23 May 2009


KL asks:
Governor Schwarzenegger's "20x2020 Plan" calls for a 20 percent reduction in per capita water use by 2020. I'd love to hear any of your thoughts on it, i.e. does it make economic sense to you? Do you think the plan will work?
Here are a few thoughts:
  • There is some controversy over which sectors will have to use 20 percent less. If we are going for statewide reductions, ag will have to be there. Note that nobody is calling for 20 percent less environmental water
  • Ag:
    1. Clarify rights (retire paper rights and cut overallocation) and monitor/regulate ground water.
    2. Then cut rights by 20 percent.
    3. Allow trade or all-in-auctions so that those who do the best conserving make money.
  • Residential: Water use can easily fall by 20 percent, given that 50-70 percent of water is used for outdoor irrigation. I would:
    1. Get per capita consumption for state.
    2. Drop that by 20 percent.
    3. Allocate that "right" to districts in proportion to their residential population.
    4. Allow those with lower CURRENT consumption to sell their excess to "wasters"
    5. Penalize those who do not hit 20x2020 with something big and ornery.
  • Non-residential M&I: There seem to be three choices:
    1. Cut everyone by 20 percent.
    2. Apportion lower targets in proportion to residential over/under because non-residential use/efficiency will be in rough proportion to residential use/efficiency.
    3. Insert your good idea here.
  • Are there non-market problems to worry about? Not if markets keep water local (avoid third party/environmental impacts) and not if residential prices are complemented by water conservation options that allow people to find ways to use less without dying of thirst.
Put me in charge, and you can have 20x2012. Even better, my system (markets and prices) will minimize the costs and maximize the efficiency of remaining water allocation. :)

Note that there is a state hearing on 20x2020 in Sac on May 29. I will not be there, so feel free to propose any/all of these ideas.

Bottom Line: 20x2020 is too timid because it relies on changing "attitudes"/engineering solutions/command and control instead of allowing people to make/save money from using less water.


  1. WaterSource/WaterBank23 May, 2009 14:14

    20X2020 ... 11 years

    10X2020 in storage for water insurance ... ?

    If you are put in charge, may I suggest that you add 10 MILLION ACRE FEET in storage in Lake Mead by 2020 with assurance of the continued generation of 2000 megawatts of RENEWABLE ENERGY each year.

    I will like you charge ! You can charge whatever price you want for the water. I would encourage you to release enough water each year for the restoration of the Colorado River Delta and take its value of 2.4 Billion dollars off of your income tax as a denotation. While you are hopefully feeling philanthropic, consider a small gift of 68,000 acre feet for recharge purposes into the old section of the All American Canal to sustain the lives and livelyhoods of the 1.3 residents of Mexicali, Mexico.

    By 2020, you will indeed be a very popular appreciated CA/NV water czar...

    WaterSource waterrdw@yahoo.com

  2. If I have the job, I'll consider it :)

  3. 1) I can imagine that the ability to sell excess water that you're allocated will lead to more conservation, which is I assume the thrust of the proposal. But has there been any evidence/studies that show that this approach actually leads to more conservation?

    2) How much would you sell your excess water for? If my neighbor is a non-conservationists, how would I sell my excess to him? What is in it for the utilities?

  4. @note19 -- successful auctions of "excess" rights happen all the time. The most-famous pollutant version of cap and trade is the SO2 auction: http://en.wikipedia.org/wiki/Acid_Rain_Program

    Sales would be priced INSIDE an auction (no need to set prices) to those who bid the most for your excess water.


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