Been reading a lot about water conservation lately where some claim the solution is as simple as controlling price – raise the price and conservation will occur. This seems logical for some situations – most notably for domestic and industrial uses which are supplied by a common water system under a common water right that is controlled by someone else who is responsible for both the delivery system and the new conservation ethic. Easy as pie and quite frankly you meet two goals at once. Not only do you encourage less water use, but you also gain the capital to maintain and eventually replace the delivery system for the common good (as long as you don’t price yourself out of the market).
But my concern is conservation in an irrigated ag setting - a compilation of thousands of individual delivery systems controlled by the thousands of water right owners using the water for individual profit motives and answerable to no one as long as they don’t exceed their water right. The most obvious way to control the price of ag water would be a mandated government severance tax on water (either via traditional means or being couched in terms of a pump tax, water right maintenance fee or whatever). But since the government doesn’t have any system to maintain, the only reason to impose such a severance tax on ag would be to use less water as a means to conserve. This will also reduce production and economic returns.
If “conservation” is defined as either maintaining current production with less inputs, or, increasing production with the same inputs (both increases in efficiency) then the severance tax is wrong because it will do neither. Yes, I know what you’re thinking – just increase the efficiency of the ag water use and conservation (less water use) happens automatically - without a severance tax or any other stimulus. Our experience has been that it costs so much money to increase ag water use efficiency that the producers are obligated to increase production to pay for it, and the exact opposite of water conservation occurs in nearly all cases – they consumptively use more water. I have discussed this issue before here.
Anyway, I’m asking all the water-mavens out there to offer ideas on “conserving” irrigation ag water – using market stimuli or otherwise – that does not also unreasonably impact the local economy. Email me here if you would rather not respond blog-publicly.