We need to raise the price of water

by Randy Simmons

Last January, California Governor Jerry Brown declared a State of Emergency following projections of severe drought. State bureaucrats and local officials jumped into action and mandated any number of water conservation tactics. While some have been relatively successful, most will do nothing. In fact, it appears that despite the drought, water use may have actually increased in the past year.

So, exactly how much do Californians value their decreasing supply of drinkable water? According to the California Water Service Company, it is valued at less than a penny per gallon. If water were plentiful, an almost-zero price would not be a problem, but under the current situation it is truly a catastrophe. The average American uses 100 gallons per day, Californians average 124, and in some regions of California up to 379 gallons per person per day. That sounds a bit outrageous for a state experiencing a drought of Biblical-plague proportions, doesn’t it?

The solution to rectifying California’s abysmal water conservation record might be found in California’s agricultural sector. In just the past year, prices for irrigation water have risen from ten to almost forty times last year’s price. Those who have the water to spare can make a sizable profit by selling it to those who need it. Thus, because the value of water has significantly increased, every gallon is a precious commodity that is not wasted.

But won’t raising prices only hurt the poor and have little effect on those who have the money to afford it anyways?

Charging more for water need not create undue hardship for poor or lower middle class families. Establish a minimal per capita water use level and then charge progressive water rates so that any extra water used is billed at a higher rate. This allows consumers to choose if they are willing to pay for an extra long shower, to water their lawn or to wash their car.

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Randy T. Simmons is a political scientist who emphasizes the importance of economic reasoning to better understand public policy. He believes the study of politics cannot be separated from the study of markets. Simmons uses this framework to evaluate environmental and natural resource policies.