Pareto efficiency at work in Montecito California:
In January, there was no rain. In
February, Mosby announced that Montecito would begin rationing water.
Part of the moratorium: a stop to the building of new homes—and
heavens!— no new swimming pools. Residents with existing pools or spas
were forbidden to empty and refill them with town water.
For the
most part, residents have embraced the restrictions, allowing Montecito
to cut its water usage by 48 percent and leaving vast aprons of yellowed
lawns as evidence. A second five-acre property owned by Oprah—across
the street from her estate—has gone to seed. Though a former water hog,
Oprah is no longer. “She is the poster child for us,” gushed Mosby in an
interview. “She’s doing her part.”
The article points out, however, that Oprah has her own sources of water on her property. But anyone who uses too much water can pay a fine.
In
May, 837 defiant—or careless—residents coughed up $532,000 in
penalties, or a collective overage of about 13 million gallons of town
water. The beachfront Biltmore Four Seasons was whacked with a penalty
of $48,000 for using about one million gallons over its allotment in
April, while a nearby private home sucked up a $30,000 fine for the
month for guzzling an extra 750,000 gallons. The district receives about
30 appeals a week. Those who do not pay their bills receive shut off
notices— and about 400 were sent out in the last year. The Montecito
Water District, which is particularly discreet about its patrons, admits
it will rake in close to $4 million in fines this year.
According to the 2013 Santa Barbara County Crop Report, the production value of Santa Barbara County crops were $1,436,651,418. Since the 2014 Crop Report has yet to be published, it is expected that this number will be drastically down due to the current drought. With fewer crops, prices will increase. Ultimately, this will have an effect on Michigan buyers who purchase produce from stores like Walmart that sell Santa Barbara crops. Therefore, the drought in California will have an impact on someone like myself, although in Kalamazoo, Michigan, because it will increase the price of produce.
ReplyDeletePersonally, I believe the current system of water restrictions and regulations is a market failure. Here, you have many celebrities such as Oprah who are wealthy enough to have more than enough water trucked to her house. However, is this an efficient allocation of water with only the wealthy satisfying their utility? I do not think so, because as of May there has already been $532,000 in penalties that have already been paid by residents. In expecting approximately $4 million dollars in fines by the end of 2014, it is clear that residents’ water needs are not being met.
Although I believe that the Santa Barbara County residents’ water needs are not being met, I do believe there still needs to be some sort of regulation on water because it is such a scarce resource especially now in California. In looking at the situation with an organic view of government, I am more concerned with having more community members having adequate access to water rather than the select wealthy residents of Montecito have more than enough.
This article really strike me because I just could not believe this was real. People get used to the phase "the gap between the rich and the poor" but this article really created a new phase "the water gap between the super- rich, the 1% and the rich." It was hard to believe that "the nation’s most populous state, the world’s 8th largest economy, get itself into such a mess" and "the thorny question of whether a rich man’s polo field or a golf course is more deserving than someone’s right to shower."
ReplyDeleteThis competition is a market failure when the California state government fail themselves to supply their residents with the most simply and essential need: water. It is important for the government to step in to provide equality for their residents.