able to afford new regulations, and this was an important source of conflict. New institutions were needed and the chapter discusses the literature on collaborations.
Chapter 2 explains the organizing vision of the New York City collaboration and the factors that influenced its design such as individualistic cultural norms and existing regulatory policy. She gives a history of water issues and institutions in New York, and the United States more generally. This history, especially the use of eminent domain by the City to acquire land in the Catskills at the turn of the previous century, fundamentally affected policy options in the present. In the watershed, “legends of loss” were shared across generations which created resentment and mistrust that had to be overcome. This is in addition to the more general rural/urban conflicts that exist in the United States. Current federal regulations for drinking water, which would have required the City to build a filtration plant at a cost of six billion dollars, plus operating costs, provided the impetus for the collaboration.
Chapter 3 explains the concept of sustainability and criteria for sustainability and then asks whether collaborations, such as New York City’s, meet the criteria or at least lead to more sustainable economic development. The chapter includes a list of design ingredients and then compares the collaboration design to this ideal. She also discusses the collaboration as a potential green milieu, a learning network in support of sustainability. The chapter also includes a discussion of the main environmental policy instruments and to what extent they were used in the collaboration and why (or why not).
Chapter 4 discusses rural, agricultural, and forestry issues. For those without rural backgrounds, this can function as a primer for some of the major differences in the economic environment. Rural areas have low wages, small firms, low density, and poor roads. She also discusses U.S. agricultural policy and for the most part gets it right. Given the importance of the dairy industry in the watershed, I find it interesting that she does not mention how labor-intensive it is, which might be an additional explanation for farmers leaving the industry. I also think it would have been useful to explain the farming system(s) in the area.
Chapter 5 gets to the heart of the book, how the collaboration was implemented and what problems were encountered and overcome. Local implementation was important since people in the watershed would have better information but in addition, employing local people transferred money to the area and increased goodwill and trust. The learning curve was steep for staff of collaboration organizations, local government officials, businesses, forest owners, and other residents, so a variety of educational efforts were employed to improve technical and communication skills. Building or upgrading waste water treatment provided some jobs and quickly contributed to improved water quality. Septic tanks were also replaced or repaired. Whole farm plans were developed to reduce agricultural pollution, and participation was high but the plans were probably overly complex and ambitious. One of the issues highlighted was the importance of incentives for maintenance of infrastructure and best management practices. There were also economic development activities such as loans for new sustainable businesses. The process of collaboration was important since problems arose during the implementation period and adjustments and compromise were necessary. A variety of meetings and websites kept people informed.
Chapter 6 focuses on how the watershed collaboration both generated and resolved conflict. The design of the collaboration provided incentives for people to work things out informally but they also had recourse to the legal system. The chapter discusses some of the general literature on conflict and the high cost of conflict and conflict resolution. She then discusses some specific examples of conflict, both daily small ones (signs that implicitly asked people to spy on their neighbors) and others that developed due to the cumulative impact of individual actions. For example, individuals selling land to the City resulted in a patchwork of land ownership that had negative consequences for ecosystem services and economic development.
Chapter 7 evaluated the collaboration’s progress on environmental, process, and economic goals. It was generally successful as far as improving water quality and improving, or at least not having detrimental effects on, incomes, employment, and other economic measures. It would have made more sense to put the environmental and economic evaluations together rather than separated by the process section in both this chapter and the next. The collaboration was also successful as a learning machine that adapted to new issues and functioned as a green milieu that promoted sustainable development. To some extent the success of the collaboration depended on individuals doing their jobs well and being committed to the larger community.
Chapter 8 summarizes the lessons learned. While the detail in the rest of the book helps to understand the issues at a deep level, this is a very useful summary. I imagine I will reread this chapter from time to time as I think about environmental policy design.
Professor Hoffmann’s book shows how detailed, on-the-ground knowledge can inform research questions asked, what data are collected, how data is analyzed and interpreted, as well as developing policy design recommendations. She also developed relationships in the watershed that helped her understand and interpret puzzling results that the data alone could not answer. The book shows a pragmatic way forward for some complex environmental problems.
I think that a graphic that showed the polycentric nature of the collaboration, and the directions of formal and informal influence, would have been useful. I would have also liked to see some sort of prioritization of the various activities and design elements (e.g. what gave the most bang for the buck) so that less well-endowed cities would be able to better take advantage of New York City’s experience.
In some ways, the New York City watershed is unique. Its history and the rural/urban cultural differences meant that conflict was greater than in most watersheds, which increased the need for compensation and communication. On the other hand, the City is large and wealthy, so it was able to pay for environmental services. This case study should be required reading for new employees in the watershed organizations. However, the nonpoint, complexity, and rural/urban issues are typical of most watersheds so the book will be of broad interest to people who are interested in water quality issues and ecosystem services. It will be of special interest to people interested in environmental policy design and implementation. It will also be useful to people conducting research on conflict and potential institutions to address it. While the book is written by an economist, and has some economic analysis, it is written to be accessible to interested lay readers and to researchers from other social science and science disciplines as well as to extension personnel and people who work in nonprofits.