I think everybody understands that if you raise the price of water enough farmers won’t be able to be in business and shut down instead of using up water. The problem doesn’t seem to be understanding of basic microeconomics but the politics and process.
Do you raise prices by taxation? Do you raise prices by taking drafting rights away and doing yearly auctions of water?
Is there a way to change the pricing of water on a seasonal level? Price pressure only works to reduce consumption if the people are knowing which price they are paying. If you do this, do people actually know which price they are paying at which time?
To me those seem to be questions for economists.
Prices alone also don’t challenge norms that good home owners maintain grass lawns. They just turn grass lawns into a desirable luxury that not everybody can afford.
It’s not just that some farmers will shut down if you raise the price of water, others will find better ways of conserving water, some will switch to less water-hungry crops, and still more will move to locations with cheaper water.
Prices alone also don’t challenge norms that good home owners maintain grass lawns. They just turn grass lawns into a desirable luxury that not everybody can afford.
But that would still lower the amount of water used on grass lawns thereby increasing the amount of water available for other purposes (assuming the demand elasticity of grass lawns is larger than that of those other purposes, of course).
Status signaling through spending money on luxury items can be complex. The fact that not everyone can afford lawns makes the lawn a better signal for status and makes it more valuable as a status signal.
I think everybody understands that if you raise the price of water enough farmers won’t be able to be in business and shut down instead of using up water. The problem doesn’t seem to be understanding of basic microeconomics but the politics and process.
Do you raise prices by taxation? Do you raise prices by taking drafting rights away and doing yearly auctions of water?
Is there a way to change the pricing of water on a seasonal level? Price pressure only works to reduce consumption if the people are knowing which price they are paying. If you do this, do people actually know which price they are paying at which time?
To me those seem to be questions for economists.
Prices alone also don’t challenge norms that good home owners maintain grass lawns. They just turn grass lawns into a desirable luxury that not everybody can afford.
It’s not just that some farmers will shut down if you raise the price of water, others will find better ways of conserving water, some will switch to less water-hungry crops, and still more will move to locations with cheaper water.
But that would still lower the amount of water used on grass lawns thereby increasing the amount of water available for other purposes (assuming the demand elasticity of grass lawns is larger than that of those other purposes, of course).
Status signaling through spending money on luxury items can be complex. The fact that not everyone can afford lawns makes the lawn a better signal for status and makes it more valuable as a status signal.
Yes, but that still decreases the amount of water used on lawns.
If having a lawn that needs water becomes a status symbol, rich people wanting to signal status can choose to grow lawns that take even more water.
Yes, in principle such a thing is possible. But we’re talking about water.