Western Water and California Drought, Part 2: No Need for Malthusian Despair

Well, some good news—it’s raining in Los Angeles.

Western droughts combined with questionable water access policies spawn water crises that unfortunately are not unique to the American west and California in particular.

Rather, water access issues are globally contentious. A Wall Street Journal book review on the “unhappy descent” of Turkey’s Meander River invoked common laments that: 

In North America, so much water is taken out of the Colorado that it no longer reaches the sea. Nor does the Rio Grande. Or the River Jordan. Or China’s Yellow River.

Access to water in times of plenty and in times of drought is a fundamental infrastructure concern worldwide. Further, the issues surrounding innovation and research in water policy are elements of broader science and manufacturing policy.

Aggravations abound—and so do penalties. One Oregon man catching rainwater on his own property received 30 days in jail for breaking a 1925 law prohibiting personal reservoirs. But when scarcity looms and emotions run high, strange things happen.

In addition to novelties like rainwater theft prosecution, water policy can be fundamentally perverse and distortionary: water supply systems may not cover their debts, operations and capital replacement needs, and as governmental monopolies, they sometimes “are used as cash cows to support more labor-intensive functions of local government, such as fire and police,” as G. Tracy Meehan has noted.

Central government efforts like the federal Reclamation States Drought Relief Act, and desalination programs, can add to such problems if they misdirect resources or responsibility. 

In California, the first Delta levees appeared around the time of the Gold Rush, so the altered landscape has long been a fixture. The federal government role enlarged during the Great Depression. Policymakers should subject water policy decisions, pricing, investment and conservation to marketplace pressures, alien as that may be. 

Regulatory liberalization, streamlining permitting and adopting competitive approaches to infrastructure and the technologies underlying it and represent a “fountain” of solutions more effective than politics at boosting innovation, enhancing consumer well-being, facilitating commerce and trade, and contributing to California’s and United States prosperity.

How can we be sure? Charles Fishman, author of The Big Thirst: The Secret Life and Turbulent Future of Water, penned a rundown of myths about water, noting even our ignorance about what happens to it once it disappears down the drain. 

In terms of quantity, water is actually not getting more scarce; it’s constant on earth. And the salty oceans? They’re actually:

Olympian springs of fresh water—every day, the sun, the sea and evaporation combine to make 45,000 gallons of rainwater for each man, woman and child on Earth.… Even in the United States, where we use water with profligacy, the oceans are making more fresh water for each of us in a month than we’ll use in a decade.

Fishman continues, “We never really use it up. Water reemerges from everything we do with it, whether it’s making coffee or making steel, ready to use again.”

That’s a useful insight for California’s feast/famine water predicament. Water is constant; it is allocation and pricing that matter. The word "shortage" does not properly define the situation when water demand has grown without accompanying market price and supply adjustments. Moreover, regulatory overreach can discourage properly priced supply.


Water is both a necessity and a luxury good. We use more as we get wealthier, which requires more energy, which itself requires still more water. Interestingly enough, though, overall the nation uses less water than in the 1980s (agriculture and power remain the largest users). Family units use a little more than back then.

But it doesn’t always rain in the same places, and over time, populations shift—sometimes, alas, even in response to artificially prolific water supplies. California represents the peak expression of this reality.

Challenges loom. America’s population is expected to grow by 100 million—a 30-percent increase—by the middle of the 21st century,” notes Bonner Cohen in “Fixing America’s Crumbling Underground Water Infrastructure.” And infrastructure won’t be cheap. Cohen continues, “Over the next 20 years, upgrading municipal water and wastewater systems is expected to cost between $3 [trillion] and $5 trillion. Building and replacing water and sewage lines alone will cost some $660 billion to $1.1 trillion over the same time period.”

Yet, there’s no need for Malthusian despair, because in the face of it all, gallons of water cost Californians and Americans less than a penny. Market prices have a role to play in response, if water is worth more than that.

As G. Tracy Mehan further notes, writing in The Environmental Forum, “Scottish lawns and recreational swimming are luxury items in arid areas and should bear the cost of scarcity in the price of water. Moreover, low water rates are basically middle-and upper-class subsidies.”

Next time—Part 3: The limits of government in drought preparedness. 

See Part 1 in Forbes: Fountains of Solutions: A Manmade Landscape Needs Less Central Planning