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Tuesday, 14 December 2010

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David Groenfeldt

Libecap's article is a refreshing overview of how water markets could help us out the the water mess we've created, but he applies his prescription (markets) too broadly. We can learn from South Africa's water law that sets aside water for human needs (not wants, but real needs, which then have to be defined) as the first priority, and water for ecosystem health (which also get defined by lots of scientists) as a close second priority. So far we don't need markets, because they will not "value" human needs or environmental needs properly, because markets are lousy at valuing what's really important but can't be translated into $$. Markets are really good at valuing all the things that can get measured in money, so that's how markets should be used. In South Africa, that comes under the category of "economic development" which is the 3rd priority for their scarce river water. That's how we need to look at water markets, as a necessary mechanism for using economic water more efficiently, but not as a replacement for social and enviornmental valuation that is incommensurable with monetary measures. That's why we need to recognize the topic of values and ethics as an inherent aspect of water policies, and not something we can pretend isn't there. When values are uncovered and analyzed, we'll make better water decisions, and we'll have a better judgement about when to use markets, and when not to. (See www.waterculture.org, and the blog, for more about water values and ethics).

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