Drought in Texas: a parable
A good example of how pricing needs to reflect the availability of resources
The NY Times writes an interesting article about drought in Texas but manages not to mention water prices. The article goes on and on about the death of "green lawns" but why do we have a fixation with green grass? I understand that it is fun to play sports on but many lawns are not used for sports but simply to "fit in" with the rest of the neighborhood. If you are a fan of conformity, that's okay with me but if the actions we take to "fit in" are resource intensive then we need to find new ways to signal our willingness to conform.Skip to next paragraph
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Texas could offer us an excellent preview concerning how climate change adaptation takes place but prices must be allowed to rise to reflect scarcity. I argue in Climatopolis that government intervention can impede adaptation if it takes well meaning actions that limit "price gouging" but price signals are exactly what we need for capitalism to help us to adapt to drought and other climate challenges. To paraphrase John Lennon, give the price system a chance!
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