Money Goes Where Water Flows

California is naturally beautiful. The population increases of the last century dramatically changed the natural landscape and modernized its beauty, thanks to both the agriculture industry and residents bringing beauty to their yards. Because the unnatural locations of original settlers (and now cities) do not pair perfectly with the natural water resources, the battles for water have physically and politically shaped California.

Agricultural centers are only viable where water is guaranteed (e.g., Salinas still produces but Owens Valley does not). Metropolitan centers created distant reservoirs that dramatically changed the natural landscape (San Francisco built and owns the Hetch Hetchy Water System; Los Angeles relies on imported water). In fact, Los Angeles became a huge city partially because other cities joined Los Angeles in order to secure water rights.

Water is limited resource. Wherever water flowed, establishments could survive. Like the efforts in reducing household electricity usage through laws affecting light bulbs, some efforts have attempted to reduce residential water usage, such as through incentives for efficient washers, dishwashers, and low-flow toilets. Increasing incentives for low-flow toilets, showers, and large appliances is important. Coupled with public service announcements, such incentives will decrease household needs for water. These changes to the household infrastructure are important in securing long-term energy and water security, which has become ever more important with the drastic results of climate change.

But these improvements in technology ignore the elephant in the room: landscaping. Coming in at 57% of new home water usage according to a recent study, landscaping easily overshadows each other category of new home water usage. (An additional 9% is lost to overwatering). In fact, showers, toilets, kitchen and lavatory faucets, and the clothes washer combined account for only 34% of new household water usage. Like the profound changes California has experienced in recent years, the decades to come will have less predictable rainfall, with unprecedented dry and wet seasons. Actions must be taken to decrease demand for water.

Water for landscaping is a luxury. There are many factors that determine the demand for water, but overall the demand for landscaping water is relatively elastic and therefore responsive to fluctuations in price: as the price of water increases, demand for water for landscaping decreases. Demand for water used in the house, on the other hand, is relatively inelastic because washers, showers, and dishwashers have only poor substitutes. However, native plants are reasonable substitutes for water-thirsty, non-native plants and can satisfy the persistent demand for landscaping while cutting down on water consumption.

Because demand for landscaping has a reasonable substitute, the Legislature should consider ways to decrease demand for the luxury use of water. Artificially increasing the cost of water through excise taxation can decrease the demand for water, especially when price increases resemble water scarcity. By using bracket rates for water usage, the Legislature can avoid taxing necessary household water use and tailor the taxes to the luxury and overuse of water in landscaping.

Bracketed excise taxation will not diminish the quality of life with regard to the demand for necessary household water uses. Instead, the taxes will only affect the excessive water consumption of landscaping and over-watering. Such taxes would incentivize repopulating California with native plants and help restore some of California’s natural beauty. Furthermore, reducing water consumption will have the added benefit of reducing greenhouse gas emissions.

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