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Mark Eiswerth

Mark Eiswerth, Ph.D., Associate Professor of Economics, studies how environmental resources — including Colorado’s water — are allocated. Photo by Woody Myers

December 21, 2018

Calm Water

Economics Professor Mark Eiswerth seeks solutions to complex — and sometimes contentious — environmental issues by considering human values and motives.

UNC Environmental Economics Professor Mark Eiswerth, Ph.D., is a fourth-generation Coloradan from a family that includes loggers and ranch cowboys (his grandfather was one of the first geophysicists in the West). As an economist and co-director of UNC’s Environmental and Sustainability Studies program, he’s acutely aware of how different values and interests affect quality of life and drive the economy.

Questions raised by the topic of environmental economics, which Eiswerth defines as “the study of how environmental resources are — and should be — allocated among competing demands,” make for engaged discourse in his classroom. Eiswerth poses environmental conundrums and then gives his students free rein to dissect, discuss, explore and debate the options. 

“We talk about water in Colorado. We look at the forecasts. We look at some of the decisions being made,” Eiswerth says.

Concerns about water use and conservation in a state that averages 15.5 inches of rain a year are complicated by those environmental economics — competing demands between farmers and city dwellers, industrial users and recreationists. And it’s not going to get easier. The Colorado Water Conservation Board predicts there will be a 20-percent shortfall by 2050 when the state’s population is expected to reach 10 million. 

As a water resource economist, is Eiswerth alarmed? Outwardly not.

He’s concerned about the future, of course. But after nearly four decades of study, he’s still upbeat, open-minded and confident about the next generation’s problem-solving abilities — and he gives his students opportunities to practice.

“I try to teach them a little bit about how to facilitate a discussion among people with competing interests,” he says. “I say, ‘God willing, you guys are going to be around a lot longer than I am, so I want you to be able to do these things after I can’t.’ ” 

“It’s important to learn how to be a citizen — or to be a stakeholder — that’s the bottom line, because everybody drinks water. Everybody eats food. Everybody takes a shower.”

Eiswerth’s doctoral research involved pollution impacts and pollution management decision-making.

He looked at how to mitigate damages when, for instance, deciding between dumping waste in a landfill or incinerating it. Neither is ideal. So how do you choose? It may not strictly be a monetary decision, he says. It’s also about environmental values and doing the least harm.

In the 30 years since, Eiswerth has studied problems coast to coast, applying his analytical skills across issues from water pollution to habitat. There’s an economic component to every conceivable problem, he says.

Sustainability experts grapple with big issues like how to cost-effectively secure, protect and allocate resources. But secondary impacts Eiswerth calls “externalities” occur whenever we produce or consume goods and services. One externality of cheap, plentiful city water might be that homeowners overwater their lawns. It’s wasteful, of course, but it also could cause soil erosion or allow for pesticides and street pollution to enter waterways, degrading water quality for those downstream.  

Eiswerth studies what economists call “payments for ecosystem services.” Financial incentives, such as payments for water-based ecosystem services (PWES), could be the carrots that motivate farmers, who control 80 percent of the state’s water, to put in buffer strips around their fields to reduce runoff, or to limit pesticide applications, allowing them to return a higher quality of water to the stream. 

Eiswerth points out that one positive externality of getting even a single producer on board might be that neighboring farmers become interested, too. And that’s starting to happen. Worldwide, there are more than 400 such PWES programs in play, with several pilot projects in the U.S., including Colorado.

From a commodity perspective, water is interesting because its value depends on how it’s acquired and how it’s used. Cities, towns and developers are buying land with irrigation rights, then converting the water to municipal use. Utilities then set the price of water for residents, with some regulatory oversight.

“It’s not a free-market system,” explains Eiswerth. “It’s more of a regulated monopoly, so the price isn’t determined fully by the laws of supply and demand.” 

Admittedly, water law in Colorado is simple in theory and complex in practice. Colorado law specifies that once water is diverted away from agriculture, it can no longer be used to grow crops. Essentially, the farmland dries up — even in wet years when a city might have surplus water that it could lease back to farmers.

And the oil and gas industry has its own set of environmental and economic concerns about water used in fracking operations. The water is disposed of by injecting it deep into wells since chemical additives make it unusable for other purposes.

“Something I ask my students when we talk about water law is, ‘Do you think it should be changed?’ People are really split about this, and it’s a hard thing to answer because it’s so complex. There are a lot of barriers to changing laws,” Eiswerth says.

“In the West, we have been working to develop various markets for water in order to allow for transfers and leases.”

What intrigues Eiswerth is how future economists will tackle such problems. He’s enthusiastic about his field and the opportunities it presents to future graduates.

“There’s a need for people who are trained to think about these issues — and who want to think about these issues — across space and across time. You can go to Washington, D.C., or you can stay right here and use [economics] in government, business, nonprofit,” he says.

With a bevy of students each semester to challenge him, he wholeheartedly believes in the next generation.

“My job is to figure out interesting ways to elicit other people’s values and preferences,” he says. “We all have ideas of what’s most important. I can’t play favorites in class. I’m happy if students go through class not sure exactly where I stand.”

It’s relaxed and respectful dialogue that allows people to see things in new ways. It opens the door to shifts in perspective.

“I’m not really looking to change minds,” he says. “I’m just trying to facilitate the process of discussion, discovery, and making wise collaborative decisions.”

–Betsy Lynch