Tuesday, September 28, 2010

Drying up Las Vegas

Contrary to the claims of economist and blogger Alex Tabarrok, water scarcity is more than "a local problem." Increasing population pressure and unchanged agricultural pressure have effectively tapped out the Colorado River, which serves large portions of 7 states and several major metropolitan areas including LA, San Diego, Phoenix, and Las Vegas.

Part of the problem is that the demand curve is really well hidden- it's hard to suss out the marginal cost of consuming a given amount of water because the water system is so full of subsidies. Water users basically don't pay for dams, reservoirs, or for upkeep of water systems- taxpayers do. Thus, people don't feel the need to restrict their usage. That's a concern not just for people maintaining yards, but even more for industries that use large amounts of water, such as agriculture and mining. Heavy subsidies make water so cheap as to not really be part of the cost equation in many parts of the country, though to their credit that's not so for farmers in much of California's central valley.

It's great to live in a country where this type of resource scarcity won't be handled by people resorting to weapons, as is feared in parts of central Asia as water supplies dwindle. I'm sure the struggle won't be easy, but the issue is at least being addressed.

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