11 Oct 2013

BC needs water markets AND good regulations

Maude Barlow, the well-meaning but misguided "Voice of the People" said recently that
[British Columbia may introduce] water trading... which would be a terrible mistake... [because water licenses are converted] into private property... The idea is if you can make money selling your extra, you’re going to be more efficient with the water you use. Then you’re able to hoard, buy, sell, trade those water rights, that property with other water users...

But in fact, where it’s been tried around the world, most particularly Australia and Chile, what’s happened is that the big users come in and gobbled up the small users because they have more money And then the big investors come in and start buying up those water rights, and then the international investors come in. And in Australia, the price of water went through the roof. And when the government, years later tried to buy back those water rights, they couldn’t afford it.
In response to this, I left the following comment:
It's interesting that Maude begrudges the fact that markets lead to higher prices when water is scarce, as if small, poor farmers are better at producing food with water. I agree that small farms are nice, but they need to get explicit subsidies if that's going to be a public policy. On the Australian government's cost of repurchasing rights, I'd suggest that those high prices were REALLY designed to help farmers (oh, and those would be the small farmers who OWNED rights before the prices rose in the big farm selling spree) to recover from the loss of water for irrigation.

I'm surprised that Maude didn't add that the Australian government HAS taken water back, by lowering yield (wet water) on licenses.
I went on to add some comments, in which I agreed with her, i.e.,
I agree that BC needs stronger controls and regulations, but that's never been a concern in this company province. Loggers and papermills caused damage; now oil and gas are. It IS time for Canadian industry reduce their water pollution, whether by regulation or taxes on discharges.
How can we square the circle? Well, Maude outlines the choices:
...whether it will be through markets or whether it will be through public trust is really up in the air... What we’re really needing, here in British Columbia, is for groundwater and surface water to be protected as a public trust for all time.
I'm pretty shocked that Maude thinks that ALL water should be controlled under public trust, since that implies that all the water belongs to the people as a collective. Such a regime would exclude the private use of water, whether that be for irrigation, industry, fracking or municipal water services. It would mean, in other words, that water would need to flow from mountain top to ocean, without any human diversions.

That's a bit strong, so I'd suggest that we go with the common sense middle ground that Maude does not appear to accept: some water should go to private uses, while the rest should stay in the commons, as public trust flows that keep the environment healthy. Those flows should be quantified (perhaps leading to a reduction in private diversions) as well as protected by insuring that various uses do not pollute surface and ground water in the commons.

I know that BC does not currently have a good handle on quality, and it can do a lot better. Next time, I hope that Maude calls out BC regulators for failing to protect the common flows that exist, rather than making a grab for the private water that flows in our taps, irrigates our fields, and underpins a lot of industrial activity.

Bottom Line: British Columbia can do a better job regulating and improving water quality. The government may even need to change the way that water is divided between private and public uses. No matter its actions, markets can improve the way we manage private water, to ensure that scarce water goes to the best economic uses.

H/T to MY

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