3 ms·

Regulation of resources is based on scarcity. When water supplies dwindle, you will prioritize drinking over industrial use and farming. So when the externalit

Regulation of resources is based on scarcity. When water supplies dwindle, you will prioritize drinking over industrial use and farming. So when the externalities of energy increase, prioritizing (or penalizing) specific uses is (a) straight-forward and (b) not a novel phenomenon.

xiphias2 4y ago
> Regulation of resources is based on scarcity. When water supplies dwindle, you will prioritize drinking over industrial use and farming. Is this really true in practice? I don’t live in the US, but there were some threads about quite the opposite happening in California: government regulating availability of water in households while raising prices, and at the same time making water cheaply available and wasting for almond production in a desert.
- uniqueuid 4y ago
  Well the concrete tradeoffs differ from case to case of course. But grandparent's suggestion that resources should be distributed irrespective of their usage is nevertheless wrong. In the end, you can look at the tradeoffs to try and infer regulatory agencies' priorities. As far as I read, the californian approach does indeed favor agricultural use. At the same time, it is obviously a good idea to limit unnecessary consumer use (lawns, albeit a small share of overall water consumption). That said, imagine there was a drinking water shortage in LA. I guess the policy would change rapidly. So it's a question of the associated costs, and the costs of civil unrest are high. Of course, the US is such a political disaster right now that a lot of really fundamental and trivial societal issues are negotiated through high-stakes (and sometimes violent) confrontations rather than through civilized political means. Woe to thee o land whose electorate is so spiteful.
  - xiphias2 4y ago
    The point I'm trying to make is that if there would be drinking water shortage in LA and the government wouldn't subsidize agriculture, almond production in California would probably get bankrupt, the farmers would move to another state that is more suitable for water intensitive farming, and the market would just solve the issue. Regulations can be beneficial, but harmful as well. In the current case gas prices are high anyways, and Bitcoin miners are dynamic resources in containers that can move easily, so I guess they will just create another wave of demand for solar panel + battery pack installations (just like Blockstream did with Tesla solar+batteries, and what's going on in Texas in the last few years with solar overprovisioning). I'm in favor of this law, just not the title.
    - uniqueuid 4y ago
      I have absolutely no objection, all correct points. One additional factor to consider is the time frame of regulation / market reactions: In some cases catastrophic short-term events may harm people. Even though market reactions would offer medium-term solutions, that may still be a case in favor of regulation. But we're approaching a textbook-length argument here and I'm not really an expert on infrastructure regulation, so I'll leave it at this :)
    - ianai 4y ago
      More probably, they would change which crops they grow. Is there any evidence that farmers enjoy the ability to pick up and move to other land? I seem to recall these land plots staying in the family for hundreds of years.
olalonde 4y ago
If there's one thing that most economists generally agree on (a rare occurence), it is that resources are better allocated through a market economy than through central planning. It is my understanding that they do that with water, your example, because it is free public utility which is not subject to market forces. Government is generally not involved in the allocation of resources.
- uniqueuid 4y ago
  I'm with you there, but some resources are limited in the sense that externalities are growing. So my argument is that more regulation will be needed as that happens. Land, for example, has always been a limited resource and has always(*) been subject to heavy regulation.

xiphias2 4y ago

> Regulation of resources is based on scarcity. When water supplies dwindle, you will prioritize drinking over industrial use and farming. Is this really true in practice? I don’t live in the US, but there were some threads about quite the opposite happening in California: government regulating availability of water in households while raising prices, and at the same time making water cheaply available and wasting for almond production in a desert.

uniqueuid 4y ago
Well the concrete tradeoffs differ from case to case of course. But grandparent's suggestion that resources should be distributed irrespective of their usage is nevertheless wrong. In the end, you can look at the tradeoffs to try and infer regulatory agencies' priorities. As far as I read, the californian approach does indeed favor agricultural use. At the same time, it is obviously a good idea to limit unnecessary consumer use (lawns, albeit a small share of overall water consumption). That said, imagine there was a drinking water shortage in LA. I guess the policy would change rapidly. So it's a question of the associated costs, and the costs of civil unrest are high. Of course, the US is such a political disaster right now that a lot of really fundamental and trivial societal issues are negotiated through high-stakes (and sometimes violent) confrontations rather than through civilized political means. Woe to thee o land whose electorate is so spiteful.
- xiphias2 4y ago
  The point I'm trying to make is that if there would be drinking water shortage in LA and the government wouldn't subsidize agriculture, almond production in California would probably get bankrupt, the farmers would move to another state that is more suitable for water intensitive farming, and the market would just solve the issue. Regulations can be beneficial, but harmful as well. In the current case gas prices are high anyways, and Bitcoin miners are dynamic resources in containers that can move easily, so I guess they will just create another wave of demand for solar panel + battery pack installations (just like Blockstream did with Tesla solar+batteries, and what's going on in Texas in the last few years with solar overprovisioning). I'm in favor of this law, just not the title.
  - uniqueuid 4y ago
    I have absolutely no objection, all correct points. One additional factor to consider is the time frame of regulation / market reactions: In some cases catastrophic short-term events may harm people. Even though market reactions would offer medium-term solutions, that may still be a case in favor of regulation. But we're approaching a textbook-length argument here and I'm not really an expert on infrastructure regulation, so I'll leave it at this :)
  - ianai 4y ago
    More probably, they would change which crops they grow. Is there any evidence that farmers enjoy the ability to pick up and move to other land? I seem to recall these land plots staying in the family for hundreds of years.

olalonde 4y ago

If there's one thing that most economists generally agree on (a rare occurence), it is that resources are better allocated through a market economy than through central planning. It is my understanding that they do that with water, your example, because it is free public utility which is not subject to market forces. Government is generally not involved in the allocation of resources.

uniqueuid 4y ago
I'm with you there, but some resources are limited in the sense that externalities are growing. So my argument is that more regulation will be needed as that happens. Land, for example, has always been a limited resource and has always(*) been subject to heavy regulation.