A lot has happened since Governor Brown issued his executive order on April 1, 2015 directing the State Board to impose mandatory conservation regulations. On water supply matters, a projected El Niño phenomenon failed to materialize in a way that provided significant water supply impacts for Southern California. 2016 was the Golden State’s hottest summer. And according to the Department of Water Resources, the state suffered a “snow drought” during Water Year 2016. Snow is important as a natural reservoir that provides a reliable flow of water as it melts during the spring and summer.
On February 2nd, the California State Water Resources Control Board revised and extended the mandatory urban water conservation regulations through October. While the newly-adopted revisions make marginal changes on some issues of fairness, which will be covered in a later post, environmental impacts remain.
The environmental impacts of the mandatory conservation regulations are tied to residential landscaping—or more specifically, the absence or reduction of watering that occurs when residents allow lawns to go brown or replace them altogether.
What are the unintended economic impacts of California’s water conservation regulations?
One must only watch the evening news to surmise that unintended consequences are frequently economic in nature. The prices of oil (and therefore, gasoline), coffee or any other tradeable commodity rises and falls according to policy implementation and political decisions. The water industry recently saw this affect when the Cadiz Inc. stock price plunged following a controversial decision by the Bureau of Land Management declaring that the proposed use of a railroad right-of-way for the Cadiz Water Project “does not derive from or further a railroad purpose.”
When it comes to California’s state-imposed conservation, the unintended economic impacts are those things that affect the pocketbooks of residents and businesses and the viability and vibrancy of communities.
The California Drought has elicited fascinating reactions. Water was moved by truck—whether to meet basic human health and safety needs in areas where wells ran dry; comfort and aesthetic needs in affluent communities like Montecito; or individual luxury needs, like the case of the celebrity who was fined for illegally transporting water over district boundaries to his estate. “Drought shaming” (use of social media by individuals to identify and reprove water wasters) emerged as a common and acceptable practice. Almonds were vilified. And some individuals even push back and deny that the drought exists.