17 Feb 2012

Values and markets

In my book, I spend a lot of time discussing the importance of our "subjective, personal values" on water management.

Part I is called "personal water choices" because reasonable policies result in efficient and fair outcomes that reflect and reconcile our personal values without impinging on the values of others. Part II is called "social water choices" because our choices affect each other.

That means that I am really annoyed when people want to measure or manage values when it comes to urban, agricultural, and other uses in Part I. Their mission to measure these values is not just a waste of time in terms of operations (compared to mechanisms that reconcile values without knowing what they are) -- they are impossible to carry out. I can't find out how valuable a shower is to you (you may not even know yourself!)

There's an EU project, for example, on measuring "water use efficiency" -- something you can't measure without knowing values!

For Part II choices (environmental water, etc.), its also impossible to measure values, but those values are reconciled via social/political mechanisms -- in the same way that we decide how to manage other social or public goods.

Bottom Line: Values can't be measured; they can be marketed or managed (choose the right tool).