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.
The real solution to California’s water problems is not desalination plants but water pricing. If supplies fall, prices should go up, which might lead private entrepreneurs to develop desalination plants without government promises made at taxpayers’ expense, but more likely would lead to more cost-effective combinations of conservation and increased supplies.
Farmers use 80 percent of California’s water, yet they are exempt from the state-mandated water conservation measures. They are not only exempt, they are legally obligated to use that water or lose the right to use the same amount of water in future years. This use-it-or-lose-it requirement forces farmers to install inefficient irrigation systems and forbids them from selling water to cities and others who may value it more.
A water pricing system would allow farmers to continue to grow crops but still provide plenty of water for cities in drought years. Farmers would have incentives to use water more efficiently, making more available to other users. Since farmers who don’t have water rights under today’s regime could buy water from farmers who do, agricultural production might actually increase and water shortages would be things of the past. Unfortunately, the state politburo legislature has never considered such a radical free-market solution to the state’s periodic water crises.