This commentary originally appeared in the McAllen Monitor.
By Leigh Thompson and Alex Perkins
Despite the spring rains, a long, hot summer is before us and the Rio Grande Valley is no stranger to the perennial water challenges that will always be an issue for much of Texas. The Lone Star State is not alone in its water woes. The once golden state of California is quickly turning brown. Drought has ravaged the state for several years and little, in way of policy or rain, has changed to assuage that.
Texas has the opportunity to learn from California’s failures and to avoid the mired path that California set itself on.
The recent mandate by California’s Governor to reduce water consumption by 25 percent exempts farmers and has many citizens irate over this supposed inequality. The oft-quoted statistic, that California farmers use 80 percent of the water and produce only 2 percent of GDP, only fuels this fire.
In fact, California farmers use 40 percent of the state’s water supply. Fifty percent of the state’s water that is captured in dams, aqueducts, reservoirs, and other infrastructure is diverted for environmental causes. By intentionally excluding environmental diversions you arrive at the 80 percent statistic, and Californians have a target with which to direct their ire.
In reality, farmers have reacted to market forces better than any other group. Since 1992, 1.4 million acres of cropland has been retired from production. Other farmers have adapted to the water shortage by shifting to high-value crops, tearing out cotton and alfalfa acreage.
One lesson easily deduced is taken from California’s water market; for years, the government kept water prices artificially low. Abstractly, low water prices seem like a wonderful idea – however, what is good for the goose is not always good for the gander.
Artificial prices have exacerbated the state’s drought in two major ways: first, when water prices are forced below the market rate innovation is stagnated. When the incentive of profit is removed companies cannot afford, or do not bother, to look for more efficient, cost effective ways to handle water.
Second, prices that do not reflect the market rate encourage waste. Gas price fixing during an evacuation for a natural disaster offers a good example of this principle. When gas prices are fixed at an artificially low rate consumers have historically raced to the pumps, causing shortages and many wasted hours spent in long lines. But, if prices were allowed to react to the market, and in doing so naturally rose to reflect demand, only those who sincerely needed gas would stop and fill up their tank. If water prices are allowed to reflect demand, consumers will begin to be thoughtful about consumption and will be more apt to self regulate.
Another important lesson derived from the California water debacle is the effect that environmental regulation has on a state’s water policies.
The Central Valley Project Improvement Act of 1992 set the course for the current California water crisis. The project was designed to provide irrigation and municipal water to much of California’s Central Valley by regulating and storing water in reservoirs in the water-rich northern half of the state, and transporting it to the water-poor San Joaquin Valley.
In order to comply with federal protections for the delta smelt, salmon, steelhead, and sturgeon, the Sacramento-San Joaquin River Delta was restricted from receiving water. In pursuit of this absurd protection, California has spilled 76 percent of the inflows into the San Francisco Bay due to inadequate water storage.
Making matters worse, in 2009, California’s legislature “restored” a 60-mile stretch of the San Joaquin River for the fish. This cost the state enough water to provide roughly 400,000 families with water, which is 100,000 more families than the expensive seawater desalination plant still under construction outside of San Diego.
Importantly, programs that explore desalination as a means of increasing the Texas water supply could provide a meaningful way to meet Texas’ 2060 projected water needs. California has provided Texas with a guide, an “Avoiding Droughts for Dummies” if only we would pay attention. In regards to water scarcity, Texas should learn from California and seek intelligent, free market water policy, backed by the understanding that people come first.
Leigh Thompson is a policy analyst with the Armstrong Center for Energy & Environment at the Texas Public Policy Foundation.