Quillagua is among many small towns that are being swallowed up in the country’s intensifying water wars. Nowhere is the system for buying and selling water more permissive than here in Chile, experts say, where water rights are private property, not a public resource, and can be traded like commodities with little government oversight or safeguards for the environment.Here are my comments:
Private ownership is so concentrated in some areas that a single electricity company from Spain, Endesa, has bought up 80 percent of the water rights in a huge region in the south, causing an uproar. In the north, agricultural producers are competing with mining companies to siphon off rivers and tap scarce water supplies, leaving towns like this one bone dry and withering.
- Make sure that some water rights are held in situ.
- Limit annual exports from a basin.
- Relax (1) and (2) as people figure out what's happening.
Bottom Line: "Market failure" means that markets deliver the "wrong" results (e.g., pollution from driving cars), but some markets fail because of "government failure." Don't blame markets when governments (through incompetence, ideology or corruption) screw up.