25 January 2013

Yes, it's time for water markets

DL sent me this article on drought in the US. I put a few "fear" words in bold:
Water use is already tightly curtailed in many states. Years of low rainfall and high heat - last year was the hottest on record for the United States, according to the National Oceanic and Atmospheric Administration - have diminished surface waters even as population and water demand expand.

As well, agricultural and oil and gas interests are pumping the precious commodity from underground aquifers at a pace that often cannot be matched by natural replenishment.

"Water has been viewed as a basic commodity, a basic right," said Les Lampe, a water expert with consultancy Black & Veatch. "You turn on the tap and water comes out and you don't pay very much for it. That has to change."

Farmers are feeling the pain of water shortages most acutely. After multibillion-dollar crop and livestock losses tied to last year's drought, they fear more losses are coming...

State officials said this month that without enough rain by spring, rice farmers could be completely cut off from irrigation, jeopardizing about 2 percent of the U.S. crop and about $1 billion for the Texas economy.

"We've got a shortage of water," said Ronald Gertson, a rice grower and chairman of the Colorado Water Issues Committee. "People are going to be both hungry and thirsty before they wake up to this problem."
Notice that you do not get these words when it comes to talking about commodities that are allocated in markets (oil, housing, ice cream, etc.) because the goods are allocated by high bidders, not by politicians. That's what we need to do with water, if we want to allocate it. Leaving to local politicians or -- heaven forbid! -- Congress is MOST likely to leave us hungry and thirsty.

Bottom Line: Allocate economic water (i.e., NOT environmental flows) in markets and stop wasting time with lobbying. All-in-auctions [pdf] will do, of course :)

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