Can’t Get No Respect

Opinion by Michal C. Moore

Water. We can’t live without it, yet we waste it with abandon, we mis-price it, inefficiently allocate it, hoard it, corrupt it and refuse to share, just in case we might lose the historic right we have to it. In one of many paradoxical observations, most of the world is covered with water, but only a small fraction of that is useable for agriculture, industry and survival.

The development of the modern West has always reflected access to two key commodities: energy and water. In the case of large hydroelectric systems, the two commodities are synonymous. Vast, expensive projects such as the Federal Water Project in California’s central valley with 500 miles of canals and 20 reservoirs, attendant pumping stations, storage facilities and associated electric turbines, the Bonneville Power Administration system on the Columbia River, or the extensive hydro facilities in British Columbia: all these highlight the cost of acquiring and using a “free” fuel like water.

The fact is, water is not a free good at all, yet it is abused as if it was.

However, since water is in such large supply in the world, the marginal utility of using it is low. In other words, as every priority use is satisfied, any additional unit of water that is available can therefore be applied to less urgent needs as lower priority uses for water are satisfied. The paradox is that any particular unit of water becomes worth less to people as the supply of water increases.

Think about that. There is plenty of water for everyone.

Really? Then why am I writing this piece? Because the water we have exists in places other than where population is increasing the most; at the same time, the overall health and quality of our supplies is in steep decline, world-wide. We don’t manage this vital resource well. We don’t price it effectively. In fact, we act as though it is an endless self-cleaning trash pit.

Are there lessons from a nearly century- long investment and management process?

There are. The paradigm that supported and glorified the independent rancher and farmer, that promised cheap power cooled by rivers and streams that were left warmer than they started, and other sources of wide, continuous water demand, is over. That rancher, that farmer we memorialize in song and show, certainly in folk legends, is dead. Sure, the ranches and farms are still there along with pockets of people who still trade lifestyles and a way of life for urban type wages. The ownership now, though, is in the hands of corporations, responsible only to shareholders, and by definition, incapable of moral or reflective judgment regarding resource use. Corporations do not face ethical dilemmas; they only respond to rules, regulations and returns on investment.

When faced with a “free” resource like water, corporations or even everyday citizens will use water right up to the point where the eventual cost exceeds the value of their products; to the extent they can, they will avoid paying the full cost of any activities that create future value.

As I said before, water isn’t free, even in the most casual sense. It is a so-called “pure” good, meaning that so far, there is no substitute for it. However, since it is, on average, available in vast quantities, virtually anywhere on Earth, in most cases its marginal utility is low. Need more water on the lawn? Turn on the tap. Need time to figure out how to treat those toxic tailings ponds? Build a berm, store it and pray for a cure. Want to insure that the death of agriculture as a core industry is confirmed? Allow all of your irrigation districts to sell off water rights to non-agricultural uses like horse tracks and shopping centers. Don’t bother with a public policy discussion about the long term implications that are involved.

Behavior like this is patently not fair and not equitable and certainly imposes a frightening and costly future burden on future generations. We have tools, processes and infrastructure to solve all of this. What is missing is a set of rules that say we mean to save our future, and the political will to make those rules stick.

In 2004, the Institute for Sustainable Energy, Environment and Economy appointed Dr. Michal C. Moore, former chief economist at the U.S. National Renewable Energy Laboratory, its first visiting fellow.

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