Why we need to stop subsidising water

In California, residential consumers are being fined for wasting water. The goal is to combat a severe drought by reducing residential consumption by 20%. The trouble is that residential water use accounts for less than 15% of total consumption. The rest is used mainly for agriculture. Even if the desired cuts are achieved, they will account for less than 3% of total demand – a drop in an otherwise empty bucket.

Meanwhile, in China, some 30,000 workers are trying to change the weather, attempting to seed clouds from airplanes or using anti-aircraft guns to shoot shells into the air, hoping to coax some rain from the sky. There is no statistical proof that this type of weather manipulation works, but cloud seeders are also busy in the United States, mainly in the west.

These pointless policies are what I have come to call “political placebos”: attempts by governments to demonstrate to their citizens that they are doing something – anything! – to alleviate water shortages. Placebos may have their place in medicine, but when they distract from efforts to address the underlying malady, they can do more harm than good. Measures like those in California are like instructing police officers to blare their sirens wherever they drive to create the impression that crime is being fought. As climate change leads to deeper and more frequent droughts, the resulting water shortages will require new, sometimes difficult, solutions that go beyond futile attempts to placate the public.

The challenges are daunting. In many places, underground water is considered the property of the owner of the land where the water is extracted, even when a well’s user is tapping an aquifer that spreads across thousands of square miles. As a result, there is little incentive to conserve. Meanwhile, widespread pumping lowers the level of the entire aquifer, potentially allowing salt water to encroach. And, because this arrangement is tied to property rights, only the bravest of politicians dare to address it.

In some parts of California and Texas, a portion of the water supply is provided to consumers for almost nothing – delivered by a network of dams, reservoirs, and aqueducts that were built decades ago. The Hoover Dam, for example, which created Lake Mead, the largest reservoir in the US, was built in 1936 during the Great Depression as part of the New Deal. Even if the federal government had intended to get a return on its investment by selling the water from Lake Mead, the dam’s construction costs have long since been amortized.

Unlike other commodities, the price of water is very often a political decision, subject to the influence of interest groups that lobby for subsidies. For example, most of the water used in agriculture in Texas and California is sold at a price below its cost. As a result, it is frequently wasted. The cost for an acre-foot of water in Dallas or Austin is at least $150. Texas rice farmers, however, pay just $10, and every year they consume the equivalent of a five-foot flood. Such a large quantity of water is not even necessary for rice farming; most of it is used to drown weeds.

The US federal government needs to intervene in the water industry. As long as these distortions persist, new technologies will struggle to compete. Rationalizing the water sector would allow new investors to enter the market. Farmers in Texas and California need to stop growing rice, which should be imported from water-rich countries like Vietnam. Instead, US farmers should be encouraged to shift to other crops, such as sesame, with the government sharing the cost of replacement machinery needed to cultivate and harvest them. The adoption of technologies like drip irrigation would make current water use seem primitive and outdated.

The water sector should follow the example of the electric-power industry, where changes to federal regulations in the second half of the twentieth century allowed independent power producers to use existing transmission lines. The deep price cuts and improved service ushered in by these regulatory changes prompted other countries to adopt the American model. It is time to turn off the tap on subsidized water and find a real cure for persistent water shortages.

Published in collaboration with Project Syndicate

Author: Moshe Alamaro is a research affiliate in the Department of Earth, Atmospheric, and Planetary Sciences at MIT and Chief Technology Officer of More Aqua, Inc.

Image: A view of a partially dried-up pond REUTERS/Stringer