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American intellectuals propose raising the price of water to fight the drought in California
Recently, we talked about the drought in southwestern Australia. California is also experiencing a drought and there are already voices being raised, demanding a higher price of water, to motivate people to reduce their consumption.
A few weeks ago, California governor Arnold Schwarzenegger declared a state of emergency and warned of possible cuts in water supply due to a third year of drought. This warning should not come as a surprise.
Whenever prolonged droughts occur, authorities give passionate speeches, declare emergencies and impose water use restrictions. They often prohibit watering lawns and make recommendations for companies to prepare emergency plans in case of not having enough water. Exceptions are also announced, such as a few years ago in Maryland, when car washing businesses were allowed to continue their activity.
Droughts always have an ending and when it comes, water consumers go back to their daily routine, treating water as if it wasn´t a limited resource. Efforts to conserve this liquid element become a thing of the past, until the next drought, until the next unnecessary crisis. Isn´t there another way of doing things?
The answer is yes, if we are prepared to treat water as the valuable natural resource that it is and price it as it deserves, so that people will use it wisely, especially in times of increased demand.
In 1776, Adam Smith described in "The Wealth of Nations" the apparent paradox that water is absolutely vital to human existence, but it´s sold for pennies .Two hundred-plus years later, we can fill an eight oz. glass 2,500 times with tap water at a cost lower than a simple pack of soda. In these circumstances, it is not surprising that we are not motivated to preserve our limited water resources.
Across the U.S., water is undervalued and its price is correspondingly low. Efficient water use will take place only when the price reflects the current cost of having it available. We should not fear that a higher price would mean suffering from thirst. On average, each of us uses 183 gallons of water daily for drinking, cooking, washing, cleaning and watering, but less than 5% of that water is for drinking or cooking. There is much room to save if people are given the right signals.
Fifty years of economic analysis have shown that water use is sensitive to price changes, both short term and long term. In the first case, people manage consuming less. In the second, adopting water-saving devices, both in homes and in businesses. For example, in Boulder, Colorado, they went from an unmeasured billing system to a system where water consumption was measured and the consumption fell by 40% on a steady basis.
Despite that water shortages usually come during the hottest months and that, from a logical standpoint, prices should be raised on a seasonal basis, this is only done in just 2% of U.S. water distributing companies.
Some people are against increasing the price of such an essential resource, saying that it would affect the poorest of the population. To avoid this effect, billing can be set in installments, in which lower consumption will also mean paying a lower price, penalizing only large consumers with higher prices.
Droughts, like other public matters, present both, challenges and opportunities. Inevitably, citizens and businesses alike, do what they can to weather the water restrictions and, with the same inevitability, once the drought ends and the supply returns to normal, we all go back to our old wasteful habits.
The next water crisis, whenever it comes, will therefore be an opportunity to not to fall into those same wasteful habits, once the crisis is over.
Whenever prolonged droughts occur, authorities give passionate speeches, declare emergencies and impose water use restrictions. They often prohibit watering lawns and make recommendations for companies to prepare emergency plans in case of not having enough water. Exceptions are also announced, such as a few years ago in Maryland, when car washing businesses were allowed to continue their activity.
Droughts always have an ending and when it comes, water consumers go back to their daily routine, treating water as if it wasn´t a limited resource. Efforts to conserve this liquid element become a thing of the past, until the next drought, until the next unnecessary crisis. Isn´t there another way of doing things?
The answer is yes, if we are prepared to treat water as the valuable natural resource that it is and price it as it deserves, so that people will use it wisely, especially in times of increased demand.
In 1776, Adam Smith described in "The Wealth of Nations" the apparent paradox that water is absolutely vital to human existence, but it´s sold for pennies .Two hundred-plus years later, we can fill an eight oz. glass 2,500 times with tap water at a cost lower than a simple pack of soda. In these circumstances, it is not surprising that we are not motivated to preserve our limited water resources.
Across the U.S., water is undervalued and its price is correspondingly low. Efficient water use will take place only when the price reflects the current cost of having it available. We should not fear that a higher price would mean suffering from thirst. On average, each of us uses 183 gallons of water daily for drinking, cooking, washing, cleaning and watering, but less than 5% of that water is for drinking or cooking. There is much room to save if people are given the right signals.
Fifty years of economic analysis have shown that water use is sensitive to price changes, both short term and long term. In the first case, people manage consuming less. In the second, adopting water-saving devices, both in homes and in businesses. For example, in Boulder, Colorado, they went from an unmeasured billing system to a system where water consumption was measured and the consumption fell by 40% on a steady basis.
Despite that water shortages usually come during the hottest months and that, from a logical standpoint, prices should be raised on a seasonal basis, this is only done in just 2% of U.S. water distributing companies.
Some people are against increasing the price of such an essential resource, saying that it would affect the poorest of the population. To avoid this effect, billing can be set in installments, in which lower consumption will also mean paying a lower price, penalizing only large consumers with higher prices.
Droughts, like other public matters, present both, challenges and opportunities. Inevitably, citizens and businesses alike, do what they can to weather the water restrictions and, with the same inevitability, once the drought ends and the supply returns to normal, we all go back to our old wasteful habits.
The next water crisis, whenever it comes, will therefore be an opportunity to not to fall into those same wasteful habits, once the crisis is over.
