The article excerpt below is from the Cato Institute's Regulation magazine. Author Jonathan Adler is a former Julian Simon Fellow at PERC and Professor of Law at Case Western Reserve University. He argues in favor of water markets as the most efficient and environmentally sound approach to water scarcity as climate change exacerbates an already dire situation.
By Jonathan Adler
"Ensuring access to quality water supplies is among the most pressing environmental policy challenges of the 21st century, and not just in the developing world. In the United States, demographic changes and existing water use patterns have placed tremendous pressure on water supplies, particularly in the West. Most states anticipate water shortages in coming years, even in the absence of drought conditions. It is no wonder water policy experts contend, without exaggeration, that the United States is heading toward a water scarcity crisis. Yet as bad as the current water situation is, global climate change is likely to make things much worse.
...Climate change presents many challenges, but it also presents opportunities. In the case of water, the need to prepare for the impact of climatic warming creates an opportunity to improve on existing institutions. In particular, the threat of climate change could provide the long-needed impetus to shift away from centralized political management of water resources, toward market-based institutions. Such a shift holds the potential to increase the efficiency and environmental soundness of water use in the United States. So as the world warms, policymakers should warm to water markets."
Read the complete article.