Investors Business Daily offers the modest proposal of using market mechanisms instead of penalties and coercion.
California is so dry that Gov. Jerry Brown has instituted water-use restrictions for the first time in the state’s history. The problem, though, is not a shortage of water. It’s a shortage of thinking.
The Parched State â€” once known as the Golden State â€” is so dry that Brown said it “demands unprecedented action.”
“We have to pull together and save water in every way we can,” Brown said Wednesday from Echo Summit in the Sierra Nevada, where, AP reports, “state water officials found no snow on the ground for the first time in their April manual survey of the snowpack.”
“Were in a new era,” said Brown. “The idea of your nice little green grass getting water every day, that’s going to be a thing of the past.”
Using an executive order, the Democratic governor, according to an official statement, “directed the State Water Resources Control Board to implement mandatory water reductions in cities and towns across California to reduce water usage by 25%.”…
No, this is not a new era. It’s still the era of limited thinking. It’s the Soviet way of dealing with scarcity.
What California needs is more water, not more government mandates. Water is a commodity just like any other, and its allocation should not be left to governments.
If it were bought and sold in an open market, there would be a strong incentive to move water to where demand is high and supply is low â€” such as California.
But as long as prices are kept artificially low by government dictums, that incentive doesn’t exist and potential providers never become actual providers.
If prices are allowed to rise, however, the profit motive will spur innovation â€” such as the unlikely prospect of squeezing water out of deserts to sell to consumers â€” and create competition in which rivals will fight to provide the best service at the lowest price.
When there is no true market for water, it falls under political control, which Terry Anderson and Peter Hill say in “Water Marketing â€” The Next Generation” precludes efficient pricing while at the same time creating political conflict and encouraging waste.
This is where we are now in California.
A water market won’t pop up this weekend to save the state, but market pricing would help conserve what’s on hand until new resources come online.
We’ve made this point multiple times. If the price of water is set by the market rather than bureaucrats who can’t possibly know what the right price is and always let politics dictate their decisions, consumers would self-ration when the price rose.
California successfully navigated its drought problems in the early 1990s under Republican Gov. Pete Wilson using pricing mechanisms and authorizing the California Drought Emergency Water Bank to buy water from agricultural sources.
Farmers profited more from selling water than from the crops they would have otherwise used the water for. One economist said in 1991 that that year might “be a turning point in California’s transition to water trading.”
But California didn’t learn then and it still doesn’t understand today.
Native old-time Californian Victor Davis Hanson identifies the underlying problem: massive population growth in an artificially-watered desert environment whose spoiled inhabitants have embraced an extremist environmentalist ideology which makes their own lifestyles “unsustainable.”
Brown and other Democratic leaders will never concede that their own opposition in the 1970s (when California had about half its present population) to the completion of state and federal water projects, along with their more recent allowance of massive water diversions for fish and river enhancement, left no margin for error in a state now home to 40 million people. Second, the mandated restrictions will bring home another truth as lawns die, pools empty, and boutique gardens shrivel in the coastal corridor from La Jolla to Berkeley: the very idea of a 20-million-person corridor along the narrow, scenic Pacific Ocean and adjoining foothills is just as unnatural as â€œbigâ€ agricultureâ€™s Westside farming. The weather, climate, lifestyle, views, and culture of coastal living may all be spectacular, but the arid Los Angeles and San Francisco Bay-area megalopolises must rely on massive water transfers from the Sierra Nevada, Northern California, or out-of-state sources to support their unnatural ecosystems.
Weâ€™re suffering the ramifications of the â€œsmall is beautiful,â€ â€œspaceship earthâ€ ideology of our cocooned elites. Californians have adopted the ancient peasant mentality of a limited good, in which various interests must fight it out for the always scarce scraps. Long ago we jettisoned the can-do visions of our agrarian forebears, who knew California far better than we do and trusted nature far less. Now, like good peasants, we are at one anotherâ€™s throats for the last drops of a finite supply.