Slashdot Mirror
Will Cape Town be the First City To Run Out of Water? (bbc.com)
Cape Town, home to Table Mountain, African penguins, sunshine and sea, is a world-renowned tourist destination. But soon it could also become famous for being the first major city in the world to run out of water. From a report: Most recent projections suggest that its water could run out as early as March. The crisis has been caused by three years of very low rainfall, coupled with increasing consumption by a growing population. The local government is racing to address the situation, with desalination plants to make sea water drinkable, groundwater collection projects, and water recycling programmes. Meanwhile Cape Town's four million residents are being urged to conserve water and use no more than 87 litres (19 gallons) a day. Car washing and filling up swimming pools has been banned.
Instead of asking "Will Capetown be the first city to run out of water?" they could just as well ask "Is Capetown the first city to misprice water?" It appears to have been written by someone who has never heard of a "market".
Just raise the price so supply equals demand. This will incentivize people to conserve, and you will quickly see lawns replaced by xeriscapes. It will also incentivize entrepreneurs to produce more water and provide innovative conservation equipment.
If they are worried about "the poor" then a simple measure is to use tiered pricing, and provide the first 10 or 20 liters per person at low cost, or even free.
Markets can't solve every problem, but they can certainly solve this one. This is just a classic mismatch of supply and demand.