Unchecked overuse is draining and damaging aquifers nationwide, a data investigation by the New York Times revealed, threatening millions of people and America’s status as a food superpower.
The government should ration water supplies to the people in the form of credits for so many gallons per year. If anyone, especially ranchers, farmers, water bottlers, or fracking companies, needs some extra water, they can buy the credits for it on the market from whomever didn't use all of theirs.
I'm talking about government controlled rationing. A committee of geologists and engineers and whatnot determine what could be sustainably drawn from each water source, add it up, and divide it among the population. The market mechanism essentially serves a means to redistribute wealth from the rich who use too much water on their lawns to the poor who often don't even have lawns as well as force industry to really account and pay for this common resource. Just because a market is involved doesn't mean that it's capitalism. I don't think carbon offsets work like what I suggested at all.
That's a bad idea imo, because it just encourages cronyism so either some groups are exempt or just not properly monitored (see carbon credits). And then there are issues such as water rights, which at least in my area exceeds the amount of actual water available.
In my area, water rights are a use it or lose it system, so farmers have an incentive to waste water they don't need. It's a stupid system, but it's a property rights issue, so it's more complicated than it should be.
But even once we solve the water rights issue (and this would apply to other countries), credits are just another use it or lose it system. Our water use should change with availability, and many industries like farming aren't okay with variable water use, so you shouldn't change the amount of credits year over year. Also, water availability isn't the same across regions (e.g. Western Washington in the US has plenty of water, while Eastern Washington relies on reservoirs). So your credits would need to apply per watershed, which is complicated, especially since water can often be moved between watersheds if needed.
I think a better system is:
Buy out water rights and replace with longer term water price contracts - you could lock in your water rates for, say, 5 years, and renegotiate at the end; these contracts would be non-transferable, and would come with caps, above which current rates apply
Set water rates based on availability and cost to transport water, which would work just like residential water bills ($X got the first Y volume, $Z after, etc)
If water use exceeds supply, use the excess revenue to improve reservoir infrastructure, build pipelines, etc
So the more demand there is, the higher prices go. We could have a relatively stable lower amount to accommodate the majority of residential uses so water bills remain fairly stable.
You're the second person to make a comparison to carbon credits, but that's totally different. As I understand it, the source of carbon credits is totally dubious in the first place and they're only valuable to the extent that they ease liberals' guilt. You don't even need them to fill up your car or anything. I'm talking about a system where instead of spending dollars to get water, you'd have to spend water credits. As I replied to that other person:
I’m talking about government controlled rationing. A committee of geologists and engineers and whatnot determine what could be sustainably drawn from each water source, add it up, and divide it among the population.