Thursday, February 15, 2007

Use Green to make Green

I paid my water bill yesterday, and after a decade of paying the same bill, something struck me as completely wrong: why is our water so cheap?

Everybody wants to do what's right for the environment - I haven't talked with anyone lately who blatantly comes out & says "forget the next generation, I'm taking everything I can from Planet Earth!" But saying it and doing it are two different things. Doing something good for the environment takes one of two things: changing behaviors, or spending / investing / donating money (and sometimes both.)

There are two economic concepts at work here (for those of you who took an econ class back in school) - supply & demand, and price/demand elasticity. Well, I don't have the information available or time to research for a supply & demand post, but I do have some thoughts about price/demand elasticity. This is a term to explain how much the demand for a product is related to that product's price, and how sensitive that demand is to price movements. For example, let's take a look at soda in the grocery store - when Coke or Pepsi has a big sale, the store sells tons of it; almost every cart that checks out has at least one twelve-pack in it. This is an example of a very price elastic product. An example of a product which is not very price elastic is gasoline; you're going to fill your car up whether gas costs $2.30 / gal or $2.50 / gal, without even blinking an eye. But only to a certain point.

Last year, when gas was inching up towards $3.00 / gallon, there was a lot of talk about alternative energy and alternative fuels. As the price of gas continued to rise to $3.20 / gallon and higher, people actually changed their habits. Sales of hybrid cars skyrocketed. Sales of SUVs slowed down considerably. People were leery of buying homes out at the edge of town. People who had never carpooled before started to do so. The bottom line is that, even though everyone wants to do good for the environment, it wasn't until their wallets were affected before their actions matched their words.

Now back to my water bill. Here are the marginal water rates for the City of Peoria, as published on their website:
2,000 - 5,000 gallons = $1.41 per 1,000 gallons
6,000 - 10,000 gallons = $2.54 per 1,000 gallons
11,000 - 25,000 gallons = $3.05 per 1,000 gallons

I'm not here to argue that those rates are too high or too low - they are what they are & I pay them each month without much thought. However, that assumes a regular amount of usage. There is absolutely NO INCENTIVE to be water-conscious. And considering we live in a desert, with lots of talk about droughts and future water supply shortages, there needs to be!

Using Peoria's rates, if I wash my car and let the hose run the entire time, with water pouring out of my driveway, down the street, and into the storm drains, I might use 50 gallons of water. 50 gallons * ($3.05 / 1,000) = $0.15. 15 CENTS! Are you kidding me? I should have to pay a large fine for blatantly wasting that much water.

On a larger scale, I could drain and refill a medium-sized swimming pool for less than $50.

Here's my proposal. Allow a certain amount of usage at the regular rates. The exact amount will need to be determined by law makers, but it should be enough water for a family to use comfortably. But maybe small enough that homes with large, lush lawns in the front AND back, and a swimming pool, could feel some pain on some months. If a home uses more than the "allowable" amount of water in a month, then each additional gallon will be charged at a rate high enough to change people's habits.

5 cents per gallon seems good to me. In my car washing example, this would end up being $2.50 in penalties. Not enough to bankrupt anyone, but after a few car washes a person might buy a hose-nozzle that shuts off when not in use. People would be more likely to fix broken sprinkler heads, or to take shorter showers. And they would definitely think twice about planting large grass areas. This would also make synthetic lawns seem like a better option.

5 cents is also low enough to be considered reasonable. People pay 25 cents for a pint of bottled drinking water, which equates to about $2.00 per gallon. People bring reusable jugs to the automatic dispensers and pay 25 cents per gallon to fill them. And this 5 cents penalty is only after someone has used their 20,000, or 30,000 or 40,000, or however many gallons before that.

The best part is what we can do with this penalty. I don't want additional profits to go to the utility company, and I don't want it to go to the city's general fund. This should be collected and earmarked specifically for environmentally friendly projects. It can be used to build Green Buildings, or as a tax credit to private parties and developers who do the same, or to develop new generators to harness the sun's or the wind's energy, or to improve re-circulated water, or to convert more vehicles to bio-diesel... The options are limitless. But watching water run down the street at 3 gallons per penny isn't one of them!

-Chris