What would Adam Smith do? (part 2)
August 19, 2008 | Posted by Spreck Rosekrans in Economics
Spreck Rosekrans is an Economic Analyst at EDF.
(Link to posts in this series: Part 1)
The short answer is that Adam Smith would do what Los Angeles Mayor Antonio Villaraigosa has done – charge more. In this case, the Mayor's action is triggered by a second consecutive dry year coupled with endangered species concerns in the Bay-Delta, which provides urban southern California with 30% of its water supply.
Many of our largest cities, including Los Angeles, San Diego, Oakland and San Francisco, charge about $1000 for an acre-foot (enough for two single family homes). Some cities, however, such as Sacramento, Fresno and Modesto, still do not even meter water use. Not surprisingly, water use in those communites is more than twice the statewide average. They are telling their customers that meters are "on the way". In our view, metering (and charging) for all use statewide cannot happen soon enough. Read more »

Ann Hayden is a Senior Water Resource Analyst at EDF.