Thesis: A better mechanism for reducing California’s water consumption would be to allow prices to rise, rather than to place a hard cap on utilities.
It seems as if we hear the same thing every year – California is in the midst of a drought due to its dry climate and lack of rainfall. This year is no different, as governor Jerry Brown called the drought to be “near-crisis proportions,” and issued a historic executive order mandating the state’s water utilities cut consumption by 25%, as the New York Times writes. The governor cited a lack of snowfall on the Sierra Nevada range as the cause of the drought, but there’s reason to suggest that overuse may also be a factor. As the graph below, provided by the Hamilton Project, demonstrates, California (and all the other western states) consumes water at a much higher rate than the rest of the nation.
Obviously part of this comes from the fact that these states are dryer and hotter, and as such will naturally demand more water. But do they really need that much more water? People can be expected to use water for things like showering, plumbing, and washing machines at roughly the same rate whether they’re living in a hot climate or not. As data from the California Water Blog points out, Australians, who live in a similar climate, manage to consume almost half as much water per capita. Where the higher rate of consumption really comes in to play is when homeowners desire vibrant green lawns, which require far more irrigation in a western climate. And if the water is cheap enough for households to afford to be able to maintain a high level of consumption, why wouldn’t they keep their lawn in tip top shape?
Short of an actual state of emergency, California does not need to place hard limits on water consumption. What California needs to do is ease up on controlling water prices and allow the market to reflect the relative scarcity of water. The higher prices would lead to more efficient use as households and farmers make an effort to save water, both by changing patterns of use (many might find that they no longer gain a positive net utility from that shiny green lawn), and by making investments in high-efficiency appliances more appealing. Raising utility prices (especially a utility which is considered to be a basic human right by most) would be politically difficult. But so is flat out telling people that they need to use less water. At least the market allows consumers to decide for themselves what they need to prioritize. Placing limitations on use merely acts as a stop-gap, while allowing prices to float addresses the problem at its root: cheap availability of water.