If you believe people are using too much of a scarce resource, the solution is remarkably simple -- raise the price. That will convey that this stuff is a lot scarcer than people had thought. They would prefer not to pay such high prices, so they'll automatically scale back their consumption of it. It's only when the stuff is so cheap that people take it for granted and don't give the slightest thought to conserving it -- as with the air we breathe, for instance.
But with resources whose markets are regulated by the government -- either from being public utilities or regulated private companies -- the simple and effective solution is much tougher to achieve. Government regulators are not in the business of getting prices right -- remember the oil crisis of the '70s? They are more or less a bunch of losers who couldn't do anything productive with their lives, and who salvage their self-esteem by imagining themselves as saviors of the people. "Somebody's gotta make sure that water stays affordable for all Americans -- I guess it might as well be me." As a result, they tend to keep prices artificially low for things like water and electricity.
And yet, that doesn't make the problem of over-consumption go away -- indeed, that is the very cause. Before environmentalism became sexy, regulators could simply have disregarded over-consumption and remained content with their champion of the little guy image. But that's no longer possible -- green, eco-friendly sustainability now commands just as much attention as saving souls once used to among the priestly caste.
So how do they strike a balance between causing over-consumption by forcing prices to be artificially low and assuring their Sierra Club donors that they're doing everything they can to tackle over-consumption? Simple: brow-beat people into using less, or adopting more efficient technologies. Here are two recent examples of local and national regulators pursuing these hopeless policies -- for energy and for water.
Notice that the regulators never defend their decision not to allow prices to move freely, so that they could go high enough to curb consumption. And the reporters, even for the Wall Street Journal, never question them on this. That is how incurably clouded the elite mind has become on these issues ever since environmentalism became fashionable. No one gives a shit anymore about conserving scarce resources -- instead, it's all about how to signal your moral superiority. Take the WaterSense initiative, which will reward you with an eco bumper sticker for your house if it consumes less water than average.
"Oh, well sure, some people may be content to just waste water on their tacky lawns all day, but I guess some of us are just more concerned about not raping Mother Earth. But once they see the cool WaterSense sticker on my window, they'll get jealous enough to want one too. So I mean, I'm just doing my part to make sure everyone else behaves as responsibly as I do."
If such a person's neighbors have any concern over the state of civilization, they will use that sticker for the only thing it's good for -- as a bullseye for a 500-gallon water balloon.
The continued legislative efforts to force consumer electronics companies to make more energy-efficient products is no less stupid. Again, it's all about being able to display your MacBook's Energy Star logo for all your crunchy confreres at the Whole Foods cafe to behold.
Rather than push policies that only provide incentives for jackass environmentalists to toot their own horn even more loudly, we need to simply let the prices of water and energy move freely. If people really are over-consuming, then getting a water bill that's 20 times greater than last month's will be a fairly clear wake-up call. Without resorting to moral strutting at all, they will slash their water usage in order to tame their now unwieldy water bill. If no products exist that are very efficient, existing companies will go broke as entrepreneurs who introduce new efficient products capture all of the now budget-conscious shoppers' money. Ditto for electricity. More, this would spur them to adopt more efficient appliances or less water-guzzling plant species for their yards, and they would also spontaneously reduce the percent of their land area devoted to grass -- again without even thinking about abstract sustainability, but just about the hole burning in their own pocket.
And of course, the handful of people who are obsessed with having their appliances being on all the time, or with watering their lawns all day, could still do so, but they'd have to pay through the nose for using up so much of a scarce resource.
But as long as these industries remain in the hands of regulators, don't expect the right thing to happen -- plan on further efforts to stimulate moral preening among consumers and make the regulators feel like their lives had a purpose.