PolicyGuy

Tuesday, December 26, 2006


Managing Drought Through Economic Incentives.
Will the simple truth that the more something costs the less of it people will buy actually catch up with water policy?

The seems to be the case in Longmont, Colorado. A panel of water experts went to the town, and the local paper offered a brief write-up of the meeting of the Geological Society of America.

But first, there are some serious numbers associated with drought:

Drought affects 30 percent of the nation and has an annual economic impact of $6 billion to $8 billion, according to Don Wilhite, director of the National Drought Mitigation Center in Nebraska. Since 1988, Congress has appropriated $30 billion for drought relief, he added.

Droughts are usually addressed through command-and-control measures: bans on washing cars, bans on irrigating lawns, and so forth. But there's a role for prices, as we read:

In case of a drought, the city will implement different levels of water restrictions depending on the condition, he said.

In the most extreme case, the city restricts the use of water by residents and increases water rates. At the lowest level, the city restricts its municipal and school use only, and residents are not required to restrict their water use.


The account doesn't say what qualifies as "the most extreme case."

"Justice Louis D. Brandeis'?s metaphor of the states as "laboratories" for policy experiments ... had almost nothing to do with federalism and everything to do with his commitment to scientific socialism. .... To this day, it continues to inhibit a truly experimental, federalist politics." -- Michael S. Greve

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