Allowing price to ration water may be a bitter political pill to swallow, but it makes economic and environmental sense. There are examples of this economic solution working in the past. Cities like Santa Fe, Tucson, and Fort Worth allowed price signals to govern water use — the more a household used, the more expensive water was to purchase. Consumers responded by conserving water. These measures worked so well utilities were forced to stabilize the sharp drop in revenue by reconfiguring rates. That is not a bad thing — especially during a drought as austere as California’s.
But won’t raising prices only hurt the poor and have little effect on those who have the money to afford it anyways?
Charging more for water need not create undue hardship for poor or lower middle class families. Establish a minimal per capita water use level and then charge progressive water rates so that any extra water used is billed at a higher rate. This allows consumers to choose if they are willing to pay for an extra long shower, to water their lawn, or to wash their car.
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