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Tapping Our Ingenuity

November 25, 2007

As water becomes more scarce, we’re going to have to find a way to balance individual rights, market forces

By James G. Workman

Last January in Davos, Switzerland, the bullish World Economic Forum foresaw “no limits to growth” anywhere, but added a caveat concerning “the one place we don’t allow market mechanisms to work – fresh water.”

Within months that exception proved the rule.

In April, the Intergovernmental Panel on Climate Change reported that global warming was not coming to America: It had already arrived. Colorado River dam reservoirs sat half-empty, Idaho’s overtapped aquifers spurred conflicts, Texas’ Rio Grande couldn’t reach the sea and California’s wildland firefighters ran dangerously short of water. As inflows diminish 6 percent a decade in the Cascades, even Seattle will lose 24 million gallons per day by 2040.

Nor was drought uniquely Western. Nationwide, 57 rivers desiccated to record lows. The Great Lakes fell 7 inches below historic levels. Southeast drought cut Tennessee Valley Authority hydropower production in half, exposed Lake Okeechobee’s bare bottom in Florida, dried $787 million of Georgia’s crops and left Atlanta, America’s fastest-growing city, with 60 days of water.

Businesses wilted. In Atlanta, UPS installed dry urinals, landscapers fired 14,000 workers, Stone Mountain Park melted 1.2 million gallons of manufactured snow, the world’s largest aquarium drained exhibits and Coca-Cola headquarters killed its fountains.

But such gestures are marginal. The real threat from drought isn’t economic; it’s political. More than oil, scarce water splits nations, rations freedom and erodes trust.

Alabama, Florida and Georgia sued over dwindling reservoirs. Maryland challenged Virginia over Potomac River currents for the first time since the Civil War.

Southwest states pull apart Colorado River remnants. Midwest states ally with Canada to seal off Great Lakes water from thirsty regions. North Carolina bans nonessential water use. Tennessee towns cut off household water 21 hours per day. Atlanta sacrifices showers, gardens and lawns. Georgia urges: “Pray for rain.”

Instead, people lose faith, for good reason: All models predict a drier winter, protracted droughts and a 30-year doubling of thirst.

These dramatically shifting projections collide with rigid public water systems. Centralized top-down allocation barely worked when and where water was abundant. Such days and places are vanishing, perhaps forever – unless a rights-based market mechanism for water can emerge.

To win broad acceptance, water deregulation must shrewdly embrace pragmatic elements from both sides of the political stream. Right-bank conservatives say water must become an economic good that sends price signals and can be privately traded. Left-bank liberals oppose commodification of water, calling it an environmental and social necessity that government must protect as a fundamental human right.

Beneath antagonistic rhetoric flows a common current. Judicious wording can forge “a certain alienable human right to water” through which markets could help eliminate scarcity, promote efficient growth, secure social equity and conserve nature.

First, agree to protect a basic equal share of water, owned by people. Every human requires a certain amount to survive independently. History, geography and now climate deny that equitable amount to half the world’s population, even in the U.S. Only government can secure law, order, life, liberty and general welfare through a certain statutory human right to water.

Second, address legitimate concerns such a right provokes. Proponents concede questions over water quality, quantity, cost and conveyance. Opponents warn that if water becomes a human right, food, housing, medicine and electricity will follow, sliding toward socialism and waste. Yet neither practical nor ideological concerns are insoluble; indeed, both have strong precedents, here and abroad.

Individuals require 10 potable gallons daily for drinking, cooking, cleaning, health and sanitation. Kenya, South Africa, Ecuador and Belgium preserve such a constitutional right, as do Massachusetts and Pennsylvania. More non-potable water would be needed to grow enough nutritional food. A secure 1,000 daily gallons covers the entire human right.

Sound radical? Actually Chile, Australia and America’s Western states have secured more abundant free rights to water for more than a century. In these cases, water is a property right – tightly confined by use and inherited by a tiny, marginally productive agrarian aristocracy – rather than a human right democratically enjoyed by all. Such restrictions leave water rights vulnerable, brittle, unable to adapt to rising demand or shrinking supply.

Third, don’t define rights to water as “inalienable.” That Jeffersonian word cements overdependence on fickle governments or charities while smothering incentives to protect and conserve. The language locks up water, blocks trade, restricts freedom and turns rivers and aquifers into what economist Hernando de Soto calls “dead capital.” To bring currents back to life, the right to water must be fungible.

Africa and Asia’s poor have long bartered water informally. In America’s West, conservationists, tribes and landowners are finally beginning to lease, buy, bank and donate water rights for nature. In both worlds, scarcity bred competition, competition spurred trade, trade brought economic efficiencies and efficiency conserved water.

Universal conservation could result if all citizens were legitimately engaged, if dams and their reservoirs became banks or if municipalities and irrigation boards ran as responsive enterprises.

That would also bring security, freedom and flexibility. A basic lifeline could never be forcibly rationed from above, yet excess shares of water could always be voluntarily conserved from below and traded laterally.

Indeed, analysts Franklin Fisher and Annette Huber-Lee argue that exchanges could alleviate national security tensions, even in the Middle East: “By assigning an economic value to water and treating it as a tradable source, parties see that the gains from cooperation exceed the costs, resulting from the change in ownership. A zero-sum game becomes a win-win situation.”

Imagine the social equity if 280 million Americans could own, conserve and choose how to invest their 1,000 gallon-a-day share. Imagine the economic efficiency as farmers, industries or governments bid for water shares from willing citizens.

America’s drought reveals a global opportunity. A certain, alienable right could emerge tomorrow. For Atlanta, 60 days of water remain.

James G. Workman is founder of DamBroker LLC and a visiting fellow with the Property and Environment Research Center. Walker Press will publish his forthcoming book, “Heart of Dryness: A True Story about the End of Water.”

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