[T]he solution to this problem is obvious. Lower demand. If you need a hint on how to do that, I can tell you in 3 minutes, or you can just go and RAISE PRICES.
Later, in the comments, Zetland wrote:
I’ve explained these ideas many times, but perhaps they are counter-intuitive to you all, perhaps because it involves unfamiliar ideas that have not been brought to bear in water — ideas from economics.
The combination of those quotes is particularly galling, because I am well familiar with the ideas from economics. Learned them from the same professors as Dr. Zetland, in fact. That’s why I know that the idea of lowering demand by raising prices is a great over-simplification, and in fact only sounds compelling because of an unfortunate pun. To economists, “demand” is how much of something people want at a price. Raise the price, and people are unwilling or unable to buy as much of it as they would at a lower price. But to laypeople, “demand” sounds more like “heart’s desire.” Those are not the same thing at all, and “heart’s desire” is what humans who use water are interested in, and our political system set up to respond to.
Here’s an example to illuminate the difference. Imagine a boy saw Lassie at an early age. The images were seared into his heart. He wants a collie. A collie is his heart’s desire. He dreams of his collie, yearns to take long walks with his collie, whom he will name “Lassie.” He wants to brush her and nap with her. However, this is not a wealthy boy, and a purebred collie is more than his family can afford. At $700 per adorable puppy, he can’t justify the purchase over necessities for his family. If collies were $20 each, he could get one. An economist would say that his “demand” for a collie has gone down as the price increased. But any human would see that his heart’s desire remains; the boy yearns for the dog as much as ever. He doesn’t get a collie at $700 per puppy, but he doesn’t want one less.
This distinction is why solving “demand” by raising prices is a trivially stupid solution. Yes. At $5,000 per acre-foot, I would buy far less than I do now, and have less of the amenities that water provides me. My “demand” would go down. But my heart’s desire wouldn’t change. I would miss my garden and my fruit trees. I would crave a long shower. I would wish I could play in sprinklers with children. Those desires would be an ache to me. Or, perhaps there are uses for water that are important cultural markers, like lining streets with jacarandas or eating meat regularly. We could (and may well) cut those out. But we will be a different people when we do. That may be fine; that may be the people we should always have been in this region and climate. But if an economist saw that and thought nothing more than “Success! Higher prices decreased demand!”, she would have vastly over-simplified that transition to a different cultural identity.
(Besides those things, which are actual experiential uses for water, I have a whole set of uses for water that have nothing to do with “heart’s desire” or “demand”. I want my clothes clean and my shit removed, but if that never involved a drop of water, I wouldn’t care one bit. If magic fairy dust made my dishes clean, I wouldn’t miss filling a sink with warm soapy water. My water usage is set by my need to have certain things happen; the price of water isn’t going to change my needs for sanitation, and water has properties (very solvent, odor reducing) that are extremely handy for sanitation.)
The reason that people don’t immediately latch onto “Raise prices! Decrease demand!” as a solution is not that they don’t understand economic ideas. Rather, they intuitively understand that not being able to afford something at a high price doesn’t mean that your heart’s desire goes away. They know that using water is a close and intimate human experience (think of the best shower you ever took), and is deeply interwoven into culture (stupid, stupid lawns imitating the English Manor). Before they blithely agree to make those unaffordable to any but the wealthy, they want to get used to the idea (change their heart’s desire to native plants, for example) or believe in a crisis that makes it necessary. People care about their heart’s desire, not demand at a price, and in a democracy, politicians and their agency staff are going to care about heart’s desire too, lest they be un-elected. It is very true that in coming scarcity, people’s heart’s desires for using water aren’t going to be met, and we need to figure out how to spread that injury out (or change their heart’s desire, get “buy-in” first). But saying that “demand will go down at a high price” is an accurate statement that misses the real problem, the ache of unfulfilled heart’s desire. If it weren’t a pun between economic jargon and common English, the concept of using price to change “demand” would be relegated to its proper place as one possible tool to address a part of the complex problem.
LATER: Some editing for clarity.
Yes, yes. There is plenty of slack in the system, people who are using water in ways that reflect carelessness, not heart’s desire. Raising the cost of water may be the way to end those. I’m fine with that. I don’t even support all forms of heart’s desire. If it is someone’s heart’s desire to watch the light play off the water as it runs down the gutter, I am not sympathetic.