Water in abundance, at a price: saving our grandchildren



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We are not short of water, as many titles claim. Certain areas, at certain times, lack water, but it is a localized economic problem, resolved by the usual economic solutions: property rights and the institutions that allow the transfer of assets.

Planet Earth today has as much water as ever. There is a tiny bit of water that turns into other molecules during chemical processes, and a tiny bit created when hydrocarbons are burned. Compared to the global water stock, these losses and additions are insignificant.

Some of our water is not easily usable. Sailors died of thirst on the ocean. ("Water, water everywhere, and no drop to drink," wrote Samuel Taylor Coleridge.) Ice trapped in mountain glaciers can be seen in deserts. Or a flowing stream may be downstream from a community that throws its trash into the water.

“Shortage” is commonly used to describe the problem, but when an economist hears this word, the answer is usually “Shortage at what cost?” Before we get to the economic solutions, let's lay out the potential problems.

Water related problems arise from poverty in many cases. A web page titled "The water crisis", Declares:" Today, 785 million people – 1 in 9 – do not have access to drinking water and 2 billion people – 1 in 3 – do not have access to toilets. This is a strange use of "crisis" since it describes the state of most people throughout human history. It seems so bad to us because most people have escaped poverty. And as countries have become richer, their citizens have demanded environmental protection. In Europe and North America, rivers are much cleaner than they were a hundred years ago. Areas with high populations can also afford to treat the water to make it drinkable.

People are moving to areas of opportunity, even if that area lacks water for all newcomers. This is our second problem, illustrated by the rapid population growth of arid places like Los Angeles and Israel.

The third problem is the drawing of aquifers. For example, the Ogallala aquifer in the high plains under eight states, including Nebraska, Kansas and Texas, is depleted by water wells. The first withdrawals were replenished by rainwater, but as irrigated agriculture developed, the withdrawal of water exceeded additions to the aquifer. Current withdrawals are not viable, but the aquifer is so large that the crisis point is distant by several years. But it will happen unless some changes are made to irrigation practices.

The natural variation in precipitation is the fourth problem. Atypical trends can last a decade or more, and it's not just drought that is dangerous. Precipitation on the American plains was above average in the 1870s and early 1880s, which led settlers to believe that they could live in the area with an adequate supply of water. The theory of "rain follows the plow" was based on a weak science that was sometimes linked to the approach of manifest fate at the border. Abnormally heavy precipitation periods are, at some point, followed by abnormally light precipitation periods, causing water shortages like the Oklahoma dust bin.

Finally, global warming is now associated with each deviation from the average, such as the drought in California from 2012 to 2018 or the excess water currently in the Great Lakes. Before blaming anthropogenic climate change for each drought, let us note, however, that history shows a great variation in precipitation and the loss of glaciers long before industrialization.

Global warming is expected to increase precipitation, on average, as warmer weather causes more evaporation and humidity, causing more rain clouds. However, global warming can trigger regional changes that lead to more droughts in some regions, more precipitation in others.

With such variability in precipitation and a growing population on the planet, how can there be optimism about the availability of water? Water shortage is a solvable problem with today's technology and understanding.

For any region, water is used by people for drinking, washing and other household uses. It is also used in agriculture, industrial activities and the environment. Environmental demand arises when people choose to let water flow naturally downstream to accommodate native plants and wildlife.

On the supply side, water flows through an area in rivers and streams. Ground

the water (some replaceable and some not) comes from wells. Occasionally, the recovery or desalination of wastewater adds to the supply. Atmospheric water can also be harvested, but at high cost.

When demand exceeds supply, the simplest approach is to reduce less valued demand, through conservation. The universally recognized approach to reducing demand is conservation by others. Everyone is in favor of someone else using less water. In reality, a pricing system works better for water, as it does everywhere else in the economy.

Agriculture around the world accounts for around 70% of water demand, followed by industry and then by households. When farmers own water rights or have to buy water at market prices, they compare the value of water in agriculture to the value in other uses, which is given by the price. In many cases, agricultural practices can reduce water consumption at a lower cost while maintaining production. Common pivot irrigation systems now use 25% less water than the original design, with further reductions of 17% proven in test applications. Small efficiency gains tend to happen quite easily. There are many other water saving options, depending on the culture and location. With the huge consumption of water by agriculture, only small gains are needed to provide high availability to households.

Farmers could also opt for less water-intensive crops. Barley needs less water than wheat, a fact that former farmers used during periods of low rainfall. In some cases, agriculture can simply be abandoned if water is more valuable elsewhere.

Changing cultures work well regionally, but the world as a whole does not want much more barley and much less wheat. The world price system easily facilitates this adjustment. Farmers in relatively water-rich regions would see wheat prices rise slightly and react by shifting production to wheat. It could also lead to more land cultivated in water-rich areas and less crops in water-poor areas. The world would end up producing all the food it needs with less water.

Industrial use can also be reduced. Energy analyst and Forbes employee David Blackmon found many cases of creative solutions to local water challenges, including the use of municipal wastewater and recycling of fracturing fluid. He offers valuable insight: "The preexisting water situation is unique in every part of the country, so the solutions to water supply challenges vary by region." Although Blackmon wrote about water for the oil and gas industry, its insight is invaluable in all areas.

Voluntary water conservation is much more likely if farmers or industrial users have marketable rights or buy their water from someone with marketable rights. If they own their rights, they will sell them to city dwellers who place a high value on water. If farmers or industrialists buy their water, they will see a rise in prices which will encourage them to conserve. Coase's theorem, developed by Nobel laureate Ronald Coase, argues that the possession of a right is irrelevant to the use of a resource as long as someone one owns it and the right can be sold at low transaction costs.

Marketing the rights to use water is becoming a critical issue for efficient use of water. Unfortunately, the lack of marketing is the source of many water shortages. The water rights in the west usually contain "use it or lose it" clauses. If a farmer installs drip irrigation to reduce water consumption, the allocation for that farm will be reduced. Market value would result in transactions that would move water from less valuable uses to higher value uses. It could also help keep water in reserve during the driest years.

Marketing could come from one or the other of two approaches: giving farmers and industrial users marketable rights, or forcing farmers and industrial users to buy water at market prices. market. The former is seen by municipalities as a gift to people who will use it to extract excess income from city dwellers. The second approach is seen by farmers as destroying their farms by depriving them of what they have always enjoyed as if they owned it. A compromise approach could give farmers full commercialization in exchange for a small percentage of their water rights.

Selling the rights to use water is much more difficult when water is pumped to the surface from large aquifers that underlie multiple properties. A specific solution could be imposed by the government or developed by water users with government approval. Usage allowances could be based on the date of first use, as in the Western Water Act, or in proportion to the area, or some other formula. Then a long-term path of total water use would be established for sustainable development. Water rights would be limited to sustainable withdrawals, recalculated approximately every ten decades in response to environmental changes or updated information. In this type of system, users would be limited to a certain allowance, but would be allowed to sell an allowance temporarily or permanently.

The use of water in the environment presents an additional challenge, but one which can also be solved through transactions on water. If water use rights are associated with land ownership, the water could be purchased by government or by conservation groups to secure environmental values. If the rights to the water belonged rather to a conservation trust, they could examine the value of their labor in having farmers' money. Government allocation of water is usually determined by small, vested interests, including agriculture, industry and environmentalists. These decisions do not allow the value of water to be taken into account in marginal changes for alternative uses.

Water shortages are created by humans, either by living in a dry area, using more

water that is readily available, or not to develop usage systems that are flexible enough to handle variable rainfall. Shortages are a human problem, solved by this good old human solution, the markets.

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We are not short of water, as many titles claim. Certain areas, at certain times, lack water, but it is a localized economic problem, resolved by the usual economic solutions: property rights and the institutions that allow the transfer of assets.

Planet Earth today has as much water as ever. There is a tiny bit of water that turns into other molecules during chemical processes, and a tiny bit created when hydrocarbons are burned. Compared to the global water stock, these losses and additions are insignificant.

Some of our water is not easily usable. Sailors died of thirst on the ocean. ("Water, water everywhere, and no drop to drink," wrote Samuel Taylor Coleridge.) Ice trapped in mountain glaciers can be seen in deserts. Or a flowing stream may be downstream from a community that throws its trash into the water.

“Shortage” is commonly used to describe the problem, but when an economist hears this word, the answer is usually “Shortage at what cost?” Before we get to the economic solutions, let's lay out the potential problems.

Water related problems arise from poverty in many cases. A web page titled "The Water Crisis" says: "Today, 785 million people – 1 in 9 – do not have access to clean water and 2 billion people – 1 in 3 – do not have access to a toilet. "This is a strange use of" crisis "since it describes the condition of most people across the world. human history. It seems so bad to us because most people have escaped poverty. And as countries have become richer, their citizens have demanded environmental protection. In Europe and North America, rivers are much cleaner than they were a hundred years ago. Areas with high populations can also afford to treat the water to make it drinkable.

People are moving to areas of opportunity, even if that area lacks water for all newcomers. This is our second problem, illustrated by the rapid population growth of arid places like Los Angeles and Israel.

The third problem is the drawing of aquifers. For example, the Ogallala aquifer in the high plains under eight states, including Nebraska, Kansas and Texas, is depleted by water wells. The first withdrawals were replenished by rainwater, but as irrigated agriculture developed, the withdrawal of water exceeded additions to the aquifer. Current withdrawals are not viable, but the aquifer is so large that the crisis point is distant by several years. But it will happen unless some changes are made to irrigation practices.

The natural variation in precipitation is the fourth problem. Atypical trends can last a decade or more, and it's not just drought that is dangerous. Precipitation on the American plains was above average in the 1870s and early 1880s, which led settlers to believe that they could live in the area with an adequate supply of water. The theory of "rain follows the plow" was based on a weak science that was sometimes linked to the approach of manifest fate at the border. Abnormally heavy precipitation periods are, at some point, followed by abnormally light precipitation periods, causing water shortages like the Oklahoma dust bin.

Finally, global warming is now associated with each deviation from the average, such as the drought in California from 2012 to 2018 or the excess water currently in the Great Lakes. Before blaming anthropogenic climate change for each drought, let us note, however, that history shows a great variation in precipitation and the loss of glaciers long before industrialization.

Global warming is expected to increase precipitation, on average, as warmer weather causes more evaporation and humidity, causing more rain clouds. However, global warming can trigger regional changes that lead to more droughts in some regions, more precipitation in others.

With such variability in precipitation and a growing population on the planet, how can there be optimism about the availability of water? Water shortage is a solvable problem with today's technology and understanding.

For any region, water is used by people for drinking, washing and other household uses. It is also used in agriculture, industrial activities and the environment. Environmental demand arises when people choose to let water flow naturally downstream to accommodate native plants and wildlife.

On the supply side, water flows through an area in rivers and streams. Ground

the water (some replaceable and some not) comes from wells. Occasionally, the recovery or desalination of wastewater adds to the supply. Atmospheric water can also be harvested, but at high cost.

When demand exceeds supply, the simplest approach is to reduce less valued demand, through conservation. The universally recognized approach to reducing demand is conservation by others. Everyone is in favor of someone else using less water. In reality, a pricing system works better for water, as it does everywhere else in the economy.

Agriculture around the world accounts for around 70% of water demand, followed by industry and then by households. When farmers own water rights or have to buy water at market prices, they compare the value of water in agriculture to the value in other uses, which is given by the price. In many cases, agricultural practices can reduce water consumption at a lower cost while maintaining production. Common pivot irrigation systems now use 25% less water than the original design, with further reductions of 17% proven in test applications. Small efficiency gains tend to happen quite easily. There are many other water saving options, depending on the culture and location. With the huge consumption of water by agriculture, only small gains are needed to provide high availability to households.

Farmers could also opt for less water-intensive crops. Barley needs less water than wheat, a fact that former farmers used during periods of low rainfall. In some cases, agriculture can simply be abandoned if water is more valuable elsewhere.

Changing cultures work well regionally, but the world as a whole does not want much more barley and much less wheat. The world price system easily facilitates this adjustment. Farmers in relatively water-rich regions would see wheat prices rise slightly and react by shifting production to wheat. It could also lead to more land cultivated in water-rich areas and less crops in water-poor areas. The world would end up producing all the food it needs with less water.

Industrial use can also be reduced. Forbes energy analyst and collaborator David Blackmon has found many cases of creative solutions to local water challenges, including the use of municipal wastewater and the recycling of fracturing fluid. He offers valuable insight: "The preexisting water situation is unique in every part of the country, so the solutions to water supply challenges vary by region." Although Blackmon wrote about water for the oil and gas industry, its insight is invaluable in all areas.

Voluntary water conservation is much more likely if farmers or industrial users have marketable rights or buy their water from someone with marketable rights. If they own their rights, they will sell them to city dwellers who place a high value on water. If farmers or industrialists buy their water, they will see a rise in prices which will encourage them to conserve. Coase's theorem, developed by Nobel laureate Ronald Coase, argues that the possession of a right is irrelevant to the use of a resource as long as someone one owns it and the right can be sold at low transaction costs.

Marketing the rights to use water is becoming a critical issue for efficient use of water. Unfortunately, the lack of marketing is the source of many water shortages. The water rights in the west usually contain "use it or lose it" clauses. If a farmer installs drip irrigation to reduce water consumption, the allocation for that farm will be reduced. Market value would result in transactions that would move water from less valuable uses to higher value uses. It could also help keep water in reserve during the driest years.

Marketing could come from one or the other of two approaches: giving farmers and industrial users marketable rights, or forcing farmers and industrial users to buy water at market prices. market. The former is seen by municipalities as a gift to people who will use it to extract excess income from city dwellers. The second approach is seen by farmers as destroying their farms by depriving them of what they have always enjoyed as if they owned it. A compromise approach could give farmers full commercialization in exchange for a small percentage of their water rights.

Selling the rights to use water is much more difficult when water is pumped to the surface from large aquifers that underlie multiple properties. A specific solution could be imposed by the government or developed by water users with government approval. Usage allowances could be based on the date of first use, as in the Western Water Act, or in proportion to the area, or some other formula. Then a long-term path of total water use would be established for sustainable development. Water rights would be limited to sustainable withdrawals, recalculated approximately every ten decades in response to environmental changes or updated information. In this type of system, users would be limited to a certain allowance, but would be allowed to sell an allowance temporarily or permanently.

The use of water in the environment presents an additional challenge, but one which can also be solved through transactions on water. If the rights to use water are associated with land ownership, the water could be purchased by the government or by conservation groups to secure environmental values. If the rights to the water belonged rather to a conservation trust, they could examine the value of their labor in having money from farmers. Government allocation of water is generally determined by small special interests, including agriculture, industry and environmentalists. These decisions do not allow the value of water to be taken into account in marginal changes for alternative uses.

Water shortages are created by humans, either by living in a dry area, using more

water that is readily available, or fail to develop usage systems that are flexible enough to handle variable rainfall. Shortages are a human problem, solved by this good old human solution, the markets.

.