07 January 2014

Am I a prophet?

I don't think so, but BB sent this:
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)
So drought is back in 2014: California faces driest year on record -- 10-20 percent of normal precip. -- and it's the third year of drought. The human impacts of drought are more interesting than the natural impacts because drought (a temporary lack of precipitation, relative to historic averages) exposes the weaknesses in systems designed for abundance (and mentalities of entitlement).

It's not just farmers who miss their free water.
The sad thing is that these problems and their flawed solutions can be avoided. Here's how:
  • 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)
Bottom Line: Responsible water management means that users pay and shortages don't happen, drought or not.

H/Ts to SJ, DL, RM and DV

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