A solution to the U.S. water problem: People who use more water, pay more

“It’s absolutely a question of bringing people into a conversation,” Glennon said. “Then we can have a discussion about how to price the rest of the 99 percent of water.”

Perhaps the biggest player in the water game is the agricultural industry. The U.S. Department of Agriculture Economic Research Service states that agriculture accounts for around 80 percent of the nation’s consumptive water use, and more than 90 percent in many Western states.

With water so cheap, there currently are no real incentives for farmers to use less of it, to spend money on installing expensive water-conserving infrastructures or to cease crop production during the offseason.

Glennon says it is what economists call “the tragedy of the commons,” in which users have limitless access to a common-pool resource.

“I like to say our water supply is like a giant milkshake glass,” Glennon said. “Each demand for water, or each well, is like a straw in the glass.”

Glennon’s solution, which would not require any price increase for farmers, is establishing markets driven by a demand-offset system. If someone wants to add a new straw to the glass, they first need to convince someone else to remove theirs.

In this scenario, farmers could stand to even make a profit by leasing their water to others during their offseasons. In turn, the profit gained could be used toward updating their infrastructure to use water more efficiently.

The release notes that this seemingly beneficial solution would be difficult to enact until U.S. water policy — which makes it difficult for farmers to trade water in some areas — is overhauled.

To Glennon, solving the U.S. drought is a matter of removing the disincentives.

“I can’t emphasize enough how important this is,” Glennon said. “As I go around the country, I meet inventors and engineers who have built better mousetraps — things that work (to conserve water),” he said. “What is so sad is that almost none of them have a viable business plan. The price of water doesn’t justify it. There’s the threat about running out of oil, but water is needed by virtually every business in the United States. The problem with the system is we don’t think about water. We use more than we need to, and we need to change that.”

— Read more in Robert Glennon, Unquenchable: America’s Water Crisis and What To Do About It (Island Press, 2010); and Peter Culp et al., Shopping for Water: How the Market Can Mitigate Water Shortages in the American West (Brookings Institution, The Hamilton Project, October 2014)