17 Feb 2009

Drought and Economic Meltdown

Tom Graff of EDF asks:
Can we use the attention the drought has focused on water to address long-term issues, including most notably the effects of climate change, simultaneously with the focus on addressing this year's immediate drought-related problems?
...and here's what I said:
Now is the time to introduce the radical (!) notion of markets for water in the agricultural sector. Markets would allow ag to reallocate 80% of "our" water among themselves without getting into the pain of ag-urban or ag-enviro transfers.

With a drought AND poor economy, it makes sense for ag to improve the allocation/pricing of its most important input.
Obviously, functioning ag-water markets would reduce the cost of ANY transfers (forced or voluntary) from ag to urban/enviro uses.

They would also push back the day when California can no longer grow food for lack of snowpack and preciptation.

Bottom Line: Markets serve all those who use them. Farmers need water markets if they are to prosper in the new era (well, since the 1970s) of water scarcity.