This summer, California’s water authority declared that wasting water — hosing a sidewalk, for example — was a crime. Next door, in Nevada, Las Vegas has paid out $200 million over the last decade for homes and businesses to pull out their lawns. It
will get worse. As climate change and population growth further stress
the water supply from the drought-plagued West to the seemingly
bottomless Great Lakes, states and municipalities are likely to impose
increasingly draconian restrictions on water use. Such
efforts may be more effective than simply exhorting people to conserve.
In August, for example, cities and towns in California consumed much
less water — 27 billion gallons less —than in August last year. But
the proliferation of limits on water use will not solve the problem
because regulations do nothing to address the main driver of the
nation’s wanton consumption of water: its price. “Most
water problems are readily addressed with innovation,” said David G.
Victor of the University of California, San Diego. “Getting the water
price right to signal scarcity is crucially important.” The
signals today are way off. Water is far too cheap across most American
cities and towns. But what’s worse is the way the United States quenches
the thirst of farmers, who account for 80 percent of the nation’s water
consumption and for whom water costs virtually nothing. Adding
to the challenges are the obstacles placed in the way of water trading.
“Markets are essential to ensuring that water, when it’s scarce, can go
to the most valuable uses,” said Barton H. Thompson, an expert on
environmental resources at Stanford Law School. Without them, “the
allocation of water is certainly arbitrary.” Two
studies to be presented at a forum next week organized by the Hamilton
Project at the Brookings Institution and the Stanford Woods Institute
for the Environment make the case that markets and prices are an indispensable part of the tool kit to combat scarcity.
They are essential to induce both conservation and investment in
water-saving technology, and to steer water to where it is valued most...more
My, my the NY Times is discovering water markets, even though the Property and Environment Research Center (PERC) has been writing about them since 1983. Check out this list of their water publications.
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