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Addressing Droughts with Water Markets

By | | Policy brief
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“The West is running out of water,” says the Economist. “Lake Mead, the largest reservoir in the United States, is at its lowest level since it was first filled in the 1930s.” This is “potentially the worst drought in 1,200 years” warns the Guardian. Moreover, frets the Washington Post, this isn’t just this year: “it’s our new, permanently arid normal.”

Click image to download a three-page PDF of this policy brief.

Many of these alarms were prompted by a major heat wave that hit the West in June, 2021. Since then, the West has cooled but remained dry: as of last week, about 22 percent of the West was in “exceptional drought” compared with just 2.5 percent a year ago. At the same time, the effects of the drought haven’t been as severe as might have been predicted. As of yesterday, for example, 5.9 million acres of land have been burned by wildfire, compared with an average of 6.9 million acres through this date over the previous 10 years. Continue reading →

Water Planning, California Style

By | | Planning Disasters, Urban areas
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Thanks to the wonders of government planning, San Diego County residents have to pay more for water they are not allowed to use. California, as everyone knows, is suffering a drought, so the state legislature mandated water conservation statewide, whether it is needed or not.

San Diego is one place where it isn’t needed, as that county has 99 percent of its normal amount of water. Yet residents are still required by state law to “let their grass die.” The costs of providing water haven’t declined, so the reductions in water usage due to mandatory conservation measures have forced the county water authority to raise its rates to cover those costs.

But it gets worse. San Diego is about to get an overabundance of water that is more costly than ever as a new $1 billion desalination plant is about to open that will increase the county’s water supply by as much as 10 percent. The plant is privately financed, but was built only after the county signed a contract agreeing to buy water from the plant whether it needed it or not. The water authority expects to spend $114 million next year buying water that was previously costing it only $45 million. This has led it to increase in water rates yet again.

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