This bit from your first book caught my eye as I was re-reading it this morning after driving through the Westside on I-5, with Dust Bowl and water allocation cut signs posted everywhere by farmers:
As I write (in early 2011), California is experiencing its heaviest precipitation in years, Australian reservoirs are spilling excesses, and the Mississippi river is flooding nearby farmlands. Does that mean that Californians, Australians and other people in water-stressed areas can ignore this book? No. First, drought will probably return to California, as it has in the past. The tools for managing scarcity will be useful when that happens. Second, tools that handle droughts can also work with floods. Robust institutions can allocate dry land just as well as they allocate scarce water.
|Someone forgot to bring the snowpack! (Photo by RM)|
It's not just farmers who miss their free water.
- Water companies that recover costs through water sales are losing money.
- California politicians seem to think that spending money will "make" water (as they do in Texas), but those "solutions" may be more costly than the water they create (especially when costs go to tax payers) and not even work -- as when red algae blooms disable desalination plants.
- Some water managers seem to think that lawsuits will solve the problem, as if burning money on lawyers' fee and perhaps moving money from one district to another will end shortages. Lawsuits only distract them from doing their jobs, i.e., preventing shortage.
- Price retail water service so fixed revenues cover fixed costs (e.g., pipes and plants) and variable revenues cover variable costs (e.g., making desalinated water or pumping water). Add an additional surcharge when water is scarce (i.e., to reflect the of of using water now that you may want later). That surcharge can be rebated to customers (by meter, not according to use) if the utility has no deficits
- Use markets to allocate irrigation water among farmers who cannot take more than sustainable volumes from surface or ground water
- These two mechanisms (for retail and wholesale water) will ration demand to prevent shortages
- Stop listening to people who promise something for nothing (free groundwater) or spend other people's money (water and money imports)
H/Ts to SJ, DL, RM and DV