Water scarcity. The End of Abundance


In a past of abundance, we had clean water to meet our demands for showers, pools, farms and rivers. Our laws and customs did not need to regulate or ration demand. Over time, our demand has grown, and scarcity has replaced abundance. We don’t have as much clean water as we want. We can respond to the end of abundance with old ideas or adopt new tools specifically designed to address water scarcity. In this book, David Zetland describes the impact of scarcity on our many water uses, how the institutions of abundance fail in scarcity, and how economic ideas and tools can help us direct water to its highest and best use. Written for non academic readers, The End of Abundance provides examples, insights and ideas to anyone interested in the management of our most precious resource.

David Zetland blogs at Aquanomics with a libertarian, market-driven approach to water. He argues water should be priced fairly but not subsidized. In a recent post he mentioned that water in Riyadh is subsidized 90%. People thus use enormous amounts of it. This leads to shortages and water being supplied only one day in four or five.

This method of “preventing” shortage is harmful for equipment and inconvenient for customers who need to use water tanks during service cuts.

Riyadh is the capital city of nearly 5 million people in a country with a per capita income of $16,000, but it’s crippled by an unsustainable, populist, inefficient policy that promises gold and delivers rubbish. I don’t know whether to laugh or cry at this level of stupid.

Bottom Line: Poor water management wastes time, money and water. Better to have fair prices that cover service costs and prevent shortages.

Well, it would be populist (and still dumb) if everyone suffered equally from the shortages. But I’m guessing the Saudi royal family can get as much water as they want anytime they want. But his main point is quite accurate. Providing ultra-cheap subsidized water to mollify the rabble creates major inefficiencies and shortages. And to do so in a desert is mind-numbingly stupid.

Water needs to be available and affordable for all. But how do we do this in a world with an increasing population and areas that are becoming arid due to climate change?

  • DJ

    Many of Utah’s water policies seem strange to people from, say, southern California, where the policy is to steal import water from as many other places as necessary to meet insatiable demand. Utah treats water as a scarce resource – the right to use it can be bought and sold on the open market.

    The system isn’t perfect. Water rights have been oversold. If everyone who owned them used them, the aquifers would dry up. So the state is aggressively enforcing its “use it or lose it” policy – unused water rights revert to the state.

    This in turn leads to use for the sake of use, which leads to (sometimes ridiculously) wasteful practices. You can often see farmers irrigating their fields in the pouring rain.

    There is also tension between agriculture and residential real estate, since it takes 4 acre feet of water to irrigate an acre of land for a year, and that’s enough water to support four homes. Houses being more valuable than food (in the current market), there is a great deal of pressure to stop growing and start building. But food has to come from somewhere!

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