Peak water

Oooh, goodie, something else to worry about.

A swelling global population, changing diets and mankind\’s expanding “water footprint” could be bringing an end to the era of cheap water.

The warnings, in an annual report by the Pacific Institute in California, come as ecologists have begun adopting the term “peak ecological water” — the point where, like the concept of “peak oil”, the world has to confront a natural limit on something once considered virtually infinite.

The world is in danger of running out of “sustainably managed water”, according to Peter Gleick, the president of the Pacific Institute and a leading authority on global freshwater resources.

Fortunately we know how to handle this problem. It\’s our old friend, Tragedy of the Commons once again. We have a resource which could be happily managed on a Marxian basis, open access for all. Now demand for that resource has risen and thus we need to place limits on access to it.

Great. So, allocate property rights to the resource and thus allow people to charge for use of it.

Simple, innit?

Note that this can be publicly owned or privately, it\’s not so much who owns the property rights as that someone starts charging and a market is created in access to the resource.

19 comments on “Peak water

  1. Haven’t we already allocated property rights and started charging for it?

    Anyway, this running out of water thing just adds support to my plan to cover Africa with solar powered desalination plants and turn the Sahara into lush green fields, forests and holiday resorts.

  2. Ok, thought experiment. If a river runs through 3 states, how should the property rights be allocated?

  3. FFS – water rights in the western states of the US are already “property” although there’s a long history of interstate conflict. The US Bureau of Reclamation was set up over 100 years ago to sort out and attempt to regulate the various claims. An acquaintance of mine living in Denver owns the rights to God knows how many acre-feet of water from the Colorado River – he’s a very rich boy.

  4. No, no, no. The solution, Tim, is for the government to identify wasteful practices and then to legislate or regulate our lives to ensure compliance. That way, things would be fair and there would be no fat cats making profits from people’s misery.

    Obviously!

  5. PC: Oh, yeah, I love that site. ‘First Use’ . It absolutely clarifies the issues we’re dealing with – for rivers.

    Next question: There is an aquifer that does not have the good manners to respect international borders.

    How should the property rights be allocated?

    Next Next question: What if we treated water like CO2 offsets/carbon credits? Create a market – the more water you use the more you pay in water credits.

    Do you get credit for collecting rain water?

    Do you get credit for desalinating the ocean? If so, do you have to pay for carbon credits required for the energy used for desalination?

    Welcome to my world.

  6. Next question: There is an aquifer that does not have the good manners to respect international borders.

    Following the river usage model from the web link, you keep what you can take from the aquifer or other groundwater supply.

    On the subject of credits etc. The simplest starting point is that everyone should pay the full cost of providing the water they use. No exemptions or deductions for the poor, farmers, politically favoured industries etc. Even tax it to discourage use if required. Thus people will automatically optimise their behaviour, e.g. locate a water intensive chemical factory in Newcastle rather than London, collect rain water, profit from building a desalination plant etc. Properly priced, we do not need any artificial carbon or water offsets or credit trading schemes.

    To prevent the poor suffering from not being able to buy water essential for living, pay everyone a citizens basic income/dividend. We don’t pay for their water bill specifically, we give them money and they choose what they spend it on. If this is funded from a LVT, those who are fortunate enough to own the land near the head of the river, or with an aquifer will pay more LVT, which will encourage them to sell the water they have in abundance, rather than deny it to others.

  7. Or you could do it the British way: establish single local monopoly providers of water who own the water in particular river systems and then allow those local monopolies to “compete” through a faux market system, where they make huge monopoly profits.

    Then the water companies get bought by foreign corporations who know a money machine when they see one, wind down the maintenance to a trickle, wind down the upgrade and placement of dams down to zero, and then when the people complain about the high cost of water, the availability of water, the bugs that come in the water, pay the derisory fines that the CEO could pay out of his own pcoket and then lobby the government to help subsidize upgrades to the water network by screwing the taxpayers.

    Rinse and then repeat.

    And all of this was achieved under Thatcher. But you won’t hear any criticism from Tim, because its a market based solution, don’t you know?

  8. My local water monopoly wasn’t “established under Thatcher”, it was established before Gladstone. Moreover it gave me a free water meter and so saved me much moolah.

  9. Or, maybe, think for a bit before instantly reacting whenever some think tank discovers a yet another crisis.

  10. “PC: Oh, yeah, I love that site. ‘First Use’ . It absolutely clarifies the issues we’re dealing with – for rivers.”

    You asked about rivers. I posted it as an interesting discussion. Walter Block has written on water privatization, as has Rothbard, if you are interested.

    “How should the property rights be allocated?”

    Homesteading.

    “Next Next question: What if we treated water like CO2 offsets/carbon credits? Create a market – the more water you use the more you pay in water credits.”

    Why create an artificial market when one already exists, sans-bureaucrats. “Water Credits” are otherwise known as [insert national currency] which would allow you to buy [insert quantity of water] for [insert market price].

  11. What Ed says, with the caveat:

    If the country upstream uses ‘more than its fair share’, then the free market solution is that the country downstream has to, er, pay the other country for restricting their usage upstream.

    A bit like the Arabs exporting oil – they’ve got more of it, and everybody else imports it.

  12. Brit_in_Ausie …. you think regulated monopolies are a market based solution? where’s the market?

  13. PC: Please don’t misunderstand – I’m not advocating any one position. I’m just relaying arguments I’ve heard. And the site you posted is indeed very interesting and I have bookmarked it. Thank you.

  14. As one of our most basic needs, a clean reliable supply of water is pretty much guaranteed for income per capita levels above $5000. Current avg. world incomes are $7000 and double almost every 20 years. How then can the article say that 2/3rds of us could be sufffering from water stress in 2025?

  15. Pamela,

    The mining industry manages quite well dealing with trans-national orebodies and I’m sure Tim Newman would point out, the oil industry and governments have worked out a system for equally disobedient oil reservoirs. Think of water as an economic resource and suddenly there are all sorts of answers out there.

  16. Remittance Man:

    Ah. Mining Industry. Never thought of that one, thanks.

    (Checked out your blog, btw – you’re a very amusing writer, I bookmarked it)

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