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Last
week, in response to the drought, Gov. Mark R.
Warner imposed water conservation restrictions on
most of the state. His measures seemed reasonable
as far as command-and-control measures go, and the
populace appeared to accept them as a necessary
evil. Despite the threat to suburbia's
water-guzzling ways, there are no outraged soccer
moms busting open water mains, no Yuppies massing
SUVs in the public square to hose them down in
demonstrations of solidarity and protest.
Although
few Virginians are defying the emergency
restrictions openly, it’s not clear that
everyone is willing to sacrifice their Tall Fescue
for the public good. In the Richmond
area, where I live, local governments have levied
fines against a number of scofflaws who didn’t
get the message. One vigilante decapitated the
spray nozzles from the offending hoses of his
neighbors. Meanwhile, die-hard gardeners are going
underground. One confided to me, somewhat
guiltily, that she might run her sprinkler at
night when no one would see it.
Surely,
there must be a better way. There are two big
problems with emergency water-conservation
measures, whether those proclaimed by the governor
or those instituted by localities across the
state. First, the rules are enforced unevenly.
Although most people comply with the restrictions,
some evade them. Unless we turn into a
commonwealth of snitches, there is no practical
way to enforce the edicts uniformly. Second, there
is no incentive to conserve water by adopting new
technologies or best management practices. If you
do what the governor says, you’re not obligated
to do anything else.
Call
me a sentimental old fool, but I can’t help but
wonder: What ever happened to the free market?
What’s wrong with using price as a
mechanism to allocate scarce supplies of water?
The governor can’t institute new rates – his
emergency police powers don't allow him to
administer local water authorities -- but
localities can, and should, take a look at market
mechanisms as tools for managing the drought.
A
market-oriented approach would work something like
this: The local utility department would calculate
the daily volume of water that a reasonably
parsimonious household would consume in essential
functions related to nutrition and hygiene --
cooking, showering, brushing teeth, etc.
Nationally, households consume about 300 gallons
daily on average. A “drought” rate might be set at
250 gallons, not enough to be punitive but enough
to remind people not to leave the faucet running.
Then
create a second pricing tier for consumption of
water above that required for basic needs. Charge
enough for each extra gallon of water – perhaps
10 times the normal rate -- to capture peoples’
attention when the water bill arrives.
Once
the water wasters stroke a $400 check, I guarantee
that they’ll think twice about running the
sprinklers and washing their cars.
Local
governments would have to enact different rate
schemes for commercial and industrial consumers,
but the principle would be the same: Big water
users should bear the burden of conservation –
but they should be given flexibility to do so cost
effectively. Personally, I don’t see why the
governor exempted commercial car washes from his
restrictions. A market-oriented approach would
make them pay more for water like everyone else.
They could either invest in water-saving equipment
or pass on the higher cost to their customers. The
world wouldn't fall apart if fewer people
washed their cars. Similarly, we should stop
chastising restaurants for serving water to their
customers. Let the restaurateurs decide how best
to conserve.
Maybe
installing water-efficient dishwashing machines
would make more sense.
Special
attention would have to be given to manufacturing
plants that consume large volumes of water in
their industrial processes. On the one hand,
industry should shoulder some of the
responsibility for conservation; other the other,
localities don’t want to shut them down.
Under
a market-based "drought pricing" scheme,
several good things would happen. First, there
would be no cheating and no need to tattle on
neighbors who run their sprinklers at night.
Utility departments would meter customers and
charge them on the basis of how much water they
consumed. End of story.
A
second good thing is that households would have a
monetary motive to use less water. It may be noble
to conserve out of a sense of civic duty, but
nothing focuses the mind like writing a big, fat
check to the utility department every month. Also,
it's easier for people to conserve when they can
alter their behavior in ways that make sense to
them – not in blind conformity to guidelines handed
down
from on high.
A
third good thing is that some people might
actually invest money in water-conservation
measures – water-efficient appliances, drip
irrigation systems, xeriscaping (the conservation
of water through landscaping), whatever. These
things all
exist but Virginians, accustomed to inexpensive
water, have never had to reason to use them.
However, higher prices for water would increase
the return on such investments.
If
Governor Warner wants the state to take an
activist role, he should enroll the Virginia Tech
agricultural extension service -- or whatever’s
left of it after the latest round of budget cuts
-- to promote the virtues of xeriscaping. As they
do in Texas, extension agents could educate Virginia’s
suburbanites about the virtues of properly
preparing the soil, mulching, contouring their
gardens and selecting drought-resistant grasses
and plants. The prospect of saving two or three
hundred dollars a month in water bills just might
induce a shift in landscaping preferences.
A
fourth good thing about drought pricing is that
higher prices will bring in extra revenues to
local water authorities. One reason that the city
of
Richmond
took so
long in implementing conservation measures,
according to press reports, is that the city
couldn’t afford the loss of revenue. A prolonged
decline in water consumption, if not offset by
higher rates, could prove financially crippling
for utilities that make bond payments to
unforgiving investors. If some fat-cat business
executive is willing to pay hundreds of dollars a
month to preserve his lovingly tended, Chem-lawn
treated sod, I don’t have a problem with that.
He’s helping keep my water company solvent.
Even
if water authorities aren't financially stressed,
they can invest the added revenues in conservation
measures of their own. Some older systems waste
millions of gallons a year through leaky pipes.
Implementing a
drought-pricing rate structure might allow them to
accelerate their maintenance programs. Water
authorities with newer infrastructure might use
the extra revenue to educate the public through
“water efficiency” certifications on new
homes, comparable to Dominion Virginia Power’s
energy efficiency certifications, or to subsidize
the installation of water-saving devices.
Admittedly,
drought-pricing strategies take time to roll out
and even longer to crimp the hose of
water consumption. Governor Warner can’t afford
to wait while local governments around the state
debate the structures of such plans. He needs to
act now.
But
forward-looking localities should consider
drought-rate pricing regardless. Virginia’s
population continues to grow faster than the
national average. What’s more, the pattern of
development is increasingly land and water
intensive: Large lots typically feature houses set
amid vast expanses of emerald green turf. We may
not see another drought like 2002’s for another
century, but with growth putting greater stress on
water supplies, even a modest shortfall in
precipitation could prove disastrous a decade from
now. Localities should put drought-pricing plans
on the books and be ready to implement them the
next time the need arises.
--
Sept.
3, 2002
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