California

Lopsided Bureaucratic Rationing Won't Cure California's Water Crisis

What's needed is market pricing

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Drought
Claudio.Ar / Foter / CC BY-NC-SA

California is battling a devastating drought, and the Golden State's heavy-handed Democratic administration has an ill-conceived plan to use aggressive government regulations to save the day. Not only is this wrong, but it won't actually do much to solve the water crisis afflicting California, which requires less — not more — government intrusion in people's lives.

The standard narrative about California's crisis is that three rainless years have depleted the state's major water reservoirs, thinned the snowpack, and dried up the rivers, causing a massive water shortage that requires mandatory cuts in water use.

However, as the young proverb goes, nature makes droughts, but men make scarcity shortages. In this case, shortages are the result of a cascading series of poor policy decisions by government officials. Chief among the problems is cheap, below-market water prices for everyone — but especially politically favored groups.

Among the most favored are environmentalists who have forced the state to abandon critical water-storage reservoir projects to avoid disruption of wildlife and ecosystems. But that's not all they've done. They also divert 4.4 million acre-feet of water every year — enough to supply the same number of families — to restore water runs such as the San Joaquin River, allowing passage of salmon and other fish, among other environmental ends. Without paying a dime, environmentalists have taken control of nearly half of California's water.

Of the remainder, 80 percent goes to farmers, the next most favored group — even though their output is only 2 percent of the state's GDP. Farmers don't pay anywhere close to market prices because many of them have inherited their surface water rights from their ancestors, thanks to California's system of "first come, first served." Under those rules, farms that first drew water from a river or some primary source have the right to that amount of water in perpetuity. Newer users get the leftovers, depending on when their ancestors called dibs.

This wouldn't be so bad if senior users could sell their surplus water to those who needed it. But that's not how it works. Instead, what they don't use one year, they lose the next — creating a massive incentive for overuse.

What's more, many farmers and property owners pay nothing but the cost of a well to draw groundwater — and even that is sometimes subsidized. The upshot is the classic "tragedy of the commons," with farmers in the Central Valley able to suck out water to their heart's content, endangering aquifers.

In other areas, you do have to pay for water — but the pricing is extremely skewed. Farmers in California's Imperial Irrigation District, who buy water from the Colorado River aqueduct, pay $20 per acre-feet, less than a tenth of what it can cost in San Diego. And it's all thanks to sweet deals they've obtained from the government.

Cheap agricultural water has led to the insanity of a desert like California becoming one of the world's chief producers of water-intensive crops, such as rice and alfalfa. George Mason University economist Alex Tabarrok estimates that if farms used just 12.5 percent less water, California could increase the amount available for industrial and residential use by half.

And although residential users pay more for water than farmers, they still pay below-market prices. Sacramento homes pay a flat rate for their water, no matter how much they consume. They don't even have meters. In Fresno, which gets less than 11 inches of rain a year, monthly water bills for families are sometimes only a third of those in Boston, which gets four times more rain.

The best — and most sustainable — solution to California's water woes would be full-bore markets in which prices can rise and fall with supply and demand. Under such a system, depleting water reserves would have led to price increases long ago, producing an automatic incentive to conserve. More importantly, this would have clearly signaled growing scarcity, spurring new technologies for affordable water generation. All of this would have allowed consumers and businesses to make small adjustments over time without letting the shortage reach a crisis point.

Moving overnight to a system of market-based water pricing is probably not doable. But if California has to make emergency cuts, it would make sense to impose the biggest cuts on the biggest users — which means the deepest cuts for fish-rescuing environmentalists, followed by water-hogging farmers, followed by residential users. Instead, Democratic Gov. Jerry Brown is doing the exact opposite.

Brown wants to cut the state's overall water use by 25 percent. But what do environmentalists have to contribute to that goal? Nothing. Nada. Zilch.

In fact, nature's protection has assumed such religious significance that California's legislature has handed the Department of Fish and Wildlife near-God-like powers to penalize violators engaging in any "unauthorized diversion of use of water that harms fish and wildlife resources." This could expose tens of thousands of farmers and ranchers to daily fines of $8,000 for reservoirs and culverts that already exist — just because the state now deems them to be obstructing the passage of fish, Steven Greenhut reports.

Farmers, by contrast, are required to cut water use — but only by 6.6 percent. City dwellers are the ones getting slammed — even though they pay the most and use the least.

The Brown administration is using executive fiat to impose a strict and intrusive water diet on them. Restaurants are barred from serving water until specifically requested by customers. Homeowners are banned from hosing down driveways or cars, with some violators facing fines of up to $500 a day. The rich folks in Beverly Hills, Newport Beach, Palos Verdes and other parts of Southern California are being targeted particularly fiercely. "The idea of your nice little green grass getting water every day, that's going to be a thing of the past," Brown declared, positively gleeful. These areas are being ordered to swallow a 35 percent cut. But sacrificing the lawns of the rich is less about conservation and more about enforcing virtue.

California is engaging in counterproductive favoritism based on totally subjective value judgments of which type of water use is right and which is wrong that have little to do with people's real needs. It's time to let the market make these decisions instead.

 This column originally appeared in The Week.

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    1. LOL comment on that tweet: ” they should stop spending money on salt removers and give it to illegals”

    2. LOL comment on that tweet: ” they should stop spending money on salt removers and give it to illegals”

  1. “The idea of your nice little green grass getting water every day, that’s going to be a thing of the past,” Brown declared, positively gleeful.

    And then just think of the money they can rake in by fining people for letting their lawns go brown. Win-win.

    1. There have been conflicts between HOA and certain localities penalizing NOT watering your lawn. Sorry I don’t have a citation.

  2. Ultimately., the Greens hate people and are happy to see the water go to benefit bait fish rather than to benefit people.

    1. “There are hidden contradictions in the minds of people who “love Nature” while deploring the “artificialities” with which “Man has spoiled ‘Nature'”. The obvious contradiction lies in their choice of words, which imply that Man and his artifacts are not part of “Nature” — but beavers and their dams are. But the contradictions go deeper than this prima-facie absurdity. In declaring his love for a beaver dam (erected by beavers for beavers’ purposes) and his hatred for dams erected by men (for the purposes of men) the “Naturist” reveals his hatred for his own race — i.e., his own self-hatred. In the case of “Naturists” such self-hatred is understandable; they are such a sorry lot. But hatred is too strong an emotion to feel toward them; pity and contempt are the most they rate. As for me, willy-nilly I am a man, not a beaver, and H. sapiens is the only race I have or can have. Fortunately for me, I like being part of a race made up of men and women — it strikes me as a fine arrangement and perfectly “natural”. Believe it or not, there were “Naturists” who opposed the first flight to old Earth’s Moon as being “unnatural” and a “despoiling of Nature”.”_– Robert A. Heinlein

      1. Like a lot of things, Heinlein had that nailed.

      2. There’s a context where criticizing man’s actions as “unnatural” while not holding beavers’ actions to the same criteria would not be hypocritical. Heinlein (and many readers here) was simply unable to imagine it, thinking others stupid, when it was he that lacked the requisite imagination.

        1. What can *you* imagine that is “unnatural?” I’ll be very highly impressed if you come up with anything.

          1. Nuclear war comes to mind… Beavers are NOT going to do THAT, they are not that stupid and/or evil…

        2. There’s a context where criticizing man’s actions as “unnatural” while not holding beavers’ actions to the same criteria would not be hypocritical.

          You would do well to identify the context rather than just baldy assert its existence without evidence.

          1. He lacks the requisite imagination.

        3. Beavers’ actions result in more available water.

        4. Like you do, kenny, lolz.

      3. ” In the case of “Naturists” such self-hatred is understandable; they are such a sorry lot. ”

        ha!

      4. I am a human, most of the time, but I sure do admire beavers!!! I do not object to me having more “access” (in the prog-tard parlance; whether I pay or even can pay, for said “access” or not) to WAY more beavers!!!

  3. What California needs to solve its water crisis is a couple dozen million more residents, obviously.

  4. This could expose tens of thousands of farmers and ranchers to daily fines of $8,000 for reservoirs and culverts that already exist ? just because the state now deems them to be obstructing the passage of fish

    Sheesh, fine the farmers who *don’t* have culverts. What could be more obstructing to fish than *land*?

  5. Here is a sad and pathetic fact. Jerry Brown has a $7 billion plan to deal with the drought. That includes spending $2.5 billion on actually increasing the water supply by building more reservoirs.

    His high speed train to nowhere is going to cost $67 billion dollars. That is right, Jerry Brown and the State of California wants to spend nearly 30 times the money on a train no one wants and few will ride than it wants to spend on doing something about its water shortage.

    One more point. Desalination costs around $2,000 an acre foot. That means for the cost of Jerry’s beloved choo choo, California could desalinate 335 million acre feet of water or enough fresh water to supply drinking water to the entire population of California for about 15 years.

    1. That train is the first thing I think of whenever this Cali water thing comes up. It’s fucking sick.

      1. I’VE GOT IT!!!!!

        1. Build that damned canal to send Northern California water to Southern California.

        2. Build a high speed FERRY instead of TRAIN and run them down that damned canal!

        Damn I is genius. Bow before me you landlubbers!

        1. “1. Build that damned canal to send Northern California water to Southern California.
          2. Build a high speed FERRY instead of TRAIN and run them down that damned canal!”

          Elon? Is that you?!

          1. I coil in fear of such an association.

      1. It is as if they elected Sheldon Cooper governor.

        1. “That’s *sarcasm*, right?”

          1. I see what you did, there.

    2. Look, John , the train is SUSTAINABLE! Because, train! It sustains! And this one does so at high speed!

      Desalinization just kicks the drought problem further down the road by providing water, instead of being SUSTAINABLE! I mean, oceans are hiding all the global warming, so if you take the water from them, you are releasing all that heat. And once you run out of ocean, what then? Huh, mr Smarty Pants? How will you SUSTAIN?!

    3. “That includes spending $2.5 billion on actually increasing the water supply by building more reservoirs”

      Which shows you the real scope and magnitude of the problem. CA is chock full of steep canyons with small creeks in them that can be dammed up and made into reservoirs fairly cheaply. Each one, though, destroys a rare and precious irreplaceable ecosystem, so Californians are against them.

      Once people *actually* can’t get water (and I don’t mean golf courses yellowing), dams will start going up and the problem will get solved right quick.

    4. Yes yes yes yes yes but trains are good. Have you not seen Thomas?

      1. Never heard of Thomas the Train until I started watching it with my grandson.

    5. And you forgot to mention that a significant percentage of that $7B is going for flood control projects.

    6. Nevermind that Elon Musk is already planning to build an even faster train, with private money.

      1. HazelMeade|4.21.15 @ 5:33PM|#
        “Nevermind that Elon Musk is already planning to build an even faster train, with private money.”

        Uh, he’s sort of fiddling with an idea using private money. We’ll see if it ever gets beyond fiddling and how it gets paid for if it does.
        This is Elon Musk we’re talking about; master at sucking taxpayer money from the gov’t.

        1. Sevo

          If commie kid’s children get a few more bucks for their college fund out of the deal you know he will support it.

        2. No shit, Musk may be the best crony capitaist evah.

    7. If only the medium speed rail will end up costing 68 billion. My over/under is 150 billion and I would take the over any day of the week for a large sum.

  6. Auric and I have already offered the state a solution: We’ll drop a couple of comets right on selected areas of the state. For a small consideration.

    1. Would there be a volume discount if someone want to drop a lot of comets on the state?

      1. Everything is negotiable at the right price.

  7. The Brown administration is using executive fiat to impose a strict and intrusive water diet on them.

    Californians were stoopid enough to vote for Brown and his cadre of economic cranks and environmental mountebanks, then they should eat crow and drink piss.

    That is why I moved back to Texas.

  8. The extent of the political posturing is revealed nicely by a line I heard on NPR the other day “can California’s wealthiest be convinced to curb their usage?”

    Considering only 20% of all water usage in the state is non-agricultural, asking the 1% to curb their domestic usage share of that 20% is a faux-solution of the first order of magnitude.

    Or could it just be more excuses for class warfare?

    1. I keep waiting for Brown to stick it to those farmers and their corporate interests, and reserve the water for the *people*. He’s a democrat, right?

      Otherwise, I’ll guess they’ll have to play up sticking it to the lawns of the rich (and, unmentionably, the not so rich) as far as they can go.

      1. The not so rich will accept that their .21 acre lot looks a little worse than it normally would as long as some multi-millionaire businessman’s several acre lawn in Malibu looks similarly dismal. As I know you, with the Dems it ain’t about making things better for all (in unequal anounts).

        1. As I know you know

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  10. On the plus side, by hammering city-dwellers, they are going to piss off the largest possible percentage of the population. Which may mean that voters, once they are fully informed of the issues, may soon change their minds about water use priorities.

  11. So a state that allows a couple million undocumented aliens and a sizable shadow economy will not somehow enforce its draconian water law.

    All you need is some study that shows most of the folks punished for watering their lawn is not white. And then, we’ll have the freedom to use water again.

    I take a shower at least once everyday. I can’t live a Frenchman.

    1. scratch “not”

    2. You’re right. The water law is doomed to failure.
      It’s going to be virtually impossible to enforce, and people will start getting very pissed off when they get hit with fines, so if they actually tried to enforce it there would be a major voter revolt.

      Most likely the water law simply wont work, water levels will fall even further, and the crisis will worsen until California either gets some rain, or else changes it’s water use priorities. City dwellers just aren’t going to put up with farmers and fish being prioritized that much over them.

  12. The Brown administration is using executive fiat

    And that’s a bad thing? Or is he just using it in a way you don’t like?

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    ??? http://www.MoneyKin.Com

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  15. “How is it that in one of richest states in the richest country on the planet, a glass of water has become a luxury item requiring government approval? ”

    Is this true? I admit that I have no clue what is going on in California but this question, even if rhetorical, doesn’t smell right.

  16. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
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  17. Like a lot of things, Heinlein had that nailed.

  18. “The idea of your nice little green grass getting water every day, that’s going to be a thing of the past,” Brown declared, positively gleeful.

    And then just think of the money they can rake in by fining people for letting their lawns go brown. Win-win.
    mangafox

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