California's water deadline on Colorado River tests Newsom's leadership
Biden deadline will impose harsh cuts unless the state stops playing politics.
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California’s game of legal chicken with other Western states over precious Colorado River water is finally on the clock.
As Callaway Climate Insights warned in February, the state’s unwillingness to craft a solution with six other states, especially Arizona, over the past few years this week led the federal government to set a formal deadline for a deal. Gov. Gavin Newsom and California have enjoyed senior legal rights to a bigger share of the water from the drying river and so have not been incentivized to find a solution.
Now, unless it can come up with a better idea than an even distribution of cuts with Arizona and other states, that is exactly what will be imposed on it. There is little chance the government will side with California’s legal status and force cuts of more than 50% to Arizona’s supply, which would essentially stop a primary flow of water to Phoenix and Tucson. Forgetting the humanitarian and economic disaster that would cause, just look at the politics. Arizona is a Biden swing state. California is not.
The Feds cleverly waited until the end of a very wet winter in California, with many reservoirs full after years of drought, to impose their deadline. The Department of the Interior wants a solution in place by August. And it’s calling Newsom’s bluff. Yes, there will be lawsuits, but in existential situations like this, governments don’t fool around. Look no further than Switzerland’s mandatory merger of UBS and Credit Suisse just last month to prevent a global banking crisis, as the government ran roughshod over laws and stakeholder rights alike.
The water wars are finally here, at least in the U.S. West. Prices are rising and a new economic reality is forming over what we once thought was an endless commodity. How Newsom and California react in the next 42 days will tell us a lot about his (its) potential to lead in a time of crisis.
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In this Federal Reserve Bank of New York staff report titled Climate Stress Testing, the authors explore the design of climate stress tests to assess and manage macroprudential risks from climate change in the financial sector. This staff report highlights the need to consider many transition risks as dynamic policy choices, better understand and incorporate feedback loops between climate change and the economy, and further explore compound risk scenarios in which climate risks co-occur with other risks. In addition to identifying needed aspects of additional research, they also discuss the relative advantages and disadvantages of using market-based climate stress tests that can be conducted using publicly available data to complement existing stress testing frameworks. Authors: Viral V. Acharya, New York University; Richard Berner, Leonard N. Stern School of Business, NYU; Robert F. Engle, NYU, National Bureau of Economic Research; Hyeyoon Jung, Federal Reserve Bank of New York; Johannes Stroebel, NYU, NBER, Centre for Economic Policy Research; Xuran Zeng, NYU; Yihao Zhao, NYU.
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Words to live by . . . .
“April is a dog’s dream. The soft grass is growing, the sweet breeze is blowing and the air all full of singing feels just right.” — Marilyn Singer, author.