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What does the privatization of water look like?

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What the Ministry means is that government or others could purchase water rights to protect the environment, citing the Murray-Darling basin in Australia.  Interesting that they should choose this example as the Sidney Morning Herald reports that in 2009, Australian governments had to allocate three billon (yes, billion) to buy water rights from irrigators to salvage ecosystems.  This should be a cautionary tale, not a model.

California is the birthplace of the water market. As the Environmental Working Group reports, taxpayers subsidize the delivery of water to California farms to the tune of $416 million a year.  The farmers turn around and sell a good portion of the water back to the State at eight times the price they paid so it may be used in San Francisco Bay and Delta restoration.  And why are the Bay and Delta in need of restoration?  You guessed it – diversion of water by agricultural users and pollution running off from farms. Little wonder California is teetering on the verge of bankruptcy.

Why is the Ministry proposing to buy environmental protection when it has the option–and the legitimate grounds–for doing so through regulation?   In any event, there simply isn’t enough money in government coffers to buy the water needed to protect the environment in every stream in BC.

Water Markets Add “Flexibility”

The Ministry says “a well designed market can provide flexibility that allows water to be shifted to other users or uses.”  This is accurate as far as it goes, but what’s left out is that flexibility to shift water between uses is better achieved through a well-designed regulatory system that ensures people don’t waste water, mandates conservation during times of drought and prioritizes water use based on societal criteria.  

What is also left out is that the forces driving the “shifting of water to other users” will be the power of the chequebook, not prioritization through democratic debate, even though water is and must remain a public resource. And why use price as the deciding factor in determining who should get to use water rather than, say, how many BC jobs a water use would create or support?  Just because a posh country club is willing to pay the most to keep its greens green, it doesn’t mean that’s the best use of the water.

The Real Problem

Image courtesy of Britanglishman on Flickr

Water markets are touted as a solution.  What exactly is the problem?

The real problem is that the current principles for determining who gets water are, quite frankly, absurd.  BC follows a system known as “first in time, first in right,” which means that rights to water are distributed on a first come, first served basis and are locked to that allocation permanently under both the existing and proposed legislation. 

Currently there are no provisions to require people who use water to accurately measure their use. Protections for the environment are few and far between, and there are no requirements to use water efficiently.  Nothing in the proposed legislation changes this, despite the word 'sustainability’ in the title.

Under this system when something like a drought happens, the oldest right gets their full allocation, while newer users may get none.   What if that results in a town losing its water supply while a water bottler (who took over a farmer's right) continues to operate?  Under the current and proposed systems, the town gets shut down.

The sensible thing would be to scrap the current first in time, first in right, and bring in a system that protects the environment, ensures efficient water use and prioritizes water use based on social utility. 

Instead, the proposed Water Sustainability Act entrenches the current system and proposes that the environment and new users must buy their way into that system.  It may be debateable whether this is “privatization.”  What’s not debatable is that the current proposal fails to adequately protect the environment and the public interest.

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