The Uneconomics of Water Rationing: Revolution, The Water Shortage Myth and the Fairness-Efficiency Doctrine (Aguanomics)

Feb.12, 2009 in Water Industry

(Feb. 12, 2009, Aguanomics)

I have criticized rationing as uneconomical, and I have criticized dumb rationing as unfair, yet water managers continue to pursue it.

What do I mean by that? Cutting EVERYONE back by 20% when supply falls by 20%. That’s not only lame compared to raising prices, but it’s patently unfair to cut water wasters and water misers by the same amount. (If anything, such cuts will encourage people to waste in non-rationing years to get a higher base.)

Here’s my (standard) solution: Give everyone some water for cheap and then charge everyone a LOT if they want more. If one MUST do rationing, then do the same thing — give everyone a right (e.g., 75 gal/capita/day) — and then the SAME amount of water above that — NOT 80% of what they did the year before.

The title of this post comes from the comments on this article reporting that San Diego intends to cut all its citizens by 20% (Thanks DW!)

From the content of the comments, I’d say that there are a lot of people (smart people!) who agree with me in San Diego. From the tone of the comments, I’d say that Mayor Sanders had better watch his ass, because there will be a revolution if he lets the water department impose a stupid (yes, it’s stupid) rationing plan.

Do the smart thing: Spend the $$ to get a household census and then reset pricing, rationing, etc. in San Diego to work on a per capita basis. (Given the fact that most people are honest, such a census could be completed through the mail, with audits for “wacky” numbers.)

Bottom Line: People understand what’s fair. In this case, what’s fair is also efficient. Set a per capita right (some for cheap) and then charge a LOT to use extra (pay for more)!

(Orginal Post Here)