Do the water wasters in the neighborhood make your blood boil? One can’t say they don’t know better, but in the absence of a free market there’s neither a constant indicator of water’s scarcity, nor incentive to conserve.
Whenever it rains in Tucson, one can observe a binge in water-wasting behaviors, from watering of landscape rocks and driveways to lawn and sprinkler system installation.
With the Rillito River setting flow records after most of the Tucson area recieved over five inches of rain in four days, Tucsonans are probably back at it again, thinking the drought is over.
It’s just not so. Droughts are long-term phenomena, and it’ll take a few years of normal to above normal rainfall to return vegetation and groundwater to non-drought conditions.
Ask someone to conserve and they’ll likely grumble “why me?” and “what difference does it make?”. The harms from overuse of water are so long-term and the benefits of conservation are so dependent on the goodwill of others that it’s a difficult behavior to foster.
We don’t have this problem with oil, also scarce and pumped from the ground. People are eager to reduce waste of gasoline, heating oil, and the like not because they’ve been reminded by an enlightened few of how scarce oil is and not out of some willingness to sacrifice for the benefit of others, but because they’re expensive. As the great 20th Century economist Friedrich Hayek explained, prices carry information about things like scarcity and demand and allow people with incomplete knowledge of the world–all of us–to make reasonable economic decisions.
Unlike reading a newspaper report on a drought, whose impact on personal decisions fades over time, a market price is a constant reminder. Furthermore the incentive to conserve is direct material benefit to the individual and not merely the satisfaction of knowing that, regardless of what others do, one isn’t part of the problem.
Currently those who buy their water from a municipality pay a nominal fee set by law, not a price determined by market forces. (Those with their own wells don’t pay a thing at all but, especially given the falling water table, find themselves conserving out of necessity.) When gas prices were capped by law, there were shortages and lines at the pump. Artificially low water prices mean a crisis will eventually build and rationing will be imposed. Whereas in a market we can choose when and how to conserve, in the absence of a market that decision will be made for us.
The oil market isn’t a perfect model for a water market, but it helps illustrate the benefits of trade. Water isn’t fungible with any other commodity, it needs by its nature to be sustainable and renewable, and groundwater pumping and river diversion causes many negative externalities, adverse impositions on the property or rights of others. A market in which someone has claim to as much water they can take, and in which the profit maximizing strategy is to pump it all now while they still can, before someone else takes it, isn’t desirable. Come to think of it, that’s close to what we have now.
Better, then, to have a system of property rights and a sustainable free market based around the cap-and-trade principle and our modern understanding of water. Issue retireable, tradeable permits for water use to residents and businesses, aquifier by aquifier that are separate from the ability to pump the water; delivery is a separate service. Lest we be accused of creating an arbitrary, false scarcity, set the market cap at what, on average, would be needed to maintain a level water table. What could be a more fair and cronyism-proof means to privatization than to give people a property right in their current entitlement to use water?
Although experiences with fishing and sulphur dioxide pollution have made free market environmentalism a mainstream idea, the lack of concern about the issue up in the state house shows that adoption of environmentally sound water policy in the near future will be about as likely as topping the Rillito’s flow record, unless, of course, libertarians start getting elected to the legislature.
The views expressed in this article are meant to give a libertarian perspective on water conservation and are those the author espoused during his 2004 run for the Board of Supervisors; neither the Arizona Libertarian Party nor the Pima County Libertarian Party have adopted water privatization as a platform plank.16a1