Supply Chain

Drought in California: The Price is Wrong

Why is the Golden State so bad at managing water?
Economist StaffApril 13, 2015
Drought in California: The Price is Wrong

California is no longer taking a laid-back approach to drought. On April 1, for the first time, the Golden State imposed mandatory curbs on water use. Governor Jerry Brown ordered 400 local water-supply agencies, which serve 90% of residents, to deliver 25% less over the coming year. Communities that have already reduced water usage in recent years — such as Los Angeles County — will be less affected than their splash-happy neighbors.

Brown put his foot on urban hosepipes while letting farmers carry on merrily wasting water, for which they pay far less than urbanites. Agriculture sucks up about 80% of the state’s water (excluding the half that is reserved for environmental uses). Farmers have guzzled ever more water as they have planted thirsty crops such as almonds, walnuts, and grapes. Meanwhile, urban water use has held relatively steady over the past two decades, despite massive population growth, thanks to smart pricing and low-flow toilets. Per-capita water use in California has declined from 232 gallons a day in 1990 to 178 gallons a day in 2010.

Last year the governor called for all Californians to cut their water use by another 20%; residents fell short of that mark in every month except December. Brown’s plan imposes restrictions on golf courses and cemeteries. It also calls for the state to replace 50 million square feet (465 hectares) of lawns with drought-friendly planting. On April 5, Brown defended his decision to go easy on farmers, saying that many of them are “really suffering.” Last year they let roughly 10% of the state’s irrigated land go fallow because of the water shortage. Farmers who have already planted their crops cannot instantly switch, but residents can take fewer showers.

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Critics are unmollifed. California cannot solve its water crisis without pricing the stuff properly and dealing with those who consume the most. For years, it was the only state in the West that did not manage how much groundwater landowners could extract from their private wells. Last year, finally, the governor signed a bill to regulate groundwater extraction.

It will take decades to implement the law, however. Communities are required to complete plans for sustainable water management by 2020, but not to manage their water sustainably until 2040. Also, although the water piped into urban bathtubs is carefully metered, the state cannot yet monitor groundwater consumption in California. “You can’t cut back what you can’t measure — it’s as simple as that,” grumbles Andrew Fahlund of the California Water Foundation, a green group.

Other places have dealt with drought better than California. Israel, for example, has built large desalination plants that helped the country, which is 60% desert, cope with a seven-year drought between 2004 and 2010 and the driest winter on record in 2013-14. In California, desalination is harder because electricity is costly, thanks to a renewable-energy program. And green rules make building anything slow. A company called Poseidon will this year complete a $1 billion desalination facility to increase San Diego’s water supply by 7%, but only after six years of permitting and litigation. Many other desalination projects around the state have stalled or simply been abandoned.

© The Economist Newspaper Limited, London (April 11, 2015)