Opinions differ on Texas water solution

December 30, 2013 by  

According to a report released recently from the Federal Reserve Bank of Dallas, Texas’ deteriorating water situation needs to be addressed in order to ensure economic growth.

The Dallas Fed has said in the report that the best method of addressing the issue is a free-market approach to water allocation. This would be a complete turnaround from the current allocation methods and, according to some water policy experts, the report does not take into account the complexity of the problem.

The report points out that current water allocation provide little incentive to curb the use of water. Farmers, whose allocations are based on past use, can only benefit from selling their excess water to cities with market development. Cities do not base their water prices on supply and demand, and therefore do not encourage conservation, resulting in water rationing during dry spells. Many municipalities in other states hire a printing company to produce pamphlets explaining a tiered system for water use. With this system, any water used over a certain threshold is charged at a more expensive rate, encouraging consumers to limit water use.

Russ Johnson, a partner at the law firm of McGinnis Lochridge and a water law expert, agrees with the report in theory but also concurs that it may not be practical to implement. While he says the buying and selling of water rights “is by and large filled with impediments”, he points out that Texas is without the water infrastructure necessary for the free market to operate efficiently.