The Policy Greenhouse

Immediate Effects of Water Conservation Policy

There are many benefits for households and small businesses when it comes to the enforcement of water conservation policy. Firstly, it helps to prevent additional operating costs for businesses like farms. According to the University of Arizona, the Imperial Irrigation District in California saw an increase in farm income by 30 percent right after a 20 percent drop in water demand from the same farms. These reduced costs from using less water are made possible for farms by using water-saving irrigation and planting methods, and these reduced costs help to serve as an example for how negative externalities can be prevented while promoting economic growth. On the household side of things, when water conservation policy is enacted in areas that were water-insecure in the first place, there is (obviously) an observed growth in availability of water as well as reduced demand for water. This continued preservation of water helps to lift these areas out of this insecurity. Conservation policy also has runoff effects on other businesses that are reliant on the flow of water. For example, in the Scott River in Siskiyou County in Northern California, the fishing industry was shut down in 2008. Following this shutdown, the California fishing industry lost out on $255 Million dollars annually until 2009, when environmentalists were able to work with local agriculturalists (meaning farmers) to decrease the amount of water they used for their crops. The decrease in water diverged from the river allowed the Salmon population to bounce back, with adult salmon numbers in the river jumping from 62 in 2008 to 240 in 2011. However, even within this example, there are some immediate drawbacks of Water Conservation policy that are quite visible. Even though there is a decrease in cost for farmers that reduce their water consumption for watering their crops, these farmers need to have the means to switch to new methods of cultivation such as drip irrigation or subsurface irrigation. This is not possible for farmers who cannot absorb the cost of a smaller yield (from decreasing water consumption) when they have not installed alternative irrigation, or the cost of installing alternative irrigation. 

Long Term Economic Effects

While Water Conservation policy has a few short term drawbacks, there are a few positive long-term benefits of the enactment of this policy. The first is quite obvious, but the implementation of this policy will lead to growth in the water-technologies industry, as technology will have to become cheaper and more efficient/accessible for there to be a widespread adoption of water conservation policy. This need for growth in technology will also lead to an increase in investment for the water efficiency industry, leading toward growth in the sustainable technologies industry. This dynamic is something that has been seen to echo in the EV industry, with their incentive for growth coming in the form of consumer incentives as tax breaks. As a whole, the implementation of water conservation policy only has negative effects in the short term, as the sudden change can negatively affect those who cannot afford to amend their operations so that they require less water. But, with the anticipated growth of the sustainable power industry as well as leaps in technology for operations like irrigation, the cost of switching to a more sustainable model will continue to decrease. The hard part about making this leap is deciding from a policy standpoint how to encourage this growth so that these industries become accessible enough so that most people can afford to decrease their consumption of natural resources.

Sources:

https://www.epa.gov/greeningepa/water-conservation-epa, Evaluating the economic impact of water scarcity in a … – Naturehttps://www.nature.com › nature communications › articles, https://wrrc.arizona.edu/saving-water-can-put-money-bank, https://environment.co/water-conservation-techniques-in-agriculture/