Comments | erudito: Water restrictions are stupid: a rant

erudito

Water restrictions are stupid: a rant

Aug 26, 2003 06:14

Received the quarterly water bill: $46.25 for a three bedroom house for three months. $23.63 was for water use (30 kilolitres). At a price (after the price rise) of 80c per kilolitre.

That’s 80c (actually 79.82c) per 1000 litres.

You charge 79.82c per one thousand litres and find, surprise!, surprise!, people use a lot of water ( Read more... )

water, economics, policy

Comments 12

shocko August 25 2003, 19:15:54 UTC

And from the bolshie greeny pinko - absolutely agree.

Hurrah for market forces.

Water is precious = let the price reflect that fact.

For everybody - farmers & industry included.

erudito August 25 2003, 23:06:09 UTC

Oh yes bruvver!

One of the best reasons to do the price thing is to stop households subsidising businesses and farmers not reflecting the full cost of what they do.

It's the old, try and find a positive reference to businesspeople in The Wealth of Nations theme revisited.

Hmmm... tooticky August 25 2003, 20:03:37 UTC

If water was reflected at its "true" monetary worth- the value to life perhaps?- do you think shmoes like us would be allowed to afford it? Usuakari has some interesting articles on water, and is much better read than I- perhaps we should ask him to provide the links for a good meaty debate.

Re: Hmmm... erudito August 25 2003, 23:09:55 UTC

No, just reflect its actual scarcity.

After all, if you raise the price 10%, then people can spend the same amount on water if they cut their use 10%.

The point is not whether price is the *only* important thing you can say about something (it almost never is). The question is whether the price you set is undermining efficient resource allocation or not. In this case it is, resulting in easily avoidable waste.

Re: Hmmm... tyggerjai August 25 2003, 23:10:06 UTC

There are two different arguments there ( ... )

Technical point erudito August 27 2003, 23:26:39 UTC

A sunk cost is sunk, so should pay no further part in decision-making since nothing you can do can change it.

Capital financing costs, however ...

Which is what you are really talking about here I think.

That the first unit is really expensive, the next dirt cheap is about returns to scale and why monopolies are the natural outcomes of networks and why we grant monopoly patent rights (though the latter is a matter of lively debate among economists nowadays).

usuakari August 25 2003, 22:48:05 UTC

Andrew Bolt's a whining bitch, who occasionally stumbles across a good point by accident, while flogging the proverbial thousand monkeys to produce his half-assed diatribe against whatever he doesn't like today...

"It was the best of times, it was the blerst of times?!? You stupid monkeys!!!"

I actually agree with you about the cost of water. We appear to disagree over private ownership of what I see as public resources, but I agree that resources should cost what they're worth. No problems with raising the price of water as way of hammering home the need to be careful with it.

Were you aware that the government offers a range of rebates for installing water-saving technology as well as for installing solar hot water services? In the far future, when I finally have the chance to buy or build my own house, all of this stuff will be installed as a matter of common sense. There is a slow move toward this kind of thing (encouraged by the government in a half-assed kind of way) with new houses, but little is done about existing, older ( ... )

erudito August 25 2003, 23:15:39 UTC

Actually, I am not in favour of private ownership of water supplies. There are too many property rights difficulties over catchment.

I am cool about private leased management of water provided the contracts are well-specified.

I would also point out that proper pricing would make the water-saving technology you link to more inherently attractive.

As it is, the govt undercharges for water and then pays people to put in technology it's own pricing policy undermines ...

Just a small left hand/right hand problem here ...

tcpip August 27 2003, 18:37:41 UTC

Private ownership of any natural resource is a very dangerous path (and bad economics too). When it's a human necessity even more so. I'm probably a little more than "cool" on private leases however ("cold" might be an apt description).

But in general, I'm with shocko on this, yes, from the Anarcho-Bolshie-Greenie left, you get my vote as well. Water should be priced according to relative scarcity (oh boy, is it scarce where I am).

Mind you, I also hold to a social welafe system where everyone can afford the necessities of life (including sufficient water). As I've mentioned before, the free market is something that has to made, it is not something that happens by itself. And one of the conditions is non-coercion - social or biological.

What's this about natural resources? erudito August 27 2003, 23:18:27 UTC

What do you mean by natural resources (food? coal? metal? wood? land? fish?) and what makes private ownership of them an inherent problem ( ... )

longi January 2 2005, 05:54:56 UTC

Ours is about $250 a quarter, for 2 people.

Then again, we're out in the sticks and our water supply is down to something like 9% and we're on stage 4 restrictions.

As for the "cost" of water.... it's not the water you're paying for, it's the supply thereof. Maintenance and administration of the supporting infrastructure.

Rates erudito January 2 2005, 06:54:59 UTC

(Piped) water is a network good, so you pay for access to the network (which would cost more for you), for the maintenance and administration of the network (again, the maintenance charge is probably a bit higher for you, though that may be included in the network-access price) and for the water.

Just like you pay for land even though it is "just there".

If something becomes more scarce, it becomes more valuable, therefore ...

In particular, if it is more expensive, then water-saving technology pays for itself quicker, so will be used more, so less water will be used.