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Rather than subsidizing this or that conservation solution, wouldn't it be better to charge a price for water that reflects the actual cost of depleting the aqu

Rather than subsidizing this or that conservation solution, wouldn't it be better to charge a price for water that reflects the actual cost of depleting the aquifer? Like shipping water in from elsewhere? Water is another tragedy of the commons. Government often charges for the cost of piping the water from the source, as if the water source had no value itself. Imagine if fish could be taken from the ocean for just the cost of taking it from the ocean. Oh, wait. That's what we do! And overfishing is also another tragedy of the commons in many populations. It would be better if a water source was turned into a for-profit corporation with the all the users of the aquifer each entitled to a share of the profits based on past usage. Then they'd break even if they keep their usage the same, but profit if they cut their usage. New residents and companies would pay the market price for anything more than personal use, which nobody would have to pay for. It would have to cover all the users of the aquifer. Otherwise, those with cheap access to it will profit at everybody else's expense. That way, the people keep the water, nobody has to pay for personal use, but everybody has a built in incentive to avoid uses of water that aren't worth using up the valuable resource.

kaikai 9y ago
Subsidies help pay installation costs, making people more likely to install systems. Inflating water prices would also disproportionally affect renters, who are often lower-income, because they don't have the ability to make changes like that for their homes.
- wallace_f 9y ago
  Electricity prices are another example of something similar: they soar during peak hours, but government keeps the price flat during the day. If the price fluctuated, people would adjust their usage; but instead, a lot of games are played to go about smoothing demand, and they don't work well. The result is higher emissions and higher prices. General carbon emissions are another example. The price burdened by society is higher than the privatized cost. Imagine we had a system that automatically rewarded cyclists, or people who just take a cold shower--any of the millions of small things--for curbing pollution. Well, price signals in supply and demand are already such a system. The problem with subsidies, public policy initiatives, and awareness campaigns is that they can't do as good of a job as simple supply and demand economics in organizing human behavior efficiently--for the same reasons why command and control economies don't work as well as market-based ones. Price signals work very well. And besides this argument for economic efficiency, there is the argument that people's privatized incentives should be aligned with other's, if possible, and policy should reward or punish decisions which bear benefits or costs on society. And if we want to help the poor, we should really just give them money to help cover their expenses rather than adopting bad economic policy just because it just so happens to be the one that is more kind to the poor. In other words, it's not necessary to bake a smaller pie just in order for us to be able to share it.
  - tzs 9y ago
    > Imagine we had a system that automatically rewarded cyclists, or people who just take a cold shower--any of the millions of small things--for curbing pollution. Several prominent conservative Republicans proposed about a year ago a system that would do that [1]. They were James Baker (Secretary of the Treasury under Reagan, Secretary of State under GHW Bush), Martin Feldstein (chairman of Reagan's Council of Economic Advisors), George Shultz (Secretary of State under Reagan), Henry Paulson, (GW Bush's Treasury Secretary), and N. Gregory Mankiw (chairman GW Bush's Council of Economic Advisers), and others. Their proposal was for a revenue-neutral carbon tax starting at $40 per ton. It would be collected at the source (such as at oil refineries), and the money collected would be returned to to the taxpayers. They estimated that would be about $2000 back to a family of four. If the rate is set right, it would be break even for a person who is carbon neutral. The tax would raise the prices on things they buy and use that produce carbon, but their share of the distribution should be about the same amount. [1] http://www.sciencemag.org/news/2017/02/group-prominent-republicans-just-launched-longshot-bid-carbon-tax http://www.sciencemag.org/news/2017/02/group-prominent-repub...
    - wallace_f 9y ago
      Dismissing political affiliations I think people can agree this would be good public policy in the sense that it increases human welfare (for example, Mankiw influenced my economics education positively, even if I do dislike some of his politics. Another: Musk also supports a carbon tax, but is not politically affiliated with the GOP).
    - stretchwithme 9y ago
      Taxing what you don't want makes sense if the market cannot solve a problem. It's more flexible than an outright ban, as it's easier to make trade offs. Cap and trade can also work.
    - ZeroGravitas 9y ago
      If the rate is set right, it would be break even for a person who is carbon neutral. That doesn't sound right. Wouldn't it depend on using the average amount of carbon? If you're above average you pay out more than you get back, if you're below average you get more than you pay. Probably depends on the exact way the money is returned. I don't know about this particular scheme, but some use the proceeds to offset regressive taxes, making the scheme progressive overall.
- stretchwithme 9y ago
  Have you read my proposal? As owners of the water, even renters would get paid the extra money for water use as well as being charged a market price for its use. So I'm not sure how they would wind up worse off.
peteretep 9y ago
> wouldn't it be better to charge a price for water that reflects the actual cost of depleting the aquifer Water is sufficiently important to poor people (and their children) that you can't reasonably price them out of the market. Same reason utility companies can't cut off your water in many places.
- jimmywanger 9y ago
  > Water is sufficiently important to poor people (and their children) that you can't reasonably price them out of the market. Where does it stop? Things cost what they cost. For instance, during famines, food shoots up in price exponentially. It's unclear whether you're talking about redistributive taxation and subsidies or price controls. I'm ok with the former, and definitely not ok with the latter. Price controls are the easiest ways to guarantee shortages of a finite scarce good. Fortunately scarcity hasn't really been a problem for water in the Western world. Yemen, however would beg to disagree. Their most profitable crop, qat, requires huge amounts of water, and their capital is completely out of water[0]. Because they held the price of water artificially low, it was overused and now is gone. [0] https://thinkprogress.org/yemen-humanitarian-crisis-water-54a9c0b52831/ https://thinkprogress.org/yemen-humanitarian-crisis-water-54...
  - peteretep 9y ago
    > Where does it stop? I think if the UN has categorized it as a fundamental human right, that's a good start?
    - jimmywanger 9y ago
      They also classified internet in that also. When everything is a fundamental human right nothing is a fundamental human right. After a flood, do you want to get food, water, and shelter in there or do you want to be fiddling with fiber cables?
      - peteretep 9y ago
        > do you want to get food, water, and shelter There we go, in response to your answer about where does it stop. Apparently you also think water is super important.

kaikai 9y ago

Subsidies help pay installation costs, making people more likely to install systems. Inflating water prices would also disproportionally affect renters, who are often lower-income, because they don't have the ability to make changes like that for their homes.

wallace_f 9y ago
Electricity prices are another example of something similar: they soar during peak hours, but government keeps the price flat during the day. If the price fluctuated, people would adjust their usage; but instead, a lot of games are played to go about smoothing demand, and they don't work well. The result is higher emissions and higher prices. General carbon emissions are another example. The price burdened by society is higher than the privatized cost. Imagine we had a system that automatically rewarded cyclists, or people who just take a cold shower--any of the millions of small things--for curbing pollution. Well, price signals in supply and demand are already such a system. The problem with subsidies, public policy initiatives, and awareness campaigns is that they can't do as good of a job as simple supply and demand economics in organizing human behavior efficiently--for the same reasons why command and control economies don't work as well as market-based ones. Price signals work very well. And besides this argument for economic efficiency, there is the argument that people's privatized incentives should be aligned with other's, if possible, and policy should reward or punish decisions which bear benefits or costs on society. And if we want to help the poor, we should really just give them money to help cover their expenses rather than adopting bad economic policy just because it just so happens to be the one that is more kind to the poor. In other words, it's not necessary to bake a smaller pie just in order for us to be able to share it.
- tzs 9y ago
  > Imagine we had a system that automatically rewarded cyclists, or people who just take a cold shower--any of the millions of small things--for curbing pollution. Several prominent conservative Republicans proposed about a year ago a system that would do that [1]. They were James Baker (Secretary of the Treasury under Reagan, Secretary of State under GHW Bush), Martin Feldstein (chairman of Reagan's Council of Economic Advisors), George Shultz (Secretary of State under Reagan), Henry Paulson, (GW Bush's Treasury Secretary), and N. Gregory Mankiw (chairman GW Bush's Council of Economic Advisers), and others. Their proposal was for a revenue-neutral carbon tax starting at $40 per ton. It would be collected at the source (such as at oil refineries), and the money collected would be returned to to the taxpayers. They estimated that would be about $2000 back to a family of four. If the rate is set right, it would be break even for a person who is carbon neutral. The tax would raise the prices on things they buy and use that produce carbon, but their share of the distribution should be about the same amount. [1] http://www.sciencemag.org/news/2017/02/group-prominent-republicans-just-launched-longshot-bid-carbon-tax http://www.sciencemag.org/news/2017/02/group-prominent-repub...
  - wallace_f 9y ago
    Dismissing political affiliations I think people can agree this would be good public policy in the sense that it increases human welfare (for example, Mankiw influenced my economics education positively, even if I do dislike some of his politics. Another: Musk also supports a carbon tax, but is not politically affiliated with the GOP).
  - stretchwithme 9y ago
    Taxing what you don't want makes sense if the market cannot solve a problem. It's more flexible than an outright ban, as it's easier to make trade offs. Cap and trade can also work.
  - ZeroGravitas 9y ago
    If the rate is set right, it would be break even for a person who is carbon neutral. That doesn't sound right. Wouldn't it depend on using the average amount of carbon? If you're above average you pay out more than you get back, if you're below average you get more than you pay. Probably depends on the exact way the money is returned. I don't know about this particular scheme, but some use the proceeds to offset regressive taxes, making the scheme progressive overall.
stretchwithme 9y ago
Have you read my proposal? As owners of the water, even renters would get paid the extra money for water use as well as being charged a market price for its use. So I'm not sure how they would wind up worse off.

peteretep 9y ago

> wouldn't it be better to charge a price for water that reflects the actual cost of depleting the aquifer Water is sufficiently important to poor people (and their children) that you can't reasonably price them out of the market. Same reason utility companies can't cut off your water in many places.

jimmywanger 9y ago
> Water is sufficiently important to poor people (and their children) that you can't reasonably price them out of the market. Where does it stop? Things cost what they cost. For instance, during famines, food shoots up in price exponentially. It's unclear whether you're talking about redistributive taxation and subsidies or price controls. I'm ok with the former, and definitely not ok with the latter. Price controls are the easiest ways to guarantee shortages of a finite scarce good. Fortunately scarcity hasn't really been a problem for water in the Western world. Yemen, however would beg to disagree. Their most profitable crop, qat, requires huge amounts of water, and their capital is completely out of water[0]. Because they held the price of water artificially low, it was overused and now is gone. [0] https://thinkprogress.org/yemen-humanitarian-crisis-water-54a9c0b52831/ https://thinkprogress.org/yemen-humanitarian-crisis-water-54...
- peteretep 9y ago
  > Where does it stop? I think if the UN has categorized it as a fundamental human right, that's a good start?
  - jimmywanger 9y ago
    They also classified internet in that also. When everything is a fundamental human right nothing is a fundamental human right. After a flood, do you want to get food, water, and shelter in there or do you want to be fiddling with fiber cables?
    - peteretep 9y ago
      > do you want to get food, water, and shelter There we go, in response to your answer about where does it stop. Apparently you also think water is super important.