No Need for Water Cops

The data is pretty clear that water use is influenced by price. Increase the cost of water, especially in an aggressive way and with tiers, and consumption will fall.

Moreover, from an economic perspective, pricing is an efficient means to influence behavior.

To avoid costs consumers will innovate in countless ways to drive down their consumption. The costs and benefits of various investments will be weighed. No need for water cops, complex regulations, and costly information gathering when utility-maximizing consumers will react to price hikes by reducing demand.

Given that the reluctance of the city of San Diego to move toward such a pricing scheme is, to be blunt, inexplicable. Even in tax-adverse Poway tiered pricing and aggressive outreach has had a predicable effect — water use has gone down — especially among those households in North Poway which previously had used far more than most other residential users.

It would be sad if the city of San Diego is relying upon communitarian esprit-de-corps (and a relatively mild summer) to avoid angry protests from those homeowners with the largest lots, the most tropical landscaping and the largest water bills.

Water is a hard issue. There are deep cultural norms that cut against treating this “necessity of life” as akin to other commodities.

It is a subject area where decisions making power is often concentrated in the hands of technical experts with little appreciation (or understanding) for how markets and self-interest can lead to efficient outcomes. But in a world that where water is growing increasingly scarce, it makes little sense to search for policy solutions with one hand (even if it is an invisible one) tied behind our backs.

Erik Bruvold is the president of the National University System Institute for Policy Research. He can be reached at ebruvold@nusystem.com.