Grazing the Non-Commons

Central Texas is having its worst drought in 50 years, and since May we have been limited to twice-a-week lawn watering. With things getting worse, on August 24 the limit goes to once per week. I’ll abide by the limit, but I’ll set my sprinklers to run longer each session than during the twice-a-week watering. I’m sure I’m not alone; and thus these private actions will partly undo the restrictions.

We all take water out of a common pool, but the water is not a public good — each of us uses it up. The local paper is trying to solve the shortage by publishing the names of the biggest residential users and shaming them. I doubt this will help. The problem could readily be solved by pricing the water sufficiently high to ensure that we get through the drought with water to spare. Indeed, that’s what a free market would do. Unfortunately, Austin hasn’t seen fit to mimic free-market pricing of this increasingly scarce resource.


Greg Jansen

Oh, good solution - only the rich can have water. That's rationing according to wealth - just like you probably think we should do with health care, education, etc. Shoud we do that with electric power, too? And with heating oil?

KB

I worry about increasing the price of water to the poor. What about giving every house a certain allocation of water at the current rate (enough to wash clothes, shower, food, & drink) and then raise the rates way high on amounts consumed above that.

frankenduf

waiddaminute- if you increase the price of H2O signifigantly, this will just shift a cost burden onto the poor- better public policy is to enforce H2O restriction for all

Quinton

Austin's not alone. Water rarely reflects its scarcity or abundence. At best the price of water reflects the cost of the underlying infrastructure. If you figure out a way to price water accurately you might deserve a nobel.

Z

This comment is sort of peripherally related to the economic point you're making, but Americans are way too obsessed with their lawns anyway. I'm also in a Southern state, and I have to say that I'm disturbed by how profligate folks are with watering their lawns.

Will C

Wasting water on lawns is obscene. The pricing of water should be on usage, and quickly get more expensive the more you use past a low, basic level.

Greg

I hope you run your sprinklers at night, when evaporation is minimized.

Keegan

Concur.

Assuming prices could be adjusted dynamically and didn't require a bureaucratic maze of approvals, how do you adjust them?

Uniformly, as with a commodity like gasoline? You pay the same for a gallon of gas that gets you somewhere essential like work as you do for an elective vacation. But that's not how water bills (currently) work.

Or do you increase the steepness of the curve, punishing only the high end users - which may be a self-indulgent single gardener or simply a family that's not a fan of birth control?

- Fellow Austin Resident

Robot Mistake

What? Raise the price of a basic necessity so you can water your lawn more. Shame!

Why not progressively charge for water based on income? That too would seem to have the result of reducing the wasting on water on the lawns and golf course of the rich. More cost to those who receive a greater benefit.

You live in a drought prone environment; that seems incentive enough to invest in drought resistive landscaping.

Tom Woolf

How thoroughly selfish of you to water longer because they take away one watering day. It is grass. Grass will survive on 1 watering a week. If it does not, well, think of the consequences of putting too much of the scarce resource into your yards - less water for drinking, cleaning, firefighting.

Raleigh, NC had a 2-yr drought which broke within the past year. They used a combination of economic and regulatory changes to limit usage. First came the lawn watering and car washing limitations. Next, the tiered water usage. Basically, if you use what is considered a normal amount of water (based on figures available from the city), the rates stay reasonably low. Start using more, and the per gallon rate increases. Use a whole lot more, and it gets really expensive.

Was it a perfect solution? No - I don't believe there was a way to distinguish a one-person household from an 8-person household, so singles (like myself) did not have to conserve to stay in the lower pricing tier. That 8-person household - they'd have to be very conscious of their usage.

So, let your grass go brown - water it enough so it does not die. Forget the aesthetics of the pretty lawn for a while. Save the water so that, if you are still in drought conditions in 6 months, you don't regret the lowered reservoir and wasted water on the lawn.

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David Zetland

Commenter #2 has it right -- some for free, pay for more. Lawns are a lifestyle good (per #5). I cover all of these issues at aguanomics.com, but here's my piece on "some for free": http://tinyurl.com/6ah7dl

Since urban water is a common pool good (we all share it but it's exhaustible), we have to manage it well. Prices work, but remember that water is managed by local monopolies that often do not understand prices as much as engineering (get more supply) and politics (cheaper!)

Owen

Why do you follow the letter of the law instead of the spirit?

Pet peeve... people that water their lawns.

Are they economically motivated? No, just like I'm not economically motivated to breathe more simply because it is free.

Would they be economically discouraged if it cost money? It depends.

jimi

To Greg Jansen:

...uh, yes.

jonathan

They could ban wasting water on lawns and could provide incentives to replace grass with drought resistant plants.

Doc

Interesting conflict between views above. Even as a dedicated free market economist, I have to draw the line at pricing water beyond the reach of those who could not afford subsistence levels. We don't want the poor carying jerry cans on their heads along the boulevards of Austin. I'm all for the public infrastructure - which IS a collective good - providing a minimum quantity but am happy to see prices rise for quantities above that. If the rich want to water lawns, fine - as long as the price reflects the marginal scarcity of the water and the use doesn't dehydrate the population.. According to yesterday's news from Austin, our Barton Creek Lakeside marina is now in the middle of what used to be Lake Travis. So much for my "waterfront" property.

Meanwhile, here in the northeast (the hardwood tropics) it has only rained twice - once for eight weeks and once for six. Now we have summer, maybe Texas will get rain.

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Grant

I like the idea of pricing water on a fairly steep curve - figure out what a reasonable amount of water use is for things like dishes, laundry, and personal grooming and then start ratcheting the rate after that. I suppose you could provide waivers or credits for large families, though really that's not something we should be encouraging anyway.

And what we certainly should not be encouraging is the use of precious water to water purely decorative crops like grass. It's time Americans got over their obsessions with acres of green and realize that we're living in a different time now.

EJ

kb has a good solution

Pru

It's just grass, after all. It's pretty vain of you to use the water in a state of drought for a *lawn* don't you think?

Cackalacka

A fine suggestion (that others have posited above) is to just let your lawn go dormant.

We had a severe water shortage last summer. Amazing to watch folks in the country-club neighborhoods hook their sprinker system (run at 3 pm in the 100 degree heat) and then put up signs saying to the effect of 'its all good, this is well water.' Like that helps the family farmer down hill from them, whose well runs dry, just so Rich Person can provide the illusion of success through green fescue (a plant that could never survive naturally in the Carolina Piedmont.)

I'm never surprised to read "free market" solutions from economists. Your entire profession is an ad hoc justification to salve the egos of the affluent.

Here's a hint: most entities with a soul place a higher premium on providing affordable water to kids whose parents have the unfortunate circumstance of having to work for a living, over, say, your f-in lawn, jack.

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Better_By_Design

Much like electricity, water pricing should be based on some sort of demand metering.

As mentioned, jumping prices up will cut consumption, but being that water is about as basic a need as there is, the best solution is simple:

'primary water' - whatever is estimated to be needed for washing/drinking/toilets is priced at zero

'extended water' - an overflow for basic gardening, etc priced at some low price - the effect of which will leave 80-90% of homeowners at the same as what they are paying now

'overuse water' - really jump the prices for those folks who can't deal with basic water use restrictions - maybe 5X the 'extended' price or more.

Also, this pricing has to be looked at for businesses - golf courses obviously, but people forget the HUGE consumers of water are often large industrial processes, and (like electricity) there is a balance here between economic punishment of industry (and jobs) versus providing incentive for efficiencies.

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