Water and Business

Cheap water has been used to attract business for years (centuries?), and we get headlines like this:

"The [Carlsbad] City Council may consider exempting some businesses from a water conservation ordinance that is being considered." (Here's a similar story.)

Exemption is not a good idea:

• It violates norms of equity ("we won't cooperation unless you do").
• Discourages efficiency (why conserve?).
• Reduces reliability by stressing supplies.

Instead, the City Council should make businesses pay the marginal cost of water. Even at flat rates, they will subsidize people, reduce demand and fund new water supplies from recycling, conservation and desalination. (Poseidon's desal plant is in Carlsbad.)

Bottom Line: Expensive water is cheaper than no water at all.

hattip to DW and DB