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Water and micro vs. macro economics

As usual, local leaders (most of whom hail from the environmental side of the divide) want to do something good, but come up with a stupid way to do it.

New rules could force homeowners to make plumbing improvements like removing wasteful showerheads and fixing leaking faucets or sprinklers. It may also include rules requiring watering of lawns and landscapes once every five days.

The City Council appears ready to impose a set of rules which attempt to solve this problem from the top down, via a sort of macroeconomic (for lack of a better word) approach. It will likely work, for given values of 'work' - I'm sure they can reduce water consumption to a certain degree with these measures, but it will likely be an inefficient effort which requires additional spending on inspection and enforcement which could be better spent elsewhere.

A far better approach would be a more graduated and progressive water charge - today, you pay a tiny amount per gallon for the first N gallons, and a higher (but still very very cheap) amount per gallon for the remaining gallons you use, where N is an amount which appears to be designed to handle a small family's typical water usage if they don't water a lawn. Adding more gradiations to this scale and more drastically accelerating the water cost as you go up would be the smartest way to internalize the incentives you want people to have to conserve water, without the need for a big bureaucracy at the city. (Yes, rain barrels should still be subsidized - there are drainage benefits to them which far exceed the tiny water supply benefits). Some people would xeriscape; others would take more showers instead of baths; others would wash dishes differently. You don't really care HOW they do it; the only interest of the city is in delaying the need to obtain more water supply. The additional cost to the city of this solution is basically zero.

This particular approach, which I dub "marketatarian", uses the power of the market to solve a readily identifiable problem involving what's commonly referred to as the tragedy of the commons, but doesn't wallow in the mire of hard-core libertarian nonsense (whose practitioners would go on and on about how the market would solve the water supply issue if we just let it do so, but would then call the pricing strategy above an example of socialist statism run amok). The Sierra Clubbers, on the other hand, typically have such a deep-seated mistrust of capitalism (thanks to those self-identified libertarians, among others) that they can't even wrap their heads around the simple fact that the market is a really really really good tool to solve problems, as long as you supply the right rules inside which it must operate. In this case, the only rules are "less water supply" and "progressive pricing so we don't completely cut off poor peoples' basic water needs".

By the way, the lack of support from the city for people who want to install "grey water" irrigation systems is another big part of the problem here. Now that we have a small child in the house who likes baths and I spend a couple nights a week soaking my aching legs in hot water, we send a ton of water down the drain which could just as easily be dumped in the yard.

This starts a new category I'm working on - titled "subsidies to suburban sprawl". This water billing scheme is one of many such 'user fees' which total up to massive undercharging of suburbanites for the costs they generate compared to urban dwellers. More to come - next up: garbage collection.

Also found another new Austin blog which seems right up my alley: New Urban Prospect.

This entry was posted in the following categories: Austin , Economics , Subsidies to Suburban Sprawl , Urban Design