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To save water, start soaking wallets

The Southwest Florida Water Management District, or Swiftmud, the body that sets local water policy has proven itself utterly incompetent to deal with our area's water shortage. The watering restrictions it imposed last spring are difficult to enforce, inefficient and inequitable. The centerpiece of these restrictions, once-a-week outdoor watering, is gimmicky. Swiftmud now admits, in so many words, that its rationing policy is a failure. Given the normal rainfall we received during the summer, water tables should be at decent levels. They are not. Groundwater levels are lower today than they were at this time last year, and Swiftmud now concedes we are likely to face the same supply problem we faced last spring.

One of the complaints last spring was that water restrictions unfairly penalized users who obeyed the rules. While the lawns of law abiding residents turned brown, those of cheaters remained green, leading some to suggest non-cheaters were being taken for suckers. If cheating were the only problem, a simple remedy could exist in tighter enforcement.

Unfortunately, tighter enforcement creates costs of its own. For example, do we really want to load up an already overburdened court system with thousands of additional cases of water scofflaws snagged by the water police? Moreover, cheating is not the only problem. The watering rules Swiftmud imposed are wasteful and inefficient. Here is an example. Suppose today is a day you can legally water your lawn. Your lawn badly needs water, but you also know there is a 70 percent chance it will rain tomorrow. So, do you water today? The socially preferred result is for you to hold off watering, because tomorrow it may rain. Suppose it doesn't rain, though. In that case you would be forced to wait another 6 days before you could legally water. So, not willing to take the risk of going six days without watering, you water today. That decision is contrary to water conservation, yet it is impelled by the restrictions.

Swiftmud apparently is so firmly bound to authoritarian solutions that it sees continued water restrictions as the only remedy to the drought. Incredibly, it even contemplates the possibility of a total ban on outdoor watering. Nothing would better demonstrate Swiftmud's lack of leadership and the utter failure of its policies than that. A total ban on outdoor watering _ assuming it could be enforced _ could potentially cause widespread harm to landscapes and impose financial losses on homeowners that easily could run into hundreds of millions of dollars.

What is the answer to the water crisis? As a start, officials at Swiftmud should stop pretending the law of supply and demand doesn't exist. In a free market, when the supply of a good falls, its price rises. The higher price sends a signal to consumers to use the good more sparingly. Price is a very efficient rationing mechanism. Consumers don't have to know why the good is suddenly scarcer _ or even that it is in short supply. They need only know it is more costly, making it beneficial to retrench on consumption. Getting someone to tell them how or when to make do with less is unnecessary. Ordinarily, folks are perfectly capable of figuring out for themselves what is in their self-interest.

Simple economics suggests the price of water needs to be raised _ possibly sharply _ at least until the water situation improves. Faced with a higher price of water, consumers can be expected to begin doing the little things that warm the hearts of water officials, e.g., taking shorter showers, hosing down their driveways less often, no longer letting tap water run needlessly and so forth. If price is used to ration water, water police aren't needed. Households would choose to economize on water willingly because that is in their narrow self-interest.

Now, what about the obvious objection that raising the price of water would amount to a back-door tax increase? I believe there are measures elected government officials can take that would deflate that issue. For example, local governments could pledge to reduce property taxes as an offset to any additional revenues collected from higher water prices. What seems most important here is that any additional revenues be returned to the public, not retained by the water suppliers as a windfall gain.

If I may tell a personal story, one thing that really amazed me when I moved here two years ago was seeing so many large lawns. Grass lawns, of course, require prodigious amounts of water. In cities where large lawns are the rule, you see residents who are hooked on cheap water. In San Jose, Calif., where I previously lived, large grass lawns are rare. The high price of land in San Jose is one _ but not the only _ reason. Watering is expensive there. While the price of water is only about 16 percent higher in San Jose than it is here, San Jose households face the added expense of watering in hot, arid summers. Because annual watering costs are so high, most homeowners favor drought-resistant plants and ground covers _ not grass. Large grass lawns aren't the fashion. This suggests to me that if watering costs are high, consumers will practice conservation.

_ Geoffrey Nunn is a retired economics professor who lives in Palm Harbor.

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